SOURCE: The St. Petersburg Times
DATE: Issue #1311 (77), Tuesday, October 2, 2007
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TITLE: Yushchenko’s Star Fades In Ukrainian Elections
AUTHOR: By Maria Danilova
PUBLISHER: The Associated Press
TEXT: KIEV, Ukraine — Although the parties tied to Ukraine’s Orange Revolution look set to return to power following the latest national elections, the man who was the central figure of the 2004 mass protests appears to be increasingly losing power.
Viktor Yushchenko is now president, elected after the protests turned Ukraine’s politics upside-down, but the adoration of millions that he once claimed is little more than a memory. His party earned only about 16 percent of the parliamentary vote Sunday, according to partial results.
The party of his Orange Revolution enemy, Prime Minister Viktor Yanukovych, had about 30 percent of the vote, the partial results indicated.
The rising star, it appears, is Yulia Tymoshenko, a vivid, controversial figure whose bloc was leading with 33 percent. She was Yushchenko’s most fervent ally in the Orange Revolution, became his prime minister — and then a nemesis. Yushchenko fired her after just seven months in office.
Now she likely holds the key to Ukraine’s political future — and Yushchenko’s. If she allies with Yushchenko, their parties should have enough parliament seats to form a government; if she holds out, Yanukovych and sundry small allies could hammer together a coalition.
For Yushchenko, the alliance appears to be a last resort in maintaining at least some of his grip on power as he pushes reform and pro-Western policies. His popularity has suffered due to political infighting and disillusionment with endemic corruption, decrepit infrastructure and, for many Ukrainians, the struggle to make ends meet.
Constitutional changes he agreed to as part of a compromise during the 2004 protests handed many of the presidential powers to parliament, and Yushchenko has seen many of his policies and decrees challenged and blocked by Yanukovych.
His choice for foreign minister was not approved by parliament, his efforts to join NATO were put on hold and even the chief prosecutor he fired initially refused to leave his office.
The early parliamentary election was in itself Yushchenko’s effort to stop what he called Yanukovych’s attempts to usurp power.
Yushchenko and his Orange allies weren’t able to put together a coalition after last year’s national elections. That gave Yanukovych room to move in — and the cohabitation resulted in months of a bitter stand-off that paralyzed the government.
This year, Yushchenko’s and Tymoshenko’s parties have pledged that if they’re able to put together enough seats for a governing coalition, the party with the most seats will name the prime minister and they’ll divide the Cabinet seats. That could spell trouble for Yushchenko.
Tymoshenko, known for her steel will and hunger for power, is likely to try to get most of the key seats in the Cabinet for her party, pushing Yushchenko’s allies into less important positions.
Her party’s strong showing makes her a likely tough candidate in the 2009 presidential election.
Yushchenko can also expect trouble from Yanukovych.
The premier, who had fiercely resisted calling early elections, has hinted he will not bow out quietly if he fails to form a coalition. A grim-looking Yanukovych told reporters early Monday that his party was leading in the vote and had “carte blanche” to form a coalition.
With the election count underway, up to three smaller parties were likely to pass the 3 percent threshold and earn seats in the parliament. They could emerge as key players in coalition talks.
Yushchenko’s party’s dismal showing in Sunday’s vote isn’t surprising.
Yushchenko was poisoned with dioxin during the 2004 presidential election campaign, disfiguring his face. Suspicions of Russian involvement persist, partly because Yushchenko was running against Yanukovych, a Kremlin-backed candidate.
Sympathy and anger prompted throngs to stand in Independence Square chanting Yushchenko’s name in the freezing weather in 2004, but many feel he has let them down in the years since.
During those protests over election fraud, Yushchenko and Tymoshenko swore eternal loyalty to each other. But after the Supreme Court threw out election results declaring Yanukovych the winner and ordered a new vote — which Yushchenko won — he could only take seven months of Tymoshenko as his premier.
He fired her amid mutual accusations of corruption and incompetence, saying Tymoshenko often worked “with the aim of solving her problems” rather than the state’s.
Many supporters feel the Orange team has betrayed the “ideals” of the Orange Revolution, and Yushchenko’s sinking support has also played into Yanukovych’s hands.
Written off as the bad guy of the Orange Revolution, Yanukovych since has reinvented himself as a moderate who talks democracy and is cordial with both Russia and the West.
He has shored up his support base in the Russian-speaking east and south, and — capitalizing on widespread disillusionment in the Orange team — has sought to win over central and western regions traditionally loyal to the Orange forces by ushering in economic growth and raising wages and retirement pensions.

TITLE: Kasparov Wins Other Russia Candidacy
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — The Other Russia on Sunday chose Garry Kasparov as its unity candidate for the March presidential vote while confirming a party list of 450 candidates for the Dec. 2 State Duma elections, in which the party is not eligible to run.
The coalition’s first national congress also saw the departure of the Red Youth Vanguard from the movement, as leader Sergei Udaltsov said he was dissatisfied with the coalition’s strategy and walked out, taking the group’s support with him.
“I will seek victory and will not turn off this path,” Kasparov told the congress after receiving the votes of 379 of the 494 delegates who took part.
Kasparov’s words were in sharp contrast to his statements at the opening of the congress, when he told the delegates that The Other Russia was not looking to win in either the presidential or Duma elections.
While over 200 members of pro-Kremlin youth groups, including Young Guard and Young Russia, protested in front of the venue Sunday, opposition parties not taking part criticized The Other Russia’s claim that Kasparov was running as a unity opposition candidate.
“It’s not a surprise his own organization elected him,” Yevgeny Bunimovich, a Yabloko Moscow City Duma deputy said Sunday. “But there are a lot of other opposition organizations that didn’t take part in the vote.”
Bunimovich said Yabloko and former Prime Minister Mikhail Kasyanov’s supporters were also likely to have a say in which opposition politicians run in the presidential election.
Other Russia leaders Kasparov and Eduard Limonov were joined by Gerashchenko in the top three spots for the coalition’s federal list, Kasparov.ru reported Sunday. The Other Russia will file its list for the Duma elections with the Central Elections Commission on Monday, Limonov said.
There isn’t much likelihood the party will get on the ballot. According to election law, only registered political parties can take part in the vote.
The Other Russia, which has never applied for party status, opposes changes to election laws by which the next Duma will be selected completely by proportional representation. Previously, half of the Duma deputies had been selected by direct votes in single seat districts.
“We will demand that the Central Elections Commission register The Other Russia’s list and include it on the ballot,” Limonov told the congress. “Whether the commission registers the lists or not, we will conduct a full-fledged election campaign.”
Limonov said that without access to television, The Other Russia would campaign by putting up posters and conducting marches.
Viktor Anpilov, leader of the Working Russia party, called on delegates to spoil their ballots by crossing out the parties listed and writing The Other Russia over them. The suggestion was greeted with loud applause.
Sunday’s gathering offered little of the upbeat mood present at the coalition’s last congress, in Moscow in early July.
About 750 regional delegates were chosen to take part in Sunday’s event, in the concert hall of the Izmailovo hotel complex in northeast Moscow, but only about 500 had registered by the start of the congress at 12:15 p.m.
The congress started 15 minutes behind schedule, as the organizers were waiting for latecomers, and Limonov and political council member Alexander Osovtsov were still staring at sections of empty seats when proceedings began. Udaltsov and Alexander Averin, a spokesman for the banned National Bolshevik Party, joined them later on the dais.
The Red Youth Vanguard’s Udaltsov was partially responsible for the subdued atmosphere, as he told the gathering that his movement had decided to leave the coalition “for now,” saying it objected to what he called the premature nomination of a unity opposition candidate.
“The Other Russia is not yet a broad opposition coalition,” Udaltsov said. “Unfortunately, for now, The Other Russia is an alliance of several relatively small organizations.”
“In these circumstances, the nomination of a single candidate does not seem very convincing,” Udaltsov said.
He left the hall after his speech without saying goodbye to anyone.
The departure of the Red Youth Vanguard, which has been a regular participant in the Dissenters Marches led by The Other Russia, came just three months after Kasyanov and his Russian People’s Democratic Union pulled out in July.

TITLE: Cellist’s Art Collection To Go to Konstantinovsky
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: The much-discussed art collection owned by the late cellist Mstislav Rostropovich and his wife Galina Vishnevskaya is to be given to the nation and placed in the Konstantinovsky Palace near St. Petersburg by the end of this year, its new owner said on Monday.
“I’m giving this collection to the state with great pleasure,” businessman Alisher Usmanov said at his press conference in Moscow.
“I made an offer to the Russian Culture Agency and the presidential administration, who are in charge of the palace, consider placing this collection in the wonderful museum at the Konstantinovsky Palace,” he said. “I see that I found an understanding with them.”
Vladimir Kozhin, head of the president’s administration, confirmed that the collection will be placed in its entirety at the Konstantinovsky Palace, a historical complex dating from 1714 that was extensively renovated in the early 2000s to serve as the Russian president’s St. Petersburg residence, among other functions. Usmanov said from the very beginning that there was an aim to save the collection as a whole, and to return it to Russia.
“We also considered the wish of the seller to place the collection in one of St. Petersburg’s palaces,” he said.
Upon consulting experts and the Culture Agency, Usmanov realized that the recently restored Konstantinovsky Palace did not have its own permanent arts collection.
A number of other Russian museums, including the State Russian Museum, had been hoping that at least parts of the collection would find homes with them.
“I think it will be right to place the collection [at Konstantinovsky Palace] by Christmas,” Usmanov said, adding that the collection consists of 850 objects.
Tatyana Vaigachyova, deputy head of the Konstantinovsky Palace complex, said they were excited about the news.
“This is such a great gift for us. We are really happy to receive this collection,” Vaigachyova said.
“The palace should definitely have its own collection, and until now we have only exhibited temporary collections.  We are ready for the collection: we’ve got everything for it — the rooms, climate-control, tight security,” she said.
Vaigachyova said the Konstantinovsky Palace deserves to have such a collection because it receives many guests and business delegations, such as the G8 heads-of-government summit hosted by President Vladimir Putin in 2006. 
Alexander Tarasov, director of the Konstantinovsky Palace, said the collection will not be spread among different museums, Interfax said.
Meanwhile, Vladimir Gusev, director of the State Russian Museum, said he hoped at least a part of the collection would go to the Russian Museum, Interfax said.
“I held negotiations with Alisher Usmanov and [Culture Agency head] Mikhail Shvydkoi to place at least a part of the collection in the Russian Museum. It’s very sad that those negotiations were not successful,” Gusev said, adding that he intends to continue negotiations on the issue.
Tatyana Pchelyanskaya, art critic at the St. Petersburg History Museum at the Peter and Paul Fortress said, said the decision to place the collection at the Konstantinovsky Palace was “rational.”
“Any museum would love to have pieces from that collection, but it would not be right to spread the collection or to place parts of it in different sections of some museum,” Pchelyanskaya said.
Kozhin said the collection would be open to the public every day from 10 a.m. through 5 p.m., except the days when state events take place at the palace.
Usmanov also spoke about the details of his decision to buy the collection for Russia, which was due to be sold lot-by-lot last month by London auction house Sotheby’s, saying it was “an improvisation.”
“Two of my friends came over with the big catalogue and began to change their plans on buying certain lots.  I occasionally opened the catalogue and saw Bilibin’s picture… on the first page.  It surprised me,” Usmanov said, Interfax said.
“Then I thought if I could save the whole collection… I called Mikhail Shvydkoi and asked if he would support my intention to pass the collection to the state if I won the auction.  When he asked if I was joking, I gave my honest word to him,” Usmanov said.
Kozhin, head of the presidential administration, said the Russian state would find an opportunity to honor Usmanov’s purchase.
“We won’t, of course, put tags on each exhibit to remind people of the gift, but in general such deeds should be marked.  I hope we’ll do it beautifully, intellectually and with dignity,” Kozhin said.
After the death of Rostropovich earlier this year, opera singer Vishnevskaya decided to put the collection she and her husband had amassed up for sale, saying she didn’t have enough money to maintain the collection.
Steel magnate Usmanov preempted the auction by buying the collection, reportedly for more than $40 million.  
The collection includes works by some of Russia’s most renowned painters, including Ilya Repin and Boris Grigoryev, as well as furniture, porcelain and other items.

TITLE: Saakashvili Returns From U.S. Amid Political Turmoil
AUTHOR: By Misha Dzhindzhikhashvili
PUBLISHER: The Associated Press
TEXT: TBILISI, Georgia — The pro-Western president of Georgia interrupted an overseas trip and returned to the ex-Soviet republic Saturday amid tensions over the arrest of a former ally who accused the leader of involvement in a murder plot.
Former Defense Minister Irakli Okruashvili was arrested on Thursday on corruption charges after alleging that President Mikhail Saakashvili ordered the killing of a well-known businessman.
“Okruashvili and everybody else knows that all the things he said about me and about the country’s leadership are unpardonable lies,” Saakashvili said in televised remarks.
Saakashvili returned overnight from the U.N. General Assembly in New York instead of traveling directly to Greece for a visit starting Monday.
Deputy administration chief Eka Dzhodzhua declined to comment on the reason for Saakashvili’s return. But it came hours after thousands of opposition supporters rallied in the capital Friday, calling for Saakashvili’s resignation and possibly signaling the start of Georgia’s most serious political crisis since the 2003 Rose Revolution brought him to power.
Members of Okruashvili’s party called his arrest a sign that the government feared a resurgent opposition, which up to now has been weak and divided. Okruashvili is generally considered the only credible rival to Saakashvili, whose National Party dominates the political landscape.
The hawkish Okruashvili, 34, was once part of Saakashvili’s inner circle, but was fired from his job as defense minister last year. He had called for the use of military force to regain control of Abkhazia and South Ossetia, two Georgian regions controlled by separatists since the 1990s.
After Okruashvili lost the defense post, he was named minister of economic development. But he left a week later and went into private business.
On Friday, prosecutors charged him with extortion, money laundering and abuse of power. On Saturday, a court ordered him held in jail for two months during further investigation.

TITLE: An Inside Track to President Putin’s Kremlin
AUTHOR: By Max Delany
PUBLISHER: Staff Writer
TEXT: MOSCOW — From his ground-floor office, at the end of a marble corridor lined with portraits of his Soviet predecessors Leon Trotsky, Felix Dzerzhinsky and Lazar Kaganovich, Vladimir Yakunin runs a state within a state.
As president of the country’s second-largest corporation, Russian Railways, Yakunin controls an empire of steel and movement that spans 11 time zones, employs a work force bigger than the population of Estonia and has a budget larger than those of many developing nations.
Now, Yakunin is being touted as a dark horse contender for the Kremlin thanks to a resume with KGB-like gaps, links to Vladimir Putin’s most intimate St. Petersburg circle and a post in an influential Orthodox organization.
Burly, yet avuncular, his hair graying at the temples, Yakunin, 58, leaned forward during a recent interview and rattled off the desired qualities for the country’s next president.
Ethnically Russian, well educated, with experience working abroad and in industry, a strong character, dedicated, able to talk to ordinary people and, above all, mature, Yakunin said, counting off the requirements one by one on his fingers.
Despite essentially describing himself, Yakunin demurred when asked whether he fit the bill.
“I consider the work of our president, and from one side it is extremely interesting,” he said in slightly accented English. “But when you know the other side of the picture, you should be very, very careful to think that you would want to continue this sort of life. Trust me.”
For a man who might be the next president, Yakunin isn’t exactly well-known. He doesn’t even rank in opinion polls of possible presidential contenders.
On a recent walk around Gorky Park during celebrations for the railroad’s 170th anniversary, Yakunin and his entourage inadvertently cornered Tatyana Pogodina, a railway mechanic’s wife, and her 6-year-old son, Yegor, outside a play-area.
“He just said hello to us,” Pogodina said, as Yegor chewed nonchalantly on a red balloon animal. “His name is on the tip of my tongue, but I know for certain that he’s someone from the State Duma.”
With nearly 1.5 million workers and a newspaper, Gudok, with a circulation of 250,000, the railway could give Yakunin a solid electoral base to start a presidential campaign.
In a cordoned-off VIP section at the park, Yakunin, his glass filled with whiskey and plate piled with rib-eye steak, hosted a charity lottery for an elite group, including government ministers, Russian Orthodox Church leaders and railroad executives.
Later, he joked with pop singer Lolita on a giant stage and handed out awards to railroad workers. Yakunin portrayed himself as a straight-talking everyman and anti-politician, peppering a speech with anecdotes and proverbs and talking, as he said at a recent news conference, “like a real railway worker.”

Orthodox Chekists
One image more than any other has illustrated Yakunin’s proximity to power and sparked whispers of a potential presidency.
At the 2005 Easter service in the cavernous Christ the Savior Cathedral, Putin stood, his head bowed, occasionally crossing himself. Directly behind him, his face half-obscured in the gloom and a candle flickering in his hands, loomed Yakunin.
For Kremlinologists used to judging the rise and demise of political careers from the standing arrangements at official events, it meant only one thing.
Yakunin has a simple explanation for his appearance next to Putin. He leads the prominent Orthodox organizations Fund of Andrei Pervozvanny and the Center for National Glory.
With close links to the hierarchy at the Russian Orthodox Church, the organizations place Yakunin at the heart of the so-called Orthodox chekists around the president. They played a leading role in the recent reunification of the church with the Orthodox Church Abroad and are responsible for bringing the holy flame to Russia from Jerusalem every year.
When asked at a recent news conference about claims that the church was becoming too influential in society, Yakunin became impassioned. “There is nothing wrong with trying to strengthen the spiritual core of our society, and I will never say there is,” he said, striking a microphone with his flailing arm.
Clergy have voiced support for a Yakunin presidency. “As an organization, the Orthodox church would never dream of interfering directly in the elections, but we would lend our support to Yakunin,” Leonid Kalinin, a priest from St. Clement Cathedral, said at the Gorky Park festivities.
Where and when Yakunin’s personal faith originated is unclear. A university friend who attended his wedding said Yakunin had showed no sign of being religious then.
Yakunin’s convictions have led him to establish and fund the annual World Public Forum on the Greek island of Rhodes, two of the forum’s co-founders said. 

Knifed by Estonians
Yakunin was born near Melenki in the Vladimir region after his father, who was serving as a border guard pilot in Estonia, ordered his pregnant wife back to his native village to give birth. Yakunin spent the first 14 years of his life in the picturesque coastal Estonian town of Parnu, today a vacation resort of just over 40,000 people.
The young Volodya Yakunin was an average, if studious, boy from a typical Soviet family, said Jevgeni Tomberg, a childhood friend and classmate in Parnu.
Despite this, Yakunin’s most vivid memory from the time was how he got his first, and only, “battle scar,” as he called it.
As a fifth grader, Yakunin was attacked by a group of six Estonian boys who singled him out because he was Russian. As he fought them off single-handedly, they cut him with a knife. Later that day, with his bloodied hand bandaged, he returned home a hero, Yakunin said.
Tomberg confirmed the account. “There were some fights and once they cut him up a bit with knives. But he wasn’t a hooligan,” he said by telephone from Tallinn.
When Yakunin was 14, his father relocated to Leningrad, where the family, including Yakunin’s mother, Valentina, and younger sister, Yelena, lived in a five-story apartment building on Blagodatnaya Ulitsa in the city’s Moskovsky district.
In 1966, Yakunin entered the Leningrad Mechanical Institute to study ballistic missile production for the next 5 1/2 years. He graduated third in his class, classmates said.
While still a student, Yakunin married Natalya, a brunette he had known since high school. Their first son, Andrei, was born two years after Yakunin’s graduation, and a second son, Viktor, followed several years later.
Yakunina often appears prominently with her husband at official events. Yakunin sat with his arm draped affectionately around her shoulder during most of a recent charity concert for Russian Railways.

KGB Mystery
After working two years as a laboratory assistant at a chemistry institute producing rocket fuel, Yakunin’s resume becomes more difficult to follow. From 1975 to 1977 he fulfilled his obligatory two years of military service. He refuses to say where he was stationed, fueling speculation that he joined the KGB while in the army. Friends from the period said they knew where he was but refused to elaborate.
In the interview, Yakunin said only that he had served in the army. He also said that while his public profile might be low, his resume was known by those who needed to know. “Among those who are making decisions, governmental bodies, the president, agencies, journalists, people who are interested, they all know who I am,” he said.
After the military, Yakunin worked for two years as an engineer at the State Committee for International Trade of the Soviet Council of Ministers before being made head of the international relations committee for the Ioffe Institute in Leningrad. It was there that he met a group of physicists — Yury Kovalchuk, Andrei Fursenko and Viktor Myachin — who would later become key figures in his rise to power.
But first he was dispatched to New York to serve for five years in the Soviet mission to the United Nations — a posting that has raised further questions about his possible KGB connections. Partially explaining his radical career shift was a massive bout of expulsions in mid-1985, when the UN sent home dozens of Russians accused of spying under diplomatic cover.
“It was an extremely complicated period in the relationship between the two countries,” Yakunin said in a 2005 interview with Itogi magazine.
Yakunin served as second and then first secretary at the mission and headed the Soviet representation on the Committee for the Peaceful Uses of Outer Space.
Two-thirds of the staff at the mission worked for the KGB or military intelligence in the 1980s, former KGB General Oleg Kalugin said.
Few details can be verified about Yakunin’s time at the UN. Two ambassadors stationed there at the time, Sir Crispin Tickell of Britain and Thomas Pickering of the United States, said they could not remember the midranking Soviet diplomat. During the period, attitudes among Soviet diplomats relaxed dramatically, Tickell said.
Another strong indication of Yakunin’s KGB service is a medal that he later received for no apparent reason, Kalugin said. The medal “For Military Service” is given only to military or KGB personnel, he said.
Back in Russia, Yakunin went into the export business with his physicist friends in early 1991 — a time when licenses for export businesses were usually only granted to former KGB officials.
To finance a series of short-lived firms that they set up, Yakunin’s group reanimated Bank Rossiya in December 1991, with Yakunin joining the board and becoming a shareholder. The bank was linked to Putin’s re-election campaign in 2004, with Ivan Rybkin, a Boris Berezovsky-backed candidate, identifying Kovalchuk and his brother Mikhail as Putin’s “cashiers.”
A business center that the group wanted to build in St. Petersburg led Yakunin to his first meeting with Putin, who had to approve the project as head of the city’s foreign relations committee.
Yakunin’s friendship with Putin appears to have flourished. Yakunin was a well-known figure in the circle around Putin and Mayor Anatoly Sobchak, said Yagya Vatanyar, then a city lawmaker and adviser to Sobchak. Yakunin was close to both men, Vatanyar said.
In interviews, Yakunin has described his relationship with Putin as first “businesslike” and then “neighborly.”
In late 1996, Putin and Yakunin were among a group of eight partners who set up Ozero, a gated dacha community on the banks of Lake Komsomolskoye, 130 kilometers north of St. Petersburg.
The Ozero group got together after a visit by Yakunin and his business partners to a dacha owned by Putin in the area, Yakunin has said. Putin is believed to have secured the dacha several years earlier through Viktor Zubkov, then a St. Petersburg official and now Putin’s new prime minister. Putin’s original dacha burned down in 1995, leading the future president to have, as he told Larry King in a 2000 interview, a profound religious experience. The dacha was rebuilt, and Putin sold it several years ago, Yakunin has said.

Following Putin’s Tracks
When Putin moved to Moscow to work in Yeltsin’s presidential administration as head of the property department, Yakunin left the private sector to head the property department’s northwestern branch. After Putin was moved in mid-1998 to the Federal Security Service, Yakunin continued serving under his successor, current FSB chief Nikolai Patrushev.
Yakunin only moved to Moscow when Putin became president in 2000, accepting the post of deputy transportation minister in charge of the country’s seaports
Former Transportation Minister Sergei Frank said Yakunin got the job after impressing him while auditing St. Petersburg’s ports. Frank said he had been particularly taken with Yakunin’s openness to new ideas, willingness to accept responsibility and obvious patriotism.
“He likes to listen rather than to speak,” Frank said in an interview. “He is very patriotic. He is really fond of his country and city, St. Petersburg ... but simultaneously he is a liberal-minded man and open to Western culture.”

TITLE: 2008 City Budget Comes Under Fire From Deputy
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: A long-standing State Duma deputy and member of its Budget and Taxes Committee has hit out at St. Petersburg’s 2008 city budget saying it is riddled with murky investment projects, contains state subsidies to local energy monopolists and inflated construction costs of socially important construction projects.
Oksana Dmitriyeva, who was once aligned with Yabloko and is currently with Just Russia, said on reviewing the budget — now passing through the St. Petersburg Legislative Assembly — that she was surprised to find billions-worth of subsidies to such suppliers as Peterburgteploenergo, slated to received 7.5 billion rubles ($30 million) in subsidies next year, and Petroenergosbyt, due to receive 2.4 billion rubles ($10 million) in city subsidies.
“These monopolists are not state agencies, they have long become joint-stock companies,” Dmitriyeva said. “And the city is not getting any benefits in return for sponsoring these giants, which sell energy to local residents at market prices.”
Governor Valentina Matviyenko said in a statement released by the governor’s press service in September, “The budget for 2008 and for the period up to 2010 will be socially oriented. Once again the budget maintains the balance between spending on social activities and the development of communal services and the city’s infrastructure.”
Dmitriyeva said she appreciated the presence of new schools, hospitals and rehabilitation centers in the budget, but expressed alarm over what she called “a consistent pattern of exaggerating construction costs” of such “socially oriented” projects.
Next year’s planned spending represents a 50 percent increase compared to 2007 and tenfold increase compared to 2003, with construction costs for schools listed at $2,000 per square meter, almost the equivalent of market prices. 
Dmitriyeva said such costs must be reduced by half.
“Market prices incorporate the costs of land, which are very high, but the city does not pay for it; profits from selling the resulting real estate also make the prices higher but I do not suppose the city intends to sell the schools,” Dmitriyeva said. “The city does not bear many of the expenses that private construction firms do, and has to price such construction projects accordingly.”
Dmitriyeva, who personally supervised the construction of a series of children’s rehabilitation centers and hospitals in Russia, said construction costs for similar centers in St. Petersburg are almost two times higher than the sums that other centers have been built with.
For example, Dmitriyeva said, the cost of the recently opened Raisa Gorbachev Center for Child Hematology and Transplantology, which was funded by both the Russian government and private sponsors, was 600 million rubles ($24 million). By comparison, Dmitriyeva said, the planned cost of a new children’s infectious diseases hospital in the city budget is seven times higher than that figure
“A rehabilitation center costs 30 million rubles at most but St. Petersburg City Hall offers to build them at a price of 110 million or more,” Dmitriyeva said.
The draft budget also allocates 5 billion rubles ($201 million) for creating a “telecommunications network for the city administration and government structures” but Dmitriyeva said the money could be better spent.
“The combined costs of all social housing construction projects, including, for example, new housing for people living in communal apartments and dilapidated buildings or housing for young families, are going to cost the city less than this questionable novelty, designed for officials to exchange databases and information,” Dmitriyeva said.

TITLE: Activists Rethink Opposition
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — About half of the names on a decree President Vladimir Putin signed Friday for the 42 Public Chamber members he appoints directly are new, including two figures from major human rights organizations that boycotted the same process two years ago.
When the 126-member chamber was created in 2005, people like Alexander Brod, the head of the Moscow Bureau for Human Rights, and Holocaust foundation head Alla Gerber were conspicuous by their absence. Come January, however, they will be taking part.
“There is nothing reprehensible in becoming a member of the chamber,” Brod said Friday after accepting Putin’s invitation.
He added that the consultative body, which was broadly dismissed as a toothless facade for civil society when created, has proven itself a viable institution able to defend people’s rights.
Gerber said she accepted because of the opportunity the chamber provided.
“I didn’t [accept] enthusiastically, but only because I believe that as a member of the chamber I can achieve more than now,” she said. “The minute I understand this is not the case, I will quit.”
After the 2004 Beslan hostage-taking crisis, Putin called for the creation of a body bringing together prominent social activists to facilitate the exchange of ideas and information between the government and civil society.
The Public Chamber has no legislative or policy implementation powers and can only issue recommendations and monitor some government activities. It can also review legislation before it is considered by the State Duma, but its findings are nonbinding.
The president appoints 42 members — one-third of the chamber’s membership — every two years. They then nominate another 42 from national nongovernmental organizations, who then help choose the final one-third of the membership from regional NGOs.
The president appoints the heads of all of the chamber’s 17 commissions.
The selection mechanism has been cited by major human rights organizations like the Moscow Helsinki Group as being behind their refusal to join the chamber. “There is nothing public about this chamber if its members are appointed by the president,” said Lyudmila Alexeyeva, head of the Moscow Helsinki Group.
She did say, however, that human rights groups, including hers, cooperated with the chamber on many issues.
Putin’s decree included Yevgeny Velikhov, president of the Kurchatov Institute, which specializes in atomic research, although it did not say whether he would remain secretary of the chamber. Prominent criminal lawyer Anatoly Kucherena, pediatrician and children’s health advocate Leonid Roshal and the editor of the Moskovsky Komsomolets tabloid, Pavel Gusev, are also returnees.
Other new faces include liberal economist Yevgeny Yasin and actors Chulpan Khamatova, Fyodor Bondarchuk and Vasily Lanovoi.
Alfa Bank head Mikhail Fridman, political analysts Sergei Markov and Vyacheslav Nikonov and theater director Alexander Kalyagin all failed to be reappointed.

TITLE: In Brief
TEXT: <b>Park & Ride Opens</b>
ST. PETERSBURG (SPT) — The city’s first “park & ride” transport scheme came into operation on a pilot basis in St. Petersburg on Monday.
The scheme, in which commuters from outlying districts park their cars at a designated parking lot and continue their journey to the center by public transport, is centered near Ladozhskaya metro station, Interfax said.
Such schemes aim to reduce car traffic in busy downtown areas.
In St. Petersburg, upon parking their car, commuters receive a smart card pass to use on public transport.
So far this means using the metro system, although the scheme will widen to include overland transport at a later stage. 
The Ladozhskaya scheme runs from 6 a.m. through 11 p.m. and accommodates 288 cars. 
After an evaluation period, City Hall plans to construct at least 11 more “park & ride” parking lots at metro stations in St. Petersburg to further ease the city’s commuter traffic.

<b>Imam Shot Dead</b>
MAKHACHKALA (AP) — Gunmen killed an imam on his way to morning prayers in Dagestan on Saturday, a day after he spoke out against Islamic extremists, police said.
Nurmagomed Gadzhimagomedov was shot by attackers in a car while walking from his home to his mosque in the Dagestani settlement of Gudben, district police chief Sergei Makukha said.
Gadzhimagomedov, a critic of Islamic extremism, had spoken out against militants.

TITLE: Superpower Space Race Started With a Comic Blunder
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW — Fifty years ago, the Soviet Union woke up to the space age with a propaganda blunder.
On Oct. 5, 1957, the main headline on Pravda’s front page said the country should prepare for winter. The real news of the day, however, was somewhat clumsily placed at the right margin. Under the headline “Notice from Tass,” the state news agency explained in its trademark dull style that the Earth’s first artificial satellite, called Sputnik, or “travel companion,” had been launched a day earlier.
While the Politburo was unusually silent about the achievement, a steady beep-beep emitted from the orbiting Sputnik was widely picked up by amateur radio operators and sent shockwaves through the world. U.S. media were caught up in a Sputnik frenzy, with The New York Times plastering its Oct. 5 front page with the headline “Soviet Fires Earth Satellite Into Space.”
Dubbed the Sputnik Shock, the event heralded the beginning of the space race. The West feared that if Moscow could launch objects into space, it might soon be capable of sending nuclear bombs in their direction as well.
The Kremlin, however, missed a big propaganda opportunity. “We did not expect this reaction at all,” Sputnik rocket scientist Boris Chertok told reporters Friday. “Neither we, nor our media first grasped the historical significance of our feat.”
Chertok, still spry at 95, worked in a group of engineers headed by Sergei Korolyov, a former gulag prisoner who became Sputnik’s remarkable chief designer and is still revered as the visionary who started the space age.
Soviet leader Nikita Khrushchev ordered Korolyov to speed up the pace for launching a satellite in the summer of 1957, fearing the United States would launch one first.
The Soviet scientists decided to abandon work on a 1,000-kilogram satellite for the more humble Sputnik, a 58-centimeter-wide alloy sphere weighing just 83.6 kilograms.
“We regarded it as Korolyov’s little toy — a no-brainer,” Chertok said, speaking in the Korolyov Museum, located in the engineer’s former home near Moscow’s Monument to the Conquerors of Space. “We believed this would mainly interest us scientists and our students.”
Sputnik’s comparatively large dimensions baffled Western scientists at the time. “When we learned about its weight, we thought that a decimal had been mistakenly moved because the Americans were expected to launch an 8-kilogram satellite,” said Harro Zimmer, a German space expert who worked in Berlin’s Wilhelm-Foerster Observatory at the time.
Zimmer, who has written extensively about space flight, said the Soviet Union built bigger satellites because they also had constructed a much bigger rocket, the R-7 intercontinental ballistic missile. This was actually a consequence of a gap in weapons technology, he said. “They could not construct small warheads like the Americans.”
The United States’ Vanguard satellite program, however, was mired in failures and dubbed Kaputnik after a rocket exploded during a launch in front of television cameras.
Even though it was just a metal ball with a radio and four antennas, Sputnik embarrassed the West. Its 51-kilogram battery made its beep last for 21 days, and the satellite orbited for another 26 days before burning up upon re-entry into the atmosphere.
Chertok said the Soviet media could have really trumpeted the success had it not been so obedient to the authorities. “They expected orders from the party but did not receive any,” he said.
Khrushchev did not even bother to attend the launch. In an interview with The New York Times two days later, he acknowledged that after receiving the news by telephone that Sputnik was on course, “we congratulated each other and went off to bed.”
In fact, it took several days for the official propaganda machine to get going. On Oct. 7, a Monday, Pravda merely ran a report about the cities that Sputnik had flown over. A full four days after the launch, on Oct. 9, the newspaper finally produced a full-sized, front-page report with a huge photo of the satellite.
Having finally grasped the enormous propaganda potential, Khrushchev told his engineers to launch a second satellite in time for the October Revolution holiday on Nov. 7. “We only had one month to make a miracle happen. We could not just send that ball up again,” Chertok said.
The scientists managed to launch a much bigger satellite on Nov. 3. Sputnik 2 weighed more than 500 kilograms, was cone-shaped and carried Laika, the mongrel dog lauded as the first animal in space. Although later it was revealed that she died of the extreme heat within hours of liftoff, Laika paved the way for human spaceflight.
The British government protested Laika’s treatment as cruel. “The country of Isaac Newton was the only in the world to protest,” Chertok said.
Sputnik led the United States to create NASA in October 1958. The Soviets eventually lost their lead in space when the United States sent the first men to the moon in 1969.
The space race triggered by Sputnik laid the foundation for all later successes in space exploration. “Without that tough technological competition, no man would have reached the moon in 1969,” Zimmer said.
In contrast, the post-Cold-War world has lacked such a catalyst. “There is much less going on today,” Zimmer said. The Russian space industry, he said, has been reduced to providing cheap rocket flights.
The Central Bank is minting a commemorative coin for the Sputnik anniversary on Wednesday. The 31-gram silver coin will have a denominational value of 3 rubles ($0.12), RIA-Novosti reported.
Among their other achievements, Korolyov’s engineers built the first unmanned spacecraft to reach the moon, took the first photographs of the dark side of the moon and sent the first man into space, Yury Gagarin, in April 1961. 
Korolyov’s identity was kept secret by the Soviet leadership and only revealed after he died in 1966. Chertok’s identity and involvement in the space program were a state secret for decades.
Chertok, who still works as a consultant twice a week at spacecraft manufacturer Energia, outside Moscow, is proud of the contribution Korolyov’s engineers gave to the world through space technology, including satellite phones and GPS navigation systems.
“You don’t know it, but many people use our science all the time,” he said.

TITLE: Vox Populi
TEXT: Should an ice rink be set up on Palace Square?

Vasilisa, 8, schoolgirl:
“It will be very beautiful to have a skating rink on Palace Square. I don’t know how to skate yet but I’d learn it there with pleasure.”

Vitaly, 50, artist:
“I’m sure the pictures in the Hermitage can stand a skating rink and rock concerts. I’d love to skate there with my child.  It would be a special experience to skate against a background of baroque and classical architecture.”

Lidia Yegorova:
“Why not have a skating rink on Palace Square? I’m sure youngsters will have fun there.”

Olga Traube, 57, 
insurance agent:
“I don’t like the idea. I think the square is such a sacred place for us, and a skating rink there will be absolutely out of place. I worry that the pavement of the square will be damaged.”

Yekaterina Gradovtseva, 25, teacher:
“I think, we’ve already got quite enough skating rinks in the city — on Yelagin Island, in malls, etc.  The historical center should remain the historical center.”
Vyacheslav Kalugin, 72, pensioner:
“I think, it’s quite possible to have a rink on Palace Square.  Some people will like it.  I haven’t skated for a long time but  maybe I would do it again on the square.”

Antonina Borisova, 55, cook:
“I think, it’s not wise to spend so much money on a one season thing.  They’d better reconstruct the old sports venues on this money.

Olga Morozova, 31, newspaper editor:
“If Piotrovsky thinks it’s dangerous for the Hermitage and the square, then it’s dangerous to certain extent.”

Vladimir Taubin, 31, IT director:
“I don’t mind.  There’s such a skating rink in Paris, there was one at Red Sqaure.  People liked it. So, I think, it’s a good idea.”

Olga Gordon, company director:
“If the skating rink reminds us of the good old days then it will be very good. It should be beautiful so as not to spoil Palace Square. …  As for the Hermitage’s reaction, why can Paul McCartney sing there while regular people can’t skate there?”

TITLE: Sokotel Plans 5 New Hotels in City Center
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The Finnish hotel operator Sokotel plans to construct five new hotels in the center of St. Petersburg over the next six years, adding about 1,000 new rooms to Sokotel hotels’ capacity, the company announced last week in a statement.
Last month Sokotel completed the construction of Sokos Hotel Olympic Garden, which will start operating in the near future.
“Over the last two years we have announced three large projects in St. Petersburg. Just a year ago we had nothing here in this spot, and today we see a beautiful building. In Finland we would not have been able to construct the building so fast,” said Juhani Jarvenpaa, general manager of SOK Holding.
At the moment SOK Holding is looking for land plots in the center of St. Petersburg to construct five new hotels. The company is considering both state-owned and private land plots, Jarvenpaa said.
All the new hotels will be four-star, and each hotel will offer 200 to 300 rooms. Construction of one hotel could take up to two years, while the total project is expected to take six years.
Sokotel estimated the total investment into new hotels at $50 million. In addition to its own investment, the company expects to attract about $213.5 million from partner investors. Jarvenpaa expects that the same partners who financed the construction of Sokos Hotel Olympic Garden will join Sokotel in its new ambitious ventures. Real estate experts were positive about Sokotel’s new projects. “The company will very probably find appropriate land plots for new developments or land plots that could be redeveloped,” said Tatyana Chursina, senior consultant in the investment department at Colliers International.
However, the proposed volume of investment is “on the edge,” she said, due to the growing prices for land in the center of the city.
“The hotel operator should not face any particular problems.  Any new hotel projects are welcomed by local authorities, as hotels are a priority at the moment and operators can find all the conditions necessary for development,” Chursina said.
She considered four-star hotels to be the most popular segment, especially for foreign tourists.
At the moment Sokotel is completing the construction of three hotels in St. Petersburg, which will offer about 900 rooms. The company invested about $178 million into these projects.
Sokotel already employs 110 people in its chain in Russia, and plans to employ a total of 400 people by the end of 2008.
Sokos Hotel Olympic Garden will open in December 2007, Sokos Hotel Vasilievsky will start operating at the beginning of 2008, and the company’s recently completed five-star Holiday Club hotel is due to start operating later this month.

TITLE: Japanese in City To Strengthen Ties
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: A Japan-Russia business seminar started Monday in St. Petersburg at the Grand Hotel Europe and will continue through Wednesday this week, focusing on traditional Japanese furniture, Japanese food, consumer goods, construction technologies and the business model of a Japanese restaurant.
The organizers believe the event should contribute to cooperation between small and medium-sized Japanese companies and local enterprises.
“The economic ties between St. Petersburg and Japan are becoming stronger, and it concerns not only large Japanese corporations but also small and medium size companies,” said Nobuko Kotani, Economic Department Attache at the General Consulate of Japan in St. Petersburg.
“That’s why we decided to organize this business-seminar, where local entrepreneurs can find out the necessary information on Japanese companies and business opportunities,” Kotani said.
The seminar was organized by the Japanese consultancy firm, President One, in cooperation with the St. Petersburg City Hall’s Committee for External Affairs and the General Consulate of Japan in St. Petersburg.
Representatives of 19 Japanese companies and officials of Takayama city are taking part in the seminar, looking for an opportunity to establish business operations in Russia.
Among the participants are the Nissin Wooden Factory furniture company, the Tenryo Sake Brewery, AE tea, Aroma-Foods, the consumer goods maker Maruhachi Towel Co. and others. These are small and medium-sized companies with an annual turnover of $5.6 million to $217 million.
The seminar is divided into three main parts — furniture and design, Japanese cuisine and beverages, and Japanese restaurants. The exhibition features both mass-market and expensive hand-made products.
“What makes this seminar different from other events of this kind is that visitors can not only take a closer look at Japanese culture, but can also find out about how traditional Japanese products and goods are produced,” said Hisaya Matsuhisa, CEO of President One.
Another advantage of the seminar is that is focuses on Japanese business models. Besides visiting the exhibition and presentations of Japanese companies, Russian participants of the seminar will have the opportunity to request individual negotiations with Japanese entrepreneurs.
“We hope this seminar will strengthen the ties between the two countries. We believe it will contribute to the dialogue and information exchange between our businesspeople, and we hope that in the near future we will establish a regular center for business meetings in St. Petersburg,” Matsuhisa said.
The seminar is part of the 4th Japanese Fall festival program. After completing negotiations with St. Petersburg entrepreneurs, the Japanese delegation will visit Moscow.
“The Japanese Spring and Japanese Fall festivals have become regular events, and now we are aiming at improving our ties not only in cultural matters, but also in the economic sphere,” Matsuhisa said.

TITLE: Soaring Gold Makes Mining Stocks a Risk
AUTHOR: By Catrina Stewart
PUBLISHER: Staff Writer
TEXT: MOSCOW — Gold prices rocketed to a 28-year high last week as Severstal tightened the screws in its battle for gold miner Celtic Resources. 
On Friday, Severstal upped its bid for Celtic, prompting feverish activity on the London-listed company’s stock. The steel firm’s march on Celtic comes amid a week of bullish forecasts on the gold front. 
Goldman Sachs raised its six-month forecast on gold to $800 per ounce earlier in the week, as the plunging dollar sent investors into gold as the next best thing.
“Here you have a choice between a paper currency that’s depreciating and a tangible asset,” said Erik DePoy, strategist at Alfa Bank. “The question is how much resistance we will see on the part of central banks.
“There is the view that central banks have been managing the gold price,” DePoy said. “They sell their reserves to keep prices down [and to] dampen inflationary expectations. They are playing a psychological game.” 
On Friday, gold was trading up at about $739 per ounce. 
But it wasn’t making a lot of difference to Russian gold stocks. Polyus Gold has been one of the poorest performers among the gold plays. Michael Kavanagh, a metals analyst at UralSib, said the gold price had little bearing on the company’s stock price, given that most of its growth is long-term. It is not expected to show an increase in production until 2009 or 2010. 
“In general, Russian precious metals stocks wouldn’t be the best bet in a rising price environment,” Kavanagh said, noting that they have displayed limited short-term growth potential. 
Meanwhile, the RTS index continued to perform well, edging closer to an elusive 52-week high of 2092.71 points. 
It closed the week at 2071.80 points. The MICEX, on the other hand, was fractionally down on the week, from 1759.46 to 1759.44.
On the base metal front, Chelyabinsk Zinc and Norilsk Nickel led the pack in one-day gains. Norilsk has been one of the sector’s success stories, analysts said. 
Norilsk’s gains come on the news that it plans to quadruple nickel production at one of its South African mines. But recovering nickel prices also helped, hovering at about $31,500 per ton Friday. 
Following the recent Fed interest rate cut, emerging markets have rallied across the board. 
“[The cut] was a catalyst for everything,” Kavanagh said. “Everything related to growth and commodities has gone through the roof.”
But by Friday, Goldman Sachs downgraded its “buy” rating on Norilsk to “neutral,” noting that the stock had significantly outperformed the MSCI Russia index since May. 
Russian metals have been buoyed by a lot of good news from Asia. Indexes in Hong Kong, China and Australia all hit record highs toward the end of the week. Australia’s BHP Billiton has been performing extremely well, and this has spilled over into Russia. 
“It all adds up this general consensus view that it’s time to get back into the emerging markets — and within the emerging markets into commodity plays,” DePoy said.

TITLE: Lenoblast Gets New Refinery
PUBLISHER: Bloomberg
TEXT: MOSCOW — Surgutneftegaz will build a $6 billion refinery in the Leningrad oblast by 2011 to meet growing demand for gasoline and other oil products, spokeswoman Raisa Khodchenko said Thursday.
The plant, Kirishi-2, will be able to process 12 million tons of oil a year, Khodchenko said, citing chief executive officer Vladimir Bogdanov.
The facility will boost the company’s refining capacity by 50 percent. Surgutneftegaz is expanding the existing Kirishinefteorgsintez refinery, south of St. Petersburg, to reach capacity of 24 million tons per year in 2009. The existing plant will process about 22 million tons of oil this year, Khodchenko said.
The Kirishi-2 project costs will be adjusted after the company finishes carrying out feasibility studies, Khodchenko said.
Surgutneftegaz is spending $2.4 billion to install a hydrocracking unit by the end of next year, Bogdanov said in May.

TITLE: Energomash Says Audit Chamber Wanted Bribe
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Engineering company NPO Energomash, which makes rocket engines for U.S. firm Lockheed Martin, said Thursday that it was approached for a 7 million euro ($9.9 million) bribe to reinstate its export license.
Energomash’s export license was frozen in May for four months following an Audit Chamber investigation. Shortly afterward, a lawyer approached the company with a proposal to overturn the freeze in exchange for the bribe, company spokesman Yury Korotkov said. Energomash has a contract to supply Lockheed Martin with $500 million worth of RD-180 engines. Korotkov said the company missed delivery deadlines after suspension of its export license.
Energomash’s statement comes after the arrest last month of Defense Ministry officer Yury Gaidukov on suspicion of extorting the bribe. Gaidukov was in charge of the Audit Chamber inspection into the company earlier this year.
The Audit Chamber on Thursday announced the detention of another linked to the racket, the chief of its legal department Zarina Farniyeva. The chamber also confirmed the arrests of two of Gaidukov’s associates — Nikolai Serykh and Alan Gogichayev — neither of whom were Audit Chamber employees.
Audit Chamber chief Sergei Stepashin on Thursday vowed to root corruption out of his agency.
“As I have said, the fight against swindlers and bribe-takers, including those in the Audit Chamber, will continue,” he said, Interfax reported.
The group behind the bribery racket was arrested Sept. 6 after taking an installment of 1 million euros in marked bills, the Audit Chamber said in a statement.

TITLE: Severstal Gold Bid
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Severstal on Friday made a new public offer for gold miner Celtic Resources worth $328 million, but Celtic’s board immediately advised shareholders to reject it. 
News of Severstal’s higher bid emerged just hours after Celtic, which has gold mining assets in Kazakhstan and Russia, informed the London Stock Exchange that a rival bidder had made a preliminary approach. 
Severstal Resurs offered $5.51 per share via affiliate Centroferve Limited, an increase on its initial bid last week of $4.49 per share. 
Celtic’s board advised shareholders to reject the approach, saying that the offer “significantly undervalues” the company. 
Severstal said it was offering a fair price. Severstal also said it now holds 29.7 percent of Celtic’s shares, up from the 26.6 percent stake it had at the beginning of last week. Severstal said several shareholders had approached it in the past week seeking an exit strategy. 
The steel firm added that it had a letter of intent from shareholder Barrick Gold to support its offer with its 6.6 percent stake, bringing Severstal’s stake to 36.3 percent. 
“In the mining industry, the price a company usually goes out at is 50 percent to 100 percent higher from when the bidding starts,” said Jonathan Guy, an analyst at Natixis Bleichroeder in London. Fair value for Celtic, according to Natixis Bleichroeder, is about $5.92 per share.

TITLE: In Brief
TEXT: <b>Russia-China Pipeline</b>
MOSCOW (Bloomberg) — Russia and China may agree in November to build an oil pipeline between the two countries, Interfax reported, citing Russian Deputy Prime Minister Alexander Zhukov.
Prime ministers from the countries may sign an agreement to regulate the pipeline’s construction, but not the flow of oil supplies to China, the Moscow-based news service quoted Zhukov as telling reporters in Beijing on Saturday.
Rosneft, Russia’s state oil producer, is seeking to increase the price at which the company ships crude to China because it can sell oil to “the West” at a higher price, Zhukov said, according to Interfax.
Russia doesn’t aim to change the volume of its oil shipments to China and continues talks on selling natural gas to that country, the news service quoted Zhukov as saying.

<b>Kudrin Criticizes IMF</b>
MOSCOW (Bloomberg) — The International Monetary Fund will lose its legitimacy as a world institution regulating international finance if selection of managing director continues to remain a matter of national origin, said Alexei Kudrin, Russia’s deputy prime minister and finance minister.
Writing in the Financial Times, Kudrin said that it’s not reasonable that the European Union and U.S. get to decide who runs international financial institutions.
Countries such as China, India and Brazil have growing economies and should be able to participate in top-level decision-making, the minister said. The IMF will lose its standing if it’s seen as a way for one country or group of countries to maintain dominion over others, Kudrin wrote.

<b>S7 Heading for Ireland</b>
MOSCOW (Bloomberg) — S7, Russia’s second-largest airline, will start the first direct flights to Ireland next year as booming economies in the two countries spur demand for travel.
S7 will fly Moscow-Dublin-Moscow three times a week from next summer, the Novosibirsk, Siberia-based carrier said Monday in an e-mailed statement.
The flights, scheduled for Wednesdays, Fridays and Sundays, will be on Airbus SAS A319 jets, the statement said. S7 was previously called Siberia Airlines.

<b>Ananenkov Will Stay</b>
MOSCOW (Bloomberg) — Gazprom, the world’s largest natural-gas producer, denied media reports saying Deputy Chief Executive Officer Alexander Ananenkov will resign.
Ananenkov, 56, returned to work Monday after a scheduled vacation, the Moscow-based company said in an e-mailed statement.
Russian media including the Kommersant and Vedomosti newspapers and the Interfax news service all cited unidentified people as saying Ananenkov may resign soon.

<b>Carousel’s Gain Triples</b>
MOSCOW (Bloomberg) — Carousel Group, a Russian superstore chain that may be bought by X5 Retail Group NV, said first-half earnings tripled after new outlets boosted sales growth.
Earnings before interest, taxes, depreciation and amortization, or Ebitda, jumped to $29.2 million in January through June, the St. Petersburg-based company said Monday in an e-mailed statement, without providing year-earlier figures or net income. Sales gained 180 percent to $343.2 million.
The retailer opened three superstores in the first half, raising its store count to 22 as of June 30. The company is adding stores to capitalize on higher consumer spending as Russia’s ninth year of economic growth fuels incomes.

<b>MegaFon Profits Soar</b>
MOSCOW (Bloomberg) — MegaFon, Russia’s third-largest mobile-phone company, said second-quarter profit surged 63 percent as economic expansion boosted demand for communication services nationwide.
Net income climbed to 8.25 billion rubles ($332 million), Moscow-based MegaFon said Monday in an e-mailed statement. Revenue rose 48 percent to $1.38 billion under U.S. generally accepted accounting principles.
Earnings before interest, taxation, depreciation and amortization rose 49 percent to $0.7 billion. The company reported average monthly revenue per user at $14. MegaFon serves more than 34 million customers.

<b>Imperial Denies Claims</b>
MOSCOW (Bloomberg) — Imperial Energy Plc, the British oil explorer accused by Russia of inflating reserves, denied exporting geological data on its deposits for an audit after a Russian regulator called for a criminal probe.
“We handed over the information to DeGolyer & MacNaughton in Moscow,” Peter Levine, chairman of the London-based company, said by telephone Monday. “We didn’t export any data.”
The Russian Natural Resources Ministry’s environmental watchdog sent a letter to the Prosecutor General’s Office Sept. 28 asking for further investigation after prosecutors said DeGolyer & MacNaughton’s Moscow office didn’t review Imperial’s reserves data, deputy head Oleg Mitvol said Monday.

<b>Russian Railways Loan</b>
MOSCOW (Bloomberg) — Russian Railways, whose track could circle the Earth twice, plans to borrow 140 billion rubles ($5.6 billion) from abroad next year to upgrade its network.
State-owned Russian Rail can get the loans it needs from foreign banks at lower rates than those offered by domestic financial institutions, Chief Executive Officer Vladimir Yakunin said, in remarks reported Monday by the RIA Novosti news agency and confirmed by company spokeswoman Yelena Kulakova.
Russian Rail plans to invest $26.6 billion from 2005 to 2008 to upgrade tracks and rolling stock, according to the company’s web site, as the economy of the world’s largest energy exporter expands for a ninth consecutive year. The company operates 80,000 kilometers (50,000 miles) of track across 11 time zones.

<b>Supermarket Profits Up</b>
MOSCOW (Bloomberg) — Seventh Continent, the Russian supermarket chain, said second-quarter profit tripled as cost growth slowed and the company booked a gain on land holdings.
Net income jumped to $36.6 million from $12 million in the same period last year, the Moscow-based company said in a statement Monday. Excluding the one-time gain, net income was $21 million according to UBS AG, beating the brokerage’s $16 million estimate.
 Sales advanced 34 percent to $304 million as Russia’s ninth year of economic growth drove consumer spending. Seventh Continent recorded a $15.3 million gain in the quarter to recognize the increased value of Moscow development sites it bought for 3.4 billion rubles ($137 million) in March.

TITLE: Telecoms Tycoon Continues to Learn With an MBA
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: Less than five years after Vitaly Yezopov founded his telecommunications company at the age of 26, it has flourished to become one of the top 10 communication services providers in Moscow.
His spacious boardroom at Mastertel’s headquarters is a symbol of sorts for a company overindulged with medals and accolades, with rows of framed certificates hanging meticulously on its walls.
But Yezopov said he was badly in need of something else: a master’s degree in business administration.
“To people of my generation, an MBA is the ultimate,” Yezopov said. “You’re like a fish in the water when you have it because it kind of cements your knowledge.”
Russia’s short marriage with market economics notwithstanding, Yezopov said holding an MBA made a person a member of an exclusive club and “widens the scope of social interaction.”
When Mastertel opened in 2002, it was the best of times for the telecommunications industry. With the economy on a seemingly endless roll, the newly established Mastertel was primed to capitalize on its enviable position as one of the first telecoms companies that offered “turn-key” solutions in the market.
Yezopov said his goal was nothing short of propelling Mastertel to the No. 1 spot among thousands of competing telecoms operators.
“The market was cluttered but seemed to lack a definite direction or philosophy,” he said. “That’s when we decided to provide a different customer experience, bundled as an integrated solution.” 
He said this meant building telecommunications facilities from start to finish, from laying cables as soon as construction work starts on a big project, to providing telephone lines, high speed Internet access and after-service support, so the client would have no need to subcontract communication jobs to other providers. 
Yezopov, 31, said his first brush with business came early in the turbulent 1990s, “when Boris Yeltsin, with a stroke of the pen, allowed Russians to sell whatever is sellable.”
In his final school year, Yezopov started a small business selling software at the Orekhovo market but said he was soon squeezed out of the business by the emerging powerful criminal gangs. 
After earning a degree in information technology at Moscow’s Stankin State Technological University, he spent two years working as senior engineer at telecoms company Inkom, before moving over to Ukraine-based T3 Telecom.
Yezopov joined Startelecom in 2000 as director in charge of business development, where he led the successful transformation of the business into a holding company.
With an extensive background in telecommunications and a reputation for innovative technological concepts, Yezopov said the only way he could provide client-oriented services was “to set up a company that could transform his vision into reality.” 
In 2002, along with three friends, Yezopov decided to “take the plunge,” and Mastertel was born.
“I’ve gained so much experience working in different capacities, but the more I know, the more I feel the urge to ground my knowledge further through an MBA program.”
Although Yezopov would not readily admit it, one of the shining beacons of Mastertel is his MBA-wielding partner, Mastertel’s commercial director, Yevgeny Sandomirsky.
Sandomirsky bagged an MBA degree from California State University, Hayward, in 2002 but in 2005, Yezopov was content to enroll in the budding International University, which started offering MBA courses in 2001.
Though Moscow’s highly congested telecoms market is characterized by cut-throat competition, Yezopov’s peers said he had a business-friendly attitude toward competition.
“Vitaly is a shrewd businessman and innovator who impresses with his restless search for new solutions. He enjoys what he does and radiates that pleasure around,” said Mikhail Kozhevnikov, the general director of rival Otkrytiye Technologii, or Open Technologies, who has known Yezopov for four years.
Yezopov still juggles long working hours with his studies, despite palpable evidence of success. His credo, “business is pleasure,” is parlayed into corporate governance.
“I overlook some indulgences, some minor mistakes and mishaps committed by my workers because making them nervous is the best way to ruin productivity,” he said.
The father of three young sons, 18-month-old Ilya, 3-year-old Nikita and 6-year-old Andrei, Yezopov said he adjusted his tight schedule to spend more time with them.
“The only people that can steal time away from me are members of my family. I’m truly proud of them.”

TITLE: Tobacco Plant Complete
PUBLISHER: The St. Petersburg Times
TEXT: British American Tobacco (BAT) has completed the construction of new production facilities at its plant in St. Petersburg. This expansion is part of a large investment program which began in 2005, Lance Mucalo, general manager of BAT–St. Petersburg said Friday at a press conference.
By 2009, BAT plans to have completed the modernization of its three plants, which are located in St. Petersburg, Moscow and Saratov, investing a total of $170 million, which should increase production capacity up to 115 billion cigarettes a year.
Most of the investment ($110 million) will be spent on the St. Petersburg plant. $77 million has been invested into expanding production facilities and administrative buildings and acquiring and installing new equipment.
“This is in addition to $200 million, which has already been invested into the plant,” Mucalo said.
The St. Petersburg plant’s production capacity has increased from 20 billion to 37 billion cigarettes a year, and by 2009 the St. Petersburg plant will produce 40 billion cigarettes a year.
The plant operates 13 production lines producing five premium brands — Dunhill, Kent, Vogue, Pall Mall and Alliance. It provides about 25 percent of BAT’s production volume in Russia.

TITLE: Heavy Industry To Turn Into State Corp
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Rosoboronexport’s assets will be consolidated into a new state corporation, Russian Technologies, in the next six months, Sergei Chemezov, head of the state arms trader, said Friday.
The new corporation will be formed after a bill goes to the State Duma this month and is signed into law by President Vladimir Putin next month, Chemezov said.
Chemezov, a close ally of Putin who is widely expected to head the new corporation, said it should lead the rebuilding of the country’s heavy industry.
“The bitter experience of the ‘90s demonstrated that our industry, without state control and mainly managed by private business, doesn’t guarantee proper development,” Chemezov told the first conference of the Union of Russian Machine Builders, which he has headed since last year. “In many ways, technologies are stalled at the level of the 1970s.”
The industry’s overhaul is happening at a rate of only 1 percent per year, when it should be 10 percent to 12 percent, Chemezov said. “This is a dead end,” he said. “Reforms are proceeding with extreme difficulty.”
First Deputy Prime Minister Sergei Ivanov, speaking at the conference, said the responsibility for state defense orders had been taken away from the Economic Development and Trade Ministry and given to the Military-Industrial Commission, which he heads, in an effort to cut out inflated prices and missed order deadlines. 
Defense orders are not “a feeding trough” but rather “a piece of licorice worth fighting for,” Ivanov said.
The change comes after the ministry also lost control of the multibillion-dollar Investment Fund in a Cabinet reshuffle last week, which saw the replacement of longtime Economic Development and Trade Minister German Gref.
Rosoboronexport’s assets include stakes in AvtoVAZ, the country’s largest carmaker, VSMPO-Avisma, the world’s largest titanium producer and RusSpetsStal, a specialist steelmaker. 
Yevgeny Fyodorov, head of the Duma’s Economic Policy, Entrepreneurship and Tourism Committee, said Putin had last week submitted a bill to the Duma on creating Russian Technologies. Deputies would pass the bill in the next two weeks, Fyodorov pledged, eliciting applause from the audience.
Last month, speculation swirled that Chemezov might get a post in the new Cabinet. Some commentators have interpreted the bill to create Russian Technologies as a consolation prize. 
Excessive bureaucracy was stifling Rosoboronexport, Chemezov said in an interview in Parlamentskaya Gazeta. As a federal state unitary enterprise, it has to receive state permission to conclude any deal worth more than $50,000; as a state corporation, it would be freed from this requirement.
But turning the arms trader into a joint stock company would not make much sense because it would lose state guarantees and other means of support, Chemezov told the paper, a publication of both chambers of parliament. 
Critics have said Chemezov has been lobbying for the creation of Russian Technologies to avoid thorough state oversight and get control of money flows. 
Chemezov said, however, that various supervisory councils and other controlling structures would ensure state control and that Putin himself would appoint the head of the corporation. “So there cannot be any withdrawal into the shadows, by definition,” he told the newspaper.

TITLE: Zubkov Slams Russian Banks Over Credit Rates
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: MOSCOW — Prime Minister Viktor Zubkov on Thursday chastised Russian banks for failing to offer credit to domestic companies and said it was a “disgrace” they had to turn to foreign banks for loans.
Zubkov, chairing his first Cabinet meeting since the government reshuffle, cited the example of a paper factory in the Penza region that could not obtain credit from state-controlled VTB as evidence that tough lending policies were forcing firms to borrow heavily from the West. 
He ordered Finance Minister Alexei Kudrin, who was promoted Monday to the rank of deputy prime minister, to investigate.
“That’s a disgrace, I am instructing Alexei Leonidovich [Kudrin] to sort out the situation,” Zubkov said, Interfax reported. Zubkov said an official at the Mayak paper factory brought the case to his attention during his visit to the Penza region Wednesday.
“They went to VTB for many months asking for loans, but they were refused, even after being promised the loan at a 14 percent interest rate. At last, the factory obtained credit from a Czech bank at 4.5 percent,” Zubkov said.
“This is disgraceful,” he said, and suggested that the indifference of Russian banks had led to huge borrowings from Western lenders. “Russian banks pay no attention to the needs of Russian industries,” said Zubkov, who until his appointment last week headed the Federal Financial Monitoring Service. 
VTB chief executive Andrei Kostin promised Thursday to look into the Penza case but said the loan received by the paper mill was backed by a Czech export guarantee and was charged interest at less than the market rate.
“We are a commercial organization,” Kostin told reporters. “We can only operate on the market.”
Zubkov’s comments received a mixed reaction, with some commentators backing his call for more domestic investment by Russian banks, while others said the market needed the extra competition offered by foreign lenders.
Zubkov’s comments were a “victory for common sense,” said Alexander Kondrashov, representative of the Association of Russian Banks, adding that the association had pushed for the government to release “sterilized funds” into the economy.
“We made several appeals to the previous leadership that all financial resources that were stacked in various foreign companies, including the pension, social and stabilization funds, must be released into circulation,” Kondrashov said. “Without that, our financially strapped banks could not finance industrial development.”
Ivan Manayenko, a banking analyst at Veles Capital, said Russian banks were not well placed to lend to domestic industry because of their low capitalization and a lack of competition in the domestic loan market.
“Local banks still find it more profitable to issue loans in small packages to a number of smaller firms than to give large amounts to a big company or factory,” Manayenko said. “With more active competition and the entry of foreign banks into the Russian loan market, the situation will improve.”

TITLE: Musical Chairs At Local Banks
AUTHOR: By Anna Shcherbakova
TEXT: Several bankers have changed their places of work over the past few weeks — or perhaps I should say that several banks and their local branches have changed their top-managers. For instance, the local office of VTB, Russia’s 3rd bank by total assets, bid farewell to its head after several month of fruitless head hunting. Finally the right person was found at a division of VTB North-West, a regional bank in which VTB has a majority stake. The new head will be more of a nominal one than a strategically important person, experts say.  
The St. Petersburg affiliate retail-oriented VTB-24, another member of VTB group, has finally got a top-manager after almost two years of intensive recruiting. This vacancy lured as many bankers as a king’s daughter attracts knights in a fairy tale, but none was worthy enough to stay at the top of the branch, which should receive a good share of private clients’ loans and deposits from VTB North-West. Finally a mid-level manager was chosen from the St. Petersburg branch of another of Russia’s top-100 banks. Such a large amount of responsibility should be a real challenge for him. 
Another famous local banker has swapped his top-managerial position at the local branch of another top-100 bank for the position of chairman at a small local bank that is looking for a strategic investor, and wishes to improve its corporate governance as well as its financial results. It’s an interesting challenge for a person with an MBA who is familiar with modern technologies and approaches. 
At his old job he was fairly dependent on head office, whereas now he will be dependent only on the bank’s shareholders, who used to manage the bank themselves. It’s difficult to say which of these challenges is more difficult. Presumably he got a pay raise at his new job. According to one of his old colleagues, the top-managers of smaller banks usually earn more than they can at larger ones. Besides, many big banks prefer to rotate the top-managers of their St. Petersburg branches every couple of years. The role of the individual is smaller at big, well-run structures, as are the possibilities of negotiations with your employer, the colleague explained enviously. The conditions of every contract are of course confidential, but according to recruiters, the remuneration for bank top-managers can be up to $10,000 a month.  
“I’m not after the money, just give me an interesting and ambitious goal,” one banker boasted recently as having said to his employer. Former employer, I should add, because the banker accepted one of half-a-dozen proposals from other financial institutions after he received no response to his request. Skilled and experienced bankers are in demand. His salary has increased even though he has taken a step down in the banking hierarchy by agreeing to take not the first but second position at his former bank’s competitors. He spends almost half of the week on business trips in Kaliningrad or Ukhta, but seems completely satisfied, and can be held up as a clear illustration of the importance of self-realization, which can come when a person chooses their job themselves.

Anna Shcherbakova is the St. Petersburg bureau head of business daily Vedomosti.

TITLE: Vital Time For Free Trade
AUTHOR: By Pascal Lamy and Haruhiko Kuroda
TEXT: We may be at the “make-or-break” moment for global free trade. Although bilateral trade deals are becoming more common, consensus on the multilateral Doha Development Round of the World Trade Organization negotiations is still elusive. Many leaders have called for progress on Doha, but rallying political support at home for dramatic trade liberalization is always challenging.
So at this critical juncture, it is most important that we continue to give special attention to those economies that can actually benefit most from the Doha round — the least developed countries and smaller states. Opening markets and expanding trading opportunities stimulate economic growth and higher living standards. But for countries still isolated from the global trading system, there are large adjustment costs to opening their markets. 
And that is why the new Aid for Trade initiative — launched at the World Trade Organization ministerial meeting in Hong Kong in 2005 — is so important. The United States, European Union and Japan pledged initial contributions of about $15 billion to kickstart the initiative through 2010.
Aid for Trade will help these least-developed and smallest countries benefit from new trading opportunities by building the necessary capacity to trade effectively and efficiently — with donor support coordinated through multilateral partnerships with institutions like the WTO, the World Bank and regional development banks.
Each small and weak economy has its own specific needs. Some are isolated or landlocked, others are in a post-conflict environment, and still others enjoy limited raw materials or resource endowments. Aid for Trade will help these economies build the infrastructure to transport goods and to create new, viable and cost-effective tradable products. It will provide assistance for export promotion and trade finance. It will also fund training for customs officials and for trade negotiators to take advantage of free trade agreements. In addition, it will offer help in implementing market-oriented reforms and, yes, building the social safety nets needed for people to adjust to the changing economic environment.
Although Aid for Trade is designed to help weak economies and small states into the global trading network, it is the private sector that will ultimately drive the supply and demand for trade, as new products fit into existing or new production networks — as raw materials for processing, intermediate goods for assembly elsewhere, or as final products.
Increased trade and investment — particularly intraregional trade and foreign direct investment — has been key in driving Asia’s expansion. China’s expansion continues at over 11 percent. India’s economic growth is about 9 percent, and those countries most affected 10 years ago by the Asian financial crisis are now growing at about 6 percent. But for all the hype about the region’s growing global economic power, there remain two distinct faces of Asia and the Pacific. 
One perspective emphasizes the advances made by newly industrialized economies and the rapid expansion in China and India. This has led to a tripling in their share of world exports — to nearly 21 percent from less than 7 percent in 1980 — helping bring about rapid growth and higher living standards.
The other perspective focuses on smaller developing nations in this region and their challenges. From Afghanistan to Vanuatu, there are some 37 developing economies in Asia and the Pacific — least-developed ones like Bangladesh and Cambodia, small states such as the Maldives or Marshall Islands, or the landlocked transition economies of Kyrgyzstan and Turkmenistan. These smaller countries today account for just 2.8 percent of world exports, nearly the same as in 1980.
The dichotomy between the region’s success stories and those left behind boosts the argument for Aid for Trade. One of the goals of this initiative in Asia and the Pacific is to galvanize support from the region’s successful economies to help the small and weak economies within the region. Together with regional development banks in Africa, Asia and Latin America, we will see what is needed in each of these regions at this early stage of the initiative. The results will then be presented at a global Aid for Trade review meeting, to be held at WTO head-quarters in Geneva in late November.
Aid for Trade is about giving developing countries the tools to take advantage of market-opening opportunities, especially those that would result from the successful conclusion of the WTO Doha round — to better harness trade as an engine of economic growth and development. It is a necessary complement, but not a substitute. A successful conclusion to the Doha Development Round is the most important contribution that we can make to accelerating economic growth, promoting development and reducing poverty. 

Pascal Lamy is director-general of the World Trade Organization. Haruhiko Kuroda is president of the Asian Development Bank. 
This comment first appeared in The Wall Street Journal Europe.

TITLE: Paying the Price For the End Of Complacency
TEXT: Global financial markets are nervous and with good reason. The long period of low and stable interest rates is coming to an end. Since the events of August, when U.S., German, French, Chinese and other banks were caught holding suddenly illiquid assets backed by U.S. subprime mortgage securities, the interbank markets in main financial centers have tightened. Liquidity is at a premium, trust is low, and market volatility has risen.
Russia is not, and will not be, immune from these developments. That said, Russia is in a favorable position, relatively speaking, because of its strong reserves, a stabilization fund at 11 percent of gross domestic product, a fiscal surplus, high oil prices and a relatively transparent capital market that is less prone to the global economic contagion factor. 
One of the most striking features of the global economy over the past 20 years has been a large reduction in the volatility of economic growth. In the United States, the variability of output growth has more than halved over the past two decades. Of course, this phenomenon, also known as the “great moderation,” did not occur everywhere simultaneously. In Japan, Latin America and Russia, volatility dropped in a meaningful way only in the current decade. But by now, the decline has become nearly universal, with huge implications for global asset markets. 
Even assuming the broader positive trends in globalization and technological progress continue, a rise in macroeconomic volatility could still produce a sharp fall in asset prices. As former U.S. Treasury Secretary Lawrence Summers warned at the end of last year in the Financial Times, “The new year will begin with the greatest divergence for a generation between the general view of global risks as reflected by conventional wisdom and the risks as priced in financial markets.” 
Without reviewing the extensive debate on the causes of this “great moderation,” it is sufficient to stress that the massive equity and housing price increases of the past dozen or so years probably owe as much to greater macroeconomic stability as to any other factor. As output became more stable, investors did not require a large risk premium, so the prices of risky assets rose. 
As Harvard economist Ken Rogoff asked, “This brings us to the $200 trillion question: What could cause macroeconomic volatility to start rising?” The figure of $200 trillion is roughly the value of global money and asset markets, including housing. Earlier this year, Rogoff thought that the greatest risk might be geopolitical instability. He could still be right. But, as the spillover from the subprime mess has shown, even the heart of the modern financial system was vulnerable.
Former U.S. Federal Reserve Chairman Alan Greenspan said in an interview with the Financial Times that U.S. housing prices are likely to fall significantly from their present levels, admitting that there was a bubble. 
Greenspan observed “that the trade-off between unemployment and inflation has shifted.” Notably the disinflationary effect of globalization underlying the “great moderation” will fade. The integration of a billion workers from the once centrally planned economies of China and the former Soviet bloc into the global market system had a profoundly disinflationary effect on prices worldwide. But once all these workers are connected to the world economy, “the rate of change goes to zero,” he said.
Credit markets are unlikely to regain their confidence any time soon. Trust will have to be rebuilt — institution by institution. 
In the meantime, even leaving aside the effects of a downturn in real economic activity and corporate profits, equity markets could be negatively affected to the extent that more conservative cash management in financial institutions, including banks, will curtail the use of short-term money to fund long-term positions. 
This will be the price to be paid for the end of our complacency.

Martin Gilman, a former senior representative of the IMF in Russia, is a professor at the Higher School of Economics in Moscow.

TITLE: The Launch Heard Around the World
AUTHOR: By Matthew Brzezinski
TEXT: Few Americans have ever heard of Sergei Korolyov. But he is the reason that NASA was created and that the United States went to the moon. It is because of this anonymous Russian that the United States has federally backed college loans and National Football League games on DirecTV. The chief designer, as Korolyov was mysteriously known because his true identity was a Soviet state secret, almost single-handedly started the space and missile races. Thanks largely to this bullheaded survivor of Stalin’s gulag, a man who lost all his teeth and nearly his life in Siberian camps, the Republican Party lost the White House in 1960, and Lyndon B. Johnson secured a place on John F. Kennedy’s ticket and ultimately became the 36th U.S. president. 
All this is just some of the fallout from Sputnik — the tiny Soviet satellite that Korolyov and his team launched 50 years ago, on Oct. 4, 1957 — igniting a national panic in the United States, the effects of which still reverberate. The little aluminum sphere was not the source of fear, but rather the huge rocket that it rode atop, the world’s first intercontinental ballistic missile, or ICBM. The 183-ton projectile gave the Soviet Union an unrivaled capability to destroy any city on Earth within minutes of its launch. For the first time in its history, the U.S. heartland was vulnerable to attack by a foreign government. 
For Korolyov’s Kremlin masters, Sputnik was never about space exploration or cosmic milestones. It was a bold display of military might meant to match — and top — Washington’s own frequent exhibitions of firepower. “We simply switch the warhead,” Nikita Khrushchev boasted, in case anyone missed the point. 
The irony of the Sputnik crisis, of the terrifying realization that the Soviet Union suddenly possessed an advanced new weapons system far more lethal than anything in the U.S. arsenal, was that the debacle was largely of Washington’s own making — a perfect example of how a nation’s best-intentioned policies can sometimes backfire. 
The roots of the crisis went back to 1953, when U.S. President Dwight D. Eisenhower swept into the White House on a platform of securing the country against communist threats. Under the stewardship of John Foster Dulles, his hawkish secretary of state, Eisenhower devised a new defense doctrine to counter the spreading “Red menace,” which had recently claimed Eastern Europe and was infecting Asia. The United States, according to Ike’s doctrine, would no longer get bogged down in “minor” wars like in Korea. Instead, it would prepare for “total war,” an all-out nuclear holocaust designed, in Dulles’ own words, “to create sufficient fear in the enemy to deter aggression.” 
To keep the Soviets sufficiently frightened and in check, the U.S. Air Force’s Strategic Air Command began a systematic and sustained campaign of harassment and intimidation. Every day, U.S. planes took off from bases around the world and penetrated Soviet airspace, probing for weak- nesses in Russian radar defenses. Huge exercises with ominous names like Operation Power House scrambled hundreds of nuclear-laden, long-range bombers that charged across the Atlantic, headed for Moscow. At the last minute, they would turn around, but in some war games, squadrons of B-47 Stratojets would take off from Greenland, cross the North Pole and fly deep into Siberia in attack formation — in broad daylight. “With any luck, we could have started World War III,” the SAC commander, U.S. General Curtis LeMay, famously declared. 
The Soviets were not amused. Had they tried the same stunt, Khrushchev indignantly responded, “It would have meant war.” 
Throughout the campaign to demonstrate overwhelming U.S. air superiority, the United States violated Soviet airspace more than 10,000 times. The U.S. thermonuclear stockpile increased tenfold, while LeMay publicly speculated about the 60 million Soviet citizens targeted for annihilation under the Dulles doctrine of massive retaliation. The term was a bit of a misnomer because Soviet planes at the time did not have the range to reach U.S. soil and never once breached its airspace. 
The double standard was not lost on Khrushchev. “Stop sending intruders into our airspace,” he thundered at a visiting U.S. Air Force delegation in 1956. But he was largely powerless to prevent the incursions, which, of course, was the entire point of the exercise. 
Unfortunately, the massive retaliation doctrine was too effective. “Soviet leaders may have become convinced that the U.S. actually has intentions of military aggression,” the CIA warned in a 1955 report. And the intelligence agency was right. “We were very afraid, and saw the Americans clearly as the aggressors,” recalled Khrushchev’s son, Sergei, who now lives in Rhode Island. 
And so the Soviet Union started a crash program to build an ICBM. Korolyov, who as a lonely and fatherless child dreamed of the Wright brothers and grew up in splendid isolation behind the locked gates of his grandparents’ tsarist estate, was given a blank check. A sturdy, studious lad who would develop a boxer’s build and a disdain for suits and ties, he nonetheless mesmerized Khrushchev, who was fascinated with rocket technology. 
While the United States slashed its meager missile budget to build bigger and more bombers, Korolyov launched Sputnik, largely to distract Khrushchev from the nagging problems he was having developing a heat shield that could protect a nuclear warhead from the atmospheric forces of re-entry. The Politburo justified its new weapon of mass destruction as a crucial deterrent. “For us, it was of national importance,” Sergei Khrushchev said. “Father felt that only its existence could stop war.” 
Sputnik, which was the ICBM’s public unveiling, was Moscow’s turn to demonstrate its air superiority. Ten times more powerful than any operational U.S. missile of the era, it instantly redressed and reversed the strategic imbalance and catapulted the Soviet Union into superpower status as the United States’ technological equal. 
The Eisenhower administration’s own actions, which some historians now call reckless, inadvertently sped up the Soviets’ quest for a missile. It’s a historical lesson the current occupants of the White House should ponder. 
Today, as it was half a century ago, the United States is far ahead of its closest military rivals. But U.S. military posturing continues at Russia’s expense. 
To be sure, no one in the new Moscow is worried about war. But the plan of U.S. President George W. Bush’s administration to install a missile defense system in several former Warsaw Pact nations — now NATO members — is feeding Russia’s traditional paranoia about the West. 
The missile interceptor shield, the U.S. administration says, is a defense against rogue states such as Iran and North Korea. Yet Washington’s insistence on deploying the system in Poland — Russia’s front yard, rather than in Central Asia, where it would be closer to its intended targets, as President Vladimir Putin has proposed — is prompting a return to Cold War rhetoric from the Kremlin. In retaliation, Moscow has resumed the global patrols of its nuclear bomber fleet, which had been suspended since 1991, tested a new “Father of all Bombs” and fast-tracked development of a new-generation ballistic missile capable of evading U.S. interceptor shields. 
Flush with petrodollars — the country’s Siberian oil fields produce more oil and natural gas than Saudi Arabia — and eager to prove that it is back as a major power, the Kremlin is not in the mood to be bullied or belittled by the United States. And Sputnik should serve as a reminder of what happens when you goad the Russian bear. 

Matthew Brzezinski, a former Wall Street Journal Moscow correspondent, is the author of “Red Moon Rising: Sputnik and the Hidden Rivalries That Ignited the Space Age.” This comment appeared in the Los Angeles Times.

TITLE: The Rot Eating at America’s Soul
AUTHOR: By Alexei Bayer
TEXT: Opponents of the U.S.-led invasion of Iraq have long compared it to the earlier intervention in Southeast Asia, which created a quagmire on the ground and a painful rift at home.
Until recently, U.S. President George W. Bush resisted the Vietnam analogy. But he has come around and now supports a revisionist view, which maintains that victory in Vietnam was within grasp and was frittered away by the failure of nerve at home. Needless to say, Bush wants nothing of the sort to happen in Iraq on his watch.
But Vietnam is hardly the only parallel for Iraq. Opponents and supporters of this war have been busily checking off similarities and differences with World War II and Korea. David Walker, head of the U.S. Government Accountability Office, reached even deeper, comparing the United States to the Roman Empire. U.S. entanglement in the Middle East is prominent among the perilous parallels he drew.
And then there is Osama bin Laden, the man Bush claims to be fighting in Iraq. Sporting a dyed beard, the perennial Public Enemy No. 1 recently appeared in a video, confidently declaring that, just like the Soviets in Afghanistan, the United States will lose in Iraq.
Unfortunately, bin Laden may have hit the nail on the head. Similarities between the Soviet army’s ill-advised foray into Kabul in 1979 and the “shock and awe” storming of Baghdad in 2003 are pervasive, the most important being that both plans were born of hubris and hatched at a time when Moscow and Washington, respectively, thought they were destined to dominate the world.
Few people remember this today, but in the late 1970s, the Soviet Union looked like a clear winner in the Cold War. U.S. foreign policy was suddenly timid following the drubbing in Indochina — pace Bush and neo-con revisionists — while the economy was mired in a mix of stagnation and inflation reminiscent of the death throes of capitalism predicted by Karl Marx.
Meanwhile, rising oil revenues allowed the Soviet Union to paper over its own fatal economic flaws and support its clients abroad. Cuban troops were exporting Soviet-style revolution to Africa. Soviet allies grabbed power in Ethiopia, Nicaragua, Grenada and elsewhere, and European Communists were ascendant in France and Italy. Humiliated in Iran, Washington was powerless to respond.
To the senescent ideologues in the Kremlin, expanding the Soviet bloc along its southern border must have seemed like Manifest Destiny.
The tables were turned when Bush invaded Iraq. The Soviet Union had been off the map for over a decade. The United States was the only remaining superpower. Democracy and free enterprise had triumphed everywhere. Surely in the few places where freedom’s introduction tarried, a gentle military nudge would do the job? Washington had the most powerful military in history; why not use it as a force for good?
The reason why the Soviet Union is no more has much to do with the costly disaster in Afghanistan. A decade later, the Soviet Union was pauperized and demoralized. It lost 15,000 soldiers by the time the troops were finally pulled out.
The U.S. military has lost close to 4,000 troops in four years. Since none of the realistic candidates in the 2008 presidential election has a plausible plan to end the war, it is likely that it will last through 2013, and the number of U.S. war dead will be rise accordingly. More to the point is the rot eating at the American soul from within due to the Iraqi crisis, ranging from the Abu Ghraib torture and prisoner abuse scandal in 2004 and the Haditha massacre one year later to the lies that now pervade political discourse in Washington.
As to the cost of the war, it has not mattered as long as China is willing to lend Washington all the rope it needs to hang itself. The fun will begin when the credit line runs out.

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

TITLE: Once Putin Leaves Office, He Won’t Return
AUTHOR: By David R. Marples
TEXT: The elevation of the virtually unknown Viktor Zubkov as prime minister has complicated the issue of President Vladimir Putin’s successor. Pundits had long debated the various merits of the two first deputy prime ministers, Sergei Ivanov and Dmitry Medvedev, but ostensibly they are now out of the running.
Some analysts believe that after four years as the new president, Zubkov would allow Vladimir Putin to return as president in 2012 without violating the existing Constitution.
In the interim, Putin could play a powerful role behind the scenes, possibly through a directorship of Gazprom or some other government agency.
Yet the powers of the president today are such that any incumbent would be predisposed to reduce the power of rivals, even if they are as popular as Putin. Indeed, ruling Russia as president with Putin and his cohorts in the background would surely be intolerable, even for a long-term acolyte such as Zubkov. If Putin steps down, he will most likely never return.
Moreover, suppositions about an interrupted third term for Putin are illogical from a close analysis of the country’s history. No ruler, however powerful, has ever made such a comeback. Rather, once power has been relinquished, the former ruler has found it impossible to reacquire it.
Admittedly, the tsarist regime was based on a hereditary system and leaving office was not an option. The last tsar, Nikolas II, was overthrown following the February Revolution. But in the later months of 1917, as well as during the Soviet and post-Soviet periods, there are pertinent analogies of leaders who were removed or gave up power and tried to return without success.
The first example is Alexander Kerensky, the pivotal figure in Russia after the February Revolution, who served as the minister of justice and minister of war and ultimately the prime minister of the provisional government. During the October 1917 Bolshevik uprising, Kerensky fled from Petrograd in the car of the U.S. ambassador, which flew U.S. flags. He made his way to the headquarters of the Northern Front in Pskov, where he recruited a Cossack army of several hundred troops. On Nov. 11, 1917 — four days after the Bolshevik takeover according to the Gregorian calendar — moderate socialist elements organized a revolt in Petrograd.
Both efforts to remove Lenin’s group failed ignominiously. Kerensky’s troops, led by General Pyotr Krasnov, simply melted away when they came into contact with Bolshevik workers, and the former prime minister left Russia for exile in Britain.
One Soviet leader who did not complete his term in office was Nikita Khrushchev, today regarded — perhaps charitably — as one of the more enlightened figures of the Soviet era. On Oct. 16, 1964, an official statement in Pravda announced that the central committee plenum had relieved him of his obligations as first party secretary because of his advanced age and poor health. Khrushchev had indeed reached the age of 70 a few months earlier, but he was in good physical condition.
Khrushchev quickly became a non-person and simply vanished from the pages of the Soviet press. His public appearances ceased abruptly. He spent his remaining seven years writing and recording his memoirs, trying to justify a series of rash agricultural experiments and belligerent actions on the world stage, not least the provocation of a missile crisis in Cuba two years earlier. Only in the 21st century has the appearance of his complete memoirs offered a justification of his leadership.
His successor, Leonid Brezhnev, perceived among the Soviet hierarchy as a weak compromise candidate, was able within a few years to emerge as a strong leader simply by using the power structures available.
Mikhail Gorbachev is another example of a figure removed from office in Moscow following his resignation as Soviet president in December 1991. In some ways, he is a better example since, like Putin, he successfully used both national and international media to bolster his image as a reformer and pioneering leader, undeterred by a volatile political climate in the latter years of the Cold War.
After the Soviet Union was dissolved, Gorbachev attempted a return to power during the 1996 presidential election, but he received only 0.5 percent of the vote, a humiliating rebuff for his reputation. As in 1991, his nemesis was Boris Yeltsin, who successfully used the advantages derived from the office of the presidency to ensure success over his rivals. Yeltsin managed this feat despite having been written off by many analysts. The army was engaged in a losing war in Chechnya, and the president was suffering from poor health.
These examples are worthy of Putin’s contemplation. Over the past eight years, he has increased the power of the presidency while advancing his own acolytes to high posts. To date, however, that authority is invested in the office rather than an individual.
Admittedly, Putin is far more popular than were Kerensky, Khrushchev, and Gorbachev. But the new president, whether Zubkov or another candidate, will have ample opportunity to use the advantages that come with the elevation — use of the Federal Security Service, armed forces and other power ministries and control over the bulk of the media. In addition, as long as oil prices remain high, the nation’s economic boom will most likely continue, giving the next president the basis for guaranteed high popularity ratings.
Thus, Putin may very likely be underestimating the ease with which the next president — with the support of a powerful Kremlin clan behind him — will be able to “steal the show” by exploiting the enormous administrative resources available to the president. The irony, of course, is that Putin did so much over the past eight years to create a strong presidency — the power vertical — and this could be the very reason that will prevent him from returning to office.
The lessons seem clear. If Putin chooses to leave office, as he has stated will be the case next spring, then his era will be officially over.
Several presidential contemporaries in former Soviet republics have opted to violate their Constitutions, enabling them to serve for three or more terms, including Belarussian President Alexander Lukashenko and Kazakh President Nursultan Nazarbayev. It would be surprising if the Russian leader had not contemplated such a course as well.

David R. Marples is professor of Russian history at the University of Alberta, Canada. He is author of 12 books, including “The Collapse of the Soviet Union, 1985-1991.”

TITLE: Unstoppable Germany Wins World Cup
AUTHOR: By Chris Lines
PUBLISHER: The Associated Press
TEXT: SHANGHAI, China — The unstoppable scorer from Brazil and the unbeatable goalkeeper from Germany stared at each other from 12 yards away — the outcome of the Women’s World Cup perhaps resting on this penalty kick.
The confrontation was won by goalie Nadine Angerer. And the World Cup was again won by Germany, a 2-0 victory in the final Sunday that was underlined by a flawless, unyielding defense.
“After the penalty save, I felt it was meant to be,” Germany coach Silvia Neid said.
In the third-place game Sunday, the United States defeated Norway 4-1 behind two goals by Abby Wambach.
Angerer was backed by goals from Birgit Prinz in the 52nd minute and Simone Laudehr in the 86th, and Germany became the first women’s soccer team to successfully defend a World Cup or Olympic title.
“We worked hard for each other,” Neid said. “It was a great team performance. It was important to work against Marta.”
It was Marta, the Brazilian scoring sensation, whom Angerer faced in the 62nd minute. Brazil trailed 1-0, the prospect still alive for the nation’s first Women’s World Cup title.
Marta was the tournament’s top scorer with seven goals in five games. Angerer had not conceded a single goal all tournament.
The goalkeeper then put some soccer psychology to work. She dived to her right, using her legs to block the low shot. She bounced to her feet and cried out in triumph as her exultant teammates rushed her.
As she stood between the posts awaiting Marta’s kick, Angerer recalled Brazil’s quarterfinal win over Australia. In that game, Marta also took a penalty kick.
“She went to the bottom left corner, so this time I thought she would go to the right,” Angerer said. “I waited as long as I could to act, and it was the right decision.”
Germany went through six games in the tournament without giving up a goal and outscored the opposition 21-0, setting other records in the process.
The Germans thwarted the flowing attacks of Brazil, which routed the U.S. in the semifinal. With this latest defensive display, Germany has not given up a goal in 619 minutes of World Cup competition, the last one four years ago in the final against Sweden. China held the previous record of 442 minutes.
German Chancellor Angela Merkel congratulated the team on the “wonderful” game, and said the country would work even harder in an effort to host the 2011 tournament. The goals “showed how beautiful women’s soccer can be,” Merkel said.
Brazil managed to control the ball much of the game. But standing in the way were Angerer and central defenders Ariane Hingst and Annike Krahn.
“We had a lot of chances. Germany had fewer chances, but when they got them they scored,” Brazil coach Jorge Barcellos said. “Even though we lost, this result ... will bring a lot of benefits to women’s football in Brazil.”
Germany’s best chance of the first half came in the fifth minute when Kerstin Garefrekes’ angled shot hit the side of the net. Brazil came close soon after when Formiga shot wide of the right post after a goalmouth scramble.
The game settled into a pattern with Brazil ruling midfield courtesy of Formiga and Ester. Play came alive in the 24th minute when Daniela’s rasping shot thumped into the left post. When the rebound crossed into the penalty area, she headed the ball over the bar.
“It was a sad day but this team has done a very good job,” Cristiane said. “We have 21 very talented players and we have given a very good example to the girls in Brazil.”
In the presentation ceremony, two Brazilian players held a banner saying “Brazil: we need support.” Marta said the country’s soccer authorities must provide a women’s club competition.

TITLE: Tension High Ahead of Pakistani Poll
PUBLISHER: The Associated Press
TEXT: ISLAMABAD, Pakistan — Pakistan’s top court ordered three officials suspended Monday over a crackdown that wounded dozens of journalists and lawyers during protests against President General Pervez Musharraf’s re-election bid.
The order, quickly executed by the government, came amid rising tensions ahead of Saturday’s presidential ballot, when Musharraf is expected to secure another five-year term.
The opposition plans more protests and legal challenges against the candidacy of Musharraf, an increasingly unpopular leader who is a key U.S. ally in the war on terror.
On Monday, Chief Justice Iftikhar Mohammed Chaudhry summoned officials to explain why police used batons and tear gas against lawyers protesting Saturday against Musharraf outside the Election Commission.
Medics told the Supreme Court that Islamabad’s hospitals treated 83 people, many for head injuries. Casualties included 13 police officials, 31 journalists and two opposition lawmakers, state-run media said.
The judges watched television footage of the clashes on a screen set up in a courtroom packed with lawyers and journalists, some sporting bandages on their arms and heads.
Chaudhry ordered the gallery cleared so he could discuss the matter with just Interior Secretary Kamal Shah and a handful of witnesses.
The judge told Shah to suspend Islamabad’s city and district police chiefs as well as the deputy head of the city administration, according to senior journalists allowed to remain in the courtroom. Shah said later that authorities had complied.
Chaudhry also told the government to pay for the victims’ treatment. Media reports “have shown the brutality of the police and law enforcing agencies,” said Chaudhry, whose attempted ouster by Musharraf earlier this year sparked outrage against the president, especially within the legal community.

TITLE: Hamilton Shows He’s Big in Japan
AUTHOR: By Alan Baldwin
PUBLISHER: Reuters
TEXT: FUJI, Japan — McLaren’s Lewis Hamilton won a wet and wild Japanese Grand Prix on Sunday to take a huge stride towards becoming the first rookie to win the Formula One championship.
While the 22-year-old Briton splashed through the spray to chalk up his fourth victory in just 15 grand prix, his closest rival and double world champion teammate Fernando Alonso crashed out.
The result left Hamilton, Formula One’s first black driver, in a position to clinch the championship in Shanghai next weekend.
After the first grand prix in 30 years at Toyota-owned Fuji, Hamilton now has a 12-point lead over Alonso with only the Chinese and Brazilian races remaining.
Renault rookie Heikki Kovalainen was second for his and the outgoing world champions’ first appearance on the podium this year. He also led for three laps.
Fellow-Finn Kimi Raikkonen had a rollercoaster race, going from third place to last and then back to third again after Ferrari started him and Brazilian team mate Felipe Massa on the wrong tires.
Hamilton has 107 points, Alonso 95 and Raikkonen 90. Massa is out of the title chase with 80.
The championship leader was fortunate to escape without damage from a collision with BMW Sauber’s Robert Kubica on lap 34 that sent both off and dropped him briefly to fourth place.
“It was the longest race probably of my life. It just seemed to go on and on,” said Hamilton, who led behind the safety car for the first 19 laps with drivers complaining about the impossible conditions.
At the end, as he neared the chequered flag after two hours of racing, it dawned on Hamilton just how close he also was to emulating his boyhood idol Ayrton Senna and the great French champion Alain Prost.
“Driving in the wet, leading and doing a last lap thinking of some of the races that Senna was in and Prost — it sort of made me feel that I’m on my way to achieving something similar to them,” he said.
Alonso crashed 27 laps from the end while in fifth place after his car had been damaged in a collision with Toro Rosso’s Sebastian Vettel.
“I really need a miracle to win (the title),” the Spaniard told reporters afterwards. “If the (last two) races are completely normal, it’s over.”
With debris strewn over the track and the wrecked McLaren left stranded, the safety car was again deployed.
Briton David Coulthard was fourth for Red Bull after Australian team mate Mark Webber and Vettel collided during that safety car period while in a stunning second and third place respectively.
Vettel, in only his sixth race, had led for three laps and was distraught with his error.
Italian Giancarlo Fisichella was fifth for Renault, Massa sixth, Kubica seventh and German rookie Adrian Sutil scored Spyker’s first Formula One point in eighth.

TITLE: Iraqi Government: Death Toll Falls 50%
AUTHOR: By Paul Tait
PUBLISHER: Reuters
TEXT: BAGHDAD — Civilian deaths from violence across Iraq fell by 50 percent in September, according to government data published on Monday, matching a drop in U.S. military casualties attributed to a boost in troop numbers.
Information provided by the health, interior and defense ministries registered 884 civilians killed in September, the lowest monthly total this year, down from 1,773 in August.
The casualties were also the lowest since Washington began pouring an extra 30,000 troops into Iraq as part of a last-ditch security crackdown aimed at al Qaeda and other Sunni Arab militants and Shi’ite militias across the country.
A total of 850 civilians were wounded in September, the figures indicated, also well down on the previous month’s 1,559.
The crackdown, which was launched in Baghdad in mid-February and then spread into other troubled areas, was designed to buy time for Iraq’s leaders to reach political benchmarks aimed at reconciling majority Shi’ite and minority Sunni Arabs.
The drop in civilian violence came despite a warning by al Qaeda at the start of Ramadan, more than two weeks ago, that it would escalate attacks during the Muslim holy month and target tribal leaders who were cooperating with security forces.
The U.S. military said on Sunday that, while violence levels were still too high, attacks so far during Ramadan were down 38 percent on last year.
This was mainly because of the “surge” of extra troops and a change in strategy to move troops out of large bases into smaller combat outposts where they live and fight alongside Iraqis, military spokesman Rear Admiral Mark Fox said.
However, U.S. commanders have also voiced concerns that the Sunni Islamist al Qaeda may still be able to launch “spectacular” one-off attacks that cause mass casualties.
Coordinated suicide bombings aimed at the minority Yazidi community in northern Iraq killed 411 people on August 14 — over a quarter of all violent civilian deaths that month.
The previous lowest monthly death toll during the “surge” was in June — the month when the U.S. troop buildup came into full effect — when 1,227 Iraqis were killed.
The government figures showed that 78 members of the Iraqi security forces were killed, down slightly from 87 in August.
The figures also recorded the deaths of 366 militants, a drop of 106 from August, with the number of detentions also down by about a quarter despite the security crackdown.
The U.S. military death toll in September was the lowest since July 2006, with 62 killed, according to the Web site icasualties.org, which tracks military deaths in Iraq.

TITLE: Ireland Exits World Cup With Poor Form
AUTHOR: By Mitch Phillips
PUBLISHER: Reuters
TEXT: PARIS — Horribly rusty against Namibia, fortunate to beat Georgia, outclassed by France and simply outplayed by Argentina, Ireland return home after failing to make the last eight for the second time in three World Cups.
Maybe it was Vincent Clerc’s fault.
If the French winger had not snatched a last-minute try at Croke Park in February, Ireland could have been celebrating the Six Nations championship and a grand slam a few weeks later instead of another consolation triple crown.
Failure to secure their first championship for almost a quarter of a century, underpinned the nagging fear among the so-called “Golden Generation” that they did not really deserve to dine at the top table.
There were brief glimpses of what might have been during the 30-15 loss on Sunday.
Captain Brian O’Driscoll finally broke the gain line and became the first man in the tournament to score a try against Argentina. Geordan Murphy finished off a breathtaking move for the second score, a contender for “try of the tournament.”
But Ireland seldom looked capable of beating the Pumas let alone winning by more than seven points and scoring the four tries which would allowed them to sneak into the knockout stages.
The warning signs were there in the warm-ups where defeat by Scotland was followed by a fortunate win over Italy.
This poor form was taken into the tournament as they labored to beat Namibia and were hanging on desperately at the end to get past Georgia after eschewing early penalty shots to chase tries even before the crowd had settled in their seats.
Ireland were not the only northern hemisphere sides to start slowly but while the rest recognized the problems and improved, Eddie O’Sullivan’s team did not.
“Why did we not replicate the form we had earlier? I can’t put my finger on it,” he told reporters. “We looked like a team who needed more rugby and the confidence just drained away.”

TITLE: Yemeni Volcano Kills Eight
PUBLISHER: The Associated Press
TEXT: SAN’A, Yemen — A volcanic explosion rocked a tiny Yemeni island in the Red Sea, spewing lava and ash hundreds of feet into the air and forcing Yemeni authorities to evacuate a military base. NATO and Yemeni ships Monday were searching for eight missing soldiers.
The eruption Sunday evening caused a landslide that collapsed the western part of Jabal al-Tair island, the Yemeni news agency SABA reported. There were no immediate reports of deaths.
The tiny oval island, about two miles wide, lacks a settled population but includes military installations used for naval control and observation because large cargo ships pass nearby.
It was not clear how many people were stationed on the island, and SABA reported that Yemeni ships had evacuated all personnel and were searching for eight missing military personnel.
A NATO fleet passing nearby reported seeing a “catastrophic volcanic eruption” at 7 p.m. local time Sunday on the island, about 70 miles off the Yemeni coast, said Ken Allan, a Navy Public Affairs with the Canadian Armed Forces.
“At this time, the entire island is aglow with lava and magma as it pours down into the sea,” Allan said in an e-mail Sunday evening. “The lava is spewing hundreds of feet into the air, with the volcanic ash also (rising) a thousand feet in the air.”
The NATO fleet was sailing toward the Suez Canal when it spotted the eruption. The government of Yemen asked NATO to assist in the search for survivors and the closet ship, the HMCS Toronto, was heading toward the island. The Canadian Armed Forces said they are trying to locate nine people believed to be at sea after the Yemen coast guard requested help. It is unclear why there was a discrepancy with the SABA report on the number of missing.
Jabal al-Tair — meaning “Bird Mountain” — is one of a number of volcanos at the southern end of the Red Sea in the narrows betwen Yemen and Sudan. The island last saw an explosive eruption in 1883, according to the Washington-based Smithsonian Institute’s Global Volcanism Program.

TITLE: Gebrselassie Breaks Marathon World Record
PUBLISHER: The Associated Press
TEXT: BERLIN — Haile Gebrselassie took advantage of a perfect course and ideal conditions to set a world record at the Berlin Marathon. Gebrselassie raced through Berlin’s flat and fast course to set his 25th world record in 2 hours, 4 minutes, 26 seconds. That lowered the time of his good friend Paul Tergat by 29 seconds. On a cool day nearly perfect for long-distance running, Gebrselassie trailed the record mark by six seconds at the halfway point, but picked up the pace over the last six miles, when he ran alone without pacemakers.
It was the sixth time a marathon world record was set in Berlin, where Tergat ran to the previous record in 2003.
After six failed attempts, and as people thought age might be catching up to Gebrselassie, the 34-year-old Ethiopian delivered on Sunday
“Don’t ask me how I am,” said the two-time Olympic 10,000-meter champion. “It’s very special, spectacular.”
Gebrselassie had vowed to crack the world record in Berlin, the same goal he had when he ran the first of his seven marathons five years ago. He succeeded, although not with his dream time.
“I promised I’d run 2.03, that didn’t happen,” he said. “Maybe next time.”
The Berlin Marathon is the fourth-largest marathon in the world.

TITLE: Foreign Students in U.K. Trained to Line Up
PUBLISHER: Agence France Presse
TEXT: LONDON — Foreign students visiting Britain are to be educated in the etiquette of queuing for buses, after local users complained about them not observing the conventions of standing in line.
Southern Vectis, which operates buses on the Isle of Wight, off England’s south coast, said it was to contact local language schools following several complaints about the behavior of young students over the summer months.
“On the Isle of Wight we get lots of foreign language students staying with families,” said operations manager March Morgan Huws.
“In their cultures, they do not queue for buses where they live and there is a scrum every time a bus turns up, while in British culture there is a nice orderly queue. We have had quite a few complaints from residents who queue up in an orderly fashion then all those foreign students push past them.
“What we have said is that we will work with the language schools to provide some instructions on the etiquette of queuing. We won’t be marching the students up and down showing them how to queue, we will just leave it up to the group leaders to pass on the information.”
Orderly queuing is seen as a quintessentially British convention. One social anthropologist believes Britons are even capable of forming one-person queues at bus stops.
But while queue-barging normally leads to tutting, muttered complaints and shuffling to close the gap on anyone looking to barge ahead, most people are too polite to confront a transgressor.

TITLE: Woman Gives Birth to Own Grandkids
PUBLISHER: The Associated Press
TEXT: SAO PAULO — A 51-year-old surrogate mother for her daughter has given birth to her own twin grandchildren in northeastern Brazil, the delivery hospital said.
Rosinete Palmeira Serrao, a government health worker, gave birth to twin boys by Caesarean section on Thursday at the Santa Joana Hospital in the city of Recife, the hospital said in a statement on its Web site.
Hospital officials were not available for comment on Sunday, but press reports said the grandmother and twins were discharged on Saturday in excellent health. The Caesarean section was performed about two weeks ahead of time because Serrao was having trouble sleeping, the statement said.
Serrao decided to serve as a surrogate mother after four years of failed attempts at pregnancy by her 27-year-old daughter, Claudia Michelle de Brito.
Brazilian law stipulates that only close relatives can serve as surrogate mothers. De Brito is an only child and none of her cousins volunteered, so Serrao agreed to receive four embryos from her daughter.

TITLE: Zenit Chases League Title
PUBLISHER: The St. Petersburg Times
TEXT: Front-runner Zenit St. Petersburg is on course for its first league title since 1984 with a 2-1 win over champion CSKA Moscow at Petrovsky Stadium on Saturday.
The victory keeps the team three points ahead of nearest rival Spartak Moscow with five matches remaining in the March-November season.
CSKA’s hopes of holding the league title were dealt a fatal blow after a string of wasted chances allowing Zenit forward Pavel Pogrebnyak to score after half-an-hour.
Midfielder Igor Denisov consolidated the lead in the final minute, with Wagner Love grabbing a face-saving goal for CSKA in extra time.
Zenit coach Dick Advocaat said he was proud of his men.
“First of all, this is a very important victory,” Advocaat said on www.fc-zenit.ru. “We didn’t start very well but after 15-20 minutes we were on top of it and started creating scoring chances.”

TITLE: Mystery Surrounds UN Envoy to Burma
AUTHOR: By Aung Hla Tun
PUBLISHER: Reuters
TEXT: YANGON — Mystery surrounded the whereabouts of UN envoy Ibrahim Gambari on Monday after he flew to Myanmar’s new jungle capital to persuade the junta to end its crackdown on the biggest pro-democracy protests in 20 years.
One diplomatic source said Gambari was being made to wait until Tuesday to meet junta supremo Senior General Than Shwe, and with the streets of Yangon quiet on Monday, had gone on a trip to Lashio, in the hills of Shan state, near the Chinese border.
No reasons for the destination were offered, although one Bangkok-based diplomat said a small group of traveling European academics was in the capital, Naypyidaw, 240 miles north of Yangon, and due in Lashio on Tuesday.
United Nations officials with Gambari were outside mobile phone coverage, the UN office in Yangon had not heard a word, and no other diplomats in the former capital could shed any light on his whereabouts.
The delay does not augur well for Gambari’s mission, hastily arranged last week when the junta sent in soldiers to crush more than a week of monk-led mass protests against decades of military rule and deepening poverty in the former Burma.
The 74-year-old Senior General is frequently rumored to be in poor health but — more ominously — has a well-deserved reputation as military hardliner who pays scant regard to the cares and concerns of the outside world.
The only certain thing about Gambari, a former Nigerian foreign minister, is that he was still in the country 48 hours after his arrival, a prospect that did not look likely when he arrived.
British ambassador Mark Canning said China had pushed for Gambari’s mission to be as long and as far-reaching as possible, getting permission for him to fly to Naypyidaw where he met the acting Prime Minister and Information and Cultural Ministers.
He then returned to Yangon for an hour with opposition leader and democracy icon Aung San Suu Kyi, who has been under house arrest and incommunicado for nearly 12 of the last 18 years.
His immediate return to Naypyidaw sparked hopes of the seeds of “shuttle diplomacy” between a military that has been in charge for the last 45 years, and Suu Kyi’s democracy camp.
“There’s been an evolution in his program. The initial pitch was minimalist. It’s got a bit better, and we want to see it get better still,” Canning told Reuters.
The UN made clear on Sunday Gambari did not plan to leave without seeing Than Shwe, whose troops are stationed on street corners across Yangon, making it impossible even for small crowds of demonstrators to assemble.
In a sign the junta was confident it had squeezed the life out of the uprising, barbed-wire barricades were removed from the Shewdagon Pagoda, rallying point for monks leading the marches.
Soldiers and government security men, however, were searching bags and people for cameras, and the Internet, through which images of the crackdown have reached the world, remained cut.
State-run media say order was restored “with care, using the least possible force,” but soldiers continued to be stationed at the four corners of Shwedagon, the country’s holiest Buddhist shrine, as well as the Sule Pagoda, the other focal point of the rallies.
Having raided more than a dozen monasteries and hauled off at least 700 monks, according to the Asian Human Rights Commission, soldiers and riot police are penning the rest behind the monastery walls.
The protests began with small marches against fuel price rises in mid-August but intensified when soldiers fired over the heads of protesting monks, causing monasteries to mobilize.
The crackdown prompted criticism even from China, the closest the junta has to an ally, and condemnation from the Association of South East Asian Nations, of which Myanmar is a member.
Among 10 people the junta says were killed, the death of a Japanese video journalist, Kenji Nagai, 50, shot dead when troops opened fire on a crowd of chanting protesters, has added to the international outrage.
A Japanese envoy has arrived to ensure a full investigation into his death, although Tokyo says the small video camera he was clutching as he died near the Sule Pagoda was missing from items returned by Myanmar officials.
Footage smuggled out of the country appeared to show a soldier shooting Nagai at point-blank range.
Western governments say the death toll is probably far higher than officially acknowledged.

TITLE: Road To Freedom Runs Via Norway
AUTHOR: By Peter Apps
PUBLISHER: Reuters
TEXT: OSLO — Using secret material smuggled out of Myanmar, the Oslo-based Democratic Voice of Burma’s radio and TV stations are a key source of information for those inside and outside the country on the government’s crackdown on protesters.
As demonstrators clash with troops in a nation with no independent media, exiled journalists and workers broadcasting from a sleek office in the Norwegian capital hope their work will help end military rule in their homeland.
Undercover local journalists secretly film and record events, risking arrest and torture to send footage and facts to the station. Material is smuggled out by airline passengers or diplomats, or sent by e-mail.
As protests grew last week, the station found itself providing film to the world’s broadcasters largely unable to get their own material from inside Myanmar, formerly known as Burma.
“Our station is a key factor in making a change,” Khin Maung Win, a veteran of 1988 protests which ended in bloodshed with a military crackdown, said. “In 1988, Burma was a completely closed country. There was no media coverage. Now everyone is watching.”
With about a dozen from its staff of 100 in Oslo, the newsroom is alive with discussion about events half a world away. “Never report rumors” says a sign on the wall alongside a painting of democracy icon and Nobel Peace Prize laureate Aung San Suu Kyi.
The Democratic Voice of Burma broadcasts by shortwave radio. It also beams satellite television for several hours a day.
Funded by the governments of Norway, Sweden, Denmark, the United States and the Netherlands, the broadcaster has increased its output and most staff have almost doubled their hours since protests led by Buddhist monks began earlier this month.
Myanmar’s government last week blocked Internet access but people in Myanmar continued to talk to the station by mobile phone, Win said.
Before the protests, the station estimated its radio programs reached about 13 million of Myanmar’s 56 million people and its satellite television about half of the estimated 10 million viewers in the country.
“Nowadays, we think everyone is tuning in,” he said. “People are watching and listening publicly. People are proud when their voices are heard on the air — they would never have that chance with state media.”
Mobile and satellite phone calls are its main expense, Win said, adding that last week alone the station spent its usual annual total of nearly $100,000 on communications. Governments that support the radio have pledged more funds.
Working for the station is a crime in Myanmar, and the staff worry about the safety of their workers and family members. Some staff in Oslo avoid communication with families back home for fear of endangering them.
The broadcaster also sees a role for itself in a free Myanmar. “In the past we were effectively propaganda for the pro-democracy movement,” Win said. “Now, we try to be objective so we can become the independent media of a free Burma.”
There is cause for optimism, Win says. The station reported that some army units refused to fire on protesters or monks: signs of a potential split in the military, he said.

TITLE: Dissidents See Shades of Past Freedom Dramas
AUTHOR: By William J. Kole
PUBLISHER: The Associated Press
TEXT: Lech Walesa and Desmond Tutu speak of solidarity. Vaclav Havel hopes for another “Velvet Revolution.” Wei Jingsheng warns of a bloody sequel to Tiananmen Square.
Some of the globe’s most prominent former dissidents — acutely aware of what can go right and wrong when a repressed society attempts to shake off tyranny — see shades of their own past struggles in Myanmar’s drama.
In interviews with The Associated Press and other media, they offered insight and advice to the Buddhist monks and pro-democracy protesters who have defied Myanmar’s military government — and to the world leaders and ordinary people watching it all unfold.
“If there’s not enough international pressure, and China offers support in the background, then there will very likely be in Myanmar something like Tiananmen Square: a big massacre,” Wei, China’s best-known ex-dissident, told the AP in a phone interview from the U.S., where he lives in exile.
Hundreds, possibly thousands, were killed in 1989 when the Chinese army cleared the Beijing square of pro-democracy protests.
Wei, who spent 17 years in Chinese prisons for challenging the communist monopoly on power, called for more international pressure on Myanmar’s ruling junta and on China for its perceived backing of the regime.
Walesa, who founded Poland’s pro-democracy Solidarity movement and became the nation’s first post-communist president, said the only hope for Myanmar’s monks and activists was to stick together — and for the world to rally around their cause.
“My advice for them is to build their own internal solidarity and to make efforts to win international solidarity,” he said in an AP interview.
But Myanmar in 2007 is markedly different from eastern Europe two decades ago.
Isolated under a regime that has crushed dissent for the past 45 years, the country formerly named Burma missed out completely on the wave of reform and revolution that swept through the world in the late 1980s.
In 1989, when Havel’s followers packed Prague’s Wenceslas Square to denounce a regime he famously mocked as “Absurdistan,” their sheer numbers and determination prevailed over truncheons and tear gas.
When demonstrators tried the same thing in Myanmar in 1988, thousands were gunned down.
“If they have no solidarity today, they will lose and will have to approach the issue many times again,” Walesa said.
Yet “even if they fail, the price [they pay] will speed up the process,” he added.
The Nobel Peace Prize winner, who marshaled tens of thousands of workers in 1980s strikes at Gdansk’s gritty shipyard, says the showdown in Myanmar has rekindled a little of his own old fire.
“Maybe I will join in, too,” Walesa said. “I will certainly do something because I cannot remain indifferent. ... I like to win.”
Fellow laureate Tutu, who won his Nobel Prize for his role in South Africa’s anti-apartheid movement, was preparing to join a march in Sweden protesting events in Myanmar when he spoke by telephone to the AP Friday.
“In South Africa we had rolling mass action that covered the action taken by the people. We also had an alliance of faith-based organizations,” Tutu said. In Myanmar, “the important thing is that religious leaders have now put their lives on the lines and I admire them for that.”
Tutu said he would call on China to use its “very powerful leverage” on Myanmar’s leaders. If China did not respond, he said he would join calls to boycott the Beijing Olympics.
Havel, the playwright-turned-president whose nonviolent movement toppled totalitarian rule in Czechoslovakia, said he’s also ready to go to Myanmar if opposition leader and Nobel Peace Prize laureate Aung San Suu Kyi emerges from longtime house arrest and takes power.
“You can’t imagine how happy I would be to travel there as soon as possible,” Havel, now 70, told the Czech newspaper Mlada Fronta Dnes.

TITLE: Myanmar’s leadership
TEXT: HOW DID THEY COME TO POWER?
The State Peace and Development Council, as Myanmar’s ruling junta is formally known, replaced another dictatorship in 1988 after suppressing a pro-democracy uprising.

WHO ARE THEY?
There are 12 members on the council, but first among equals is Senior Gen. Than Shwe, 74, an uncompromising hard-liner. No. 2 is Deputy Senior Gen. Maung Aye, 69, known for his ruthless suppression of Myanmar’s ethnic rebels.

HOW DO THEY STAY IN POWER?
Myanmar has a 400,000-man military, one of the largest in Asia. Soldiers live in isolated barracks, secluded from civilian life; their families are provided with housing as well.

WHERE DO THEY GET REVENUES?
Than Shwe’s government has opened up the country to foreign investment. Myanmar is rich in natural resources, including potentially vast oil and gas reserves.

WHO ARE THEIR ALLIES?
China is the regime’s main ally as well as its main trading partner. Both China and India curry favor with the junta because of Myanmar’s strategic location on the Indian Ocean and its oil and natural gas resources.
(AP)