SOURCE: The St. Petersburg Times
DATE: Issue #1315 (81), Tuesday, October 16, 2007
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TITLE: Late U.S. Missile Offer After Tense Talks
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW — A weekend visit by U.S. Secretary of State Condoleezza Rice and Defense Secretary Robert Gates failed to resolve tensions between Washington and Moscow, lowering hopes that relations will be mended before Presidents Vladimir Putin and George W. Bush leave office.
But the U.S. side did make a last-minute offer on the issues of missile defense and arms control, saying later that the proposal was received positively in private talks with Russian officials.
In public, the two-day visit was full of signs that relations continue to be poor, as Putin warned his American guests to back off their plan to install a missile defense system in Central Europe or risk further harming relations with Moscow.
“We might decide some day to set up a missile defense system on the moon, but until then, the opportunity for an agreement might be lost while you are realizing your own plans,” he said in a sharp speech Friday that was posted on the Kremlin’s web site.
Putin also warned that Russia could withdraw from the Intermediate-Range Nuclear Forces Treaty if the pact is not applied to other countries, especially those near Russia’s borders. Signed in 1987 by the United States and the Soviet Union, the treaty banned the deployment of nuclear and conventional ballistic and cruise missiles with ranges of 500 to 5,500 kilometers.
Before meeting Putin at the Novo-Ogaryovo presidential residence outside Moscow on Friday, Rice and Gates were left waiting for more than half an hour.
Later, Rice and Gates held five hours of talks with Foreign Minister Sergei Lavrov and Defense Minister Anatoly Serdyukov.
At a joint news conference for the participants afterward, Lavrov said that if the United States does not freeze its missile defense plans while the issue is still under discussion, Russia would “take measures to neutralize that threat.”
Serdyukov said the United States’ plans contained “a strong anti-Russian component.”
The Pentagon plans to install 10 missile interceptor systems in Poland and a missile-tracking site in the Czech Republic to provide protection from long-range missiles launched by what it calls “rogue” states, and Iran in particular.
Moscow says the system could undermine its nuclear deterrent and could even develop offensive capabilities. It has offered the United States the use of radar sites in the southern city of Armavir and another that it leases in Azerbaijan, but demands a freeze of the U.S. plans in Central Europe in exchange.
During the talks, Rice and Gates proposed an integrated system that would involve liaison officers from both sides stationed at each site. Neither Lavrov nor Serdyukov appeared impressed, and Lavrov said only that the proposals needed more study.
After leaving Moscow, Gates downplayed the uncompromising public positions as “mainly theater,” arguing that the tenor of private talks was much more constructive.
Speaking to reporters on his way back to Washington, Gates said the Russian reaction was in keeping with past behavior when dealing with unexpected proposals.
“When they’re hit with new ideas, they basically go to a default position of a defensive crouch until they really have time to think about it and consider it,” Gates said, Bloomberg reported.
He added that Putin and the other Russian officials “clearly were intrigued by some of the things we put on the table,’’ adding that the Russian leader appeared particularly interested in what Gates described as a detailed proposal for a U.S.-Russian partnership on a system to counter ballistic missiles launched by third countries.
But Ivan Safranchuk, head of the Moscow office of the World Security Institute, said the United States was making a mistake by not accepting Moscow’s proposals. He dismissed the U.S. position that the sites offered by Russia were technically insufficient, arguing that Washington was acting on political motives by involving Poland and the Czech Republic, both former Soviet-bloc nations that joined NATO after the collapse of communism.
He added that both Putin’s threat of withdrawing from the Intermediate-Range Nuclear Forces Treaty and from the Treaty on Conventional Armed Forces in Europe would mainly hurt Washington’s European allies. “They will have to suffer for the U.S.,” he said in a telephone interview Sunday.

TITLE: President Comfirms  Iran Trip
AUTHOR: By David McHugh
PUBLISHER: The Associated Press
TEXT: WIESBADEN, Germany — Russian President Vladimir Putin insisted Monday that he would travel to Iran despite reports about a possible assassination attempt.
Russia’s Interfax news agency, citing a source in Russia’s intelligence services, said Sunday that suicide terrorists had been trained to carry out the assassination in Iran. The Kremlin said Putin was informed about the threat.
But the Russia president said his trip was planned long in advance and that he would talk with Iranian leaders about their disputed nuclear program, although he stressed the original purpose of the trip was to discuss issues affecting states bordering on the Caspian Sea.
“Of course I am going to Iran,” Putin said at a news conference with German Chancellor Angela Merkel following talks with her. 
“If I always listened to all the various threats and the recommendations of the special services I would never leave home,” Putin said.
Iranian officials have rejected reports about the plot as disinformation spread by adversaries hoping to spoil Russian-Iranian relations.
Putin underlined the need to solve the nuclear problem “through peaceful measures,” adding that it was important to make direct contact with Tehran whenever the chance presented itself.
Russia, which is building Iran’s first nuclear plant, has resisted the U.S. push for stronger sanctions against Tehran and strongly warned Washington against using force. But it has urged Iran to comply with international controls on its nuclear activities and dragged its feet on the plant’s completion.
Putin’s Tehran trip repeatedly has been postponed, as has the launch of the nuclear plant.
Russia warned early this year that the plant in the southern port of Bushehr wouldn’t be launched this fall as planned because Iran was slow in making payments. It has also delayed the shipment of uranium fuel for the plant.
Iranian officials have angrily denied any payment arrears and accused the Kremlin of caving in to Western pressure.
During his visit to Iran, Putin is to meet with President Mahmoud Ahmadinejad and attend Tuesday’s summit of Caspian Sea nations. He is the first Kremlin leader to travel to Iran since Josef Stalin attended the 1943 wartime summit with Winston Churchill and Franklin D. Roosevelt.
Putin’s trip would be important for Iran even if it yielded no agreements. “It’s a break in international isolation, a chance to show that Iran is an important country,” said Alexander Pikayev, a leading expert on Iran with Russia’s Institute for World Economy and International relations.
Iranian media also emphasized the importance of Putin’s trip. Iran’s state television said the visit would “show Russia’s independence from the United States.”
“Iran can use the visit to lobby for getting our nuclear dossier out of the U.N. Security Council and Russia can strengthen its opposition to the U.S. through boosting ties with Tehran,” the hard-line daily newspaper Resalat said in an editorial Monday.
Last week, Putin bluntly spelled out his disagreements with Washington, saying that he saw no “objective data” to prove Western claims that Iran is seeking nuclear weapons. Though Russia has shielded Iran from harsher sanctions in the U.N. Security Council, its relations with Tehran have been hurt by disputes over the $1 billion deal to build the nuclear plant.
Iran also has continued its own enrichment program, saying it wants to produce fuel by itself — an effort that has heightened international suspicions. Low-enriched uranium is used to fuel nuclear power plants, but highly enriched uranium can be used to build nuclear weapons. Iran has insisted that its program is meant purely to generate electricity, and it has stonewalled a Russian proposal to move the enrichment to Russia.
European Union nations on Monday were considering more sanctions or other measures against Iran, with a meeting of foreign ministers planning to warn that Iran’s time is running out.
Diplomats said EU governments were to warn Iran of “further appropriate measures” if it fails to cooperate, notably new economic and political sanctions that could include investment bans, or scrapping export credit guarantees.
Britain’s Foreign Secretary David Miliband said European trade to Iran had already fallen “by about 37 percent in the year to May,” signaling that the EU was serious about punishing Iran.
“The EU is playing its part in signaling very clearly to the Iranian regime that they need to abide by the successive U.N. Security Council resolutions,” Miliband told reporters.

TITLE: Bureaucracy Puts Brakes on Charity
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: While businesses have seen profits shoot up as Russia’s economy goes from strength to strength, bosses have shown little inclination to share new wealth with the country’s poor, and charitable giving is hit by a tangle of bureaucratic obstacles. 
Lev Paneyakh, general director of ASK, a large insurance company, uses the phrase “shadow charity.” This means that the intended benefit of charitable activity is not actually delivered.  
“Our company made several attempts to launch charitable projects but we usually found that our potential partners’ enthusiasm soon evaporated because of ridiculous bureaucratic hurdles and absurd legal restrictions,” Paneyakh said. “Sometimes you must either help secretly — to avoid dealing with all sorts of inspectors — or not help at all.”
His company once offered to pay for a microwave oven for a children’s clinic, where the most gravely ill patients were on the top floor and food became cold on the journey up to the ward. 
“In the end, the only legitimate solution was for the donors to buy the microwave and bring it to the clinic,” said Tatyana Dolinina, marketing director of ASK. “Not all sponsors will take the trouble to find a solution if they are told their money can’t be accepted.”
State-funded clinics are not allowed to manage the money they receive from donors and are barred from accepting medicines except from state agencies. 
“In one clinic the management told me that a payment we offered for medicines for a sick child would be cleared by the state in six months’ time,” recalled Yelena Gracheva, of the St. Petersburg charitable foundation Advita, which specializes in helping children with cancer. “But it was at that very moment that the gravely ill child needed that medicine.”
Liberal politician Yury Tomchin, a member of the Public Chamber which reviews the activities of the legislature and administration, said the elaborate bureaucratic restrictions, meant primarily to catch cheaters, illustrate the level of mistrust between the Russian state and the people. 
“It’s an open secret that Russians don’t trust the state, and the feeling is mutual,” Tomchin said. “Every ordinary citizen is treated as a potential criminal by officials, and people have to go to great lengths to dispel the unjustified suspicions of state officials.”
According to President Vladimir Putin, the problem is a lack of corporate responsibility. He first voiced this thought in early 2004 in a speech urging large Russian businesses to open their eyes to the needs of the rest of society. The incomes of Russia’s richest 10 percent are nearly 17 times those of its poorest 10 percent. 
But what Putin called corporate responsibility, politicians were soon nicknaming “the Faberge syndrome.” This followed a public gesture by the oil and metals tycoon, Viktor Vekselberg, who paid $90 million for a collection of Faberge jewellery, which was then put on public display in the Kremlin’s Armory Museum. 
Vekselberg was widely acclaimed for his patriotism by members of Russia’s political establishment. 
Putin’s slogan, “Nado delitsya” or “We have to share,” is often repeated by members of his administration. But its repeated use has annoyed many oligarchs, who accused the Russian government of trying to saddle big business with alien functions. Many business leaders also insist they are entitled to get a return on their charitable actions. 
According to the Charities Aid Foundation Russia, approximately half of Russian companies have charity budgets, although the size of those budgets varies enormously. A survey of 20 midsize and large companies by the independent ROMIR market research agency in St. Petersburg this year reveals a clear pattern, said the agency’s Anna Khmelyova. 
“Businessmen feel charity is being imposed on them, like paying taxes, and at the same time private business is still widely regarded as dishonest by both average Russians and the authorities,” which hardly puts them in a giving mood, she said. 
“For these reasons they say they would rather not get involved in charity.”

TITLE: U.S. Secretary of State Says Kremlin Is Too Powerful
PUBLISHER: Combined Reports
TEXT: The government under Vladimir Putin has amassed so much central authority that new attempts to centralize power may undermine Moscow’s commitment to democracy, U.S. Secretary of State Condoleezza Rice said.
“In any country, if you don’t have countervailing institutions, the power of any one president is problematic for democratic development,” Rice told reporters Saturday after meeting with human rights activists. “I think there is too much concentration of power in the Kremlin. I have told the Russians that. Everybody has doubts about the full independence of the judiciary. There are clearly questions about the independence of the electronic media and there are, I think, questions about the strength of the Duma.”
Telephone messages left with Kremlin spokesman Dmitry Peskov were not immediately returned on the weekend.
The top U.S. diplomat encouraged the activists to build institutions of democracy. These would help combat arbitrary state power amid increasing pressure from the Kremlin, she said.
The United States is concerned about the centralization of power and democratic backsliding ahead of Russia’s legislative and presidential elections in December and March.
Putin will step down next year as president. He has said he would lead the ticket of the main pro-Kremlin party in the parliamentary elections and could take the prime minister’s job later.
Rice sought opinions and assessments of the situation from eight prominent rights leaders.
“I talked to people about the coming months and how they see the coming months. How these two elections are carried out will have an effect on whether Russia is making the next step on toward democracy,” Rice said after the private sessions at Spaso House, the residence of the U.S. ambassador in Moscow.
But as has been the case in the past, Rice declined to comment on Putin’s possible political future and said she did not raise the matter in her official discussions. Although she would not speculate about Putin’s ambitions, Rice said there were signs that whatever transition occurs would be smooth.
“To the degree that anyone can predict, it looks like it will be fairly stable,” she said. “But, I would just caution that change is change.”
Earlier, Rice said she hoped the efforts of rights activists would promote universal values of “the rights of individuals to liberty and freedom, the right to worship as you please and the right to assembly, the right to not have to deal with the arbitrary power of the state.”
In the meeting with business, media and civil society leaders, Rice said she was “especially interested in talking about how you view the political evolution of Russia.”
“Russia is a country that’s in transition and that transition is not easy and there are a lot of complications and a lot of challenges,” Rice said. “If Russia is to emerge as a democratic country that can fully protect the rights of its people, it is going to emerge over years and you have to be a part of helping the emergence of that Russia.”
Participants in the meetings said they outlined their concerns but that Rice did not offer any judgments about the state of human rights and democracy under Putin.

TITLE: A Political Animal and Man of the People
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: VERKHOVYE, Oryol Region — Gennady Zyuganov looked completely at home as he stood on a dirt road in the village of Verkhovye, listening to a dozen or so middle-aged workmen and elderly women pour out their troubles.
Zyuganov — tanned and wearing a pink-and-white striped shirt, a red-and-white striped tie and gray slacks — shook hands with the poorly dressed workmen and patted the women on their shoulders as they complained about high utility prices and idle farmland.
Zyuganov, who grew up in a nearby village, nodded his head sympathetically from time to time. “I will meet with the head of your village’s administration now, and we will sort out all your problems,” he said.
Zyuganov’s former allies — and he has many after nearly 15 years as head of the Communist Party — criticize him as an opportunist, plagiarist and coward who forfeited the presidency in 1996 by failing to stage Orange Revolution-style protests.
But detractors and supporters alike agree that Zyuganov genuinely loves his country, knows the ins and outs of bureaucracy better than many politicians and, above all, has the gift of the gab with ordinary folks.
Those communication skills were on full display during his recent visit to Verkhovye, a village 380 kilometers southwest of Moscow and smack in the middle of the Red Belt — the southern agricultural regions that are a traditional stronghold of the Communists. His supporters were impressed.
Zyuganov is doing “the impossible” under “fascist conditions,” organizing demonstrations and making decisions aimed at improving lives, said Zoya Sinitsyna, 67, a rank-and-file Communist activist from the city of Oryol.
Sinitsyna said she believed most of the country supported Zyuganov. “The people are voting for the Communist Party alone, but the elections are fraudulent,” she said.
Zyuganov, 63, will need Sinitsyna’s loyalty to spread beyond the Red Belt if he hopes to mount any sort of challenge in the March presidential election. President Vladimir Putin said last month that five people stood a real chance of succeeding him, and he identified Zyuganov as one of them. (The other people he named were Prime Minister Viktor Zubkov and Yabloko leader Grigory Yavlinsky.)
Zyuganov, however, is indelibly linked to the Communist Party, and opinion polls give him little chance of winning unless his party manages to pull off a surprise upset at the State Duma elections in December.
Zyuganov is one of the few politicians who has withstood shifting political winds to stay in national politics for most of the post-Soviet years. The Duma elections will be his fifth consecutive vote on the Communist ticket, and the presidential race will be his third. Zyuganov’s survival appears to be largely connected to his promises of a return of Soviet-era benefits and the devout support of an elderly — and dwindling — voter base.
Nevertheless, Zyuganov’s popularity is sliding. Just 4 percent of voters are ready to vote for him as president, compared with 15 percent in October 2000, according to surveys conducted by the Public Opinion Foundation. In the 2001 election, Zyuganov went on to get 29.21 percent of the vote, losing to Putin, who had 52.52 percent. He skipped the 2004 election after the Communists faired poorly in Duma elections the previous December.
Anatoly Baranov, ousted last month after serving for four years as the editor of the Communist Party’s web site, is blunt about Zyuganov. “He is a coward,” Baranov said. “He does not fight for power. It’s not important for him to be somebody but to produce the impression of being somebody.”

Tacit Support of Putin?
The Communists dominated the Duma throughout the 1990s but lost control to pro-Putin factions in 1999. Their popularity has sunk as Putin’s power has grown, but they still win seats in national and local elections — a direct result, critics said, of Zyuganov’s tacit support of the Kremlin.
“There is no real opposition here,” said Zhukov, who aligned his splinter group of 20,000 youths with A Just Russia, a pro-Kremlin party, in August.
He was echoed by Ilya Ponomaryov, leader of the Communists’ Youth Left Front, which dropped Zyuganov for A Just Russia last month. “Zyuganov’s political views are rather opportunistic and transitory,” Ponomaryov said. “He doesn’t have an ideology. ... He loves Russia and loves to talk about it.”
Zyuganov said in an interview that the Communists do have an ideology and that it has adapted to changing times. As a result, he said, the party now supports religious freedom and private property, among other things.
Working Russia party leader Viktor Anpilov, who has accused Zyuganov of having a “policy of accommodation” toward the Kremlin since the early 1990s, described Zyuganov’s ideology as “Orthodox communism.”
Zyuganov rarely criticizes Putin’s domestic policy over anything but social issues, and in the interview he voiced only one cautious concern. “Putin appoints everyone and is not responsible for anything,” he said, in a reference to Putin’s power to appoint governors, federal judges, prosecutors, auditors and the Cabinet.

A Disciplined Student
Zyuganov spent his childhood, youth and a large part of his adult life in the Oryol region, where wide expanses of farmland produce wheat, rye and buckwheat. Born in 1944 to parents who were teachers, Zyuganov is remembered by former classmates as both studious and athletic.
Alexander Lavrukhin, who lived next door to Zyuganov’s family in the village of Mymrino, said that even in grade school he noticed Zyuganov’s ability “to guide the collective” and “set and accomplish tasks.”
After graduating with honors from the Mymrino school in 1961, Zyuganov taught mathematics, physical education and military training at the school for a year. In 1969, he graduated from the Oryol State Teachers Institute with a degree to teach physics and mathematics, and he taught at the institute for a year.
Zyuganov immersed himself in academia for the next decade, studying at the Academy of Social Sciences with the Central Committee of the Communist Party of the Soviet Union and earning a master’s degree in science.
Later, Zyuganov received a doctorate in science from Moscow State University, and his name appears on more than 150 works on history, politics and philosophy.
Zyuganov and his wife, Nadezhda, have a son, Andrei, 39, daughter, Tatyana, 33, and three grandsons, ages 10, 13, and 17. Andrei Zyuganov, a graduate of Bauman Moscow State Technical University, is a businessman, while his sister studied to be a secretary and is now a housewife.

Foray Into Politics
Zyuganov got into politics while studying at the OryolInstitute in 1967, where he was elected head of a union of students and professors and took a leadership post in the institute’s Komsomol youth group.
His Komsomol position was followed by promotions to the Party’s city and regional committees, where he served until 1983, then to the Party’s Central Committee, where he served until 1989.
Finally, in December 1993, Zyuganov was elected to the Duma with the Communist Party of the Russian Federation. He had been elected party leader a few months earlier.
Zyuganov’s funding comes from a combination of party membership dues, medium-size businesses and the federal budget, which allots money to parties with Duma seats. Zyuganov has denied news reports that Mikhail Khodorkovsky’s Yukos helped finance the party’s Duma campaign in 2003, although former Yukos executives Sergei Muravlenko and Alexei Kondaurov were included on the party’s ticket.
Baranov accused Zyuganov of running the party like his personal fiefdom and forcing potential rivals and dissenters to leave under various pretexts. “The party has turned into Zyuganov’s personal office,” he said. The party, in dismissing Baranov, accused him of plotting to subvert party policy to reflect “the interests of pro-Western forces.”
Many former allies were reluctant to comment for this article.
“Zyuganov and I were close for several years, but then we had a disagreement,” said Alexander Prokhanov, editor of the Zavtra newspaper. “I have a very critical attitude toward his role [in politics] and don’t want to comment on it for that reason. I feel uneasy.”
Asked to comment on Zyuganov, National Bolshevik founder Eduard Limonov said, “I just don’t want to.” He added, however, that Zyuganov and Yavlinsky were “the two people who hinder the unification of opposition.”
Limonov and Zyuganov go back to at least 1992, when they helped organize the National Salvation Front, an anti-Yeltsin coalition. Their groups rallied together as recently as last year, but Limonov has since disassociated himself from Zyuganov and joined The Other Russia.
Zyuganov does surprise people. Never widely known for his sense of humor, he unexpectedly published a book of jokes for April Fool’s Day this year. Zyuganov has been making up jokes to tell friends and colleagues for years, his spokesman said. Two of his other hobbies are volleyball and beekeeping.
Zyuganov also loves nature. “Gennady Andreyevich likes very much to look in the bright blue sky,” said Prokhanov, the Zavtra editor. “When he looks at Russian landscapes, his eyes grow tender and he says, ‘Life is so good.’”
With moments like this, Zyuganov defies supporters and opponents who try to narrowly define him.
“I am often asked, ‘Who am I pretending to be?’” Zyuganov said of his presidential ambitions. “It’s not about me pretending.

“I am perhaps one of the few politicians who has been everywhere in Russia. My knowledge of Russia is good and profound. ... I believe that I have the right background for it.”

TITLE: University Unveils Nano Technology Programs
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: St. Petersburg State University has become the first higher educational institution in Russia to teach students nanobiology and nanotechnology, the university’s press service has said.
Students will be able to study the program for two years. Professors at the university’s biology and chemistry faculties developed the nanobiology course.
“Russia does not have specialists in nanobiology. Neither Europe nor Asia prepares such specialists,” said Maria Shishova, professor of the Biology and Soil Faculty of the university.
Shishova said that separate lecture courses on nanobiology exist in the United States, but only St. Petersburg State University can offer a full course on the subject.
Nanobiology studies the qualities and functions of biologically active connections in a cell. This modern science serves as the basis for research into AIDS/HIV, as well as for making new medicines to treat cancer and genetic illnesses.
Another trend in nanobiology is the development of genetically modified food products.
The university has bought laboratory equipment worth 20 million rubles ($800,000) for teaching the first Russian nanobiologists.

TITLE: Soccer Stadium Architect Kurokawa Dies
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Japanese architect Kisho Kurokawa, 73, who designed St. Petersburg’s new soccer stadium under construction on Krestovsky Island, died in Tokyo on Friday.
Kurokawa died from a heart attack in a hospital where he was being treated for liver disease, Japanese media said.
As well as the new stadium, being built for St. Petersburg’s soccer team Zenit, Kurokawa designed a trade and entertainment center in Yekaterinburg, Interfax said.
Governor Valentina Matviyenko expressed the city’s condolences, her press service said.
“This death takes from us a man of huge talent and ideal taste, a genuine professional,” Matviyenko said.
Matviyenko said Kurokawa’s stadium design was the best solution for the city, which is replacing the outmoded Petrovsky Stadium.
“Construction is going very quickly, and it’s very sad that Kurokawa won’t see its creation. I’m sure the stadium will become a real asset for Russia’s Northern capital,” Matviyenko said.
Grigory Feldman, general director of Avanta, the company in charge of the stadium’s construction, said the death of the architect will not influence the construction process.
“It’s very sad that Kurokawa died but the project will be fine,” Feldman said to The St. Petersburg Times.  
The construction of the stadium is planned to be complete by November 2008, he said.
Feldman said the contract to build the stadium had not been signed with Kurokawa personally but with the architectural bureau he headed, Rosbalt said.
Avanta is currently completing the stadium’s foundation.
The decision to construct a new stadium for Zenit was made because its current stadium does not meet UEFA standards and cannot host some games at international level.
City Hall chose Kurokawa’s $225 million “Spacecraft” design from five submitted for its combination of functionality and extensive territorial development. 
Among other requirements, the project requires a 60,000-capacity stadium built in accordance with the standards of UEFA and FIFA, as well as the development of the western part of Krestovsky Island.
Kurokawa’s project comes complete with sliding roof, a removable pitch and a heated roof to keep it clear of snow. 
Kurokawa’s project includes the construction of a new ring road, a sightseeing terrace, a beach pavilion, centers renting out sports equipment, cafes, restaurants, a warehouse and three parks near the stadium. 
Kurokawa was known as the creator of new trends in architecture. He designed the central bank of Fukuoka, the Sony skyscraper in Osaka, the National Ethnography Museum in Osaka, the headquarters of Japanese Red Cross in Tokyo, and other projects.

TITLE: Muse To Play The Ice Palace
PUBLISHER: The St. Petersburg Times
TEXT: A British rock band that has new-found popularity in Russia is to perform at St. Petersburg’s largest indoor venue on Friday in a huge step forward from its debut in the city five years ago. 
Muse, the British “prog-rock” band noted for its frenzied live performances as well as shrieking vocals and eccentric views of its frontman Matthew Bellamy, returns to Russia this week as rock giants with their most successful album and tour to date.
Muse made its St. Petersburg debut five years ago, when it was mostly known to a limited number of Britpop connoisseurs in Russia. 
The current tour promotes “Black Holes and Revelations,” Muses’s fourth album and the first since 2003.
“We needed to open up these new doorways so we could go forward,” Bellamy was quoted as saying about the new album by Sunday Mail in January. “It could be seen as some kind of transition album, going from what we were and songs like ‘Supermassive Black Hole’ could open up whole new areas for us in terms of electronics and dance grooves, but also songs like ‘Soldier's Poem’ could open up slower, more acoustic or even more jazz based music.”
Muse formed in Teignmouth, Devon by former students of Teignmouth Community College in 1997. The band’s debut album, the 1999 “Showbiz,” was produced by John Leckie, who has produced albums by Radiohead, the Stone Roses and The Verve.
The band’s first concert in St. Petersburg was at LDM (Leningrad Palace of Youth), a modest, 1,000-plus concert hall in May 2002.
But on Friday, Muse will perform at the 12,000-seat Ice Palace.

TITLE: Pop Star Bilan in Millionaire’s Black Book
AUTHOR: By Kevin O’Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW — Having spent $5 million on his protege, multimillionaire Viktor Baturin should probably be happy that singer Dima Bilan teamed up with Timbaland, one of the hottest pop producers in the world, to sweep the Russian MTV awards.
But Viktor Baturin is anything but impressed, and Bilan’s work with the African-American producer is mostly to blame.
“Dima Bilan is now the chief black man in Russia,” said Baturin, the brother of Mayor Yury Luzhkov’s billionaire wife, Yelena Baturina, adding that he did not want to help propagandize American culture in Russia.
Baturin was so vexed that he has handed over his contract with Bilan, the man who gave birth to a million copycat mullet haircuts, to the pop star’s manager, Yana Rudkovskaya.
The story provides a window into the strange world of Russian pop.
First off, Baturin is not distancing himself from Bilan quite as seriously as he might want people to believe, as Rudkovskaya is not just Bilan’s manager, but also Baturin’s wife.
Nonetheless, Baturin has railed at the singer’s new direction. He says the problems began with the album Bilan recorded in English in the United States with Timbaland, who has worked with major stars like Missy Elliot and Justin Timberlake. 
The Russian version of the disc is due to be released in November, with the English version following early next year.
Baturin said he wanted Bilan to go to London’s Abbey Road Studios and follow in the tradition of The Beatles, who made the studio famous, rather than take the American route.
This conflict is not Baturin’s first over Bilan. He and Rudkovskaya had to go to court after the singer’s first manager, Yury Aizenshpis, died in 2005. The couple had to fight for their stake in the singer after the mother of Aizenshpis’ son claimed the boy had been left the rights to the Bilan name and his music.
Baturin said Bilan had prospered under his guidance, receiving 50 percent of all concert receipts and pulling in at least $1 million per year. But he said the singer had responded by turning his back on his own musical heritage.
“Why don’t we preserve the best of what’s ours and take the best of what’s theirs?” Baturin asked during an interview last week in his office on the seventh floor of the Radisson Slavyanskaya hotel. “Why do we have to put out R&B, which was created in the brothels of New Orleans?”
Rudkovskaya, whose office is just one floor below, find’s her husband’s attitude difficult to fathom.
“I don’t understand why [he] is separating this into categories,” Rudkovskaya said. “I don’t think [people] can be divided into colors. Everyone is equal and the most important thing is the music … it should not be divided by race.”
“If Timbaland had been Russian, for example, everything would have been OK,” she said. Rudkovskaya could offer just one explanation for Baturin’s stance.
“I think he was in a bad mood,” she said.
That mood was on open display ahead of the MTV awards, where Bilan won in three categories, including best song. Baturin called MTV head Leonid Yurgelas and asked him to remove Bilan from the nominations and not allow him to perform.
He also said he would not attend the ceremony, joking that he was afraid Russian rapper Timati might hit him.
While expounding on his attitude toward R&B music — and to Timbaland in particular — Baturin launched into a short discourse on the history of music.
Beginning with the 10th century and explaining how music was split into the Catholic and Byzantine traditions, Baturin expounded on how American music, coming from a Protestant tradition divorced from the Catholic church, was too young and fallow.
“If you say you love Russia, then you have to respect its music and a musical tradition based on Byzantine orthodoxy,” he said. Baturin has recently designed an album by singer Filipp Kirkorov celebrating 25 years in show business.
“Who is Timbaland? He sings in falsetto. … It is not a voice. It is a parody of a voice,” said Baturin, who called Timbaland “a fat African-American who thinks he understands something about musical culture.”
Neither Timbaland nor Bilan could be reached for comment this week.
Bilan appears at least to be trying to smooth things out. He turned up at Baturin’s birthday on Oct. 2, Baturin said, and when he performed one of the songs from the new album earlier this month in Ryazan, he added a bayan, the traditional Russian accordion, to the band.

TITLE: Audit Co. In Probe
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Federal Tax Service on Friday expanded its case against PricewaterhouseCoopers as it called for the auditor and prosecutors to produce documents that it said pointed to PwC advising Yukos on avoiding taxes.
The tax service’s lawsuit against PwC accuses the international auditing firm of colluding with the now-bankrupt oil company by signing off on false audit reports, the Financial Times reported.
PwC and the Prosecutor General’s Office were subpoenaed during a hearing at Moscow’s Ninth Arbitration Appeal Court on Friday, with members of the service’s fifth tax inspectorate demanding that a list of all the company’s 146,000 employees worldwide and a rundown of the firm’s international units be handed over by Oct. 25, Interfax reported.
Judges granted a tax service request that PwC provide information about what it called the firm’s help to Yukos in registering firms abroad, creating trust agreements and “option” schemes to control foreign firms and the “siphoning of assets out of Russia via oil trading firms,” the newspaper reported.
PwC is the biggest auditor in the country, employing more than 1,500 people and auditing such firms as Gazprom.

TITLE: Local Firm To Blame for Internet Crime
AUTHOR: By Brian Krebs
PUBLISHER: The Washington Post
TEXT: WASHINGTON — An Internet business based in St. Petersburg has become a world hub for web sites devoted to child pornography, spamming and identity theft, according to computer security experts. They say Russian authorities have provided little help in efforts to shut down the company.
The Russian Business Network sells web site hosting to people engaged in criminal activity, the security experts say.
Groups operating through the company’s computers are thought to be responsible for about half of last year’s incidents of “phishing” — ID-theft scams in which cybercrooks use e-mail to lure people into entering personal and financial data at fake commerce and banking sites.
One group of phishers, known as the Rock Group, used the company’s network to steal about $150 million from bank accounts last year, according to a report by U.S.-based VeriSign, one of the world’s largest Internet security firms.
In another recent report, the U.S. security firm Symantec said that the RBN is responsible for hosting web sites that carry out a major portion of the world’s cybercrime and profiteering.
The company “is literally a shelter for all illegal activities, be it child pornography, online scams, piracy or other illicit operations,” Symantec analysts wrote in a report. “It is alleged that this organized cyber crime syndicate has strong links with the Russian criminal underground as well as the government, probably accomplished by bribing officials.”
Law enforcement agencies say these kinds of Internet companies are able to thrive in countries where the rule of law is poorly established. 
The company isn’t a mainstream Internet service provider — rather, it specializes in offering web sites that will remain reachable on the Internet regardless of efforts to shut them down by law enforcement officials — so-called bulletproof hosting.
Though there are thousands of web sites that bear the Russian Business Network name on registration records, the company is unchartered and has no legal identity, computer security firms say.
The network has no official web site of its own; those who want to buy its services must contact its operators via instant-messaging services or obscure, Russian-language online forums, said Don Jackson, a researcher at Atlanta-based SecureWorks.
According to VeriSign, cyber-criminals  can rent a dedicated web site from the RBN for about $600 a month, roughly 10 times the monthly fee for a regular dedicated web site at most legitimate Internet companies.
Alexander Gostev, an analyst with Kaspersky Lab, a Russian antivirus and computer security firm, said the RBN has structured itself in ways that make prosecution difficult.
“They make money on the services they provide,” he said. The illegal activities are carried out by groups that buy hosting services. “That’s the main problem — RBN does not violate the law. From a legal viewpoint, they’re clean.”

TITLE: Web Plus To Get Makeover
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Web Plus invested over $200,000 into a rebranding campaign launched earlier this month, as managers expect that unifying all the company’s telecom services under one brand will increase its market share and reduce spending on advertising and promotion.
Customers see Web Plus mainly as an Internet provider; other services offered under separate trademarks are not associated with the core brand. “By unifying several trademarks we will see a synergetic effect from spending on advertising,” Yaroslav Prokopovich, director for network projects at Web Plus, said at a press conference Friday.
“We were the first Internet provider to offer ADSL technology. We expected clients to file orders themselves and connect to the Internet without any support. However, as time went on, we realized that we had to change this model and focus on inexperienced Internet users,” said Dmitry Myasnikov, commercial director at Web Plus.
The new strategy was expressed in a new slogan: “Get connected without any adventures.” Web Plus focused on advanced technical support and 24-hour processing of clients’ requests. As well as a simplified connection, Web Plus has introduced expanded service packages that include a visit from a technical specialist and the cost of a Wi-Fi modem.
Web Plus currently services 60,000 Internet subscribers. In this market niche, Web Plus competes with Northwest Telecom’s Avangard trademark, which also provides complete technical support.
“The question is in the speed of servicing. Technical support is our strong point. We have been working in this market longer, and we have more technical specialists,” Myasnikov said.
At the end of 2006, Northwest Telecom was servicing 50,000 Internet subscribers in St. Petersburg, and in June this year Northwest Telecom reported that the number of Internet subscribers in the city had reached 100,000 people.
In March this year, St. Petersburg Cable Television (TKT) announced its plan to triple the number of broadband subscribers using its Tvoi Internet brand by the end of 2007.
“This is a strategic market for us. At the beginning of 2006 we were serving 1,700 subscribers. But we increased our market share from five percent to 15 percent last year, and this year we expect to get 60,000 new subscribers,” said Ruslan Yevseyev, commercial director of TKT.
According to Prokopovich, Web Plus holds 20 percent of the St. Petersburg Internet market. Prokopovich expects this share to increase to 23-25 percent.
Web Plus has operated since 1996 as a subsidiary of Telecominvest. Among the services it offers are ADSL Internet, home and office networks, dial-up, Wi-Fi, fixed-line telephone connections, web hosting and web design.
Web Plus has renovated its logo and replaced its specialized trademarks — Telephone Cloning, Smart Nets, WEBstroika and WiFi — with the core brand Web Plus. 
Humorous advertisements will be put up in metro cars, on public transport, in public toilets, in glossy magazines distributed free of charge and fliers offered on the city’s streets. One example is a sign resembling those usually hung on hotel room doors, which reads “Please do not disturb — gone to the Internet.”
Myasnikov considers companies which provide home networks to be serious competitors for Web Plus. The company is constructing home networks in five districts of St. Petersburg — in the Central, Primorsky, Frunzensky and Nevsky districts and also in the South-West of the city.

TITLE: In Brief
TEXT: <b>Banknote Forgery Up </b>
MOSCOW (Bloomberg) — Russia’s central bank took 1.8 percent more fake banknotes out of circulation in the first nine months of the year as cash continued to be the main form of payment. A total of 79,993 counterfeit ruble bills were identified, compared with 78,562 in the same period last year, the Moscow-based central bank said in a report on its web site.
Russia, the world’s 10th biggest economy, recovered double the number of forged ruble notes in 2006 from the previous year as wages and consumer prices increased. The majority of counterfeit ruble notes discovered in the third quarter of this year were 1,000 ruble bills, the central bank said.
Cash is still used in most payment transactions in Russia, where 90 percent of issued plastic cards are only used to withdraw cash from salary payments deposited into bank accounts, according to Anatoly Aksakov, deputy chairman of the lower house of parliament’s credit organizations and financial markets committee.

<b>Ratings in Question</b>
MOSCOW (Bloomberg) — Kazakhstan’s government may purchase shares of Kazakh companies listed on foreign exchanges in response to “unfounded” downgrades to the country’s credit ratings, President Nursultan Nazarbayev said.
“The rating companies started to cut ratings without taking into consideration at all the level of Kazakhstan’s economic development,” Nazarbayev told reporters in the capital Astana on Friday. “We have a stable economy and a stable banking system.”
Standard & Poor’s cut the government’s debt ratings and lowered the outlooks on three banks Oct. 8, citing concern that falling depositor confidence would end the country’s eight-year economic boom and cause lenders to exceed debt limits. The Central Asian state holds 3 percent of the world’s oil and is the largest energy producer in the former Soviet Union after Russia.

<b>India Eyes Oil Stake </b>
MOSCOW (Bloomberg) — Oil & Natural Gas Corp., India’s biggest explorer, said it will seek a stake in an exploration area in Russia’s Sakhalin Island to secure supplies for the South Asian nation.
The company’s senior management will accompany Oil Minister Murli Deora to Russia later this month to bid for the stake, Chairman R.S. Sharma said in an interview in New Delhi on Thursday. It will also seek shares in other areas, he said.
India, Asia’s fourth-largest economy, is looking to invest in oil projects in nations such as Kazakhstan, Russia, Iran and Africa. India imports three-fourths of its oil requirements as output from local aging fields declines.

<b>Celtic Resists Severstal</b>
MOSCOW (Bloomberg) — Celtic Resources Holdings Plc, which produces gold and molybdenum, has urged shareholders to reject a 270-pence per share takeover bid from Russian steelmaker Severstal as the offer undervalues the company.
“Prospects as an independent company are excellent,” London-based Celtic said Friday in a statement distributed by the Regulatory News Service. Severstal is trying to buy Celtic without paying for these prospects, the statement said.
Severstal, Russian billionaire Alexei Mordashov’s Moscow-based steelmaker, acquired 22 percent of Celtic Resources, in August. Severstal bought the stake from Aton International Ltd., a unit of UniCredito Italiano SpA, for an undisclosed amount.

<b>Timber Shadows Talks</b>
MOSCOW (Bloomberg) — Russia will discuss a conflict with Finland and Sweden over its timber exports at talks this week on its bid to join the World Trade Organization, Russian trade negotiator Maxim Medvedkov said Friday.
In July, the Russian government raised export duties for unprocessed timber to shore up processing and other manufacturing industries as it tries to become less dependent on oil and gas. The country is the world’s biggest energy exporter and has a fifth of the world’s forested land. Sweden and Finland have raised concern over the duties.
Russian officials are discussing options for resolving the dispute, Medvedkov said, adding that that Russia had “every legal right” to increase the duties before it joins the WTO.

<b>Belarus Set on Terms</b>
MOSCOW (Bloomberg) — Belarus expects the terms of its contract for gas deliveries from Gazprom not to change next year, Interfax reported, citing the country’s Energy Ministry.
The ministry’s press office said Belarus plans to pay 67 percent of the western European gas price next year, in line with the agreement for this year reached with Gazprom on Dec. 31, the Russian news agency reported Friday from Minsk, the Belarusian capital.
Energy Minister Alexander Ozerts headed a delegation to Moscow on Thursday to discuss gas deliveries through 2008, Interfax reported. Gazprom last year threatened to cut deliveries over a price dispute.

<b>Milk Monopoly Probe</b>
MOSCOW (Bloomberg) — Russia’s antitrust body began investigating the nation’s six biggest milk producers to determine whether they are attempting to monopolize the dairy industry, the Federal Anti-Monopoly Service said.
Wimm-Bill-Dann, Russia’s biggest dairy producer, and five other companies that together control more than 60 percent of the dairy market are under investigation, the Moscow-based service said in an e-mailed statement Friday.
Russia is struggling to damp accelerating inflation, driven by increasing prices of dairy and other food products. 

<b>Bank Zenit Plans IPO</b>
MOSCOW (Bloomberg) — Bank Zenit, a Russian bank partly owned by oil company Tatneft, plans to raise about $500 million by selling shares to the public and listed them in London and Moscow, the Sunday Times reported, without saying how it gained the information.
     JPMorgan Chase & Co. and UBS AG will advise Bank Zenit on the share sale, the newspaper said. Bank Zenit's equity may be worth about $1.8 billion, the Sunday Times said.
     The bank is in the process of building a retail banking business to sell mortgages and car loans, the London-based newspaper said. Its main partners and clients include oil and trading companies, as well as those in industries including defense, telecommunications and engineering, the paper said.
Banks Left Vulnerable</b>
MOSCOW (Bloomberg) — Russian banks have pushed up borrowing abroad, which “potentially increases the vulnerability” of some lenders, Interfax reported, citing central bank Chairman Sergei Ignatiev.
Foreign liabilities accounted for 15.4 percent of total banking industry liabilities by the “middle of 2007,” the Moscow-based news service reported Ignatiyev as saying.
This indicator is “much higher” for some banks, especially those that are subsidiaries of foreign lenders, he said, according to Interfax.

<b>$10Bln Warplane Plan</b>
MOSCOW (Bloomberg) — Russia and India plan to spend as much as $10 billion developing a so-called fifth-generation warplane, Kommersant said, citing unidentified people familiar with the matter.
Test flights should begin 2009, with commercial production starting the following year, the Moscow-based newspaper said, citing Russian Air Force Commander Alexander Zelin.

<b>Import Duties Slashed</b>
MOSCOW (Bloomberg) — Russia plans to reduce import duties on foodstuffs including milk and vegetable oils as the government struggles to curb rising consumer prices, RIA Novosti reported, citing Agriculture Minister Alexei Gordeyev.
Russia’s government will reduce import tax on milk and dairy products to 5 percent from 15 percent, the Moscow-based news agency said. The discount will stay for six months, RIA said.
The government may also reduce import tariffs for soy and rapeseed oil.

TITLE: Zubkov Urges U.S. To Back Russian WTO Bid
AUTHOR: By Anna Smolchenko and John Wendle
PUBLISHER: Staff Writers
TEXT: MOSCOW — Prime Minister Viktor Zubkov on Saturday pressed U.S. Secretary of State Condoleezza Rice on Russia’s bid to join the World Trade Organization and called for the repeal of the Jackson-Vanik amendment, a Soviet-era piece of legislation that has been a key obstacle to the country’s WTO accession. 
Zubkov’s call came during a meeting with Rice and U.S. Defense Secretary Robert Gates, the government press service said, Interfax reported. The press service gave no further details of the meeting, except to say that it covered bilateral relations and focused on trade and economic issues.
On Friday, WTO negotiator Maxim Medvedkov expressed hope that the country would join the body by year’s end, but observers cast doubt on this timetable, citing the upcoming elections season as a likely obstacle to progress.
There are a plethora of outstanding disputes between Russia and WTO members, ranging from the European Union’s concerns on energy supplies to Russia’s year-long economic blockade of Georgia, U.S. concerns over intellectual property rights and reluctance by the U.S. Congress to lift the Jackson-Vanik trade amendment.
Medvedkov told reporters at a briefing that a recent Cabinet shake-up would not impede progress on Russia’s bid, which has been the subject of discussions for more than a decade. 
But he conceded that the target could be missed. “We know that plans do not always come true, due to various reasons,” Medvedkov said.
He said the government would amend some legislation to comply with WTO rules, mostly by year’s end. Most of the legislation in question was related to intellectual property rights, he said.
The reshuffle saw the departure of German Gref, the economic development and trade minister widely credited with securing a bilateral deal with the United States last year. U.S. officials are still pressing for implementation of the conditions in that deal, including those on intellectual property rights.
Medvedkov said Friday that he did not feel that the change of ministers would affect the talks. Gref’s successor, Elvira Nabiullina, “is actively getting involved in the work,” he said.
The country still needs to conclude bilateral deals with Saudi Arabia and Georgia and a multilateral deal with all the WTO’s 151 members. Medvedkov said he would start talks with Georgian officials in Geneva on Friday and with Saudi Arabia soon after those talks. He also said Russia would try to come up with a solution to Finnish and Swedish objections on Russian raw timber import duties in time for an Oct. 26 EU-Russia summit in Portugal.
Sean Spicer, a spokesman for the U.S. Trade Representative’s office, said U.S. officials did not plan to attend the Geneva talks this month. “There are some outstanding issues, but we are determined to work with Russia to resolve these issues. [The] timetable is up to them,” Spicer said by telephone Friday.

TITLE: Telecoms Giant Comes to City
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The world’s leading contractor for the production of computers, electronics and telecom equipment, Foxconn, will construct a plant in St. Petersburg, after signing an agreement Friday with the St. Petersburg government, the Committee for Economic Development, Industrial Policy and Trade said in a statement.
The new plant will produce and assemble computers, liquid-crystalline monitors and other devices for leading electronics brands. Construction of the plant will start in November 2007 and should be completed by the end of 2008 or beginning of 2009.
“At the first stage of the project, investment into construction will amount to approximately $50 million. After two to three years of operation, the plant will employ around 5,000 people,” said Sergei Fiveisky, deputy chairman of the Committee for Economic Development, Industrial Policy and Trade.
At the first stage, the new Foxconn plant will produce computers for Hewlett-Packard, and later the production line will be expanded to service other electronics companies. Foxconn’s clients include Apple, Dell, Nokia, Motorola, Sony, Nintendo and other leading electronics companies.
Foxconn’s global sales grow at a rate of over 30 percent a year. From 2000-2007, the company’s turnover increased from $3 billion up to a forecasted $55 billion this year. Over the same period the number of employees increased from 30,000 people to 500,000 people.
Foxconn managers have been investigating opportunities for establishing a plant in Russia for the last two years and decided to settle in St. Petersburg, said Terry Guo, chairman of the board and executive director of Foxconn.
Among the advantages of locating a plant in the city, Guo listed a favorable investment climate, booming technological sector and large number of qualified specialists in the labor market.
In St. Petersburg, Foxconn will cooperate with local suppliers of components, Guo said. However, Fiveisky promised that the Committee for Economic Development, Industrial Policy and Trade will assist Foxconn in negotiations with the federal authorities to get exemptions from customs duties for importing components for the new plant.
“With the new plant, new jobs will be available in the city at the modern production complex and the local budget will benefit from additional payments. Production will be oriented toward both the local market and on export,” Fiveisky said.
Foxconn, which is registered in Taiwan, has been operating since 1973. It develops and produces computers, communication equipment, consumer electronics, cooling systems, video system boards and servers.
Last year, Foxconn global sales amounted to approximately $40 billion. The company plans to develop its existing product lines and introduce new products including components, software and system integration solutions.

TITLE: Lukashenko Slams Nord Stream Link
AUTHOR: By Andrei Makhovsky
PUBLISHER: Reuters
TEXT: MINSK — Belarus told Russia on Friday that it was making a mistake to build a gas pipeline under the “minefield” of the Baltic Sea and offered tax breaks instead to increase pipeline gas flows across its own territory.
“Why have you decided to go under the Baltic? Don’t you remember I told you that nothing good will come of this?” President Alexander Lukashenko said at a meeting with journalists broadcast on state radio.
“Today you not only face [problems on the] seabed, but also with mines and bombs from World War II. Why are you laying a pipeline on a minefield?” he said.
Gazprom has teamed up with Germany’s E.On and BASF to build the Nord Stream link, which will pump 27.5 billion cubic meters of gas per year under the Baltic to Germany from early next decade.
Russia supplies one-tenth of Europe’s oil needs via the Druzhba pipeline, which traverses Belarus.
Nord Stream decided in August to reroute the pipeline around Denmark to stay further away from known World War II munitions dumpsites, but Lukashenko said the link also made no sense from an economic point of view.
He said Russia should instead double the capacity of the Yamal-Europe gas link, which delivers gas to Germany and Poland via Belarus.
“If you are afraid that it is going be too expensive, we will give you tax and fee breaks on gas transit for five years. Just don’t do stupid things!”
Russian oil pipeline monopoly Transneft is considering fully shutting down Druzhba, which pumps 1 million barrels per day, and expanding its Baltic Sea port of Primorsk, forcing Poland and Germany to buy crude in tankers.

TITLE: Cabinet Insists Food Prices Are Coming Under Control
AUTHOR: By Gleb Bryanski
PUBLISHER: Reuters
TEXT: MOSCOW — Senior officials on Saturday sought to reassure voters that the Cabinet has price growth under control despite a spike in food prices six weeks ahead of the State Duma elections. 
“Within two or three months the situation will stabilize,” Finance Minister Alexei Kudrin said after a meeting of ministers with senior State Duma deputies. 
Consumer prices rose 0.8 percent in September, bringing nine-month inflation to 7.5 percent, close to the 2007 full-year target of 8 percent. Food prices jumped 1 percent due to rising costs of milk, dairy products and sunflower oil. 
Officials conceded that inflation this year would exceed last year’s 9 percent. 
The Duma summoned key Cabinet members to report on rising prices. 
“We have all the necessary tools to compensate for the negative influence of global food price rises,” Economic Development and Trade Minister Elvira Nabiullina told lawmakers Saturday. 
The government has introduced export tariffs on wheat and barley and plans to lower import tariffs on milk and dairy products to help combat inflation. It also plans to break local monopolies on the country’s food markets. 
Igor Artemyev, head of the Federal Anti-Monopoly Service, said about one-quarter of the price growth is a result of cartels. He said his service has initiated 15 criminal suits against producers and middlemen in recent days. “There are firms that decided to profiteer on global food price rises and stuff consumers’ money into their pockets,” Artemyev said, promising billions of rubles in fines. 
Agriculture Minister Alexei Gordeyev said a state corporation should be set up to tighten control over grain exports. The ministry forecasts a grain crop of 80 million tons this year. 
Kudrin pledged $6.7 billion in pension hikes, seen by economists as one of the most inflationary policy moves.

TITLE: VimpelCom Executive Finds Inspiration in Russia
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: Kent McNeley has a long history in Russia. It was McNeley who launched the first Procter&Gamble branch in Russia fifteen years ago when the country was taking its first steps in the market economy, and two years ago he came back to Russia after receiving an exclusive offer to join the Russian mobile phone service provider VimpelCom as its Vice President and Chief Marketing Officer.
Having graduated in 1979 from Iowa State University with a Bachelors of Science degree in Engineering, McNeley began his career with Procter&Gamble in the U. S., where he held various positions in manufacturing, sales and marketing. “Although I had a degree in engineering I had to start over my career in marketing and went through working on different kinds of brands until 1991 when I was asked to come to Russia and help start up the business there,” he said.  McNeley says that when he moved to St. Petersburg in November 1991, he really liked the people he met and the challenges he saw in Russia, which at that time was undergoing the very beginning of the capital market development. “Here we launched about 16 different brands in 9 product categories,” he said. “There were so many unclear laws, new things which in many ways were pioneering for me.”
However, St. Petersburg turned out to be not only a lucky business venue for McNeley: he also met his future wife in the very building where he worked – at the Hotel Europe, where Procter&Gamble’s first office was located. 
Having gained three years of work experience in Russia, in 1994 McNeley moved back to the U.S., where he took up the position of general manager of the food label Green Giant, and then headed a consulting company for a year. “Then I started to miss being an international again and accepted an offer from Citigroup to join its branches in Puerto Rico,” he said. Now he recollects with nostalgia the picturesque views of the Caribbean and the nearby mountains that he could see out of his window in Puerto Rico.
In Singapore, where he later moved to continue to work for Citigroup, he was impressed not only by the beautiful nature, but also by the financial wealth of the country, which is one of the richest countries per capita. Everyone in McNeley’s team was a dollar millionaire. “Real estate is growing so fast in Singapore that people who invest into it can make their fortune fairly rapidly. I had a bunch of young kids working for me who were really very wealthy.” Although the real estate market is also growing at a fast pace in Russia, McNeley said that he is not quite sure how many millionaires he has in his Moscow VimpelCom team. “There are probably one or two but I’m not quite sure,” he said. 
From 2000, McNeley held senior positions at Eastman Kodak, including Vice President and Chief Marketing Officer for Consumer Imaging and General Manager of Worldwide Output Business, until he moved back to Russia to work for VimpelCom.
“Moscow has changed a lot in fifteen years. In terms of business it is now a lot more Western in the way it is done. The reason is that many business people have been trained in Western companies, and that expats are also in high demand in Russia. Eight out of nine people that I first hired in Procter&Gamble in the U. S. now work as chief marketing officers or presidents of companies here in Russia. The growth of Russia is still incredible. VimpelCom, as big as it is now, is still growing 40 per cent a year in revenues. It is incredibly fast,” he said. 
Having worked in different companies in many countries, McNeley says it would be difficult to choose a favorite work place among the others. Although there were aspects that he liked and disliked about all of his jobs, he always focused on what he really enjoyed in them and as a result acquired unique knowledge and useful skills. 
“I will forever be grateful for the fabulous education I got while working at Procter&Gamble. I learned a lot about marketing, branding, working with people, how to get things done and move forward,” he said. “At Citigroup, I learned a lot about selling something that is not tangible to people, how to establish long term relationships, target marketing, how to understand what your consumers want and build even richer business experience. I was also very lucky to work for Kodak which is one of the top-selling brands in the world, and I was responsible for the world-wide distribution of this brand. In less than a year we created and launched a global campaign that was used in 60 countries. It was tremendous to be a part of it.”
McNeley thinks that what makes his job very interesting in Russia is that it is a vital time to work here now. “There are still lots of chances for me to contribute here. I can teach, coach and provide perspective,” he said.
In VimpelCom, McNeley is in charge of dozens of people in his team and over 5, 000 employees in the customer service, sales and marketing departments. He said that he is still very impressed by the high entrepreneurial spirit of business people he meets daily in Russia. “One of the greatest things I like in my team at VimpelCom is that they really sponge for ideas. When you have new ways to suggest in business they are very quick to pick them up and build on them. Frankly, they can do that faster than their counterparts in the U.S.,” he said.

TITLE: Strong Support For Atomic Corporation
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — A bill to put the country’s nuclear industry under a tightly controlled state corporation received overwhelming backing in its first reading in the State Duma on Thursday, but the Communists labeled the bill as dangerous.
Unlike the existing Federal Atomic Energy Agency, the corporation would assume ownership rights over the civil and defense plants that produce weapons, nuclear fuel and electricity. 
The move would increase management efficiency, combined with the ability of the corporation’s chief to issue orders to directors of the entities that make up the body, the agency said. The agency can now offer only recommendations, and it is the Federal Property Management Agency that currently owns the plants. 
The corporation will help control a national champion that is being created to run all stages of nuclear power generation, from uranium mining and enrichment to construction of reactors to running them, Federal Atomic Energy Agency chief Sergei Kiriyenko said Thursday. The national champion, Atomenergoprom, would incorporate 86 other state companies.
“We had concerns that the agency would lose control over that company,” Kiriyenko said, fielding questions from Duma deputies.
The corporation will use Atomenergoprom to develop the internal market and compete for a greater share of foreign contracts, given renewed international interest in nuclear energy, Kiriyenko said.
Russia plans to build 26 reactors by 2020. Federal budget spending on the plan will increase from 51 billion rubles ($2 billion) in 2008 to 97 billion rubles ($3.9 billion) in 2010, Duma Speaker Boris Gryzlov said last week.
But the industry makes money largely through its foreign contracts, said Sergei Novikov, a spokesman for the atomic agency. 
In the latest news on a potential export deal, Foreign Minister Sergei Lavrov said Wednesday that the Republic of Cape Verde, a group of islands off the West African coast, had been studying a deal to buy a floating nuclear power station from Russia. 
The Communists were the only faction that did not vote in favor of the bill, faction member Anatoly Lokot said. They refused to give their backing partly because they did not trust Kiriyenko, blaming him for the default in 1998 when he was prime minister, Lokot said.
Communist Deputy Vladimir Kashin called the bill “dangerous,” saying it gave too many powers to the corporation, including responsibilities that now fall to the Federal Security Service.
Vladimir Zhirinovsky, leader of the ultranationalist Liberal Democratic Party, veered somewhat off-topic during the debate, attacking a 1993 deal to sell uranium from dismantled Russian nuclear weapons to the United States for conversion into nuclear fuel. He said the deal, which expires in 2013, valued the uranium too cheaply.

TITLE: Yushchenko Gives Assurance On Gas
PUBLISHER: Combined Reports
TEXT: Ukrainian President Viktor Yushchenko assured Europe on Thursday that his government would meet its obligations to ensure Russian oil and gas exports flow across its soil on schedule and in full. 
Yushchenko gave the assurance days after Kiev resolved a dispute with Gazprom over the payment of debts worth $1.2 billion. 
Gazprom had threatened to reduce supplies to Ukraine in a move many analysts saw as putting pressure on the country, as election votes were being counted, to form a government willing to work with Moscow. 
The threat caused unease that Russian gas supplies to Europe might also be disrupted. 
“Our government guarantees the timely and total fulfillment of all our obligations to transport oil and gas through our own territory,” Yushchenko told a regional energy conference in the Lithuanian capital, Vilnius. 
Russia and Ukraine are yet to agree on gas import prices for 2008, which are expected to rise from the current $130 per 1,000 cubic meters. 
Lithuanian President Valdas Adamkus said at the conference that the European Union needed to adopt a united policy toward Russia on energy issues, because the supplier of one-quarter of the region’s gas is “unpredictable.”
“The European Union must develop a common approach to the issues at hand and speak in one voice,” to deal with issues including “increased dependence on a single, unpredictable source of imports,” Adamkus told the conference.
Reuters, Bloomberg

TITLE: Duma Moves To Protect Consumers’ Rights
PUBLISHER: The St. Petersburg Times
TEXT: The State Duma on Thursday approved measures to tighten rules protecting consumers’ rights and regulate the retail sector. 
The changes to consumer rights legislation will allow shoppers to claim refunds on defective or sub-standard goods without going through laborious administrative procedures. In the case of imported goods, buyers will be able to return them to the importer through a retail outlet or demand a refund.
Brady Martin, an analyst with Alfa Bank, said the measures appeared to be directed at some of the less efficient retail operations, as most of the large ones already have some form of refund and replacement policy. Such rights are taken for granted in developed economies, and it is normally an issue of competitiveness rather than a matter for government policy, Martin said.
“I cannot see how to enforce such rules, or which organ will oversee enforcement,” Martin said.
Another detail included in the legal changes stipulates that in the event of a disagreement over the cause of a defect in a sold item, the seller is obliged to conduct required tests on the goods at no additional cost.
The new rules will place heavier burdens on retail outlets by stiffening sanctions for breaches. Shops failing to issue a timely refund or replace defective goods will be liable for a fine equivalent to 0.5 percent of the original value of the item for every day after the complaint is made.

TITLE: Faberge Is Back in Business
PUBLISHER: Bloomberg
TEXT: MOSCOW — The Faberge family, which started making luxury-goods in 19th-century tsarist Russia and were displaced by Bolsheviks in the revolution, are back in business.
Faberge Ltd., which bought the brand name from Unilever Plc in January, appointed Tatiana and Sarah Faberge to its supervisory council, the Cayman Islands-based company said in a statement. They are great-great-granddaughters of House of Faberge founder Gustav Faberge and will oversee product development for the new business.
Gustav Faberge founded the family business in St. Petersburg in 1842. It produced jewelry, tableware and Faberge Eggs until the Russian Revolution in 1917.
London-based investment firm Pallinghurst Resources LLP founded Faberge Ltd. to buy the trademark from Unilever, the world’s second-largest maker of food and detergent.

TITLE: A Golden Opportunity
AUTHOR: By Anna Shcherbakova
TEXT: On the evening of October 7th, the Konstantinovsky Palace State Residence located on the shore of  the Gulf of Finland on the south-western outskirts of St. Petersburg was crowded with well-dressed people. Presumably they were waiting for President Putin, but he was celebrating his 55th birthday in the Kremlin in Moscow. However, the guests could entertain themselves by discussing Spanish architect Ricardo Bofill’s new design for a congress center at Strelna, where the Konstantinovsky palace is located.  Bofill, along with half a dozen other famous western designers, participated in a strictly confidential contest that was organized by the Presidential Administration. The new building will have an area of approximately 90,000 square meters, which will be able to be converted from a congress center into a concert hall or even an ice rink. The building is to be located near the Konstantinovsky palace, and the project should be completed by 2011, at a cost of 494 million dollars.  One development expert pointed out that the cost of renovating the Konstantinovsky palace itself, and of creating an entire complex with a hotel and cottages around it were approximately the same — $5000 per square meter, which is not very much for a top-end facility. 
Seven years ago, the Konstantinovsky palace was a complete ruin, with the Gulf of Finland visible through its windows and broken walls. In 2001, the presidential administration announced plans to restore the palace to a residence where the president could invite VIP guests to come and celebrate St. Petersburg’s 300th anniversary. The administration raised $330 million from Russian companies who were happy to sponsor the ‘president’s palace’ but preferred not to declare their participation. The average donation was $10 million, according to the representative of one sponsor. By May 2003, the restored palace opened its doors to guests and last year hosted the G8 summit. It is ideal for such meetings. 
The creation of Bofill’s fantasy will be financed by St. Petersburg Sea Port, Lukoil, and three banks – Rossiya, VTB and Gazprombank. All of them except the latter, which is owned by Gazprom, have private shareholders who might not be happy with such costs that do not promise fast returns. 
Experts say St. Petersburg is lacking in modern congress facilities, so three years ago the presidential administration ordered a project to design a congress-hall, recalled a former employee at the Konstantinovsky palace. According to him, they compressed the project to $35 million, while the original, more expensive version was worth $60 million. The latest project includes a small concert hall, exhibition space and hotel. All the components except the congress-hall are superfluous, since the Konstantinovsky palace already has everything except a congress center, and the new facilities will therefore compete with the Konstantinovsky palace. (The compound does not have to return investments but is capitalizing on its facilities, for example, by organizing corporative events at the hotel’s restaurants or leasing cottages for around $2000 a day. The service, however, is poor, according to the participants of such outings.) 
Although representatives of most of the aforementioned companies claimed that the project for a new congress hall is commercial, one of them admitted that it is “purely a political thing.” In actual fact, the project, which starts six months before the presidential election, is a good opportunity for businesses to show their loyalty to the administration. 

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

TITLE: The Virtue of Selfishness
AUTHOR: By David Kelley
TEXT: Fifty years ago last week, Ayn Rand published her magnum opus, “Atlas Shrugged.” It’s an enduringly popular novel, with some 150,000 new copies still sold each year in bookstores alone. And it’s always had a special appeal for people in business. The reasons, at least on the surface, are obvious enough. Businessmen are favorite villains in popular media, routinely featured as polluters, crooks and murderers in network television dramas and first-run movies. Oil company CEOs are hauled before congressional committees whenever fuel prices rise, to be harangued and publicly shamed for the sin of high profits. 
Genuine cases of wrongdoing like Enron set off witch hunts that drag in prominent achievers like  Martha Stewart and former investment banker  Frank Quattrone.  By contrast, the heroes in “Atlas Shrugged” are businessmen — and women. Rand imbues them with heroic, larger-than-life stature in the Romantic mold, for their courage, integrity and ability to create wealth. They are not the exploiters but the exploited: victims of parasites and predators who want to wrap the producers in regulatory chains and expropriate their wealth. 
Rand’s perspective is a welcome relief to people who more often see themselves portrayed as the bad guys, and so it is no wonder it has such enthusiastic fans in the upper echelons of business as Ed Snider (Comcast Spectacor, Philadelphia Flyers and 76ers) and Fred Smith (Federal Express) — not to mention thousands of others who pursue careers at every level in the private sector. 
Yet the deeper reasons why the novel has proved so enduringly popular have to do with Rand’s moral defense of business and capitalism. Rejecting the centuries-old, and still conventional, piety that production and trade are just “materialistic,” she eloquently portrayed the spiritual heart of wealth creation through the lives of the characters now well-known to many millions of readers. 
Economists have known for a long time that profits are an external measure of the value created by business enterprise. Rand portrayed the process of creating value from the inside, in the heroes’ vision and courage, their rational exuberance in meeting the challenges of production. 
As for the charge, from egalitarian left and religious right alike, that the profit motive is selfish, Rand agreed. She was notorious as the advocate of “the virtue of selfishness,” as she titled a later work. Her moral defense of the pursuit of self-interest, and her critique of self-sacrifice as a moral standard, is at the heart of the novel. At the same time, she provides a scathing portrait of what she calls “the aristocracy of pull”: businessmen who scheme, lie and bribe to win favors from government. 
Economists have also known for a long time that trade is a positive sum game, yet most defenders of capitalism still wrestle with the “paradox” posed in the 18th century by Adam Smith and Adam Ferguson: how private vice can produce public good, how the pursuit of self-interest yields benefits for all. Rand cut that Gordian knot in the novel by denying that the pursuit of self-interest is a vice. 
Precisely because trade is not a zero-sum game, Rand challenges the age-old moral view that one must be either a giver or a taker. The central action of “Atlas” is the strike of the producers, their withdrawal from a society that depends on them to sustain itself and yet denounces them as morally inferior. Very well, says their leader, John Galt, we will not burden you further with what you see as our immoral and exploitative actions. The strike is of course a literary device, but it has a real and vital implication. While it is true enough that free production and exchange serve “the public interest,”  Rand argues that capitalism cannot be defended primarily on that  ground. Capitalism is inherently a system of individualism, a system that regards every individual as an end in himself. That includes the right to live for himself, a right that does not depend on benefits to others, not even the mutual benefits that occur in trade. 
This is the lesson that most people in business have yet to learn from “Atlas.” At a crucial point in the novel, the industrialist Hank Rearden is on trial for violating an arbitrary economic regulation. Instead of apologizing for his pursuit of profit or seeking mercy on the basis of philanthropy, he says, “I work for nothing but my own profit — which I make by selling a product they need to men who are willing and able to buy it. I do not produce it for their benefit at the expense of mine, and they do not buy it for my benefit at the expense of theirs; I do not sacrifice my interests to them nor do they sacrifice theirs to me; we deal as equals by mutual consent to mutual advantage — and I am proud of every penny that I have earned in this manner ...” 
We will know the lesson of “Atlas Shrugged” has been learned when business people, facing accusers in Congress or the media, stand up like Rearden for their right to produce and trade freely, when they take pride in their profits and stop apologizing for creating wealth. 

David Kelley, author of “A Life of One’s Own: Individual Rights and the Welfare State,” is the founder of The Atlas Society. This comment appeared in The Wall Street Journal.

TITLE: A Lesson in Russian History for Clinton
AUTHOR: By Alexei Bayer
TEXT: The war in Afghanistan was not the main reason the Soviet Union collapsed. Nevertheless, it bankrupted the Soviet state and pointed out the moral blight, skewed priorities and irrelevance of the Communist gerontocracy.
The United States is a vibrant society with a diversified and resilient economy. But it currently stands on the brink of considerable social and economic upheaval, and the Iraq war reveals the fault lines within the world’s only superpower. It is a nation living beyond its means by exploiting the status of the dollar as the global reserve currency. The war is costing some $3 billion per week — all of it borrowed from more productive nations. 
The United States is the leader of the free world, which the rest of the world refuses to follow. Even the pathetic “coalition of the willing,” a bunch of mostly third-tier nations Washington assembled to back it in Iraq, has crumbled.
Iraq occupies a far more important place in the political debate in the United States than Afghanistan ever did in the Soviet Union. It is divisive, and frustrations on both sides have been exacerbated by the fact that no victory, however defined, can be achieved. Nor can U.S. forces leave without plunging a strategic, oil-rich region into chaos.
U.S. overconsumption and unilateralism predated President George W. Bush. But it was Bush who turned federal fiscal surpluses into deficits by granting his disastrous tax cuts. He plunged the United States into the irrelevant global war on terror, started the unnecessary war in Iraq and created the moral climate in which Americans stand accused of torture, war crimes and atrocities.
Bush has been called the worst president in U.S. history. But now he has devised a clever plan to rescue his legacy. His troop surge in Iraq is designed to create a sense of stability and even progress. His economic policy, aided and abetted by the U.S. Federal Reserve, has been to stretch the liquidity bubble for another year or so. He could then credibly claim that he left office with Iraq on the mend and the economy booming and that his successors dropped the ball.
The next occupant of the White House will have to fight back in self-defense. He — or most probably she (meaning Democrat Hillary Clinton, who is currently the most credible candidate) — should study recent Russian history. Gorbachev withdrew troops from Afghanistan, but he never put those responsible for the war on trial. Boris Yeltsin ended communism and split the Soviet empire, but he avoided pushing for de-Stalinization. Even a symbolic condemnation of communism by Russian courts would have allowed the country to turn over a new page and rejoin the community of nations. 
As a result, in post-Soviet Russia, Stalin is widely venerated and former KGB officers rule the Kremlin. Gorbachev and Yeltsin, meanwhile, are reviled for “destroying a great country.”
If Clinton doesn’t want to share their fate — i.e. a failed one-term presidency — she would need to start de-Bushification. Her first act in office should be to put Bush and his entourage on trial. 
Putting blame where it belongs would, first of all, extract the next president’s reputation from the rubble of failed policies. More important, a guilty verdict passed on the Bush administration by an independent U.S. court might put an end to unilateralism and restore the United States’ rightful place in the community of nations. Both would benefit.

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

TITLE: Putin’s Political Oligarchy
AUTHOR: By Anatoly Lieven
TEXT: The key political question in Russia over the past two decades has not been about the relationship between democracy and dictatorship, but about the relationship between different kinds of oligarchy. The oligarchy that has taken shape under President Vladimir Putin is far more coherent, close-knit and disciplined than Boris Yeltsin’s collection of feuding magnates. It has a common culture and ethic drawn from the common origins of many of its members in the Soviet security services. Its comparative success is due to these factors, as well as good luck with energy prices and good economic management. 
Then again, a fully fledged oligarchy does not depend on one leader for its survival; on the contrary, it tends to rotate power among different members of the ruling elite. For better or worse, the oligarchy is still far from achieving that degree of solidity. 
Putin may be more like the chairman of a corporate board than a personal dictator, but he is extremely powerful. Without him, it is felt, not only would the ruling group lose its prestige with the population, but it would be liable to fall into uncontrollable rivalries. Not just Putin himself, but most members of the elite are, therefore, determined that he continue exercising dominant influence after stepping down as president next year. 
Hence Putin’s apparent intention to take over the leadership of United Russia and turn it into a real ruling party rather than the present coalition of bosses and celebrities, held together by allegiance to the president. This could be accompanied by Putin’s assumption of the prime minister’s office, leading, in turn, either to the next president quickly stepping down to allow Putin to run for another presidential term as permitted by the Constitution, or to the transfer of real power from the presidency to the office of the prime minister. 
Given Putin’s youth (he has just turned 55), his great, though contested, achievements and his immense popularity, it would have been surprising if he had not sought to retain dominant influence. Whether this is the best way to go about things is a different matter. Frankly, if he could not retire, then it might have been better if he had changed the Constitution to allow presidents to run for extra terms and submitted the change to a popular referendum. 
As it is, all of Putin’s possible courses look extremely problematic. Worst of all would be if he became an all-powerful prime minister under a supposedly weakened presidency. This strategy could lead to a disastrous clash between the president and prime minister and the destruction of the entire system. 
Even if it succeeded, it would create a system in which power migrates restlessly from one government office to another, depending on circumstances. This is no recipe for stability or predictability. 
By the same token, if a new president wins an election and takes office, only to step down again in favor of Putin, that would preserve continuity of power, but it would reduce the Constitution to a pantomime farce. 
In terms of the sheer effectiveness of government, the best option might be a strong premiership under Putin together with a strong presidency under someone such as First Deputy Prime Minister Sergei Ivanov. In theory, this would be a truly formidable combination. In practice, it would require greater mutual trust than exists between most brothers. 
Finally, there is the option of Putin limiting himself to the role of leader of United Russia and exercising his power and influence from this platform — something like the role of Sonia Gandhi, the leader of the Indian National Congress. The great danger of this would be the risk that it would recreate a de facto one-party state. 
On the other hand, Russia’s post-communist democracy failed in large part precisely because society proved incapable of generating real new political parties. If Putin succeeds in turning United Russia into such a party, then it might eventually — if unintentionally — help encourage the emergence of real democratic party politics on the basis of a new society, created by economic growth. 
Until that day comes, however, Russia is unlikely to do better than the present oligarchy. It can only hope that it works as efficiently as possible under a reasonably stable and consensual leadership. 

Anatol Lieven is a professor in the war studies department of King’s College London and a senior fellow of the New America Foundation. This comment appeared in the Financial Times.

TITLE: Changes to The Law No Novelty
AUTHOR: By Andrei Kolesnikov
TEXT: Every Russian or Soviet leader changes the structure of government to serve his own tactical interests. It’s highly unlikely that Nikita Khrushchev, NKVD chief Lavrenty Beria or Georgy Malenkov, chairman of the Soviet Council of Ministers, thought too much about observing the letter of the Soviet Constitution when they divided power after the death of Josef Stalin.
When Beria needed to centralize power by strengthening the role of the Council of Ministers, a simple resolution was enough to accomplish this. In order to deprive Beria of his authority, however, the other two members of the triumvirate had to use other means — arrest.
In 1957, Khrushchev tried to weaken the concentration of power in the Kremlin that Beria had instituted by introducing the Regional Economic Councils. This was an attempt to decentralize the federal ministries. In 1958, Khrushchev became a head of the government.
When Khrushchev’s opponents ousted him in 1964, they once again changed the government structure. A new triumvirate later emerged: Alexei Kosygin, chairman of the Council of Ministers, Nikolai Podgorny, chairman of the presidium of the Supreme Soviet and Leonid Brezhnev. The de facto leader of the country was Brezhnev, the general secretary of the Communist Party. It took Article 6 of the 1977 Constitution to codify this into law.
In 1988, when the Communist Party’s power was gradually fading, Mikhail Gorbachev concentrated power in the parliament and combined the positions of general secretary and head of the Supreme Soviet. In 1990, the new position of president of the Soviet Union was introduced.
Throughout the 1990s, it was impossible to rely on laws to rule the country. Russia was instead ruled by presidential and Cabinet decrees.
Legal contradictions have never been an obstacle for Russian leaders to change the structure of government and how power is allocated. There is no model that cannot be invented or manipulated in order to decide the main issue for a leader — how to preserve his power. 
History has shown that coups, conspiracies, plots and revolutions are often carried out under the pretexts of restoring law and order. And when leaders try to achieve “stability” by manipulating the laws to increase their own power, this is fraught with tremendous political risk.

Andrei Kolesnikov is a deputy editor of The New Times. This comment appeared in Vedomosti.

TITLE: A Hostage to the Elite
AUTHOR: By Boris Kagarlitsky
TEXT: I received the news that President Vladimir Putin would be heading United Russia’s federal ticket while on a visit to Harvard University. My U.S. colleagues expressed empathy. Now Russia would be led by a dictator, I was told, and the last remaining remnants of civil liberties would be tossed out the window.
I might have disappointed them by declaring that I did not see any connection between Putin’s announcement and their gloomy predictions. I did not say this because I am somehow optimistic about Russia’s prospects.
A collapse of the real estate market or a sharp fall in oil prices would be serious matters for sure. But I don’t see the significance in Putin’s decision. The question of who will head United Russia’s ticket in the elections to a decorative parliament is not important for anyone besides the politicians who are participating in this charade.
From a legal and ideological point of view, the president’s willingness to link up with United Russia weakens rather than strengthens his position. It is one thing to be the great and revered ruler who is independent of any party affiliation. It is another matter entirely to head the ticket of a particular party.
It is obvious that United Russia stands to gain from Putin’s endorsement. The party can expect not only to win additional votes, but it will have the opportunity to deliver a knockout blow to “opposition” parties competing for State Duma seats. Moreover, the party’s ratings would increase from the current 45 to 50 percent level to 60 percent with the president’s endorsement.
But what possible use would a Duma seat be to Putin, who enjoys 70 to 75 percent approval ratings? If he wants to become prime minister in March, why would he need a place in the Duma elections? Does anyone really think that Putin would step down as president, which is required by election law, to become a Duma deputy?
It seems that all of this makes no sense at all. It is extremely difficult to determine Putin’s motives and rationale, and Putin has once again left people guessing.
If Putin wanted a third term as president, he could have made changes to the Constitution two years ago rather than resort to the elliptic maneuverings he is undertaking today. If Putin were to make a firm decision to become prime minister, no one would stand in his way. If Putin decides to become prime minister in March, would his spot as a United Russia deputy help him?
Why doesn’t Putin say straight out that he wants to become prime minister?
The answer is that he has no intentions to occupy this post. But the people surrounding the president want him to stay in power very badly. Keeping Putin in the Kremlin — or, at the very least, in the White House — is what his inner circle desperately wants. For them, the fewer the changes, the lower the risk. The political elite want to be sure that they don’t lose their cushy and lucrative spots.
Most important, Putin is the source of legitimacy for the entire political system; it is like a combination of the British queen with the authority of a French president. Moreover, Putin is a rare example of a leader who does not evoke nausea from the people.
The political elite have been fighting for some time to prevent Putin from leaving office. The decision of a ruling president to run for office as a Duma deputy, however, is strange and belittling. A president would normally only agree to this under extreme pressure or desperation.
The truth of the matter is that, despite Putin’s immense power and prestige, he has become a hostage to the very bureaucratic elite that he himself created. Bureaucracy has won and the politician has lost. It is high time to gather on the main square and cry, “Free Vladimir Vladimirovich!”

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

TITLE: Raising New Doubts About State Capitalism
AUTHOR: By Martin Gilman
TEXT: Two weeks ago, we were once again warned about the possible perils of state control in Russia — this time by no less than President Vladimir Putin’s top economic adviser, Arkady Dvorkovich. In a speech to a conference, he cautioned that further expansion of state control to other specific sectors of the economy could hurt economic growth. 
Except for a self-interested group of economically illiterate people who are well connected to the power vertical, Dvorkovich’s observation is obvious and noncontroversial. Is there a cause for concern? How likely is the extension of state control over the economy? And can Russia’s economic steamroller be stopped as a result?
To begin with, there is no simple concept of state control. It has many meanings in global practice, a number of which could apply to the country, going well beyond government ownership of companies.
For instance, it can describe a partnership of government and big business, where the state is intervening on behalf of large companies, in contrast to laissez-faire capitalism, where big business isn’t protected from market forces. Alternatively, it can describe a close relationship between the government and private sector, with private companies producing for a guaranteed market. An example of this would be a military-industrial complex in which companies producing under government contracts aren’t subject to the discipline of competitive markets. Another example: exporters that benefit from cheap state credit or guarantees. 
The idea of state control has strong historical roots that vary from country to country and over time. State control has suggested itself as a reaction to economic collapse and sector decline or to ensure operation of a natural monopoly. Imitating the “infant industry” argument as a development model, some were inspired by the examples of earlier Japanese or Korean economic miracles.
A variant on this theme used by supporters of state control is the need to create national champions in response to globalization, already a supposedly worn-out idea borrowed from West European experience. Socialist ideology, of course, has also been a key factor behind nationalization in postwar Britain and Francois Mitterrand’s France. 
Clearly, state control exists to some extent in all countries. So, it is understandable that there is support in the country for some major role for the state. And those who favor greater state control, whatever their real motives, are not shy in using the above arguments. In fact, Russia has belatedly joined a crowded field where state ownership of the so-called “commanding heights”— to use Lenin’s phrase to describe strategic sectors — is common.
State control, as a policy, is subject to fashion. Since Milton Friedman’s influence on the Reagan-Thatcher era and the fall of the Berlin Wall, much of the world has moved away from direct state ownership to a more regulatory or partnership mode with the private sector. So Russia seems to be bucking the global trend toward privatization. But this should not hide the fact that there has been a rampant increase in government interference in the form of regulation in various guises. Public-private partnerships have become the new flavor of the day.
Before jumping to conclusions, it should be noted that, according to the European Bank of Reconstruction and Development, about 35 percent of gross domestic product is from the public sector, well below West European averages and only slightly higher than in the United States.
So, going beyond the rhetoric, is there a problem with state control in Russia? In some sectors, such as energy, the state role is understandable even if the costs of extensive state ownership are high. The state also dominates in banking, aircraft, shipbuilding and now nanotechnology. The latest on the list is Russian Technologies, which plans to develop heavy industry. And Dvorkovich referred to proposals from government ministries in recent months that called for state companies to run the fishing industry, build roads and produce pharmaceuticals. 
The concerns expressed by Dvorkovich are warranted. Even while appealing in theory, the practical experience of state control is not inspiring. With few exceptions, in most countries state-controlled enterprises are associated with waste, corruption, overstaffing and underperformance — all of which constitute a huge burden on the economy. And in a country like Russia, where the principal challenge is to develop trained, competent and honest managers — especially in the public sector — the last thing the country needs is to bring more of its economy under the control of state managers. This has to be a sure recipe for more rent-seeking behavior by bureaucrats and state managers and for more corruption.
Before condemning this apparent trend in Russia, however, we have to acknowledge that the experience in every country is different. Although a few years ago the International Monetary Fund was somewhat sceptical about the prospects for Moscow’s stabilization fund, few now doubt that the fund has had unprecedented success in preventing Russia’s economy from being infected by the Dutch disease, which is caused by rapid and extensive currency appreciation. By analogy, it is not a given that state control will fail, although it is quite likely.
And it is hard to argue with Russia’s success so far, even if energy prices played an important role. The economy has been growing at an average rate of almost 7 percent for eight years in a row. 
Moreover, there is a real difference between the modern Russian experience and international precedents. State control is not driven by ideology but by raw greed disguised as patriotic necessity — or worse, as economic rationale. This is by no means a return to a Soviet model. 
Since the people who support the extension of state control are driven by their own self-interest, we can expect that they will go to great lengths to preserve the gains of their asset grab. In this sense, the country’s experiment with an expanded state sector could be short-lived. The newly installed state-appointed managers and directors of these enterprises will want to ensure that they and their progeny continue to enjoy the lifestyles created by their control over state assets. The only way to do this is to privatize a certain percentage of the companies over time with big chunks of shares going to those currently in control. The recent flurry of initial public offerings is likely to continue and perhaps intensify in the year ahead, financial market conditions permitting. Deplorable as it may be, this scramble for assets cannot come as a big surprise. 
Dvorkovich is absolutely right — particularly so at a time when the formula for success of the past eight years is unraveling. For instance, the country’s external current account balance will be in deficit by next year, and the days of easy productivity gains through the better use of installed capital will give way to an era when new capital investment is crucial. Without a significant contribution by the private sector, including foreign direct investment, the country could face real medium-term risks. Already, Russia pays a price in terms of foregone growth, jobs that are not created, new skills that are not developed and competitiveness that is lost.
Putin understands this, even if all of his entourage does not. We can only hope that during this period of political transition, he will be able to keep the greed of his acolytes in check. 

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

TITLE: Hu Promises More Open China in Future
AUTHOR: By Christopher Bodeen
PUBLISHER: The Associated Press
TEXT: BEIJING — Chinese leader Hu Jintao pledged Monday to make the communist government more open and responsive, while moderating the juggernaut economy to produce balanced and environmentally friendly growth.
Opening a pivotal Communist Party congress seen as a major test of his political strength, Hu outlined policies intended to make China more prosperous and stable by raising incomes and improving the party’s hold on a fast-changing society.
While offering few specifics, Hu said Chinese citizens would have “more extensive democratic rights” by 2020, China’s target year for establishing lasting economic security, even as the Party retains its monopoly on political power.
“Contemporary China is going through a wide-ranging and deep-going transformation. This brings us unprecedented opportunities as well as unprecedented challenges,” Hu told the more than 2,200 delegates gathered in Beijing’s massive Great Hall of the People for the meeting, held every five years.
The address was the most public event of the weeklong congress, whose chief purpose is to reappoint Hu for a second five-year term as party general secretary. A key measure of Hu’s influence will be how many of his political allies he can maneuver into top party jobs, including proteges expected to take over from him when he steps down in five years.
Broadcast live on nationwide television, the far-ranging speech lasted more than two hours and 20 minutes and was one of Hu’s most important public addresses since taking over as party leader at the last congress in 2002. Reflecting Hu’s cautious manner, it contained few initiatives while laying out a blueprint for upcoming policies.
Hu pledged to cut pollution, reflecting mounting worries about the environmental costs of a boom that has left China with some of the world’s dirtiest air and water.
Beijing will “promote a conservation culture by basically forming an energy- and resource-efficient and environmentally friendly structure of industries, pattern of growth and mode of consumption,” Hu said.
He also promised to continue a buildup of China’s military, emphasized Beijing’s preference for a peaceful settlement with rival Taiwan and pledged to use the country’s economic and diplomatic clout as a force for peace internationally.
With Hu at the midway point of his expected 10-year term, the congress offers him a chance to further entrench his role as first among equals in the party’s increasingly collegial leadership structure.
“I think the secretary-general did very well with this speech,” said Shen Ruixiang, a district party secretary from the thriving eastern province of Jiangsu.
“I’m sure he’ll emerge from this congress with even more authority and prove an even better leader,” Shen said.
In his report to the congress, Hu dwelled on his signature policy, a push to re-channel breakneck development by spreading the benefits of economic growth more evenly.
Hu referred to the social divisions that have erupted from fast growth — gaps between rich and poor, urban and rural — and made an oblique reference to an emerging, demanding middle class.
“There are still a considerable number of impoverished and low-income people in both urban and rural areas, and it has become more difficult to accommodate the interests of all sides.”
While Hu spoke, police and soldiers, who sealed off Tiananmen Square and the areas around the Great Hall of the People, detained at least two dozen people, many of them elderly, forcing them into police vans. Many carried documents detailing grievances against local officials and hoped to get the attention of Chinese leaders.
In looking outward, Hu reiterated an offer to end the hostilities between China and Taiwan since their separation amid civil war 58 years ago. Hu, however, restated a condition for talks that has been anathema to Taiwan’s democratic government — that the island must recognize that it is a part of China.
Hu reveled in the achievements China has made since he took over, pointedly referring to income growth and its two manned space missions.
“During this period, China’s overall strength grew considerably and the people enjoyed more tangible benefits. China’s international standing and influence rose notably,” Hu said.
Hu’s leadership has never been threatened, but he is largely seen as weaker than past leaders, forcing him to compromise on some top appointments and other decisions. In a sign of possible constraints, Hu’s retired predecessor, Jiang Zemin, was appointed to the committee handling the congress’ arrangements, state media said Sunday.
Deliberations over the next leadership lineup have been going on for months and will take place this week behind closed doors. Its makeup is officially announced after the congress ends.
Hu is expected to push for the elevation of protege Li Keqiang onto the Politburo Standing Committee, while Xi Jinping, the party boss of Shanghai and the son of a revolutionary veteran, is also expected to get a seat.

TITLE: Russians Win In Moscow
AUTHOR: By Gennady Fyodorov
PUBLISHER: Reuters
TEXT: MOSCOW — Russia’s Yelena Dementyeva gave herself an early birthday present when she rallied after dropping the first set to beat Serena Williams 5-7 6-1 6-1 and win her maiden Kremlin Cup title on Sunday.
Top seed Nikolai Davydenko prevailed over France’s Paul-Henri Mathieu 7-5 7-6 in the men’s final later in the day to retain his crown and complete the Russian double at the $2.3 million indoor tournament.
Davydenko, who called for a medical timeout late in the second set to treat his right wrist, needed four match points to finish off the fourth-seeded Frenchman for his third victory in Moscow in the last four years.
The Russian, who won his first title of the year, said he was one point away from defaulting.
“Honestly, I was pretty lucky to win the tiebreak,” said the world number four, who saved seven set points in the tiebreak.
“I had a lot of pain in my wrist, so I would’ve quit, no doubt, if had lost that second set.”
A visibly disappointed Mathieu, who won his first career title here in 2002, had his chances.
“I had two set points at 5-4 and 15-40 on his serve in the first set and if I had won that set it might have been a different story,” he said. “In a match like this, it’s always two or three points that make a difference.”
Dementyeva, who turned 26 on Monday, came out storming after losing the first set, breaking the fourth-seeded American three times in each of the next two sets to claim her first career win over the former world number one in emphatic fashion.
The 14th-ranked Russian had not even won a set off Williams in their four previous meetings.
Both players traded breaks several times in the first set before Williams broke to love in the 12th game to take a one-set lead.
The Muscovite, seeking her first title on home soil in her 11th Kremlin Cup appearance and after losing her two previous finals here in 2001 and 2004, came out fighting in the second set.
Urged on by a near capacity 10,000-strong home crowd, she broke the world number seven three times to claim the second set in just 24 minutes before repeating the feat in the decider.
Serving for the match, Dementyeva was able to overcome her nerves to clinch a breakthrough victory and the $182,000 first prize on her second opportunity when Williams’s forehand sailed wide.
“It’s just a great victory for me,” the Russian told reporters after winning her eighth career title.
“This has been one of my favorite tournaments and playing at home in front of my fans, finally I was able to do it. It is a very important win for me and my whole career.”
“She just played really unbelievably, she should play like that more often,” said Williams, who was making her second visit to the Kremlin Cup.

TITLE: American 
Economists Win Nobel
AUTHOR: By Karl Ritter and Matt Moore
PUBLISHER: The Associated Press
TEXT: STOCKHOLM, Sweden — Americans Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson won the Nobel prize in economics on Monday for developing a theory that helps explain situations in which markets work and others in which they don’t.
The researchers “laid the foundations of mechanism design theory,” which plays a central role in contemporary economics and political science, the Royal Swedish Academy of Sciences said.
The academy said their research helped explain decision-making procedures involved in economic transactions including, for example, what insurance policies will provide the best coverage without inviting misuse.
Essentially, the three men, starting in 1960 with Hurwicz, studied how game theory can help determine the best, most efficient method for allocating resources given the available information, including the incentives of those involved.
“Mechanism design theory, initiated by Leonid Hurwicz and further developed by Eric Maskin and Roger Myerson, has greatly enhanced our understanding of optimal allocation mechanisms,” the academy said.
Their theory lets economists, governments and businesses “distinguish situations in which markets work well from those in which they do not,” the academy said in its citation.
Hurwicz, 90, is the oldest Nobel winner ever, the academy said. The Moscow-born researcher is an emeritus professor of economics at the University of Minnesota in Minneapolis.
“I really didn’t expect it. There were times when other people said I was on the short list but as time passed and nothing happened I didn’t expect the recognition would come because people who were familiar with my work were slowly dying off,” he said.
Maskin, 56, is professor at the Institute for Advanced Study at Princeton, New Jersey; and Myerson, 56, is a professor at the University of Chicago in Illinois.
“I think this is a great privilege,” he told The Associated Press, adding he was inspired by the work of his fellow laureates.
“There were a lot of us working in this area in the late 1970s,” he said, categorizing his work as investigating “how does information get used in society to allocate resources?”
Maskin said he was relieved that Hurwicz was among the winners.
“Many of us had hoped for many years that he would win,” Maskin told reporters in Stockholm in a conference call. “He is 90 years old now and we thought time was running out. It is a tremendous honor to have the opportunity to share the prize with him and with Roger Myerson.”
The prize is officially known as the Nobel Memorial Prize in Economic Sciences.

TITLE: Holyfield Fails To Win Title
PUBLISHER: Combined Reports
TEXT: MOSCOW — Evander Holyfield’s quest for a fifth heavyweight title ran into a roadblock Saturday: Russia’s Sultan Ibragimov. 
Ibragimov kept his WBO title with a unanimous decision over Holyfield, who turns 45 next week. 
This title would not only have made Holyfield  the second-oldest heavyweight champion, but was to be the first step on his quest to unite all four heavyweight titles. 
Fighting before a home crowd at the sparsely attended Khodynka Ice Palace, Ibragimov improved his record to 22 wins and one draw with a slick, counter-punching display, while Holyfield’s dropped to 42-9 with two draws. 
The three American judges scored the 12-round fight, which had no knockdowns, 118-110, 117-111 and 117-111. 
The fight, planned since June, had been hyped as Holyfield’s first step towards a unification of all four heavyweight titles. 
After watching Ibragimov win the title match in June, Holyfield called his promoter, Kathy Duva, and coolly told her, “Yeah, I’ll fight this guy.” 
His plan was to trick Ibragimov with his famed left hook and follow it up with a straight, totaling punch down the center, he told his team. 
The first sign everything might not follow Holyfield’s plan was that he weighed in 211 lbs., 6-7 pounds under his expected weight of 217, a significant amount for a heavyweight. 
Despite the upset, Holyfield said he planned to continue fighting. 
“It was a great fight. He got the decision, and I have to go back to the drawing board,” he said. But others have urged him to end his career. 
“It’s time for Evander to quit,” prominent boxing trainer Freddie Roach said after the fight. “He’s got nothing left to prove. I’d hate to see him end up being hurt. He’s got a lot of money, but what’s that worth if you can’t count it?”
Ibragimov, 32, will now try to unify a fractured division. The other heavyweight titles are held by Wladimir Klitschko (IBF), Ruslan Chagaev (WBA), and recently declared champion, Samuel Pyotr (WBC). 
This was Holyfield’s twenty-third title bout in 20-year heavyweight career. In title fights, he beat James “Buster” Douglas (IBF, WBA, and WBC) in 1990, Mike Tyson (WBA) in 1996, Moorer (IBF) 1997 and John Ruiz (WBA) in 2000. 
As the final round started, Holyfield appeared desperate, but rejuvenated. 
However, on the odd occasion that he trapped Ibragimov against the ropes to throw left and right hooks, the Russian was able to tie him up in a clinch and force the referee’s intervention.  
In the previous round, Holyfield slipped as he threw a wild haymaker, with the referee ruling no knockdown. The round ended with a defeated Holyfield standing in the center of the ring, looking lost and perplexed. 
The fight began with both fighters feeling each other out, and Holyfield appeared happy to tie up Ibragimov and negate his superior speed. While Holyfield stayed strong throughout most of the match, he was often on the defensive, standing in the center, while his young opponent danced around him. 
In the next round, Holyfield rocked Ibragimov with a heavy right and caught him with a glancing left hook. 
Ibragimov clearly took the third, despite Holyfield being the early aggressor. Fighting off his back foot, the Russian, nonetheless, looked to unleash his left hook. Meanwhile, Holyfield tracked Ibragimov around the ring trying to land his planned right punch. 
Ibragimov took more initiative in the fifth, landing cleaner punches, only to get caught with a straight right, left-hook combination. Ibragimov’s snaking job allowed him to circle the ring and fight on the outside, while Holyfield, attempting to get closer, took some straight lefts to the chin. 
In the seventh, Holyfield’s legs buckled after he caught a punch to the chin. But he came back with a flurry of blows before Ibragimov landed a wild right hook to take the round comfortably. 
Ibragimov’s quicker hands and feet kept him ahead on the scorecards. But his chin did well to withstand an overhand right from Holyfield, and his compact, southpaw combinations helped him recover his poise. 
A succession of left rips to the body staggered Holyfield in the 10th round and brought the crowd to its feet. Holyfield lagged as Ibragimov chased him around the ring, snapping a couple of jabs to the face. Though it was not the climatic combination he had planned, Holyfield recovered late in the round to land a right-left combination of his own. 
(AP, SPT)
Additional reporting by Ashley Cleek

TITLE: Rice Calls for Creation Of a Palestinian State
PUBLISHER: The Associated Press
TEXT: RAMALLAH, West Bank — Secretary of State Condoleezza Rice said Monday it was “time for the establishment of a Palestinian state,” and described Israeli-Palestinian peace efforts as the most serious in years.
An international peace conference expected to take place in Annapolis, Maryland, in November has to be substantive, Rice said at a news conference with Palestinian President Mahmoud Abbas.
“We frankly have better things to do than invite people to Annapolis for a photo op,” she said.
Israelis and Palestinians, Rice added, are making their “most serious effort” in years to resolve the conflict.
“Frankly, it’s time for the establishment of a Palestinian state,” she added.
Rice is on a four-day shuttle mission, trying to create some common ground ahead of the meeting. A State Department official hinted on Sunday that the conference might be postponed because of the gaps between the two sides.
The Israelis and Palestinians are trying to work out an outline for a final peace deal ahead of the Annapolis conference, but tensions arose on Sunday when Israeli Prime Minister Ehud Olmert told his Cabinet that he did not regard that outline as a prerequisite for the meeting to take place.
The Palestinians said that without such a document they would not attend.
Israel has been pushing for a vaguely worded document, while the Palestinians want a detailed outline, complete with a timetable for establishing a Palestinian state.

TITLE: South Africa To Face England in Rugby World Cup Final
AUTHOR: By Mitch Phillips
PUBLISHER: Reuters
TEXT: PARIS — South Africa earned a World Cup final rematch with the England team they demolished in the pool stage when they overcame Argentina 37-13 in their semi-final on Sunday.
Bryan Habana scored two of their four tries to equal Jonah Lomu’s 1999 tournament tryscoring record of eight as Argentina’s first appearance in the semi-final fell flat with a performance littered with errors.
South Africa are in the final for the first time since they won the trophy on home soil 12 years ago and can probably barely believe that their opponents will be England, whom they thrashed 36-0 in their second pool match.
Coach Jake White predicted a far tougher encounter when the teams run out at the Stade de France next Saturday but his manager Zola Yeye was in more ebullient mood.
“What we did to England, 36-0, we will inflict the same punishment on them again,” he said.
“Some people say I am overconfident, but we are playing a team we have already beaten.”
Few though will disagree with his verdict on Habana. “Bryan is a special player,” he said. 
“He has a killer instinct that few players have.”
Argentina will now play France in the third/fourth playoff at the Parc des Princes on Friday in a repeat of the tournament opener when they stunned the hosts 17-12 to set the tone for the whole tournament.
On Sunday, however, they were unable to reproduce that form as they cut down on their previously successful kicking game and opted for a more adventurous but high-risk approach. They gifted Fourie Du Preez an intercept try after seven minutes then conceded two more tries before halftime off turnovers as Habana and Danie Rossouw effectively ended the contest.
South Africa, who matched the Puma pack and were aggressive in the breakdown, led 24-6 at halftime and though Manuel Contepomi briefly had Argentina hoping when he scored a try soon after the re-start, the Springboks were always in control.
Habana finished it off when he intercepted Juan Martin Hernandez to sprint 80 metres and dive under the posts.
Fullback Percy Montgomery did not miss a kick all night, slotting all four conversions and three penalties, to extend his lead at the top of the individual scoring chart. Felipe Contepomi, who ended the game in the sin bin alongside South African flanker Juan Smith, gave due credit to the victors.
“They are used to this kind of pressure. They have been the best southern hemisphere team in this World Cup,” he said.
England spent the day recovering from and basking in the glow of their 14-9 win over France on Saturday.
“If you had asked me five weeks ago I would have had to think deep and hard before I said yes,” said coach Brian Ashton when asked he could ever have envisaged such a finale after the pool-stage struggles.
He said that experience had been key on Saturday and that it would not now surprise him if his team became the first to retain the title.
They will probably have to do so without their semi-final tryscorer, however, as Josh Lewsey faces a fight to recover from a hamstring strain.
Hosts France meanwhile was left pondering their defeat and lock Fabien Pelous said it was a scar that would never heal.
“It’s not the end of the world but I will feel bitterness about it for the rest of my life,” the 33-year-old said.
Sebastien Chabal’s memento from the game was a citing for a dangerous tackle on England lock Simon Shaw.

TITLE: U.S. Denies Afghan Claims
AUTHOR: By Amir Shah
PUBLISHER: The Associated Press
TEXT: KABUL, Afghanistan — The U.S. military said Monday it had looked into allegations that soldiers had desecrated the Quran during a raid on an Afghan home and found no evidence that soldiers had defaced the Muslim holy book.
The allegations sparked an outcry among villagers in the eastern province of Kunar, who met with the governor, provincial leaders and U.S. military commanders on Sunday over the issue.
Kunar deputy provincial governor Noor Mohammad Khan said American soldiers raided the home of Mullah Zarbaz on Saturday morning, arresting him and three others.
Villagers alleged that soldiers ripped, knifed and burned a Quran during the raid, allegations that sparked an angry demonstration on Saturday, Khan said. Two Afghan officials had been assigned to investigate the allegations, and a U.S. commander at the meeting Sunday said the military would punish anyone who had defaced the holy book, Khan said.
But Maj. Chris Belcher, a spokesman for the U.S.-led coalition, which oversees Special Forces soldiers who usually carry out nighttime raids, said Monday that the allegations had been investigated and were found to be baseless.
“We looked into it. There was no desecration of the Quran or any religious symbol by U.S. forces,” Belcher said. “Had a soldier desecrated it, we would take action.”
Khan said that elders on Sunday told the U.S. commander attending the meeting of Afghan leaders that U.S. soldiers should tell Afghan officials before searching a house, a complaint frequently voiced by Afghans. 
He also said U.S. officials should tell Afghan leaders when they arrest someone.

TITLE: Euro Hopefuls Set For Do-Or-Die Qualifiers
AUTHOR: By Zoran Milosavljevic
PUBLISHER: Reuters
TEXT: BELGRADE — England, Sweden and the Czech Republic can secure Euro 2008 finals berths on Wednesday and join Germany, who became the first nation to qualify with a 0-0 draw at Ireland on Saturday.
After an unimpressive start, England registered a fifth successive 3-0 victory with its triumph over Estonia on Saturday, and a win against Russia in Moscow would secure qualification with a match to spare. Such a result would also see Group E leaders Croatia through.
Croatia, who top the group with 26 points from 10 matches, will also reach next year’s tournament in Austria and Switzerland with a Moscow draw before they visit Macedonia and England in November.
Group F front-runners Sweden is a win away from the finals ahead of its home match with Northern Ireland, which has a slim chance of staying in contention after consecutive defeats at Latvia and Iceland.
Sweden has 22 points from nine matches as does second-placed Spain, which has played a game more but still look a safe bet to finish in the top two after a resounding 3-1 win in Denmark on the weekend.
Third-placed Northern Ireland faded after a bright run and has 16 points from 10 games with a home match against Denmark and the final outing at Spain after facing the Swedes in Solna.
The Czech Republic will be looking for a win against old rivals Germany in Munich in Group D to be mathematically sure of finishing ahead of Ireland and Cyprus, who play each other at Croke Park in Dublin.
Germany has 23 points from nine matches followed by the Czechs on 20 from nine and Ireland on 15 from 10. Fourth-placed Slovakia is out with 13 points from 10 matches while Cyprus on 13 from nine can still theoretically finish second.
Elsewhere, the most enthralling of tight three-way battles is in Group B, where Scotland needs four points from its visit to Georgia on Wednesday and the home match against Italy on Nov. 17 to end a decade-long barren spell.

TITLE: Argentina to Build on Rugby Success
AUTHOR: By Rex Gowar
PUBLISHER: Reuters
TEXT: PARIS — Argentina want their 2007 World Cup performance to be a legacy to future generations of Pumas and the game at large.
The weight of superior opposition and a lack of regular top-tier international competition finally caught up with Argentina in their 37-13 semi-final defeat by South Africa at the Stade de France on Sunday.
Coach Marcelo Loffreda and captain Agustin Pichot will attempt to lift the team for one more match, the third-place playoff against France which matters to them from the point of view of making a dignified and, if possible, winning exit.
Pichot will find it tough and may prefer not to play, however, retiring from the international game with the demand that the world’s rugby authorities take a serious look at the future of the game and that of the smaller nations like Argentina.
“Our performances were never an issue,” Pichot said after Argentina had confirmed their progress with five successive victories at the tournament before their fall at the penultimate hurdle.
Pichot said that between the 2003 World Cup in Australia and the tournament in France, the Pumas had played around 20 matches, half the amount of the other leading nations, yet “we came close to beating all the best teams in world and before this World Cup we were ranked fifth”.
“Rugby at the moment has to make a very tough decision of taking a more non-profitable path,” Pichot told the post-match news conference on Sunday night.
“Imagine, they wanted to cut the tournament from 20 teams to 16, that would be the end of rugby.
“This is not just about Argentina... two of the greatest teams in the world have gone home. They have a lot of power, it’s time to look at where we want to go,” he added of the quarter-final elimination of New Zealand and Australia.
“It’s important that other nations are also part (of international competitions). Sanzar, the IRB or whoever must understand that,” he said.
Sanzar, which groups the Tri-nations southern hemisphere powers Australia, New Zealand and South Africa, and the world body IRB have looked into incorporating Argentina into an annual competition but made little progress.
“Rugby is for all, not just for the few,” said Pichot, who with Loffreda has long called for Argentina’s inclusion in Europe’s Six Nations championship. Loffreda, who moves on after the tournament to a head-coaching job with Leicester Tigers in England, said: “I think what Argentina showed through this group of players is that rugby is not just professionalism, interests distant from sport.
“It’s also about love of a jersey, a philosophy, the spirit, heart of a team and that allowed us to reach the final stages [of the tournament],” said Loffreda, a former Pumas centre.
“That speaks well of Argentine rugby and very well of these players.”

TITLE: Gore’s Nobel Raises Hopes and Questions
AUTHOR: By Alan Zarembo and Johanna Neuman
PUBLISHER: The Los Angeles Times
TEXT: LOS ANGELES — Former Vice President Al Gore, who has waged a decades-long fight against global warming, on Friday shared the Nobel Peace Prize with a Geneva-based United Nations climate group. The choice of Gore delivered a symbolic rebuke to the Bush administration, which has opposed calls for mandatory greenhouse gas reductions, and fueled speculation that the former Democratic presidential candidate might yet enter the 2008 race.
In its citation, the Nobel committee said Gore’s commitment “has strengthened the struggle against climate change” and called him “probably the single individual who has done most to create greater worldwide understanding of the measures that need to be adopted.”
The 2006 Oscar-winning documentary “An Inconvenient Truth,” which captured Gore’s crusade, has been credited with helping push global warming into the public consciousness.
Gore, 59 — who has insisted he does not plan to run for office again — said Friday that he was deeply honored to receive the peace prize and that he and his wife, Tipper, would donate his half of the $1.5-million award money to the nonprofit Alliance for Climate Protection, which he founded.
“We face a true planetary emergency,” Gore said. “The climate crisis is not a political issue, it is a moral and spiritual challenge to all of humanity. It is also our greatest opportunity to lift global consciousness to a higher level.”
If Gore made global warming a cause celebre, the UN’s Intergovernmental Panel on Climate Change, a group of more than 2,000 scientists from 130 countries, has provided the scientific heft. Its series of reports released this year definitively blamed humans for global warming and said that rising temperatures, if left unchecked, would lead to widespread coastal flooding, starvation and species extinction.
“This prize belongs to the international UN community and the states that support us,” the IPCC’s chairman, Rajendra Pachauri, said from his offices in New Delhi. By bestowing the honor on those sounding the alarm against global warming, he said, the Nobel panel elevated a problem that has “the potential to disrupt stability and peace all over the world.”
When the UN climate group was formed nearly two decades ago, scientists were divided over whether human activities were causing climate change. But as evidence mounted, a broad consensus began to emerge that the connection was real.
The White House has opposed joining the Kyoto Protocol — a UN-led treaty to reduce global greenhouse gases that Gore helped negotiate when he was vice president — on the grounds that it does not restrict emissions in the developing world, where pollution is worsening most rapidly. Instead of mandating greenhouse gas cuts, the Bush administration places its hopes on voluntary reductions and future technologies.
The Kyoto treaty was signed by the Clinton administration but was not submitted to Congress, then dominated by Republicans, for ratification.
“Almost inevitably [the 2007 peace prize] will be taken as some sort of statement on the U.S. policy — or lack thereof,” said John Reilly, an economist at the Massachusetts Institute of Technology. “For those people who have been skeptical about global warming, the Nobel Prize is a broad societal recognition of its importance.”
Skeptics were not swayed.
“In terms of Al Gore, it’s a wonderful award that recognizes the brilliance of Hollywood promotional activity,” said John R. Christy, director of the Earth Systems Science Center at the University of Alabama in Huntsville. “He has really created an astounding career and a mega-fortune by demonizing energy.”
Christy, a lead author in the IPCC’s 2001 report, has criticized Gore’s dire predictions about the effect of global warming.
The economic forces against cutting emissions of heat-trapping gases are enormous, particularly in the developing world.
China, whose annual greenhouse gas emissions are expected to surpass those of the U.S. as soon as this year, opens a new coal-fired power plant every week.
“Their entire base of power and incentive structure since Mao Tse-tung has been based on growth,” said Michael Gillenwater, a climate policy researcher at Princeton University.
At the same time, because carbon dioxide remains in the atmosphere for decades, the United States bears the most responsibility for current greenhouse gas concentrations.
“You’re always looking for some kind of event that will catalyze action,” Gillenwater said, suggesting the Nobel award was not enough to make nations rethink how they affect global warming.
A hurricane hitting Manhattan, he added, might do the trick.
In one measure of the sensitivity of the issue, a British judge this week ruled that public schools could continue to show “An Inconvenient Truth” as long as students were alerted to nine scientific “errors.” For example, the judge said, the disappearance of snow on Mount Kilimanjaro, the drying up of Lake Chad and the devastating force of Hurricane Katrina — all highlighted in the film — were not proven effects of global warming. He also called predictions about rising sea levels “distinctly alarmist.”
Scientists generally have lauded the film, even if it occasionally overstates its case.
“I think [Gore] pushes it at times,” said Mike Wallace, a professor of atmospheric sciences at the University of Washington. “On the other hand, the big picture he portrays is close to the truth.”
And Robert Mendelsohn, a Yale University economist, worried that Gore’s calls for urgent measures could backfire at a time when small steps are needed to overcome the political hurdles of international cooperation.
“People want to do something about it, but it is not clear they want to sacrifice deeply,” he said. “The question is how far do we go, especially in the beginning.”
Environmentalists were overjoyed Friday, with several recalling how long Gore had toiled on the issue, often to political ridicule.
Greenpeace’s Chris Miller called the former vice president “a true American hero.” He praised the Nobel committee for highlighting the issue and said Gore’s “unstinting efforts to wake up policymakers and the public alike to the global warming crisis have inspired many around the world to redouble their efforts to protect the planet.”
Sierra Club Executive Director Carl Pope said Gore had personally urged him to persevere. “Once, when I was particularly frustrated by challenges I faced in my job, Gore heard me out and replied, ‘Never, ever give up,’” Pope said. “That would seem to be his motto, as reflected in the thousands of speeches he has delivered, the Live Earth concert he built from scratch, the naysaying he has endured, the movement he inspired.”
The White House too offered congratulations.
“Obviously it’s an important recognition,” said spokesman Tony Fratto, adding that President Bush, who defeated Gore in the 2000 election, was “happy for the vice president.”
And Senator James M. Inhofe of Oklahoma, a ranking Republican on the environment and public works committee and a longtime critic of the alarms over global warming, congratulated Gore, “though we disagree on the issue.”
Inhofe added that he hoped Gore would use the prize’s award money “for something useful, such as providing for malaria shots in Africa or clean water projects in the developing world.”
Gore was one of the first politicians to call attention to the issue of global warming, first as a Tennessee congressman and then as a senator in the 1980s. He ran for president in 1988, he said, largely to draw attention to what he viewed as looming environmental catastrophe — a platform that, like his campaign, failed to connect with voters.
His 1992 best-selling book, “Earth in the Balance: Ecology and the Human Spirit,” became a point of attack in that year’s election, with Republicans portraying the vice presidential candidate as an extremist who wanted to sacrifice America’s individual freedoms.
In the book, he compared society’s appetite for natural resources to a drug addict’s need for a fix. Most controversial, Gore called for eliminating the internal combustion engine in 25 years.
In 2000, after losing the presidential race, Gore refocused his efforts on the environment. He updated his slide-show presentation on global warming and began using it in front of audiences around the world. It became the basis for “An Inconvenient Truth.”
On Friday, the leaders of a group promoting a Gore candidacy in 2008 posted a statement on www.draftgore.com, their website, saying he “is in a unique position to make a difference in the world” and has “no choice but to take the one step left to have the greatest impact in changing policy on global warming — run for president.”
Gore has said repeatedly that he never plans to run for public office again, and many argue that he may have more influence as an activist than as a politician.

<i>The only other person to win both a Nobel Prize and an Oscar was George Bernard Shaw. 
The Anglo-Irish playwright won the Nobel Prize for literature in 1925 and an Oscar for the 1939 screenplay of his stage play “Pygmalion.” 
However, Shaw took a dim view of the Hollywood honor. He is quoted as saying, “It’s an insult for them to offer me any honor, as if they had never heard of me before — and it’s very likely they never have. They might as well send some honour to George for being King of England,” according to imdb.com. 
Although legend has it Shaw never received the Oscar, when film star Mary Pickford visited him she reported that it was on his mantle. When Shaw died in 1950 his home in England became a museum. By that time, his Oscar statuette was so tarnished the curator believed it had no value and used it as a doorstop. It has since been repaired and is now on displayed at the museum.
—  SPT
Bookmakers cut the odds of Al Gore becoming the next president of the United States and started to sweat as the former U.S. vice president won the Nobel Peace Prize on Friday.
The reason is that in winning the prize Gore has now satisfied two of the three conditions the bookies set for a 100 to one bet they had offered — winning an Oscar, becoming a Nobel laureate and taking up residence in the White House.
Gore’s campaigning climate change film “An Inconvenient Truth” won an Oscar this year.
On Friday, after the Nobel award was announced, the bookies cut Gore’s odds of becoming the next U.S. president to 8/1 from 10/1 — although Hilary Clinton remains hot favorite at odd of 4/7.
“He seems to have the Midas touch and if his supporters encourage him to stand he may shake up the whole race,” Ladbrokes spokesman Robin Hutchison said. 
— Reuters</i>

TITLE: Nelson Mandela Among VIP Guests in Paris on Saturday
PUBLISHER: Reuters
TEXT: PARIS — Former South African president Nelson Mandela has been invited to attend next weekend’s World Cup final between the Springboks and England.
South Africa coach Jake White said the current president Thabo Mbeki had already confirmed he would attend the match and there was a chance Mandela might also come to Paris if he was healthy enough to make the trip.
“I can confirm that Mbeki will attend,” White told a news conference on Monday after the Springboks had booked their place in the final by beating Argentina 37-13 the previous night.
“When Madiba [Mandela] was [recently] staying in Paris for his children’s foundation, we visited him and gave him a number two jersey.
“An invitation was extended there that he was more than welcome to come and join us in the week of the final.”
Mandela, who spent over a quarter of century in prison on Robben Island, was president when South Africa won the World Cup at Johannesburg in 1995 and helped inspire the team to victory.
He arrived at Ellis Park wearing a replica of Springbok captain Francois Pienaar’s number six jersey, shaking his hand before the match, then presenting him with the Webb Ellis Cup after they had won the final.
White said the team had given Mandela a replica of the current captain John Smit’s number two jersey but his attendance at the final would be dependent on his health.
“I’m just hoping that Zelda [La Grange, Mandela’s personal assistant] will see what his diary looks like but more importantly it’s what his health looks like,” White said.
“These long trips are not too good for him so hopefully he’s feeling up for it and if he’s strong enough I’m sure he’ll be here.”
South Africa was banned from competing at the first two World Cups, in 1987 and 1991, because of apartheid but made an emotional return in 1995. Chosen to host the tournament, the team rode a wave of national support to defy the odds and beat New Zealand in extra-time in the final.
Few people thought the Springboks would win the title this time but they were catapulted to favorites after New Zealand and Australia crashed out in the quarterfinals and host-nation France bowed out in the semis.
“It’s a massive thing. No one gave us a chance before we left,” White said.
“The reality of coming here and being in the final is massive. To win a World Cup away from home would be massive for us.”

TITLE: Grant ‘Can Coach’ Chelsea
PUBLISHER: Reuters
TEXT: JERUSALEM — Chelsea head coach Avram Grant is set to complete study requirements for his UEFA Pro license early next year, the Israel Football Association (IFA) said on Sunday.
“If Grant participates and successfully completes the pro course which is set to begin in February, he will receive his license approval,” the statement said. 
European soccer’s governing body is expected to require that from next season coaches of clubs that play in European competitions must hold a Pro license.
“Grant and nine other Israeli coaches must complete a number of [study] hours the content of which will be determined by UEFA,” Israeli coaches association chairman Amnon Raz told Israeli sports web site ONE.
Media reports in Israel said Grant, who met with Israel Football Association chairman Avi Luzon in Tel Aviv on Sunday, had received the license, but the IFA statement later clarified the situation.