SOURCE: The St. Petersburg Times
DATE: Issue #1299 (62), Tuesday, August 21, 2007
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TITLE: Summer Fires  Not As Bad As Feared, Say Firefighters
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: Firefighters in the region surrounding St. Petersburg say they have not had as much to do so far this summer as they had feared after a record low number of forest fires broke out during recent high temperatures — despite the raging fires experienced during a similar heatwave in southern Europe in spring.
The fire service was expecting disastrous outbreaks in St. Petersburg and the Leningrad Oblast as temperatures reached up to 33 degrees Celsius, the highest in decades, but the region has reported 11 times fewer forest fires affecting an area 25 times smaller than during the same period last year. 
Determined to avert disaster as forecasters warned of hot weather, Alexei Akulenko, of the Leningrad Oblast central directorate of the Ministry of Emergency Situations, said federal authorities allocated extra funds to tackle the situation, tripled the number of firefighting units to more than 200, improved the quality of equipment and increased aerial forest surveillance. 
But despite having less fires to tackle than expected, Akulenko hailed his office for doing a good job, saying that "thanks to our re-organization and improved co-ordination system we were able to prevent the region from what would have been perhaps its worst ever forest fires."
"We adopted a new way of waging a public security awareness campaign this year by holding regular emergency sessions in local administrations in line with a gubernatorial decree," he said.
"Perhaps a fear of possible calamity helped raise public awareness about environmental preservation this summer, making people especially careful in their handling of fire," Akulenko said, adding that "even so, human factors were behind all 318 incidents of fire, except one, reported [so far] this season." 
More than 3,400 fires registered last year were caused by human negligence or arson, according to the Ministry of Emergency Situations. 
The worst incident this year was reported in the Vsevolozhsk military base where explosions carried out during military exercises destroyed 14 hectares within an unusually short time. 
Of 26 arson-related criminal cases opened last year, only three reached court, Akulenko said, “due to difficulties in proving the offenses against forestry preservation laws.” 
No comparative figures for this year are available, he added. 
“We intensify our aerial surveillance on Mondays when we expect outbreaks because weekenders go on sprees that involve lighting a lot of fires,” said Akulenko. 
He said his directorate had signed a rental agreement with an airline to provide the forest fire services with two helicopters used in case of emergencies on condition that they arrive at the scene of the incident within two hours. 
Akulenko said that more than 2 million people from St. Petersburg and about 20 urban centers in the Leningrad Oblast go to the countryside at weekends and for vacations during the summer.
With an area about the size of Wales and about a quarter the size of Portugal, only 632.56 hectares caught fire in this season compared to 16,126.78 hectares during the same period which ended September last year, according to official figures.
However, despite the unexpected good news, Akulenko complained that when his service was pressed into action, they were sometimes prevented from acting as efficiently as he would like.
“Gardens, residential and forest areas are so compact in the Kingisepp and Luzhsky districts that it renders it difficult to fight fires there, which means these territories have many fire victims,” he said.
Kingisepp and Luzhsky districts have been the worst affected areas with a total of 133.68 hectares destroyed by 36 incidents of fire in the former and 59 fires hitting 105.75 hectares in the latter. 
Podporozhsky is the only district in the region that reported no incident of fire, while four districts out of 18 had less than 10 hectares burned. 
More fires are expected throughout August and September.

TITLE: Observers Slam Kazakh Vote as Flawed
AUTHOR: By Olessya Ivanova
PUBLISHER: The Associated Press
TEXT: ASTANA, Kazakhstan — President Nursultan Nazarbayev’s party won all available seats in Kazakhstan’s new parliament in an election that international observers said Sunday was flawed but that still showed the oil-rich country was making progress toward becoming a democracy.
The Nur Otan party received 88 percent of Saturday’s vote, and no other party cleared the 7 percent barrier needed to win a seat in the legislature, according to preliminary results released Sunday by the Central Elections Commission.
The two largest opposition groups condemned the results, saying the figures had been manipulated.
Nazarbayev — who has ruled the Central Asian country since 1989, when it was still a Soviet republic — had pledged that the elections would be free and fair. He is pushing for Kazakhstan in 2009 to chair the Organization for Security and Cooperation in Europe, which has delayed making a decision because of concerns about the country’s commitment to democracy.
The OSCE, which had sent more than 400 election observers, said the vote count was assessed negatively in more than 40 percent of the polling stations visited, mainly due to procedural problems and lack of transparency.
“Notwithstanding the concerns contained in the report, I believe that these elections continue to move Kazakhstan forward in its evolution toward a democratic country,” Consiglio Di Nino, a Canadian senator who heads the OSCE observer mission, said in a statement.
Lubomir Kopaj, who heads the long-term election observation mission of the OSCE Office for Democratic Institutions and Human Rights, was more restrained in his assessment, saying Kazakhstan still needed to make many improvements to its election process.
“I have never seen a democratic country with one political party in the parliament,” Kopaj said at a news conference.
The election had been expected to improve slightly the position of the opposition, which held only one seat in the last parliament. Instead, both of the largest opposition groups were shut out.
“We don’t recognize the results of the election. They absolutely do not reflect the actual alignment of political forces and the social support they draw,” said Burikhan Nurmukhamedov, a leader of the Ak Zhol party, Interfax reported.
The elections commission said Ak Zhol had received about 3.25 percent of the vote, but Nurmukhamedov said the party’s own surveys indicated it won about 12 percent.
“We have definitely won those votes,” he said, adding that the party was preparing reports on irregularities to present the elections commission and prosecutor general, Interfax reported.
“The elections have been utterly profaned,” said Ualikhan Kaisarov of the All-National Social Democratic Party, which received 4.62 percent in the official tally.
The OSCE mission expressed concern about the high 7-percent threshold for representation in the parliament.
The same threshold has been introduced in Russia, where parliamentary elections are scheduled for December.
An observer mission from the Commonwealth of Independent States said the Kazakh elections were “free and transparent,” CIS Secretary Vladimir Rushailo said, Itar-Tass reported.
The CIS observers consider the elections “a reflection of the stable social and economic development of Kazakhstan,” said Rushailo, a former Russian interior minister.
Lyubov Sliska, first deputy speaker of the State Duma, said Sunday that that the results were an accurate reflection of Nur Otan’s popularity.
“Behind that 88 percent, which demonstrates the support enjoyed by the party of power, is the real strength of the leadership of the country and the head of state most of all, in ensuring a normal life for its people,” Sliska said, Interfax reported.
Nazarbayev has brought relative prosperity to the nation of 15 million, where economic growth has been in the double digits in recent years.
The election was to choose 98 members of the lower house of the parliament. Nine more seats will be filled by members of the Assembly of Peoples, a powerless body designed to give a voice to ethnic minorities. Voter turnout was just under 65 percent nationwide, the elections commission said. In the 2004 parliamentary election it was 56.8 percent.

TITLE: Finding the Best Bet for the Kremlin
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — If you’re looking to strike it rich on the presidential election in March, Lyudmila Putina is a name to keep in mind. A $10 dollar wager with Britain’s Unibet that President Vladimir Putin’s wife will replace him in the Kremlin could bring a $2,000 payout should she get the job.
But while betting on the winners of elections might be fairly popular in the West, there is much less wagering activity when it comes to Russian votes.
A law forbidding betting on elections, politically apathetic gamblers and the fact that just one bookmaker is taking bets all bode poorly for the future of political gambling.
“Betting on elections is forbidden,” a man who did not give his name said by telephone from Moskovsky Totalizator. “No one here will talk about it.”
The company raked in the bets eight years ago when Putin first ran for the presidency, and it wasn’t alone. A large number of other bookmakers did good business offering odds on that election and on the preceding contest, when an incumbent Boris Yeltsin locked horns with Communist Party leader Gennady Zyuganov in 1996.
This all changed in 2003, when the Central Elections Commission pushed a law through the State Duma banning any type of election betting during the official campaign period. 
Officials said gambling on elections, like extremist language in campaigning and bribing voters, threatened the process’ legitimacy.
Four months before Duma elections and a bit over half a year to the presidential vote, just one bookmaker in the country, Shans, is taking bets related to politics.
Pollsters of a sort, bookmakers often offer tantalizing insight for political junkies looking to predict the outcomes of elections, based on the idea that thousands of people putting money down on candidates have a vested interest in predicting the winner.
But Shans has been careful in offering bets not on election results, but on changes in the popularity ratings of individual politicians and parties.
“And we will stop taking bets when the election campaigns officially begin,” said Oleg Zhuravsky, head of Shans and executive director of the National Association of Bookmakers.
Campaigns usually start three months before voting day.
One option Shans offers lets you put your money — there is a 30 ruble ($1.15) minimum bet and a 3,000 ruble maximum — on whether the popularity rating of a political party will rise or fall from the previous week. The deadline for bets is Tuesday, after which gamblers wait until the Levada Center releases its weekly poll results on Wednesday.
Zhuravsky said Shans began collecting the bets in May and that the number of gamblers putting their money down had grown from 200 in the first week to 2,000 on Friday. He said the average bet was 500 rubles.
Wagers on individual politicians work differently. Gamblers are offered pairs of names, like first deputy prime ministers Sergei Ivanov and Dmitry Medvedev, and then bet on whether there will be a change in which one is more popular.
“If the politicians are running neck and neck, the payoff is not big,” Zhuravsky said. “But if an obvious outsider suddenly moves ahead, the payoff can be dozens of times higher.”
Asked why Shans is not accepting straight bets before the campaigns kick off, Zhuravsky said gamblers would not be willing to wait three months to find out whether they won. Besides the legal hurdles, it appears a lack of interest in politics among gamblers also stifles political betting.
Zhuravsky said, without providing revenue figures, that political bets accounted for only about 1 percent of the totals being placed, with the rest of the wagers coming on sports. Of those, 80 percent are on football.
Larisa Nikolskaya, deputy financial director of Offside bookmaker, said her company decided not to take political bets. “Our cashiers taking bets across Moscow say it is extremely rare that someone wants to place a bet on a party or a politician,” Nikolskaya said.
Meanwhile, some major foreign bookmakers, such as Britain’s Unibet and Ireland’s Intrade Prediction Markets, are taking bets on who will be the next president.
Unibet had Ivanov in front as of Friday, offering a $2.20 payback on a $1 wager should he win. Unibet is giving Medvedev less of a chance, so the potential return is bigger in the event he wins — $3.75 on a $1 bet.
Unibet’s list of 24 candidates includes Prime Minister Mikhail Fradkov (at 10-to-1 odds), his predecessor and opposition politician Mikhail Kasyanov (14-to-1) and Zyuganov (30-to-1).
The biggest payoff, $200 on every dollar wagered, can be had from a bet on Lyudmila Putina, jailed oil tycoon Mikhail Khodorkovsky or Chukotka Governor Roman Abramovich, should any of them land the president’s post.
Ireland’s Intrade offers contracts that will pay off 100 monetary units — the choice of currency is up to the gambler — if a certain figure becomes president.
Oddly enough, Putin, who is barred constitutionally from running for a third consecutive term, has topped the action, with 128 contracts sold for 11.5 units, meaning, for example, that an $11.50 bet returns $100.
A contract for Ivanov can be had for 41 units, while Medvedev’s costs 17. Despite the fact that the two are widely considered the front-runners to replace Putin, neither has had any takers.
Three betters have purchased contracts for opposition leader and former world chess champion Garry Kasparov, at a cost of seven units, while Liberal Democratic Party leader Vladimir Zhirinovsky has had two people offer up the 5.5 unit price for a contract should he be the country’s next leader.

TITLE: Delegates Dismiss Plane Claim
PUBLISHER: The Associated Press
TEXT: TBILISI, Georgia — A visiting delegation of Russian defense experts said Georgian officials had provided them with no convincing proof to support their assertions that a Russian plane entered the country’s airspace and dropped a missile.
A senior Russian official, meanwhile, said Friday that a report by a team of international investigators that backed the overflight claims was politicized, and the head of the Air Force Main Staff suggested Georgia had planted the missile debris.
Georgia says a plane coming from Russia entered the country’s airspace and dropped a missile on Aug. 6. The missile did not explode and no casualties were reported, but the incident escalated tensions between Georgia and Russia.
Russia on Thursday blocked a U.S. attempt to have the UN Security Council issue a statement on the incident.
The Russian experts, speaking in Tbilisi, said their two-day investigation had not confirmed any violations of Georgian airspace by Russian aircraft.
“We asked the Georgian side to show us the radar ... or at least to inform us about its characteristics, but we were refused,” Lieutenant General Igor Khvorov said at a news conference.
“The statement of international experts arouses bewilderment. It looks as if the statement was made not by experts, but by politicians. It is clear that they were only using the information from one side,” Russian special envoy Valery Kenyaikin said earlier.
Georgia’s deputy defense minister, Batu Kutelia, in turn, said “The Russian side has not shown constructiveness and practically evaded cooperation with the investigation.”

TITLE: New Liquid Rules For Passengers
AUTHOR: By Marina Kamenev
PUBLISHER: Special to The Moscow Times
TEXT: MOSCOW — Airline passengers will face restrictions on bringing perfume, juice, water and other liquids aboard flights from Aug. 27 as Russia joins the West in cracking down on liquids that could be used in a terrorist attack.
Liquids will only be allowed in transparent plastic containers in quantities of 100 milliliters, with the exception of medicine and baby food, which the passenger may be asked to sample, a decree issued Friday by the Justice Ministry said.
Passengers will be able to carry up to 10 containers on board, but the containers will be taped shut by ground staff for reopening on the plane.
Alcohol will be barred unless it is purchased in the airport waiting area, and a passenger will be required to provide a receipt as proof of purchase. The alcoholic drinks must be placed in the main carry-on luggage, be in their original packaging, and not have an alcohol content of more than 70 percent. Each passenger will be limited to 5 liters.
The rules will apply to domestic and international flights, and anyone who refuses to follow them will not be permitted on board the flight.
“These standards are set by the International Civil Aviation Organization, and we expect them to be successful,” said a Transportation Ministry spokesman, who declined to give his name.
U.S. and European airlines implemented similar rules after a scare in November that terrorists might detonate liquid explosives during a flight. 
Aeroflot could not say whether the restrictions would affect the prices of drinks on domestic flights. “That will depend entirely on our suppliers,” Aeroflot spokesman Viktor Sokolov said.

TITLE: Putin Orders Restart to Bomber Patrols
AUTHOR: By Ivan Sekretarev
PUBLISHER: The Associated Press
TEXT: CHEBARKUL TESTING RANGE, Chelyabinsk Region — President Vladimir Putin said he had ordered strategic bombers to resume regular long-range patrols Friday as the Air Force carried out maneuvers involving 20 strategic bombers over the Atlantic, Pacific and Arctic oceans.
One of those drills, involving 11 aircraft, prompted NATO member Norway to scramble F-16 fighter jets to observe and photograph the Russian planes as they flew over the Norwegian Sea.
The group of strategic bombers, early warning aircraft, fighter jets and refueling planes represented the biggest show of Russian air power in that region since the early 1990s, said Brigadier General Ole Asak, chief of the Norwegian Joint Air Operations Center.
“We haven’t seen that kind of activity in a very long time,” Asak said. “Not since the early 1990s. It was quite impressive to see.”
In announcing the policy change, Putin said halting long-range bombers’ flights after the Soviet collapse had affected Russia’s security as other nations had continued such missions — an oblique reference to the United States.
“I have made a decision to resume regular flights of Russian strategic aviation,” Putin said in televised remarks. “We proceed from the assumption that our partners will view the resumption of flights of Russia’s strategic aviation with understanding.
“Starting today, such tours of duty would be conducted regularly and on a strategic scale,” Putin said. “Our pilots have been grounded for too long. They are happy to start a new life.”
Soviet bombers routinely flew such missions to areas from which nuclear-tipped cruise missiles could be launched at the United States, but stopped in the post-Soviet economic meltdown. Booming oil prices have allowed the country to increase its military spending sharply.
“This is a significant change of posture of Russian strategic forces,” said Alexander Pikayev, a senior military analyst with the Moscow-based Institute for World Economy and International Relations. “It’s a response to the relocation of NATO forces closer to Russia’s western border.” NATO in recent years has expanded to include the former Soviet republics of Latvia, Lithuania and Estonia as well as the Czech Republic, Hungary and Poland.
The resumption of bombing patrols comes amid a growing chill in U.S.-Russian relations, strained over Washington’s criticism of Moscow’s democracy record, the Kremlin’s objections to U.S. missile defense plans and differences over global crises.
In Washington, U.S. State Department spokesman Sean McCormack sounded neutral about the patrols.
“We certainly are not in the kind of posture we were with what used to be the Soviet Union. It’s a different era,” he told reporters. “If Russia feels as though they want to take some of these old aircraft out of mothballs and get them flying again, that’s their decision.”
Putin spoke as Russian and Chinese forces held their first joint military exercise on Russian soil — a show of armed muscle that analysts said aimed to send a pointed message to the United States.
Friday’s Russian-Chinese war games, which took place near the Urals Mountain city of Chelyabinsk, involved some 6,000 troops from Russia and China along with soldiers from four Central Asian nations that are part of the Shanghai Cooperation Organization, a regional group dominated by Moscow and Beijing.
Putin, Chinese leader Hu Jintao and other leaders of the SCO nations attended the exercise, which followed a summit Thursday in Kyrgyzstan’s capital, Bishkek.
The summit concluded with a communique that sounded like a thinly veiled warning to the United States to stay away from the strategically placed, resource-rich region: “Stability and security in Central Asia are best ensured primarily through efforts taken by the nations of the region on the basis of the existing regional associations.”
Putin hailed the exercise “as another step to strengthen relations between our countries.” Hu said the maneuvers “underlined the SCO’s readiness to confront terror.”

TITLE: Radio Station Yanks BBC World Service Broadcasts
AUTHOR: By Alexander Osipovich
PUBLISHER: Staff Writer
TEXT: MOSCOW — The new owners of a Moscow radio station abruptly pulled the plug on the BBC Russian Service on Friday, raising new fears about media freedom.
Finam, an investment company that acquired the BBC’s host station, Bolshoye Radio, in early August, said the BBC’s broadcasts had been removed because they violated the terms of the FM station’s license.
“According to the terms of the license, we cannot retransmit content,” said Igor Yermachenko, a spokesman for Finam. He said the station would now start broadcasting original content.
Andrei Ostalski, editor of the BBC Russian Service, disputed the claim. “All the documents we have in our possession say that 18 percent of the content aired can be produced by the BBC,” he said by telephone from London.
Ostalski said that the BBC was appealing the decision to the Federal Service for Mass Media, Telecommunications and the Protection of Cultural Heritage, which deals with radio station licenses.

TITLE: Political Activist Released From Psych Clinic
PUBLISHER: The Associated Press
TEXT: MOSCOW — A member of an opposition group led by the former chess champion Garry Kasparov was released Monday from a psychiatric clinic after being held against her will for 46 days, a spokeswoman for the group said.
Larisa Arap, 48, a member of Kasparov’s group in the northern port city of Murmansk, was forcefully hospitalized July 5 in what opposition activists said was revenge for exposing alleged abuse of children in a local psychiatric hospital.
Her case was taken up by human rights defenders, who saw in it echoes of the Soviet-era practice of locking up dissidents in psychiatric hospitals.
Arap was released Monday from a psychiatric hospital in Apatit, a city 180 miles from Murmansk, and was picked up by her husband, said Marina Litvinovich, a spokeswoman for Kasparov’s United Civil Front. Arap was moved to the hospital farther from her home in late July.

TITLE: In Brief
TEXT: <b>Aquabike Horror</b>
ST. PETERSBURG (SPT) — A man on an aquabike rammed into a 44 year-old woman sitting on the bank of the Griboedov canal on Friday, severing one of her legs below the knee and breaking the other one, Interfax reported. 
The driver of the vehicle, who had a passenger, tried to flee the incident but he was subsequently located by Special Forces Police in speed boats. 
He tried to justify his actions by saying that he had only intended to spray the woman, and that the fin of the aquabike had got lodged on the bank of the canal.

<b>Swiss Plan Release</b>
WINTERTHUR, Switzerland (AP) — A North Ossetian architect convicted of killing an air traffic controller after losing his wife and two children in a midair plane collision may be released from prison Friday, his lawyer said.
The Superior Court of the canton of Zurich ruled that Vitaly Kaloyev could be released from prison Friday, lawyer Markus Hug said.
But prosecutors said they would appeal the decision with Switzerland's highest court.
Kaloyev was initially sentenced to eight years in prison for the premeditated homicide of Danish-born Peter Nielsen, an air traffic controller with Swiss company Skyguide who was the only person on duty when the planes — Bashkirian Airlines plane and a DHL cargo jet — collided on July 1, 2002, in airspace he was responsible for over Germany.

<b>Blood Birthday</b>
ST. PETERSBURG (SPT) — The Church on Spilled Blood held celebrations on Saturday marking the 100th anniversary of the completion of the church and its consecration on August 18, 1907, Interfax reported.
The event was commemorated with an open-air gala concert outside the walls of the church, including performances by the Governor’s Orchestra of St. Petersburg, the Chamber Choir of Smolny Cathedral, the Children’s Television and Radio Choir and the Five Corners Woodwind Quintet. Bell-ringing and fireworks provided a finale to the celebrations.
The church, also known as the Cathedral of the Resurrection of Christ, was built from 1883–1907, and the name refers to the blood of the assassinated Alexander II, who was mortally wounded on the site on March 13, 1881.

<b>Ammunition Defused</b>
LENINGRAD OBLAST (SPT) — A bomb-disposal unit dismantled explosives on Monday that had been discovered near the Moscow-St. Petersburg highway, Interfax reported.
“Two caches of ammunition from World War II were found on Sunday evening in the Pushkin District of the city, 50 meters from the St. Petersburg-Moscow highway, not far from an oil pipeline,” a source in the Ministry of Emergency Situations told RIA Novosti.
More than 90 items of ammunition were found, all dating back to World War II.

TITLE: Caring for Orphaned Pups and Howling Like a Wolf
AUTHOR: By Kevin O’Flynn
PUBLISHER: Staff Writer
TEXT: BUBONITSY, Tver Region — Vladimir Bologov was 18 when the wolves first answered his howl.
Sitting in the kitchen of his house in a small village 500 kilometers northwest of Moscow, he explains how to howl properly. You need to think of something sad, Bologov said.
“The feeling of being wet, hungry, with nowhere to go and no one to sleep with,” he said. “The stars must align.”
By the time the wolves spoke to him, Bologov, 42, already had years of experience following, tracking and hearing wolves in the forest of the Tver region with his father, also a wildlife biologist.
Bologov and his family live in Chisty Les, a village in an isolated part of the Central National Park. The village is a biological station set up by the former director of the park, Valentin Pazhetnov, who has worked to rehabilitate bear cubs, orphaned or abandoned by their mothers, for more than 10 years. Specialists from around the world came to the village in May for a conference on reintroducing bears into the wilderness.
Bologov has followed in Pazhetnov’s footsteps but with a different carnivore. He takes in orphaned wolf cubs, more than 30 of which have been rehabilitated in the last decade. Each day Bologov visits the forests where he has two sets of wolf cubs, a group of four and a group of seven who rely on him for their food. The cubs are fed within a protected area, where they can learn the basics of wolf life without fear of being attacked or having to hunt or scavenge for food.
Eventually, they head off into the forests by themselves.
“The work is done on enthusiasm alone,” said Bologov, because feeding the wolves and keeping the project running requires about $100 per day.
Driving along muddy tracks to where seven of the wolves live, Bologov talks nonstop about ideas to help his wolves, from regenerating abandoned villages in the area to the film editing suite that has been set up in one house nearby. NTV will run a series of films in September cut from the thousands of hours of footage he has made over the years.
As Bologov’s SUV turns a corner, Laetitia Becker, 24, a biologist from Strasbourg, France, emerges from the forest with a blur of fur scrambling at her feet, running around, fighting and biting. Seven wolf cubs greet him and continue playing in the small clearing in the woods.
The image does not fit with the wolves that haunt Russian fairy tales, gobbling up innocent grandmothers and preying on the herds of good country folk. As in many European fairy tales, the wolf is the ideal enemy, coming out of the forest to pick off whomever he chooses.
When President Vladimir Putin wanted to compare the United States to an animal, he chose the wolf to create an image of a dangerous, bloodthirsty and stubborn rival.
“Comrade Wolf knows whom to eat, he eats without listening, and he’s clearly not going to listen to anyone,” Putin said last year.
In Soviet times, hunters killed up to 50,000 wolves per year. Now, permission to shoot 15,000 wolves is granted each year.
A passionate defender of the wolf, which grows up to 1 1/2 meters long and can travel up to 95 kilometers per night, Bologov contends that it is not a particularly dangerous animal.
“There is no need to say the wolf is special or any different from the fox,” said Bologov, claiming they are far worse for stealing livestock. “The fox is also a carrier of rabies — with wolves it is a rarity.”
Bologov recently lost his chickens and cat — not to a wolf, but to a wildcat.
People who live near wolves are not scared, Bologov said. “Children walk to school, people collect mushrooms, nobody is scared that a wolf will eat them ... the reaction comes from people where there aren’t any wild animals.”
“There are 40,000 to 45,000 wolves,” he said, “but we have 200,000 bears in Russia and nobody says we have too many bears.”
One of Bologov’s studies attempts to track wolves and show that they often visit villages without doing any harm and that attacks on domestic animals are rare.
Wolves do not attack people that often today. In the 1940s, however, attacks were more common. One explanation is that the wolves developed a taste for human flesh because of the huge number of bodies that lay in the devastated countryside following the war.
Becker first met Bologov when she came to Chisty Les in 2004 as a volunteer. She fell in love with the forest and returned the next year planning to stay watching these wolves until they decide to leave, a process that can take 18 months or longer.
She has been observing the cubs for months. Every day she heads up to the cabin in the forest. As part of one study, she keeps notes of their every move. In another part, she follows a different cub with a GPS transmitter and then uploads the data onto a computer back at her cottage outside the forest.
She rotates surveillance of the seven cubs each day and has named each one after the day on which she follows it. She chose Spanish names of the day, she said, and giggles when talking about miercoles, or Wednesday, but is serious when she says the name is for scientific reasons and that she never calls them that out loud.
“It’s not my dog,” she said, “and in the future, it is better if they are not used to the human voice.” With wolf hunting still a national tradition, fear of the human voice is necessary.
The cubs are part of a scientific experiment with set rules, but she admits that developing an attachment is inevitable. Her previous set of wolves went into the wild unexpectedly last year.
“It was hard. I did not think that it would happen,” she said. “I would prefer to have been ready for it emotionally ... but in general, if they are alive somewhere, I am very happy as it is the goal for the project. I don’t want to keep them.”
Wolves are social and intelligent animals and ideal subjects for animal behaviorists. “They live in a group, they play in a group and they interact. The interaction is very interesting as they are communicating, smelling and playing with each other,” said Becker.
Bologov’s other group of wolves is being watched by Andrei Polyarnov, a behavioral scientist from the Moscow Ecology Institute who lives in an abandoned village near the 1 1/2-hectare enclosure where four cubs live. He and his students study the group of four, recording wolf howls and whimpers and studying how the animals interact.
Other volunteers also help by paying to stay and assisting at Chisty Les. Walter Heijder, a biology teacher from Holland, bore the bites of a night in the forest waiting for wolves. But the bites were from mosquitoes — not wolves — as it had been a fruitless night waiting for wolves to come.
Bologov was wondering where to put his latest charge. The day before, some hunters had called to tell him they had found a wolf cub in the neighboring region. Either take it, or we will kill it, the hunters told him. He instantly agreed and began to wonder where he would get the $100 or $200 the hunters would demand for the cub.

TITLE: Ilim Agrees to Form $1.6Bln Venture
PUBLISHER: Reuters
TEXT: NEW YORK — U.S.-based International Paper said Friday that it had signed a definitive agreement to form a $1.6 billion joint venture with Russia’s leading forestry firm, Ilim Holding.
International Paper, which signed a letter of intent with Ilim in October, said it would pay about $650 million for a 50 percent stake in the venture, to be called Ilim Group. It expects to close the deal in the fourth quarter.
“We view the deal ... as positive for IP both from a strategic and financial standpoint and continue to view the company’s growing emerging market presence as an attractive long-term strategy,” JPMorgan analyst Claudia Shank said in a note to clients.
The partners will invest $1.5 billion in Ilim’s four pulp mills over the next five years to upgrade equipment, increase production capacity and make high-value paper products.
“The joint venture with Ilim positions us very well within low-cost, high-growth markets in Russia and Asia,” said International Paper’s CEO, John Faraci.
JPMorgan’s Shank said the deal could add at least 20 cents per share to International Paper’s 2008 earnings, while adding that the deal offered the largest U.S. paper company an opportunity for margin and revenue improvement.
Credit Suisse analyst Mark Connelly said that deal would be cash flow negative for a few years, however.
“The investment will result in cash outflows for the first six years, so while the math says the deal may be accretive, the project is expected to result in negative free cash until about 2013,” Connelly said in a research note.
Ilim Holding has an enterprise value of about $1.6 billion and produces more than 2.5 million tons per year of market pulp, uncoated papers and packaging for sale to Russia and Asia.
The company reported earnings before interest, taxation, depreciation and amortization of about $212 million in the first half of 2007 and full-year EBITDA is forecast to surpass $400 million.
President Vladimir Putin has called on the country’s forestry industry to invest more in processing and cut exports of logs. The government this year announced export duties on unprocessed timber to encourage development of the domestic industry.
Ilim Group chairman Zakhar Smushkin said the joint venture, which was approved by the Federal Anti-Monopoly Service in June, was a response both to global market challenges and appeals from the government.
“I hope this alliance will not just give a powerful impetus toward Ilim Group’s development but will also open the way for the inflow of investment and know-how that our industry so badly needs,” Smushkin said.
Ilim has grouped its pulp and paper mills, the largest in European Russia and Siberia, for inclusion in the joint venture.
The venture will not include International Paper’s pulp and paper mill in the town of Svetogorsk, in the Leningrad region. Ilim Pulp will, meanwhile, fold its wood-products business into a separate holding company that will be Russia’s largest timber processor.
The joint venture will be headquartered in St. Petersburg. Smushkin will chair a board that will include four directors from either company. International Paper senior vice president Paul Herbert will be the joint venture’s CEO.

TITLE: Bank Accused Of Ripping Off Clients
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The General Prosecutor’s Office has requested that Bank Russky Standart abolish a number of practices that were found to violate consumer rights in a case that could have a dramatic impact on the banking industry. The bank has been told to stop charging accounting commissions and that it should recalculate client debt without forfeit, something that has been forcing many borrowers into a spiral of ever greater debt.
“Rustam Tariko, chairman of the board of directors of Bank Russky Standart was invited to the General Prosecutor’s Office and it was suggested that the bank stop violating customer rights,” the General Prosecutor’s Office said last week in a statement.
Following the request, Russky Standart has “abolished, from Aug. 15, 2007, monthly commissions for accounting services for all loans and the recalculation of client debt and abolished penalties for delays in payments and forfeits. It has also stopped selling the rights for debt claims to the Agency for Debt Collecting,” the statement said.
A popular advert for Russky Standart has the words: “You can get a credit card in 15 minutes in any branch. To get a card you just need a Russian passport.” Such leniency towards client creditability made Russky Standart one of the largest consumer lenders in Russia.
According to the last financial report audited by PricewaterhouseCoopers, by the end of 2006, Russky Standart’s loans and advances to customers accounted for 163.7 billion rubles. The bank earned a net interest income of 52.15 billion rubles. Annual profit was reported at 14.5 billion rubles.
In an attempt to simplify the procedures Russky Standart goes as far as sending credit cards by post, despite the fact that the clients are liable for any spending made by unauthorized persons.
In June this year the General Prosecutor’s Office claimed that Russky Standart did not inform its clients about all the commissions and fees related to loans. As a result, the actual interest rate exceeds client expectations several times over.
At a forum on www.biznet.ru one Russky Standart client posted the following comment: “I took out a loan of 25,000 rubles, and now I owe 28,000, despite the fact that I have already paid back about 10,000. My friends told me that if I keep paying 1, 500 a month I could be in debt for the rest of my life.”
Someone else said the bank accused him of delays in monthly payments. A Russky Standart representative demanded that he pay the whole debt at once, or else increase the initial debt of 78,000 rubles to 100,000 rubles.
“A month later somebody called me saying that he was in debt to a debt collecting agency. He demanded that I bring the whole sum in cash. I consulted a lawyer and sent a request to the bank saying I was being blackmailed by people I don’t know and with whom I did not sign any agreement, and I provided the police and the banking commission with copies of this letter,” the post said.
“Russky Standart is one of the leaders in consumer loans. If it’s not a political decision, we can expect smaller banks to follow their example to avoid problems with supervising bodies. Those banks that do not voluntarily come clean could face sanctions from the Central Bank,” said Georgy Pchelintsev, lawyer at Beiten Burkhardt St. Petersburg.
“Civil legislature allows debt to be sold to debt collecting agencies, unless it is prohibited by an agreement with the borrower. However it was reported in the mass media that Russky Standart worked with an affiliated debt-collecting agency and this provoked objections from the Central Bank. The Central Bank suspected Russky Standart of manipulating their financial reports,” Pchelintsev said. The public relations department at Russky Standart confirmed that accounting commissions had been abolished. As for forfeits, they can be abolished only for those borrowers who applied and get the bank’s approval to recalculate their debt.
“I’m pleased that such attention has been paid to the details of our business. Considering the importance of the issues discussed, the bank quickly changed its credit policy,” said Rustam Tariko, chairman of the board of director of Bank Russky Standart.

TITLE: Intel to Customize Solutions for the Dacha
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Intel Corporation has launched an anthropological and ethnographical research project in Russia — by studying the behavior of the middle class, and how they use information technologies at their dachas, Intel hopes to come up with solutions and products customized for Russian country-homes.
“We are focused on how people around the world use technologies at home. Engineers often have an inappropriate understanding of technologies,” Francoise Bourdonnec, head of Domestic Designs and Technologies Research Group at Intel, said Friday at a press conference in St. Petersburg.
Intel said there are about 1.6 billion households around the world. According to Intel, people in Los-Angeles and Singapore use the same technologies but in different ways. For example, in one UK residential flat researchers found a total of 12 TV sets being used.
One of the discoveries was that “people don’t want all of the information all of the time and everywhere,” Bourdonnec explained. Regardless of technical capabilities, people limit the use of a TV or computer to protect their children from inappropriate programs and web sites.
Only after introducing a special “lock” mechanism did Intel manage to significantly increase the sales of personal computers in China because Chinese parents wanted their children to use computers for studying and not for gaming and browsing over the web.
Bourdonnec and her group have recently completed research in 16 countries, spending two to four weeks on each project. 
Research focused on cell phones, TV sets and PCs. The group presented the results to Intel engineers and indicated new development opportunities.
Among innovations inspired by the research Bourdonnec mentioned the introduction of public PCs in India, shock-proof and dust protected, and school PCs, which will be offered on the Russian market soon.
The results of the research in Russia will be presented in January next year at the International CES – a forum and exhibition on consumer electronics in Las Vegas.
“Considering Intel’s goals —modifying existing products for the Russian market and inventing new product categories — this is the best research tool they could have used,” said Mikhail Podushko, director for development at WorkLine Research.
“Ethnography works best when identifying and describing social and cultural differences in consumption across various countries,” Podushko said.
Ethnographical research is not something new or particularly rare for large companies in Russia. Since 2000, WorkLine Research completed a number of such projects for the producers of electronics, medical companies, suppliers of consumer chemicals and IT companies. One of the latest projects was ordered by Microsoft and BBDO.
“Studying the real life of consumers and participating in their day-to-day activities, researchers see patterns of behavior inaccessible by way of traditional market research. They see hidden needs, non-declared criteria of choice, untraditional ways of using goods,” Podushko said.
When the research was completed, Samsung managers were surprised to find out that some Russian families use vacuum cleaners to catch insects and whitewash ceilings, Podushko indicated.
The research also showed that people did not like the smell of air after vacuum cleaning. “It gave an opportunity for innovation — the company offered vacuum cleaners with an aromatizing function,” Podushko said.
Through ethnographical research the companies get a multifactor model of consumer behavior and see emerging market trends, Podushko added.
Intel employs 40 people in its ethnographical and anthropological research departments. Bourdonnec admitted that Intel is not a pioneer in this field. She listed Microsoft, Pioneer and Rico among the technological companies that use ethnographical research. 
All of them are following in the wake of consumer goods companies like Procter & Gamble, which first introduced such methods.

TITLE: Shareholder Denies Juice Takeover Talks
PUBLISHER: Reuters
TEXT: MOSCOW — A key shareholder in juice maker Lebedyansky denied that the company was in sale talks with PepsiCo.
A Lebedyansky spokesman confirmed the details of an Interfax report on Friday in which Nikolai Bortsov, Lebedyansky’s former director and an owner of a 30 percent stake in the company, was quoted as telling reporters that there had been no discussions with PepsiCo, the world’s No. 2 soft drink maker.
People familiar with the matter said Monday that PepsiCo was in talks with Lebedyansky and Kommersant reported that the U.S. firm had agreed to buy more than 76 percent of its shares for $1.5 to $2 billion before the year-end.
Bortsov’s son Yury, Lebedyansky’s chairman, has 25.13 percent in the firm, which has over 30 percent of the country’s juice market, while 23.87 percent of shares are freely floated.
PepsiCo, which currently controls just 2 percent of Russia’s juice market through the Tropicana brand, does not have its own juice-producing facilities in the country.
Analysts have said the deal became more likely after private equity group Lion Capital agreed to buy PepsiCo’s previous target, the country’s No. 3 fruit juice maker, Nidan Soki. Sources familiar with the matter said Deutsche Bank was advising Lebedyansky while Dresdner bank and Renaissance Capital was advising PepsiCo on the deal.

TITLE: In Brief
TEXT: <b>Railway Net </b>
MOSCOW (Bloomberg) — Russian Railways, the country’s rail monopoly, doubled first-half profit to a record 25.3 billion rubles ($983 million) as it carried more cargo and passengers, Interfax reported Monday.
The earnings were calculated using Russian accounting standards, the news service said, citing a company report. 

<b>Deripaska, Alrosa Team</b>
MOSCOW (Bloomberg) — Russian billionaire Oleg Deripaska may team up with diamond miner Alrosa in the bidding for two coal deposits in Siberia, Kommersant reported Monday.
Deripaska’s Basic Element may form a group with state-run Alrosa and Vneshekonombank to bid for Yakutugol and Elgaugol, which Russia’s Federal Property Agency is scheduled to auction on Oct. 5, Kommersant reported, citing an unidentified official at Alrosa.
The starting price in the combined sale of the two coal companies is 47.4 billion rubles ($1.8 billion). 

<b>Sibir Stake</b>
MOSCOW  (Bloomberg) — Gazprom Neft, the oil division of Gazprom, offered to buy out Sibir Energy Plc’s shares in a disputed Siberian oil production unit, Vedomosti reported Monday, citing Gazprom Neft spokeswoman Natalya Vyalkina.
Gazprom Neft didn’t specify what price it’s willing to pay Sibir owner Shalva Tchigirinsky and his business partners in a letter sent Aug. 13, Vedomosti cited Vyalkina as saying.
Sibir’s 1 percent stake in the unit is worth about $60 million, Vedomosti said, citing Valery Nesterov, an oil analyst at Troika Dialog in Moscow.
Sibir Energy has been fighting to regain control of the unit, claiming in court that Sibneft, as Gazprom Neft was formerly known, illegally diluted its 50 percent stake in 2002 and 2003. 

<b>Arming Airports</b>
MOSCOW (Bloomberg) — Rosoboronexport, Russia’s arms trader, will take over jet-fuel sales at the nation’s airports to strengthen state oversight of the aviation industry.
Rosboronexport set up a subsidiary to upgrade and expand existing fuel stations and create a service network for commercial carriers, the Moscow-based company said in an e-mailed statement Monday.
“The measures will allow us to stabilize the jet-fuel market and make it transparent,’’ Rosoboronexport said. It will also “bring jet-fuel prices in line with their real cost.’’

<b>Deripaska Backing</b>
MOSCOW (Bloomberg) — Russian billionaire Oleg Deripaska gained European Union approval to buy 30 percent of Strabag SE, Austria’s biggest builder.
The stake will be controlled by Rasperia Trading Ltd., Derpipaska’s Basic Element holding company said in an e-mailed statement Monday. Russian regulators also approved the deal.
Strabag sold a stake worth around 1.2 billion euros ($1.6 billion) to Deripaska, Russia’s second-richest man, in April. The Vienna-based company, with around 10.4 billion euros in annual sales, plans to sell shares to the public in October.

<b>Black Sea Fines</b>
MOSCOW (Bloomberg) — Container terminals at Russia’s Black Sea port of Novorossiisk have come to a virtual standstill after fines were increased for the transportation of overweight cargoes by road, Kommersant reported Monday. The volume of loads taken from two terminals has fallen by 70 percent since the higher fines were imposed Aug. 11, the Moscow- based newspaper said, citing Dmitry Bolotov, the port’s deputy general director.
Freight charges will rise as haulage companies increase the number of trucks, according to Kommersant.

<b>Deutsche Coverage</b>
MOSCOW  (Bloomberg) — Coverage of Baltika Breweries and Wimm-Bill-Dann, Russia’s biggest beer and dairy companies respectively, was discontinued at Deutsche Bank AG.
Deutsche will no longer issue recommendations on Baltika, controlled by Carlsberg A/S and Scottish & Newcastle Plc, because ``there are almost no institutional investors left as company shareholders,’’ analysts Alexey Krivoshapko and Maria Kolbina said in a research note Monday.
Wimm-Bill-Dann, part-owned by Groupe Danone SA, was discontinued because “operations have improved considerably and our previous forecasts are no longer valid,’’ the analysts said.

<b>Lenta Plans </b>
ST. PETERSBURG (Bloomberg) — Lenta, a Russian retailer, plans to borrow 200 million euros ($270 million) from a group of international banks, Interfax reported Monday, citing an unidentified person from the banking industry.
     The company will use some of the proceeds of the three-year loan to refinance 90 million euros of debt taken out last year, according to the news service.
<b>Wild Opening</b>
LONDON (Bloomberg) — Wild Orchid, Russia’s biggest lingerie retailer, will open its first store in the U.K. under the brand name “Vendetta,’’ the Financial Times reported Friday.
The store will be based in the Bluewater shopping center in Kent, about 20 miles east of London. Closely held Wild Orchid also plans another three stores in London by the end of this year, including one on Oxford Street in the heart of London’s West End shopping area, the newspaper said.
The company is considering stores in Italy, France and China, the Times reported.

<b>J.W. Construction</b>
WARSAW (Bloomberg) — J.W. Construction Holding SA founder Jozef Wojciechowski boosted his stake in the largest Polish homebuilder by 0.3 percent to 80.2 percent and said he plans to keep buying shares.
“At the current price level, I will certainly keep buying,’’ Wojciechowski, the company’s largest shareholder, said in a telephone interview from Warsaw Friday.
J.W. Construction was down 2 percent at 49 zloty as of 12:31 p.m. Friday on the Warsaw Stock Exchange. The shares have dropped 39 percent since they started trading June 4, pushing the company’s market value down to 2.68 billion zloty ($938 million).
The company, which sold a 20 percent stake for 777 million zloty in its initial public offering, plans to buy land for development in Warsaw and other major Polish cities. The builder may also enter Ukraine and Russia, as well as Romania and Bulgaria, the European Union’s two most recent entrants.
Wojciechowski bought 51,454 shares on Aug. 14, the company, based in a suburb of the capital city, said in a regulatory statement late Sunday. He bought 116,547 shares for 6.3 million zloty, or an average of 53.99 zloty apiece, in 11 transactions from Aug. 8 to Aug. 14, according to statements over the period.

<b>Hochtief Plans </b>
BERLIN (Bloomberg) — Hochtief AG plans a joint bid with Russian billionaire Oleg Deripaska for the overall planning of new constructions in the city of Sochi which will host the 2014 Winter Olympics, Boersen-Zeitung reported Friday, citing a company spokeswoman it didn’t identify.
To have Deripaska on board, who is said to have “best contacts’’ to the Kremlin, may be helpful to win the contract, the newspaper reported. Investments in the south-Russian city will probably amount to between 15 and 20 billion euros ($20-$27 billion), Boersen-Zeitung said, citing Hochtief Chief Executive Officer Herbert Luetketratkoetter.
Sochi’s airport is already owned by Deripaska, so Hochtief’s chances of receiving an order for the expansion and operation of the airfield are good, the newspaper said.

<b>HP Factory</b>
MOSCOW (Bloomberg) — Hewlett-Packard Co. and Foxconn are planning to spend $50 million on building a computer factory near St. Petersburg, Kommersant reported Monday, citing Foxconn’s chief in Russia, Andrei Korzhakov.
The plant will make Hewlett-Packard computers and liquid crystal monitors, initially for the Russian market and later for export, the newspaper said.
Construction of the facility will begin in the fall this year and will take 12 months to complete, Kommersant said.

TITLE: China, Kazakhstan to Link Pipe to Caspian
PUBLISHER: Combined Reports
TEXT: ASTANA, Kazakhstan — China and Kazakhstan agreed Saturday to expand an oil pipeline that will link China to the Caspian Sea, giving Beijing direct access to an energy-rich region controlled by Kazakhstan.
China has become increasingly assertive in Central Asia, viewing neighboring Kazakhstan, an ex-Soviet state the size of Western Europe, as a key source for raw materials to fuel its booming economy.
Chinese President Hu Jintao, in Kazakhstan on a state visit, agreed with Kazakh counterpart Nursultan Nazarbayev to expand the Atasu-Alashankou pipeline by 700 kilometers westward to link it to the Caspian Sea, home to many Kazakh oil and gas deposits.
“These are really big projects, and today we reached agreements on these matters,” Nazarbayev told reporters alongside Hu in the capital, Astana, after signing agreements on cooperation in energy, metals and other sectors.
Hu and Nazarbayev also agreed to route a proposed new gas pipeline from Turkmenistan to China through Kazakh territory, embedding Kazakhstan as a transit nation after months of talks.
The pipeline is due to be built by 2009 and pump 30 billion cubic meters of gas to China.
The agreement signed by Hu and Nazarbayev followed last month’s agreement between China and Turkmenistan on a 30-year gas contract. China and Turkmenistan had already agreed to build the pipeline, but gas prices had not been determined.
Turkmenistan’s natural gas reserves of 2.8 trillion cubic meters, the second biggest among all ex-Soviet republics after Russia, are a major prize in the region. But Turkmenistan has been forced to export its gas through Russia and Ukraine, which have their own gas companies that have squeezed out their smaller rival. Turkmenistan is eager to break free from Russia’s influence and sees exports to China as one solution.
The existing $800 million, 966-kilometer oil pipeline, from Atasu in Kazakhstan to Alashankou in China, is part of Beijing’s plan to strengthen energy supplies through more long-term contracts from oil producers.
China sees its expansion as a step toward entrenching itself in Central Asia, where energy trade is dominated by Russia and most of the pipeline infrastructure sends Caspian oil and gas west to Europe rather than east to the growing Chinese market.
Kazakhstan has been careful to pursue equally pragmatic contacts in both directions.
“We are strengthening our eastern direction but that does not mean we are weakening our western direction,” Uzakbai Karabalin, president of Kazakh state oil company KazMunaiGaz, told reporters after the Hu-Nazarbayev meeting.
He said the Caspian extension could be built as soon as 2009 but did not say how much it might cost. Analysts say the pipeline can send China 5 million tons of Kazakh oil per year and could be expanded to supply four times as much.
As for the Turkmen project, Karabalin said the Kazakh part of the pipeline, which will run through the south of the country, was also likely to be completed by 2009. “Our plans are very aggressive,” he said.
Separately, Hu and Nazarbayev agreed to work closer in the steel sector, signing a deal to supply iron ore from Kazakhstan’s Sokolov-Sarbai plant, part of the Eurasian Natural Resources Corporation, to China.
They also agreed that the Export-Import Bank of China would extend a $292.8 million, 10-year loan to the ENRC, a Kazakh metals major considering a float on the London Stock Exchange, to help finance construction of a primary aluminum plant in Kazakhstan.
ENRC is building the 250,000-ton smelter in the northeastern city of Pavlodar and expects production to start next year. ENRC already received a $1.48 billion loan in July to help fund its expansion.
The Kazakh government, which owns 24.8 percent of ENRC, in March said that it planned to sell shares to local investors before an initial public offering in London. The rest of the company is owned by Alijan Ibragimov, Alexander Machkevich, Patokh Chodiyev and Kazakhmys chairman Vladimir Kim.
ENRC, which runs five iron-ore mines in Kazakhstan, also agreed to supply the steelmaking raw material to a new venture in China. The company will sell an unspecified amount of iron-ore concentrate to a new plant set up by International Mineral Resources of the Netherlands and China’s Jiuquan Iron & Steel Group. The venture will make rolled steel and steel pipes in northwest China. Kazakhstan borders China, the world’s largest consumer of commodities such as iron ore and copper.
Reuters, AP, Bloomberg

TITLE: Gas Storage in Ukraine Set To Resume, Russian Facilities Full
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom agreed to store as much as 2.5 billion cubic meters of gas in Ukraine this winter because of a lack of space in Russian storage facilities, Vedomosti reported Friday.
Gazprom stopped storing gas in Ukraine two years ago after a dispute over payment for 7.8 bcm of gas held in Ukrainian underground storage containers, the newspaper said.
A warm winter this year decreased demand for gas, leaving Russian storage facilities too full to meet Gazprom’s storage needs and forcing the company to return to Ukraine, Vedomosti said. 
Gazprom’s gas storage capacity in Russia is about 65 bcm, the newspaper said.
The company’s contract for Ukrainian storage runs from October to March 2008, said Andrei Knutov, spokesman for RosUkrEnergo, a Russian-Ukrainian gas venture half-owned by Gazprom.
Gazprom has assigned RosUkrEnergo to handle the storage in Ukraine, the newspaper reported.

TITLE: Russia Attracting Investors
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Russia was the leader among East European countries in attracting foreign direct investment into real estate in the first half of 2007, according to the latest research by real estate consultancy Knight Frank.
A number of western investment funds and banks, including Morgan Stanley, Merrill Lynch, Goldman Sachs, Immoeast, Quinn Group, JER Partners and Rutley Russia, have recently announced plans to invest millions of dollars into commercial and residential real estate in Moscow, St. Petersburg and the other big Russian cities.
“The rate of capitalization in Russia is substantially higher than those found in the rest of Europe,” said Jeremy Oates, Managing Director of Knight Frank Russia and CIS.
Institutional investors are attracted by the large potential found in all real estate market segments, high yields and a quicker, compared with the rest of Europe, return on investment.
“Primary yields for Class A offices purchased by investors are estimated at eight to 10.5 percent, for high quality retail premises, nine to 11 percent, and 10 to 12 percent for industrial permises,” Oates said.
In terms of market yields Russia is followed by Poland, the Czech Republic and Romania. The annual rate of capitalization on these markets varies between six percent and eight percent.
“Many Russian developers prefer to keep ownership of the properties until the market situation allows them to demand higher prices. For example, in the Moscow market for offices, the sale price for Class A properties went up by 20 to 30 percent, and this is an extremely good indicator,” Oates said.
According to Knight Frank, major problems for foreign investors in Russia include the lack of completed projects that meet market requirements, and high asking prices.
“In a situation like this, investors often agree to pay higher prices to finish uncompleted projects before they enter the market,” Oates said.
Instead of purchasing uncompleted projects investors can also set up joint enterprises with Russian companies, for example, the projects carried out by Raven Russia, London Regional Property Fund, Quinn Group and TriGranit.
“Usually western partners who contribute to the financing of a project, share their experiences and technology, whereas their Russian counterparts take administrative responsibility for obtaining all the necessary documentation, forming agreements with sub-contractors and so on,” said Evgeny Semyonov, Director of Capital Markets at Knight Frank Russia and CIS.
Retail still attracts the highest levels of investment. According to Knight Frank, this sector experienced the largest number of transactions in 2006 and the first half of 2007. The retail sector remains the most popular among tenants as the levels of domestic consumption and real disposable incomes rise.
In the remaining part of 2007 Knight Frank expects further growth in the activity of large foreign and domestic investors in the Russian real estate market, especially in the development of new projects.
At the same time, Global Property Guide ranks Russia as a country with extremely high risks related to the acquisition of real estate. According to Global Property Guide research, total roundtrip costs are between 20 and 25.5 percent of the property value — among the highest in Europe.
Other negative factors indicated by Global Property Guide include moderate yields, high rental income tax & VAT, high transaction costs, pro-tenant rental market and ownership issues.
“Rents are rising but not as fast as property prices, leading to a decline in rental yields,” the report by Global Property Guide said.

TITLE: Clawing Metals in Siberia’s Frozen Land
AUTHOR: By Alex Nicholson
PUBLISHER: The Associated Press
TEXT: NORILSK, Krasnoyarsk Region — Norilsk Nickel’s company anthem praises its smelters as “the light in Russia’s window,” but even in summer the Arctic city sits wreathed in a gray cloud of pollution.
This city of 200,000 started life in 1935 as one of Stalin’s gulag slave labor camps, which exploited tens of thousands of supposed enemies of the state.
Norilsk’s original work force was shipped here by prison barge. The unlucky zeks, as they were called, found themselves 300 kilometers above the Arctic Circle, where temperatures can drop to nearly minus 50 degrees Celsius.
The city is home today to the biggest source of nickel and palladium in the world. A closed city in Soviet days, Norilsk still does not welcome casual visitors: Foreigners who show up uninvited are put on the next plane out.
Norilsk is also one of the most polluted cities on earth. The towering smokestacks of its three nickel and copper smelters pumped 1.8 million tons of sulfur dioxide into the air over the city last year. That is three times the total emissions from Britain for the same period. Dust from the plants is laden with cancer-causing metal particles.
It’s hard to tell where the factories end and the city begins, as the smoking pools of industrial water, pylons and steaming pipes that snake around the smelters give way to streets lined with shabby apartment blocks. Buildings sit 1.5 meters off the ground on steel beams because foundations would conduct heat and melt the permafrost, causing them to sink.
Norilsk has a hard time holding on to its youth. Sergei Romashkin, 21, will soon finish his university studies and dreams of working in computer design in Moscow, half a continent away.
“I don’t want to spend my whole life here,” he said. “There’s no greenery in the town, the trees don’t grow properly. There aren’t trees, just sticks.”
Norilsk’s chief product is nickel, a key ingredient in stainless steel. To extract it, workers at the Taimyr mine, one of seven belonging to Norilsk Nickel, descend over a kilometer underground into 150 kilometers of tunnels.
Deep beneath the Talnakh mountains, they drill and blast out the ores. Amid the thundering roar of machinery, the rocks are crushed and milled into a powder. The powder is mixed in giant vats, where chemicals are added to bring a gray foam of nickel concentrate to the top, which is then shipped to Norilsk’s three nickel and copper smelters.
Workers are dwarfed by the converter furnaces. Ninety-ton cauldrons of molten nickel and copper matte swing overhead. Liquid copper and nickel is poured into panel-shaped molds, then dipped in acid baths and further refined using electrolysis. The rich slime that forms at the bottom of the electrolysis baths is gathered up, and from these dregs, Norilsk reclaims palladium and platinum as well as zinc, cobalt and lead.
Workers get nearly three months off each year due to the harsh conditions, and salaries are good. Wages rose 40 percent in April; now the average salary is $1,500 per month — three times the national average.
Vladimir Bekker, chief engineer at the Nickel Plant, the oldest of the three factories, says Norilsk is very different now than in the 1930s.
“Every age has its tasks,” he said. “Back then it was the gulag, it wasn’t about keeping people alive. ... The goal was to produce metal, to win the war, then to rebuild the country after the destruction. It wasn’t about people.”
Now, he said, the company is trying to address the environmental challenges and the health and safety of its workers.
“Of course we know what still needs to be done. And there isn’t enough money for some things despite the factory’s riches,” he said. “We are taking small steps, but we’re not standing still.”

TITLE: Norilsk Goes Big In Africa
PUBLISHER: Reuters
TEXT: JOHANNESBURG, South Africa — Norilsk Nickel will spend over 4.4 billion rands ($588.6 million) on two projects in Botswana and South Africa, it said Friday.
Norilsk will develop the Tati nickel mine in Botswana and the Nkomati nickel mine in South Africa, which it acquired after buying LionOre, Tav Morgan, Norilsk deputy director, told a news conference in Johannesburg.
Morgan said these projects, along with last week’s acquisition of over 97.7 percent of LionOre Mining International, strengthens Norilsk’s portfolio of assets in attractive mining regions.
“It consolidates our position in Australia, while gaining exposure in Southern Africa,” Morgan said.
Norilsk said Tuesday that it had acquired over 97.7 percent of the shares in Canada’s LionOre for 6.8 billion Canadian dollars ($6.4 billion), paving the way for a mandatory purchase of the remaining shares.
Peter Breese, LionOre chief operating officer, said the Tati mine would be Norilsk’s flagship project in Southern Africa.
Breese said Norilsk has earmarked $482 million of capital to build the world’s first Activox refinery.

TITLE: Sakha Coal Auction to Start at $1.9Bln
AUTHOR: By Robin Paxton
PUBLISHER: Reuters
TEXT: The government will sell majority stakes in two firms with licenses for large coal deposits in the republic of Sakha as a single lot and has set a starting price of $1.85 billion for the Oct. 5 auction, the Federal Property Management Agency said Friday.
The fund said it would sell 75 percent minus one share in Yakutugol and 68.86 percent of Elgaugol, plus associated infrastructure, in a long-awaited auction that has drawn interest from firms including steelmaker Mechel and diamond monopoly Alrosa.
“It would have been possible to raise more money by holding two separate auctions. This form of auction can be explained by the desire to sell Elgaugol,” said Kirill Chuiko, metals and mining analyst at UralSib bank.
“Elgaugol is a complicated project,” he said. “It wouldn’t be easy to find someone prepared to invest several hundred million dollars then to wait eight to 10 years for a return.”
Russia is the world’s fifth-largest coal miner and the country ranks third in terms of exports, behind Australia and Indonesia.
Elgaugol has a license for the Elginskoye coal deposit and is owned by Russian Railways and the local government of Sakha, an area in the northeast the size of Western Europe and home to the world’s coldest place.
The winner of the auction must commit to opening the Ulak-Elga railroad for permanent use by Sept. 30, 2010.
Yakutugol mines about 9 million tons of coal a year from three deposits in Sakha.
New York-listed Mechel, which is spending $700 million raising coal output by 47 percent to 25 million tons by 2011, already owns 25 percent plus one share of Yakutugol and is seen by some analysts as the leading contender in the auction.
“Mechel is studying the conditions of the contest for the sale of Yakutugol and Elgaugol with a view to making a decision on the possibility of taking part,” a Mechel spokesman said in an e-mailed statement.
Other contenders for the stakes may include Alrosa, whose diamond assets are in the republic of Sakha, and Basic Element, the investment vehicle of billionaire Oleg Deripaska.
Finance Minister Alexei Kudrin, who is also chairman of Alrosa, said on Aug. 9 that the company would take part in any contest for Elgaugol and had Sakha’s best logistics network.
A South Korean consortium including LG International and state-controlled Korea Resources has also been cited as one of the contenders.
“I think it’s unlikely that a foreigner will win,” Chuiko said.

TITLE: Kazakh March Towards The Greatest of Uranium Assets
PUBLISHER: Bloomberg
TEXT: ALMATY, Kazakhstan — Toshiba, Japan’s biggest maker of nuclear reactors, sold a 10 percent stake in its Westinghouse Electric unit to Kazakhstan’s state uranium miner to gain access to the world’s second-largest reserves of the metal, Almaty-based Kazatomprom said in a statement August 13.
Toshiba, which bought 77 percent of Westinghouse in October for about $4.16 billion, sold 10 percent to Kazatomprom for $540 million, Kazatomprom said.
Kazakhstan, the world’s third-biggest uranium miner, plans to become the largest by 2010 and boost its share of Japan’s market to about one-third from 1 percent now. The nation wants to use its reserves, which may be 20 percent of the world’s total, to gain market share in all parts of the nuclear fuel cycle, including power generation.
“The alliance of Toshiba, Kazatomprom and Westinghouse will lead to a global increase in nuclear energy production,” Kazatomprom said in the statement.
Toshiba last week said it was in talks to buy a stake in a uranium mine in Kazakhstan from Marubeni, Japan’s fifth-largest trading company. Tokyo-based Toshiba plans to buy 22.5 percent of the mine, located in southern Kazakhstan, for tens of billions of yen, the Nikkei newspaper reported August 10, without saying where it got the information.
Toshiba was seeking investors to help pay for its 77 percent stake in Westinghouse. Shaw Group of the United States paid $1.08 billion for 20 percent of Westinghouse and Japan’s Ishikawajima-Harima Heavy Industries invested $162 million for 3 percent.

TITLE: ShalkiyaZinc Eyes Hefty Loan
PUBLISHER: Reuters
TEXT: ShalkiyaZinc, owner of Kazakhstan’s largest zinc deposit, said Monday that it expected to arrange up to $150 million in debt finance from Barclays Capital to fund expansion of a mine and construction of an ore-processing plant.
ShalkiyaZinc, which raised $102 million in December placing one-quarter of its stock in London, said in a statement that it expected to open the plant in 2010. It will have capacity to process 4 million tons per year of lead-zinc ore.
The company has also appointed Barclays Capital, the investment banking division of Barclays Bank, as financial adviser to the project. It appointed SRK Consulting Group as independent project manager and Russia’s Mekhanobr Engineering as a consultant. ShalkiyaZinc owns the Shalkiya deposit in southern Kazakhstan, which holds about 30 percent of the Central Asian country’s total zinc reserves. The metal is used mainly to protect steel from rusting.
“Through the proposed expansion of the Shalkiya mine and construction of the new processing plant, the company intends to significantly increase production from our current resource base,” ShalkiyaZinc chairman Marat Sarkytbayev said.
The company previously said it planned to triple output by 2010. It sold 13,700 tons of zinc concentrate containing 6,200 tons of the metal in the first six months of 2007.

TITLE: The Weak Link
AUTHOR: By Alexei Bayer
TEXT: The selling panic that is rocking equity markets is unlikely to topple the global financial system. Investors worry that financial institutions will curb lending in response to the subprime mortgage crisis in the United States. Major central banks, however, led by the U.S. Federal Reserve, have demonstrated that they will add as much liquidity to the banking system as needed to avoid a credit crunch. They have already pumped in hundreds of billions dollars worth since early August, allaying investors’ fears.
But the global financial system is not out of danger yet. What could push it over the brink is if a major player — a top-tier financial institution — suffers a default. In 1998, Russia’s debt default and ruble devaluation nearly triggered an international financial meltdown, dragging down Long-Term Capital Management, a blue chip U.S. hedge fund.
The situation is different now as far as Russia is concerned. It has emerged as a favorite among financial investors. Its eurobonds are now rated investment grade, or BBB+, by rating agencies. The ruble has strengthened against the euro and the dollar, and in real, or inflation-adjusted, terms it is now far stronger than it was before devaluation. But this time the currency is supported by a cache of Central Bank reserves that, at more than $400 billion, is the world’s third largest after China’s and Japan’s.
Foreigners are not only active investors on the Moscow stock exchange but are buying ruble-denominated bonds as well. The issuance of ruble bonds, on which the government defaulted to the tune of $40 billion in 1998, totaled more than $30 billion over the past two years.
On paper at least, the Russian market might seem to be protected from global turmoil. It is a major producer of oil, gas and other commodities and should be able to weather the crisis well and even emerge as something of a safe haven.
In reality, it is the other way around. Russia may still be the Achilles’ heel of the global economy — even more than in 1998. If jitters in global financial markets endure for a few months and translate into slower global economic growth, it could implode again.
The oil boom under way since 1999 has been very good for Moscow. Crude prices have increased more than seven times while its oil production and exports expanded. Other commodity prices, including metals and timber, also increased. Petrodollars stimulated domestic demand and spurred the revival of moribund Soviet-era sectors as well as the creation of new industries, especially in consumer goods and distributive trades.
Still, Russia remains heavily reliant on oil and other commodity revenues. While the economy has been growing by more than 8 percent per year in recent periods, an index compiled by VTB-Europe, a London-based subsidiary of Russia’s state-owned bank VTB, shows that non-oil growth in gross domestic product has been slowing for nine months and measures a less impressive 6.3 percent.
High oil prices, meanwhile, underpinned a borrowing spree by Russian companies in international capital markets. While the government has not issued any sovereign debt under President Vladimir Putin, corporate borrowers more than made up for the shortfall. At the end of 2006, the cumulative foreign debt of the corporate sector measured around $260 billion, which, depending on how you tally it, measures one-quarter to one-third of its nominal GDP.
Interest and principal payments next year will add up to $88 billion, larger than the country’s projected trade surplus, especially as the import bill continues to rise along with domestic consumption.
In fact, global financial turmoil might prove a blessing for the economy. Analysts calculate that before the credit crunch, Russian companies planned to add another $125 billion to their foreign debt burden in 2008.
This debt could still be paid off in full from its hard currency reserves if push came to shove. But international financial markets have other kinds of exposure to Russia. Companies have been active in the London market for initial public offerings, gobbling up a lion’s shares of available funds. Last year, they placed $20 billion worth of shares, and this year they are on track to raise an additional $30 billion.
VTB raised $8.2 billion in May by selling a 22.5 percent stake. Its shares are down 20 percent from their peaks, even though the government still stands behind it.
The banking sector is top-heavy yet fragmented. It is also weak and nontransparent. Sberbank holds a stunning 50 percent share of the national retail banking market. The sector also includes some 1,200 fly-by-night small fries. Over the past two years, lending has exploded. With overall lending growing by around 45 percent, consumer loans spiked 75 percent last year alone.
How this will play out in a serious credit crunch is anyone’s guess. In early March, when global stock markets were unsettled by selling in China, the RTS index fell by an even larger margin than the Composite Index in Shanghai. Sharp declines have been seen in August as well, with the RTS losing more than 10 percent. Unlike other emerging stock markets, Moscow shows virtually no gain this year.
In 1998, Russia’s default had far deeper repercussions in global financial markets than the country’s economic weight would have suggested. While it followed on the heels of the 1997 Asian financial debacle, the U.S. economy at the time was booming and Wall Street was humming along. Now, the credit crunch is spreading from the over-leveraged U.S. economy, and Russia is now one of the world’s 12 largest economies based on the size of its GDP.
The reason why Russia’s default spooked world markets back then was wider political implications. Even though Moscow has been off the radar screen in Washington, financial markets understand that it remains very much a superpower — at least as far as its nuclear arsenal is concerned. Economic turmoil in what is still an unsettled country could change the global political landscape radically.
Under Putin, Russia has been moving away from the free market and toward an increasingly rigid form of state capitalism. The government has renationalized strategically important resource industries and has built state-controlled quasi-monopolies in other sectors as well.
An economic crisis is likely to reinforce the trend toward state capitalism. As inflationary pressures in the economy picked up, driven largely by higher global prices for corn, State Duma Speaker Boris Gryzlov has talked darkly about prosecuting price gougers.
Even more troubling is the threat of social turmoil. The collapse of communism and the disintegration of the Soviet Union came off relatively peacefully and without bloodshed, and the 1998 default triggered no street protests. But that was in the 1990s, when the country’s population was poor and traumatized by 75 years of brutal communist rule. Now, Russia has seen nearly a decade of prosperity but, unfortunately, this wealth has not trickled down in any meaningful way to the lower layers of the social pyramid — or made its way much beyond the capital’s city limits.
Even within Moscow, free-floating anger is difficult to contain; it is palpable in any sized crowd. The danger is that in an economic downturn, it could gel and find a ready outlet — as it did in Indonesia, for instance, after the 1997 crisis.

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

TITLE: Equal Pay for Equal Labor
AUTHOR: By Boris Kagarlitsky
TEXT: While politicians make use of the summer recess to prepare for the election campaign fracas in the fall, an altogether different battle is shaping up in provincial cities that has much more significance for ordinary citizens. 
This summer has seen a marked increase in the number of labor conflicts. Workers staged strikes for higher wages at the Mikhailovcement plant in the Ryazan region and at the AvtoVAZ factory in Tolyatti. In St. Petersburg, Heineken brewery employees and postal workers clashed with their employers. Workers also demanded higher salaries at dozens of smaller enterprises around the country, but their protests were not given as much coverage in the news or, in some cases, by the trade unions. We can’t yet speak in terms of a hot summer of labor unrest, but at the very least we are seeing clear signs of growing social tensions. While we hear so much from optimistic government official sources about the growth of salaries in dollar terms, a significant percentage of workers and members of the middle class are experiencing a decrease in their purchasing power. Salaries at many manufacturing enterprises in the provinces do not exceed 6,000 rubles ($235) per month, and a salary of 10,000 to 12,000 rubles per month is considered quite good, even for those employees who have jobs that are dangerous or harmful to their health.
There are two types of companies in Russia today — those financed by transnational capital and those owned and funded by domestic sources. The work is roughly the same in both categories, but the rules of the game — and, more important, the salaries — differ significantly. Employees of domestic companies have definitely taken note of this difference, and they are demanding equal pay for equal labor.
As a rule, labor productivity is higher at enterprises with foreign capital, but the lower productivity at older Russian factories does not prevent their owners from reaping huge profits nonetheless. The economy and profits are growing, in general, but the fruits of that growth have not been evenly distributed. 
There is still a lot of potential for salaries to grow even more. As a rule, a manufacturer’s salary expenses is responsible for 10 to 12 percent of the retail price of the products it produces. Thus, even if salaries were doubled, it would result in price increases of no more than that same 10 to 12 percent — that is, if companies simply pass the additional expense on to consumers without increasing labor productivity. This is what most likely will happen, but it is not a problem of the workers.
When the ruble sharply fell following the 1998 default, salaries also plummeted. For the most part, people came to terms with their significantly lower salaries, however, because they understood that this was a necessary price to pay to restore a battered economy that was on the verge of collapse. Another factor that helped people accept lower salaries was that in the late ‘90s, workers were finally being paid regularly in both the public and private sectors. Moreover, the state started to pay back its pension arrears. On the whole, Russians perceived these developments as a sign of progress and, as a result, the nation avoided any serious demonstrations or protests. 
By the early 2000s, the emerging middle class and residents of the largest cities not only gained back everything they had lost in the 1998 crash, but their standard of living actually increased. It is a completely different matter, however, for provincial industrial workers. Although their labor is a huge contributing factor driving the nation’s economic growth, industrial workers haven’t seen improvements in their standard of living. Thus, it is not surprising that this situation now has led to discontent and protest in small and mid-size cities. 
Economists see the increase in wages as a necessary step and as a natural consequence of the economy’s growth. Moreover, increased incomes fuel greater demand and consumption of domestic production; after all, those in the lower economic strata typically buy less expensive goods, which are produced on the domestic market, as opposed to the middle class and elite who prefer expensive imports. 
Raising the salaries of industrial workers to 22,000 to 25,000 rubles per month is entirely realistic. But it is unlikely that workers will be given such raises on a silver platter from their employers. Trade unions will have to fight tooth and nail for every ruble. And there is no guarantee they will be successful. 

Boris Kagarlitsky is the director of the Institute of Globalization Studies.

TITLE: Another Explosive August
AUTHOR: By Yevgeny Kiselyov
TEXT: We are once again in the month of August. And again another explosion — this time on a Moscow-St. Petersburg train. It seems to me that there is more to this incident than meets the eye because a terrorist act has taken place at such an important moment for the country — on the eve of a presidential election. 
And the central figure in all of this drama is President Vladimir Putin. He will be the main figure in the upcoming presidential election even if he is not a candidate, because whomever he names as his successor will probably come out the winner.
The first time a bombing interrupted the election campaign process was on Aug. 31, 1999. Just 22 hours after then-President Boris Yeltsin announced that he was appointing then-Federal Security Service director Vladimir Putin as the new prime minister and that he would like to see Putin succeed him as head of state, a homemade bomb exploded in an underground shopping strip on Manezh Square, which is located adjacent to the Kremlin. One person was killed and 40 wounded. 
On Sept. 4, 1999, a bomb exploded at an apartment building in the Dagestani city of Buinaksk. Then two more explosions leveled Moscow apartment buildings: the first on Guryanova Ulitsa on Sept. 9, and the second on Kashirskoye Shosse on Sept. 13. Three days later, on Sept. 16, a bomb exploded at an apartment building in Volgodonsk. 
In each case, terrorists packed explosives in either the building’s basement or in a truck parked close by. They then set the bomb’s timer to go off in either the evening or early morning, when most people would be home. The number of dead and wounded ran into the hundreds. Chechen militants were named the main suspects. 
In his sensational book titled “The FSB Blows Up Russia,” former FSB officer Alexander Litvinenko said the explosions had been organized by the FSB to stir up support for a new war in Chechnya — and for Putin personally as the self-appointed leader of the war effort. Need I remind the reader that Litvinenko was murdered last year in London?
In March 2000, long before Litvinenko’s book was published, the NTV television station, which was privately owned at the time, aired an investigative report on the whole murky affair of the bombings in the Moscow apartment buildings. On Sept. 23 of that year, the Interior Ministry announced that it had just prevented the bombing of another apartment building in Ryazan. Late in the evening of Sept. 22, residents noticed suspicious-looking people unloading something from a car and called the police, who discovered sacks and an armed detonator in the basement. 
But a full day later, FSB director Nikolai Patrushev caused a sensation when he explained that the whole affair had actually been an anti-terrorism training exercise — that the sacks were not filled with explosives, but with sugar, and that the detonator was really a fake. 
There were so many strange incongruities in Patrushev’s version that people began to grumble among themselves and contemplate what could have happened if the police hadn’t discovered the explosives in the building’s basement in time. Six months after this incident, NTV aired a program in which eyewitnesses to the Ryazan incident expressed all of their doubts as to the “Ryazan sugar” version of events without blaming anyone specifically. 
I was the general director of NTV at that time, so I know first-hand that the day after the program aired, one of the television company’s shareholders received a phone call from a high-ranking government official responsible for working with the media. This official had a more or less positive attitude toward NTV, although he had often warned us that reporters should exercise restraint, and that nothing good would come of being overly aggressive in reporting events that the Kremlin considered sensitive. “Everything you’ve aired up until now is nothing compared with what you reported on yesterday’s program,” he said, and then added a dire prediction: “You will not be forgiven for that.” 
Soon after Putin was elected president in March 2000, the FSB and the Prosecutor General’s Office organized a wide-scale attack against NTV. Vladimir Gusinsky, NTV’s owner at the time, was arrested on trumped-up charges and jailed for three days in Moscow’s Butyrskaya prison. He was released only after he agreed to sell all his business holdings. Gusinsky left the country soon after that. Nine months later, NTV was taken over by Gazprom, which, for all intents and purposes, means the Kremlin. NTV reporters who were critical of the new Kremlin administration were forced out of their jobs. 
Four years later, in 2004, bombs went off again in Russia. First, 89 people died after Chechen suicide bombers blew up two passenger planes in mid-air after they took off from a Moscow airport. Then, a powerful explosion went off next to the Rizhsky market.
On Sept. 1, 2004, terrorists seized a school in Beslan. We all remember the efforts to negotiate the hostages’ release and the bloodbath that resulted in 334 deaths, including 186 children. Using Beslan as a pretext, Putin cancelled direct elections of governors in favor of presidential appointments, a move that clearly strengthened his power.
And now Putin appears to be on the way out. The ruling elite has only recently realized that Putin wasn’t joking last spring when he said during an annual Kremlin speech before the State Duma that next year a different president would be addressing them from that tribune. 
The hopes of many among the elite who didn’t want to see any changes take place in the country and who wanted to persuade Putin to amend the Constitution to allow him to run for a third term did not pan out. 
It is clear, however, that Putin will continue to exert significant control over politics and foreign policy even after his term expires. Some sociologists assert that just one word from Putin would be enough for nearly half the electorate to vote for the candidate whom the president endorses. 
And isn’t it strange that at precisely this moment, with only two weeks remaining before the official start of Duma election campaigns, which will be followed by the presidential election, another mysterious terrorist attack takes place, igniting more fears of terrorism and pushing the country toward emergency measures.
These circumstances remind me of one more August — August 1991. During Soviet leader Mikhail Gorbachev’s term, conservative, anti-reform members of his inner circle realized that he was serious about his intention to sign a new, revolutionary treaty with the Soviet republics that could have terrible consequences for their political careers. Gorbachev’s opponents realized that if this treaty was signed, they could very well wake up in a entirely new country in which there would no longer be a Soviet Union and all of their high positions as prime minister, head of the KGB, defense minister, interior minister, chairman of the Supreme Soviet would be eliminated. They started to panic, and, out of fear, attempted a coup against Gorbachev.
Could a similar thing happen now, when many high-ranking officials are suddenly realizing that Putin is in fact leaving and that they could be left with nothing?
Even Putin’s most ardent opponents are in a somewhat confused state of mind. By building his “power vertical,” Putin has consolidated all power around himself. Moreover, he has become the single center of all criticism among his opponents; once Putin is gone, who will they be able to attack? 
Things must be twice as bad for Putin’s supporters. Putin’s popularity is the main — if not the only — source of legitimacy for the current system of strong state governance.
One thing is clear. In the critical 2007 and 2008 election season, some of the most unpredictable events still await us.

Yevgeny Kiselyov is a political analyst.

TITLE: Dangers of an Islamic Reformation
AUTHOR: By Diana Muir
TEXT: Novelist Salman Rushdie, journalists Thomas Friedman and Nicholas Kristof and Mansour al-Nogaidan, a Saudi Arabian young intellectual, are among the well-intentioned people who have called for an Islamic Reformation. They should be careful what they wish for. 
The Protestant Reformation did precede the things these men admire about modernity in the West, including women’s emancipation, political liberty, scientific breakthroughs, the wealth and opportunity created by the Industrial Revolution and permission to think freely regarding God. But all this came later, and the reformation was only part of what brought them about. 
The Reformation was a time of intense focus on God and what he requires of people. As a movement, it was enthusiastic, narrow and far from tolerant. It and the Counter-Reformation brought two centuries of repression, war and massacre to the West. It’s unlikely that anyone who lived through it would consider wishing a reformation on Muslims. 
And yet, even as some hope for such a turn of events — presuming, it seems, a certain conclusion — a reformation is sweeping through the Muslim world. Westerners are generally aware that the Shiite and Sunni sects of Islam are struggling for dominance in Iraq. But more broadly, the words and doctrine promoted by the Muslim Brotherhood and the Salafis or Wahhabists are eerily similar to those of the 16th-century Christian reformers. 
Like the followers of Martin Luther and John Calvin, Islamic reformers reject the interpretations of generations of scholars in favor of seeking the word of God directly in scripture. Careful study leads students to understand that God’s word is often nuanced. Nuance is not the stuff of reform. Salafi reformers argue that Muslims should ignore generations of sages, read the Koran for themselves, and act on the truth they find. 
This is heady stuff. The conviction of having the Word direct from God can empower individuals to  rebuke, to command and even to kill in his name. Protestant determination to follow the word of God straight from the Bible was accompanied by a desire to purify Christianity by emulating the beliefs and practices of the early church. 
The call to purity appeals in part because in the Muslim world today corrupt holders of wealth and power resist moderate attempts at reform, much as the corrupt holders of wealth and power in the church and states in Luther’s Europe resisted moderate reform. 
Western pundits have debated whether Arabs who voted for Hamas or the Muslim Brotherhood in the Palestinian and Egyptian parliamentary elections were voting for the Islamist religious program or voting against corruption. This was a compelling idea when preached by Calvin. It is compelling still. 
There are, of course, differences between the Protestant and Islamic reformations. In Islam today, it is usually radical reformers who have reached first for the sword. In the European Reformation, things became tense when a determined minority demanded reform, but in general it was those church and state officials who held power who first resorted to violence. 
In some European countries, the Reformation or the Counter-Reformation produced a rigid orthodoxy that stifled development for generations. In other countries the wars of religion were followed by the Enlightenment. Muslims might not follow a European course. 
In the near term, though, the Islamic Reformation will divide Muslim society as the Reformation divided Europe. A fervent minority in many countries is already pressing for narrow interpretations on issues such as veiling, listening to music and replacing secular laws with religious ones. As we have seen in Europe and more recently in Afghanistan, Muslim Puritans are likely to take over communities where they are far from being the majority. Meanwhile, the majority has yet to construct an effective ideological defense of moderation. 

Diana Muir is working on a book about the history of nations and nationalism. This comment appeared in The Washington Post.

TITLE: State Capitalism as a Model for Development
AUTHOR: By David M. Woodruff
TEXT: Hydrocarbons are not the only industry to witness the trend. In the banking sector, state-owned VTB has acquired private rivals. Defense firms in aviation and shipbuilding are consolidating into large conglomerates under state control. The state’s arms export firm, Rosoboronexport, has taken control of assets in metallurgy and carmaking.
Because privatization is so closely identified with economic reform, some observers have seen growing state ownership as evidence of a reversal of reform. Such judgments, however, obscure the shifts under way by implicitly associating contemporary state-owned enterprises with the rickety enterprises of Soviet-era ministerial bureaucracies that Moscow privatized in the 1990s. State-owned enterprises operate on international capital markets in ways that radically differ from practices in the pre-privatization era. They have borrowed huge sums on international markets to fund their acquisitions. Rosneft took on $22 billion of debt in early 2007 for the purchase of Yukos assets, and Gazprom is seeking $12 billion in new financing for its entry into Sakahlin-2 and other purchases.
Even though the majority of their shares are held by the state, all major state-owned enterprises view stock market capitalization as a crucial measure of their performance. Gazprom has liberalized circulation of its stock, unifying long-segregated foreign and domestic markets; with a capitalization of more than $220 billion, it is now one of the world’s most valuable firms. Rosneft, VTB, and Sberbank have held initial public offerings for a portion of their shares.
Beyond raising general concerns about the microeconomic efficiency of state-owned enterprises, some observers have suggested that the slowing growth in domestic oil production since 2004 underscores the negative side of state expansion. But rapid oil production gains in the prior years were largely a one-off, short-term opportunity to use new technology to improve yields from mature fields discovered in the Soviet era. Gazprom and Rosneft seem to be managing their newly acquired oil fields no worse than Sibneft and Yukos did before them.
Ironically, the expansion of state-owned enterprises is creating the greatest challenges in areas where one might expect state ownership to confer an advantage — fostering a coherent set of priorities and a long-term focus. Their massive foreign borrowing is a primary example. When these loans are converted into rubles, the money supply expands, contributing to Russia’s core macroeconomic dilemmas of inflation and real exchange rate appreciation. Borrowing has been especially intense recently. In the final quarter of 2006, foreign indebtedness of state-owned banks and other firms grew by $13.9 billion, nearly 19 percent. Capital inflows for 2006 reached a record $40 billion, a figure that was nearly equaled in the first five months of 2007 alone.
Finance Minister Alexei Kudrin and other government officials have called for a slowdown in foreign borrowing, and they have pushed state firms embarking on IPOs to seek capital from the ruble-holding public instead of relying solely on new funds from abroad. Macroeconomic factors limit how much incoming investment Moscow can effectively absorb. The state must thus regard international financing as a scarce resource and take steps to ensure that it is directed in line with long-term development priorities. At the moment, however, state-owned enterprises are directing these scarce resources not to production projects, but to empire-building acquisitions, saddling themselves with large debt burdens that could be a barrier to their subsequent development.
Gazprom is the most important example. As gas consumption rises with economic growth and as deposits in developed fields dwindle, the company will need to make large investments in new fields to meet demand. But Gazprom has not made these investments a priority. Instead, it has raised capital to bring more assets under its control. The oil and gas giant is presently poised to significantly widen its presence in the power generation sector, where assets are now being sold off as part of efforts to promote competition and attract investment. Despite objections from the state’s anti-monopoly agency, Gazprom is also likely to win approval for the purchase of coal producer SUEK, which would leave it controlling nearly 40 percent of the country’s coal output. Thus, Gazprom’s acquisitions threaten to undermine the competitive logic of the intricately crafted electricity sector reform.
In other sectors, however, state-owned enterprises do not threaten to reduce competition (to the extent that it exists to begin with). Banking has been dominated by state-owned entities since the 1998 financial crisis, and acquisitions by state banks do not significantly change the competitive balance in the sector. In carmaking, foreign companies are building significant new capacity. Private companies will likely continue to play a central role in the production and refining of oil.
In assessing the growth in state ownership of the economy, the key issue is not the precise percentage of assets owned by the state. Indeed, this is likely to shrink in the medium term. Even though many energy system assets will wind up under the control of Gazprom, others will pass to the private sector. Heavily leveraged state-owned enterprises are also likely to engage in additional share offerings to pay down their debts. This reversal, should it occur, would not resolve the major difficulties revealed in the their acquisition boom. Russia’s macroeconomic situation limits the volume of foreign investment it can accept without severe inflationary consequences. It needs to take steps to insure these funds are directed not to reshuffling ownership, but to productive investments for the long term.
So far, expanded state ownership has failed to accomplish this urgent goal. This may cast a long shadow over prospects for converting Russia’s current economic boom into sustainable development, the benefits of which are broadly distributed across different regions and social groups.

David M. Woodruff, lecturer in comparative politics at the London School of Economics, published this comment in Development and Transition Newsletter, produced by the United Nations Development Program and the London School of Economics.

TITLE: Man City Rubs Salt In Rival’s Wounds
AUTHOR: By Martyn Herman
PUBLISHER: Reuters
TEXT: LONDON — Manchester United’s stuttering start to the defense of the Premier League title became a full-blown slump on Sunday when they were beaten 1-0 by Manchester City.
The win, courtesy of Geovanni’s 31st minute shot, left Sven-Goran Eriksson’s City top of the league with a maximum nine points and looking down on their rivals who languish just above the bottom three with two points.
It is United’s worst start to a Premier League season since 1992 when they managed only one point from their opening three matches. It is also the worst start by any defending champions.
The only good news for United was that all their chief title rivals dropped points. Liverpool and Chelsea drew 1-1 at Anfield, Frank Lampard’s harshly-awarded penalty canceling out Fernando Torres’ first goal for Liverpool, while Arsenal were held to a 1-1 draw at Blackburn Rovers.
"We really should have sewn the game up even before they’d crossed the halfway line. We’ve only got ourselves to blame — let’s make no mistake about that," United manager Alex Ferguson told the club’s web site (www.manutd.com).
An untidy Manchester derby at Eastlands was settled after 31 minutes by Geovanni, one of the numerous foreign signings made by former England boss Eriksson since taking charge last month.
The Brazilian midfielder delivered a low swerving shot that skimmed off the shin of United defender Nemanja Vidic before nestling inside the post.
It was one of the few City attacks in a match dominated by a United side missing the injured Wayne Rooney and suspended Cristiano Ronaldo but including Owen Hargreaves in midfield for the first time since signing from Bayern Munich.
United wasted numerous chances with Nani failing to beat City keeper Kasper Schmeichel, son of United great Peter, in the opening minutes. Patrice Evra and Carlos Tevez squandered opportunities and Vidic also headed against the crossbar for the champions.
Eriksson, enjoying a dream start to his return to English football, praised his defenders for a resolute performance.
“Today we defended very well, our back line and goalkeeper were fantastic,” the Swede told the BBC. “I’m very happy, nine points and three clean sheets. “We’ll enjoy the night but the season is very long ... today we had a bit of luck.”
Liverpool manager Rafael Benitez described the decision of referee Rob Styles to award Chelsea a penalty as “unbelievable” after watching his side pegged back.
Torres showed why Benitez splashed out a club record $48.5 million to sign him from Atletico Madrid after 16 minutes when he glided on to a Steven Gerrard pass, outfoxed Tal Ben-Haim and guided a precise shot across Petr Cech.
Like so many clashes between the two sides it was not memorable, although not without controversy.
Just past the hour Shaun Wright-Phillips cut a ball back behind Malouda and when the Frenchman stumbled into Steve Finnan, Styles awarded a penalty which Lampard slotted home.
Dirk Kuyt headed just over for Liverpool late on while Ryan Babel shot into the side-netting.
There was confusion when Styles appeared to show a yellow card to Chelsea midfield man Michael Essien having already booked him in the first half, but the Ghanian stayed on.
“It was unbelievable decision... how can [Styles] change a game like this,” Benitez told Sky Sports. “You can’t expect decisions like this.”
Robin Van Persie gave Arsenal an early lead at Blackburn but Rovers, who ended the game with 10 men after Ryan Nelsen was sent off, got a point when Jens Lehmann fumbled David Dunn’s 25-meter shot into his net.
Arsenal manager Arsene Wenger later accused Rovers of “violent” tactics. Arsenal, Blackburn and Liverpool all have four points, while Chelsea are second behind Manchester City with seven.

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BERLIN (AP) — Hamburger SV stayed perfect after two games in the Bundesliga, beating Bayer Leverkusen 1-0.
Rafael van der Vaart, who was booed by the home fans because of his desire to leave the club for Valencia, scored from the penalty spot in the 63rd minute after Arturo Vidal was called for a handball.
“At the start they booed, but later they stopped,” Van der Vaart said. “I just said my feelings — it’s my dream to play for Valencia.”
Hamburg is in second place behind Bayern Munich.
Tommy Bechmann scored both goals to lead VfL Bochum over Energie Cottbus 2-1. Ervin Skela scored for Cottbus.

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MADRID, Spain (AP) — Frederic Kanoute scored a hat trick and Renato added two more goals and Sevilla lifted the Spanish Supercup for the first time with a 5-3 win over Real Madrid.
Sevilla won the annual trophy between the league champion and the Copa del Rey winner by a 6-3 aggregate, having won last week’s first leg 1-0.
Sevilla faces AC Milan in this season’s European Supercup on Aug. 31.
Royston Drenthe, Fabio Cannavaro and Sergio Ramos replied for Madrid, which was seeking its eighth Supercup triumph since the competition began in 1982.
Madrid’s defeat was a blow to its new German coach Bernd Schuster, a former Madrid midfielder who replaced the sacked Fabio Capello after the team won the league title in June.

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AMSTERDAM (AP) — Ajax opened the Dutch season by routing De Graafschap 8-1, getting four goals from Klaas-Jan Huntelaar and two from Hedwiges Maduro.
Luis Suarez and Kennedy Bakircioglu also scored for Ajax, while Donny de Groot scored a consolation goal for De Graafschap.
Ibrahim Afellay and Mike Zonneveld scored second-half goals to give defending champion PSV Eindhoven a 2-0 win over Heracles Almelo.
Feyenoord also started the season with a win, getting goals from Luigi Bruins, Nicky Hofs and Roy Makaay in a 3-0 win over FC Utrecht 3-0.
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GLASGOW, Scotland (AP) — Celtic stayed two points behind Rangers in the Scottish Premier League by beating Aberdeen 3-1.
Kenny Miller scored two late goals and Massimo Donati added the other after Craig Brewster had given the hosts the lead in the 25th minute.
Donati scored with a bending shot in the 62nd minute, and Miller gave Celtic the lead in the 85th. Miller scored another in the 89th with a 30-yard shot.

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PARIS (AP) — Nancy rallied in the second half to hold Marseille to a 2-2 draw in the French league and join Lorient and Le Mans at the top of the standings through four rounds.
Benjamin Gavanon began Nancy’s comeback with a penalty kick in the 64th minute, and substitute Marc-Antoine Fortune charged down the right flank in the 80th to set up midfielder Youssouf Hadji for the equalizer.
Marseille, a preseason title favorite still chasing its first win, was on the scoreboard in the 22nd when Nigerian leftback Taye Taiwo’s intercept and cross allowed forward Mamadou Niang to score. Marseille doubled the advantage on a counterattack in the 50th with Djibril Cisse’s goal.
Earlier, mid-table Rennes drew Nice 1-1, and Valenciennes held Lens to a scoreless draw.

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MILAN, Italy (AP) — AS Roma beat Inter Milan 1-0 to win only its second Supercup, Italy’s traditional season opener.
Daniele De Rossi converted a penalty in the 78th minute after Francesco Totti was fouled by Inter defender Nicolas Burdisso inside the area.
Roma’s only other Supercup victory came in 2001. The Giallorossi lost 4-3 to Inter last year. 
The Serie A kicks off Saturday.

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LISBON, Portugal (AP) — Midfielder Joao Fajardo’s early goal helped newly promoted Guimaraes draw 1-1 with Setubal in the opening round of the Portuguese league.
Defending champion FC Porto and last season’s runner-up Sporting Lisbon won their opening games. Porto won 2-1 at Braga on Saturday, while Sporting crushed Academica 4-1 on Friday.

TITLE: Second Iraq Governor Killed by Bomb
AUTHOR: By Mariam Karouny
PUBLISHER: Reuters
TEXT: BAGHDAD — An Iraqi provincial governor was blown up by a roadside bomb on Monday in what appeared to be an escalation of a power struggle between rival Shi’ite factions, threatening to destabilize the country’s oil-producing south.
Mohammed Ali al-Hassani, governor of Muthanna province, was on his way from the city of Rumaitha to Samawa, the provincial capital, when his convoy of nine cars was targeted by a powerful roadside bomb, provincial officials said.
One bodyguard was also killed and two others wounded.
He was the second provincial leader to be killed in two weeks. The governor of southern Diwaniya province, a fellow member of the powerful Shi’ite Supreme Iraqi Islamic Council (SIIC), was blown up by a roadside bomb on August 11.
SIIC and Shi’ite cleric Moqtada al-Sadr’s political movement are uneasy bedfellows in the ruling Shi’ite Alliance and have 30 seats each in parliament. But outside the assembly, fighters loyal to the two parties have clashed repeatedly.
SIIC and its armed wing, the Badr Organisation, are locked in a struggle with Sadr’s Mehdi Army militia for control of towns and cities in Iraq’s predominantly Shi’ite southern provinces.
The tensions have occasionally erupted into full-scale street battles, and have only ended by intervention by U.S. troops.
Analysts fear the turf war will escalate as the SIIC and the Sadrists try to strengthen their powerbases ahead of provincial elections expected in 2008.
“This is part of a settling of scores prior to the elections next year,” said a senior Shi’ite official who declined to be named due to the sensitivity of the subject.
“I don’t think there will be a Shi’ite bloodbath because a decision has been taken to act with restraint. But more assassinations of some figures are expected,” he told Reuters.
He said Hassani had played a “key role” in facing elements which had taken up arms against the government, an apparent reference to rogue elements of the Mehdi Army.
The acting mayor of Samawa, Riyadh Majeedh, told state television that Iraqi security forces had been deployed in the city and that an indefinite curfew had been imposed.
He said Hassani had been on his way from his home in Rumaitha to his office when the attack occurred.
Iraq’s southern provinces have largely escaped the wave of sectarian violence between Shi’ites and minority Sunni Arabs that has killed tens of thousands and displaced millions of people.
The sectarian violence, which erupted in February 2006, overshadowed the Sunni Arab insurgency against U.S. forces and the Shi’ite-led government. Intra-Shi’ite fighting in the south would mark a new and more worrying phase in the conflict that could draw in neighboring Iran.
U.S. officials have accused Iran of arming and training elements of Sadr’s militia to kill U.S. soldiers and act as a proxy to exert control over Iraq’s weak and divided government.

TITLE: Beijing Streets Fail Smog Test
PUBLISHER: Reuters
TEXT: BEIJING — Traffic flowed more smoothly but the sun was still shrouded by smog on Monday, the fourth and final day of Beijing’s Olympic pollution prevention test.
To see if the city’s poor air quality could be improved at least temporarily during next August’s Games, the Chinese capital has taken up to 1.3 million cars off the roads by banning number plates ending in odd and even numbers on alternate days.
Seoul used similar traffic control measures when it hosted the Olympics in 1988, and Athens battled its pollution problem with the same tactics for more than a decade before it held the Games in 2004.
Pollution remains the main concern for organizers of the Beijing Games. Olympics chief Jacques Rogge said two weeks ago that some endurance events might have to be postponed if air quality was not up to scratch.
One such event is the 174-km (108-mile) cycling road race, and some of the world’s top cyclists were in Beijing over the weekend for a test event.
Despite taking more than a third of Beijing’s cars off the roads and a race course that took in the less polluted climes around the Great Wall, there were clearly respiratory issues for some competitors.
“I have a sore throat and lungs but unless we get everyone to stop driving for a month I guess there is not a lot we can do about it,” Tour de France runner-up Cadel Evans told Australia’s Sunday Telegraph after the road race.
Official air quality reports gave Friday, Saturday and Sunday Grade 2 ratings on the National Scale of 1 to 5, with the major pollutant cited as large particulate matter. Grade 1 denotes “excellent” air quality and Grade 2 “fairly good.”
Beijing’s Environmental Protection monitoring centre said the still, humid weather over the weekend had been unfavorable for “emission diffusion.”
“The vehicle emissions such as nitrogen dioxide have been reduced continually over these days,” monitoring center Vice Director Zhao Yue told the bureau’s official web site (www.bjepb.gov.cn) on Sunday.
“If there had been no restrictions, the air quality would have worsened within one or two days but today it remained Grade 2. In this way the restriction showed an obvious effect on the air quality.”
Some athletes and coaches, however, are concerned that China’s pollution ratings do not take into account smaller particulate matter and ozone, both of which can have an adverse impact on the human body.
Beijing spent 120 billion yuan ($15.80 billion) from 1998 to 2006 on environmental improvement — shutting down or moving the worst industrial polluters, taking old vehicles off the roads and extending the city’s rail and subway network.
Bicycles have been more in evidence on the streets over the four days of the test and Xinhua news agency reported on Monday that a Beijing company would make 50,000 bikes available to rent at 230 outlets around the city before the Olympics.

TITLE: Israel Turns Away Darfur Refugees
PUBLISHER: The Associated Press
TEXT: JERUSALEM — Israel said Sunday it will no longer allow refugees from Darfur to stay after they sneak across the border from Egypt, drawing criticism from those who say the Jewish state is morally obliged to offer sanctuary to people fleeing mass murder.
Israel has been grappling for months over how to deal with the swelling numbers of Africans, including some from Darfur, who have been crossing the porous desert border.
The number of migrants has shot up to as many as 50 a day, according to the UN High Commissioner for Refugees, apparently as word of job opportunities in Israel has spread. The rise has led to concerns that the country could face a flood of African refugees if it doesn’t take a harsher stand on asylum seekers.
But Israel has not turned back refugees from Darfur until now, and last month Prime Minister Ehud Olmert said a limited number would even be allowed to remain in Israel.
On Sunday, a government spokesman said some 500 Darfurians already in Israel would be allowed to stay, but all new asylum seekers would be sent back to Egypt, with no exception.
‘’The policy of returning back anyone who enters Israel illegally will pertain to everyone, including those from Darfur,’’ spokesman David Baker said.
Overnight, Israel returned 48 Africans to Egypt. An Israeli government official said Egypt had guaranteed that any Darfur refugees would not be forced to return to Sudan. The official spoke on condition of anonymity because he was not authorized to release that information to the press.
Egyptian Foreign Minister Ahmed Aboul Gheit told reporters Sunday that Egypt would accept the refugees for ‘’very pressing humanitarian reasons’’ but that this type of transfer ‘’would not be repeated again.’’
Fighting between pro-government militias and rebels in Darfur has killed more than 200,000 people and displaced 2.5 million since February 2003.
Most of the displaced people remain in Darfur, but the UN estimates that 236,000 have fled across the border to neighboring Chad, where they live in camps. Tens of thousands of others have sought sanctuary in Egypt, which is ill-equipped to provide them with jobs and social services.
About 400 of the Darfurians who reached Egypt have driven and trekked through desert sands to cross the unfenced frontier with Israel, according to the refugees’ advocates in Israel.
Israel’s response to the unexpected arrivals has been mixed. Threats to expel them have clashed with sentiments inspired by the memory of Jews seeking sanctuary from the Nazis before and during World War II and being turned away. Some volunteers have helped migrants find jobs and housing.
Eytan Schwartz, an advocate for Darfur refugees in Israel, objected to any ban on the asylum seekers. ‘’The state of Israel has to show compassion for refugees after the Jewish people was subject to persecution throughout its history,’’ he said.
The Association for Civil Rights in Israel said in a statement that it is, ‘’Israel’s moral and legal obligation to accept any refugees or asylum seekers facing life-threatening danger or infringements on their freedom.’’
But Ephraim Zuroff of the Nazi-hunting Simon Wiesenthal Center said the Jewish people could not be expected to right every wrong just because of its past.
‘’Israel can’t throw open the gates and allow unlimited access for people who are basically economic refugees,’’ Zuroff said.
The Darfurians found sanctuary from the killings in Sudan by fleeing to Egypt, he said, but their arrival in Israel ‘’was motivated primarily by the difficult living conditions and bleak economic prospects in that country.’’
That the refugees are from Sudan further complicates the matter, because Israeli law denies asylum to anyone from an enemy state. Sudan’s Muslim government is hostile to Israel and has no diplomatic ties with the Jewish state.
Although the case of the Darfur refugees is unusual, the late Prime Minister Menachem Begin set a precedent in 1977 when he offered asylum to nearly 400 Vietnamese boat people.
Israel estimates that 2,800 people have entered the country illegally through Egypt’s Sinai desert in recent years. Nearly all are from Africa, including 1,160 from Sudan. Many spent months or years in Egypt before entering Israel.
Israel has repeatedly urged Egypt to step up its surveillance of the border to prevent the illegal flow of goods and people.

TITLE: Maradona Tells Chavez He Hates America
PUBLISHER: Reuters
TEXT: CARACAS — Former Argentine soccer star Diego Maradona on Sunday said he hates the United States “with all my strength” during an appearance on Venezuelan President Hugo Chavez’s weekly television show.
The leftist soccer legend, like the fiercely anti-U.S. Chavez, is a close ally of Cuba’s Fidel Castro.
“I believe in Chavez, I am Chavista ... . Everything Fidel does, everything Chavez does for me is the best (that can be done),” Maradona said, sitting with Chavez on the set of the president’s Sunday talk show.
“I hate everything that comes from the United States. I hate it with all my strength,” he added to thunderous applause and cheering from the hundreds of Chavez supporters gathered in an auditorium for the show.
Chavez, a self-described socialist revolutionary, is an unrelenting critic of Washington and frequently describes the United States as a decadent empire.
U.S. State Department officials call Chavez a threat to regional democracy and accuse him of using the OPEC nation’s oil wealth to meddle in the affairs of neighboring nations.
Maradona, 46, received drug rehabilitation treatment in Cuba following a hospital stay in 2000 linked to cocaine use. In 2005 he launched a television talk show that lasted one season.
One of the most brilliant soccer players ever, he led Argentina to its 1986 World Cup victory and is revered in his own country and around the world.

TITLE: Federer Wins Fiftieth Career Title, Prepares For U.S. Open
PUBLISHER: The Associated Press
TEXT: MASON, Ohio — Roger Federer raised both arms triumphantly when his ace finished it off. After years of having everyone else’s number, he had a special one of his own.
Fifty for Federer.
The Swiss star reached another measure of tennis greatness on Sunday, winning his 50th tournament title by beating James Blake 6-1, 6-4 in the Western & Southern Financial Group Masters.
At age 26, he became the fifth-youngest player to reach 50, and only the ninth overall in the Open Era — since 1968 — to win so many tournaments.
“It’s not a goal I set for myself in my career, but it’s definitely a nice number to get to, especially in terms of titles,” Federer said. “It’s really a lot, you know, so it’s great.”
There could be a lot more to come. Given the way he played on Sunday, nobody would be surprised if the U.S. Opens winds up being 51. The higher the stakes, the better he plays.
Federer struggled early in the week and needed a pair of three-set victories to reach the title match against Blake, a 27-year-old American playing in only his second Masters Series championship.
Once Federer got there, he was vintage.
“Just about everything he does is pretty impressive,” Blake said. “So, yeah, 50 titles at any age is impressive. Fifty titles at 26 is incredible.”
Federer almost got the noteworthy win a week earlier in Montreal, where he lost the title match to Novak Djokovic in a third-set tiebreaker. This time, he was determined to get it.
Dressed in all-white on a muggy, 33-deg. C afternoon, Federer extended his mastery of Blake — and all Americans, for that matter.
Federer improved to 7-0 against Blake, who has won only one of their 19 sets — off a tiebreaker in the semifinals at the U.S. Open last year. He’s not the only hard-hitting American who can’t figure out how to handle Federer’s overall excellence. Federer has won 35 straight matches against Americans since he lost to Andy Roddick in the semifinals at Montreal on Aug. 9, 2003. During that span, different Americans have risen and fallen, but none has broken through.
“He’s good enough to find just about any which way [he can] to beat you,” Blake said. “There’s always something for him to fall back on.”
Blake was playing catch-up from the start. Federer served a pair of aces to open the match, then broke Blake’s serve in the next game to take control. Blake had three break chances in the fifth game of the opening set, which lasted 20 points and ended with Federer’s emphatic forehand volley.
Opponents rarely get such chances against Federer. Deflated that he let it slip away, Blake was broken at 0-40 in the next game.
Blake was on the defensive the rest of the way. Federer broke him to go up 4-3, then fought off a couple of break points in the next game to retain control.
Finally, he served his ninth ace of the match to win the title that was, in his words, “a very special number.”
Bjorn Borg won his 50th title when he was 23 years, 7 months old. Jimmy Connors was four months older when he got to the mark. John McEnroe and Ivan Lendl were 25 when they did it.
The crystal trophy that he received on court will wind up in his home in Oberwil, Switzerland, where he has a special room — “It’s grown to about office size” — to display those 50-plus mementos. They’re kept behind glass “so you don’t have to dust them off all the time,” Federer noted.
Gives him more time to work on dusting off the competition.
In recent years, the Cincinnati tournament has been a good barometer heading into the U.S. Open. Federer won it easily two years ago, then went on to get the second of his U.S. Open titles.
Last year, Roddick emerged from his season-long funk in Cincinnati, won the tournament and took a lot of confidence into the Open, where he reached the title match before losing to Federer.
Federer has momentum in his quest for a fourth straight U.S. Open title, but there’s reason for others to see opportunity. Federer wasn’t in peak form this week, making a lot of unforced errors. He needed three sets to beat Nicolas Almagro and resurgent Lleyton Hewitt to reach the title match.
Using that as a guide, this Open could be more wide-open. Or, if Sunday is an indication, it might end up as another addition to that glassed-in trophy case.
“A lot of people have tried to say at times that he looks beatable, then he goes out and shows that he’s not beatable,” Blake said. “Then he goes into a Grand Slam and he plays even better.”

TITLE: Chinese Parents Are Where It’s @
PUBLISHER: Reuters
TEXT: BEIJING — A Chinese couple tried to name their baby “@,” claiming the character used in e-mail addresses echoed their love for the child, an official trying to whip the national language into line said Thursday.
The unusual name stands out especially in Chinese, which has no alphabet and instead uses tens of thousands of multi-stroke characters to represent words.
“The whole world uses it to write e-mail, and translated into Chinese it means ‘love him’,” the father explained, according to the deputy chief of the State Language Commission Li Yuming.
While “@” is familiar to Chinese e-mail users, they often use the English word “at” to sound it out — which with a drawn out “T” sounds something like “ai ta,” or “love him,” to Mandarin speakers.
Li told a news conference on the state of the language that the name was an extreme example of people’s increasingly adventurous approach to Chinese, as commercialization and the Internet break down conventions.
Another couple tried to give their child a name that rendered into English sounds like “King Osrina.”
Li did not say if officials accepted the “@” name. But earlier this year the government announced a ban on names using Arabic numerals, foreign languages and symbols that do not belong to Chinese minority languages.

TITLE: Delighted Finn Triumphs
At Scandinavian Masters
PUBLISHER: The Associated Press
TEXT: STOCKHOLM, Sweden — Mikko Ilonen of Finland won the Scandinavian Masters by two shots Sunday after Martin Kaymer double-bogeyed the final hole.
Ilonen birdied the last hole at the Arlandastad course, closing with a 2-under 68 to finish with a 6-under 274 total. It was the second European Tour victory for the former British amateur champion. The Finn won his first tournament at the Indonesia Open in February.
“Everything can happen in golf and it did today,” Ilonen said. “It was an unbelievable feeling to walk up to the 18th. If I had to pick one tournament to win, alongside the majors, it would be this one.”
Kaymer missed the green and failed to save par to force a playoff. He chipped short to the green, the ball rolling halfway back down on a steep slope. The double-bogey dropped the German to a 73 and a tie for second with Jean-Baptiste Gonnet (68), Christian Cevaer (69), Peter Hedblom (69) and Nick Dougherty (70).
Corey Pavin shot 67 and was tied for seventh at 3 under. Tournament host Jesper Parnevik of Sweden (68) finished at 5 over.
Ilonen began the day three shots behind Kaymer and James Kingston of South Africa.

TITLE: Sports Watch
TEXT: <b>Another Olympic Bid</b>
n MOSCOW (Reuters) — Russia’s Olympic Committee voted unanimously on Monday to submit a bid to host the first Youth Summer Olympics in 2010.
It agreed to enter the Russian capital in the bidding process to stage the youth version of the world’s greatest sporting spectacle, for athletes aged 14-18.
Moscow, which hosted the boycott-affected 1980 Summer Olympics, also staged the first try-out Youth Games in 1998. 
They were held under the patronage of the International Olympic Committee (IOC), but did not carry the Olympic title.
The IOC approved a plan to stage summer and winter Youth Olympics to try to revive the dwindling interest of teenagers in the Olympic movement at its session in Guatemala last month.
In Guatemala, the IOC also awarded the 2014 Winter Olympics to Russia’s Black Sea resort of Sochi. The IOC plans to name the Youth Olympics host city next February.

<b>Henin Shoulder Worry</b>
n TORONTO (Reuters) — Justine Henin’s gritty 7-6 7-5 victory over Jelena Jankovic at the Toronto Cup on Sunday proved that the world number one is well prepared for her U.S. Open title bid.
But the Toronto tournament also revealed a fragile shoulder that could prevent the Belgian from walking away with the year’s final grand slam.
Bothered by a sore right shoulder that flared up during her semi-final win over China’s Yan Zi, Henin told Tennis Canada officials after Saturday’s match that there was only 50/50 chance she would play in the final.
Henin’s warning was so serious that tournament organisers hastily arranged an exhibition between Jankovic and Russian Nadia Petrova.

TITLE: DVD-Sniffing Dogs Given Heroes’ Send-Off
PUBLISHER: The Associated Press
TEXT: PUTRAJAYA, Malaysia — Malaysia gave a hero’s send-off Monday to Lucky and Flo, honoring the two DVD-sniffing dogs with medals as they ended a six-month assignment that netted 1.6 million illegal movie discs.
The two black Labradors looked puzzled when a multitude of press photographers’ flash bulbs went off as Malaysia’s deputy trade minister S. Veerasingham placed medals around their necks.
‘’What they have helped us achieve in such a short time is remarkable,’’ said Veerasingham. ‘’Malaysia is committed to wiping out piracy and pirates. We will go after them very fast.’’
The world’s first dogs trained to identify optical discs by the scent of their chemicals, Lucky and Flo were loaned to the Malaysian government in March by the Motion Picture Association, a U.S.-based watchdog.
During that stint — dubbed Operation Double Trouble — they helped unearth 1.6 million DVDs and other optical discs, three DVD replicating machines and 97 compact disc burners, worth $6 million. Twenty-six people were arrested during the raids.
The operations were so successful that Malaysian movie pirates were reported to have placed a bounty of $29,000 on the dogs, prompting them to be kept under close guard.
The two dogs will leave on August 23rd for New York, where they will take part in shows and also help in raids on movie pirates.
The dogs cannot distinguish between pirated and legal discs, but that can be easily done by enforcement officers once the dogs had unearthed the caches. 
In at least one instance, the dogs uncovered a secret room behind a false wall.
The domestic trade ministry will set up a canine unit later this year to unearth pirated DVDs. Two new dogs will be trained in Ireland by the same trainer who taught Lucky and Flo, said Veerasingham.
According to the MPA, its member studios in the U.S. lost $6.1 billion to worldwide piracy in 2005, of which the Asia-Pacific region accounted for $1.2 billion and the United States for $1.3 billion.

TITLE: Six Dead In U.S. Floods
PUBLISHER: Reuters
TEXT: OKLAHOMA CITY — Six people died in floodwaters across Oklahoma after heavy rains from the remains of Tropical Storm Erin drenched the state on Sunday, according to police and local media reports.
Three women from the same family were driving in a van swept away by rushing water, according to the sheriff’s office.
The bodies of the three were found after a search of floodwaters near Carnegie, Oklahoma, 150.5 kilometers southwest of Oklahoma City, said the Caddo County Sheriff’s office.
A woman drowned near Fort Cobb, Oklahoma when she sought shelter in her cellar from thunderstorms, which is the usual procedure for storms in tornado-prone Oklahoma.
“Evidently she went to her cellar due to the storming. She couldn’t get the door back open,” said Caddo County emergency management director Larry McDuffy.
Another person was confirmed drowned west of Kingfisher, Oklahoma, the Kingfisher County Sheriff’s office told the Daily Oklahoman newspaper.
A 67-year-old woman in Seminole, Oklahoma, drowned when her car was swept off a residential street into a flooded drainage ditch by rushing waters, according to the Daily Oklahoman.

TITLE: Jamaica Struck by Devastating Hurricane
AUTHOR: By Horace Helps
PUBLISHER: Reuters
TEXT: KINGSTON, Jamaica — Hurricane Dean buffeted Jamaica’s southern coast, flooding the capital and littering it with broken trees and roofs after killing nine people earlier on its run through the Caribbean.
Dean was an “extremely dangerous” Category 4 hurricane, the second-highest on the five-step Saffir-Simpson scale. It could have gained even more strength on Monday to become a potentially catastrophic Category 5 as it passes south of the Cayman Islands and heads for Mexico’s Yucatan Peninsula, the U.S. National Hurricane Center said.
Jamaican Prime Minister Portia Simpson Miller declared a month-long state of emergency and called a cabinet meeting to discuss the potential impact on August 27 general elections.
The power company switched off electricity as the wind began to howl and pounding waves battered the southern coast.
Police said they shot and wounded two men caught trying to break into a business in the capital during the storm.
Torrents of rain pelted the capital Kingston and streets were blocked by toppled trees, utility poles and broken roofs. A man was missing after falling trees tore into his house.
The eye of the storm stayed just south of Jamaica but the intense wall of winds around the calm center pummeled the island.
“They’re still getting pretty beaten up,” hurricane center forecaster Dave Roberts said. “I know they were massively flooded from the reports that we had.”
Mudslides were reported in several parts of the mountainous country of 3 million people.
Local media reported 17 fishermen and women had been stranded ahead of the storm on the Pedro Cays, a small island chain south of Kingston, directly in the path of the hurricane.
The government urged residents to go to shelters. But many people, including those in one low-lying seaport town close to Kingston, refused to flee.
“We are going nowhere,” Byron Thompson said in the former buccaneer town of Port Royal, settled by pirate Henry Morgan in the 17th century. “In fact, if you come by here later today you will see me drinking rum over in that bar with some friends.”
Dean packed sustained winds of 230 kilometers per hour and its eye was about 217 km west-southwest of Kingston at 11 p.m. local time.
Storm warnings were also in effect for the Caymans and parts of Mexico, Cuba, Haiti and Belize. The latest computer tracking models forecast Dean would spare the U.S. Gulf Coast but slam into Mexico’s Yucatan Peninsula, cross the Bay of Campeche and then hit central Mexico.
Thousands of frightened tourists on Mexico’s Caribbean coast stood in line for hours at airports to flee before Dean’s expected arrival.
Four people were killed in Haiti, where landslides destroyed several hundred houses, according to the UN Office for the Coordination of Humanitarian Affairs. It said that brought to at least nine the number killed by Dean since it roared into the Caribbean as the first hurricane of what is expected to be an active 2007 Atlantic season.
Risk modeling company EQECAT Inc. estimated insured losses from Dean’s rampage through the Caribbean islands at $1.5 billion to $3 billion, most of it in Jamaica.
Dean was moving west at 32 kph and was being watched closely by energy markets, which have been nervous since a series of storms in 2004 and 2005 toppled Gulf of Mexico oil rigs, flooded refineries and cut pipelines.
Mexico’s Pemex oil company began evacuating 13,360 workers from its Gulf rigs.

TITLE: Trapped U.S. Miners Left For Dead
PUBLISHER: The Associated Press
TEXT: HUNTINGTON, Utah — Officials said six trapped coal miners may never be found, outraging family members of the men who say their loved ones are being left for dead.
Searchers were grim on Sunday after receiving air readings from a fourth hole drilled more than 1,500 feet into the mountainside. The readings detected insufficient oxygen to support life.
Repeated efforts to signal the men have been met with silence.
“It’s likely these miners may not be found,” said Rob Moore, vice president of Murray Energy Corp., co-owner of the Crandall Canyon Mine.
Mine officials had sustained hope for two weeks that the miners would be brought out alive, even after three rescuers were killed and six more hurt in another “bump” inside the mountain.
Family members of the six miners trapped in the initial collapse on Aug. 6 accused the mine’s owners and federal officials of abandoning their loved ones.
“We feel that they’ve given up and that they are just waiting for the six miners to expire,” said Sonny Olsen, a spokesman for the families, reading from a prepared statement on  Sunday night as about 70 relatives of the trapped miners stood behind him.
“We are here at the mercies of the officials in charge and their so-called experts. Precious time is being squandered here, and we do not have time to spare,” Olsen said.

TITLE: European Union Suspends Funding as Gaza Goes Dark
PUBLISHER: The Associated Press
TEXT: GAZA CITY, Gaza Strip — The European Union cut off vital funding to a Gaza power plant on Sunday, forcing it to shut down the last of its generators and darken tens of thousands of Palestinian homes.
The shutdown was another blow to the long-suffering residents of the Gaza Strip, where the Islamic group Hamas has been governing, largely under international isolation, since June.
The power plant already cut electricity to large swaths of Gaza last week after Israel closed a fuel crossing into the coastal territory, citing security concerns. Israel reopened the passage Sunday, but the plant’s Israeli fuel supplier said the European Union had instructed it not to deliver new supplies because it wouldn’t guarantee payment.
“Fuel supplies will resume if and when the European Union or another credible source notifies us that it will guarantee payment for the power station’s fuel,” Israel’s Dor Alon fuel company said in a statement.
Alex de Mauny, a spokeswoman for the EU’s executive branch, confirmed the EU would not finance Sunday’s fuel payment. 
“In light of the security situation, we’ve decided to take stock of all of our mechanisms and systems, including auditing, monitoring and funding flows,” de Mauny said. Funding would resume by Tuesday evening at the latest, she said.
Gazans initially were unfazed by the outages, because power reserves are always so thin that consumers are used to living without electricity for about five hours a day. But as the shortages dragged on for a third straight day, nerves began to wear thin.
The din of private generators outside every shop on Gaza City’s main commercial street filled the air as Naim Hamdan, a civil engineer, recounted how he sent home his 25 employees to conserve fuel. Grocery store owner Fawaz Khalil said $750 worth of cheese and milk spoiled because his generator wasn’t powerful enough to keep his refrigerator cold.
“People have started coming to ask for candles and flashlights,” Khalil said. “I hope that selling candles and batteries and flashlights will help me make up for the loss of the cheese and milk.”
European officials were caught off guard by the power shortage, mistakenly believing the plant had enough fuel for another two days, an EU official said. The official spoke on condition of anonymity according to EU regulations.
The government of moderate Palestinian President Mahmoud Abbas, formed in the West Bank after Hamas took over Gaza, charged the Islamic group with responsibility for the power shortage.
The EU ceased payment “because Hamas took over the electric company and started collecting the revenues and taking them to its pocket,” Palestinian Information Minister Riad Maliki told reporters at a press conference Sunday.
The EU, however, did not say its decision was connected to Hamas.
In turn, Hamas lawmaker Yehia Musa accused Abbas of a “dirty conspiracy” to persuade international donors to cut off electricity to Gaza in an attempt to discredit Hamas.
The Gaza Generating Co., which powers 25 percent of the coastal strip, cut power to nearly half of Gaza’s 1.4 million people on Friday after Israel closed the Nahal Oz fuel crossing.