SOURCE: The St. Petersburg Times
DATE: Issue #1319 (85), Tuesday, October 30, 2007
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TITLE: Wave of Prison Riots, Protests Breaks Out
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Prisoners in at least three prisons in St. Petersburg and Leningrad Oblast staged disorderly protests during the last week, adding to a list of similar such actions in some other Russian prisons.
Human rights experts say the wave of disorder in prisons has to do with a recent toughening of prison regimes.
On Sunday, at least 16 inmates at St. Petersburg’s central detention center, known as Kresty, refused food, Interfax reported, citing Alexander Sidorov, a representative of the federal penal service.
Sidorov said the refusal amounted to a targeted hunger strike because the prisoners refused prison food but ate products sent to them in parcels.
Boris Panteleyev, head of St. Petersburg’s branch of Committee For Civil Rights, said that according to information he obtained there were initially about 200 people who notified prison authorities about their intention to go on hunger strike, but their applications were not taken.
Panteleyev told the St. Petersburg Times that the prisoners decided to go on hunger strike to protest against the recent decision by the prison authorities to remove TVs and radios. They also wanted to protest against bad meals and poor medical service.
At the same time, Panteleyev did not exclude the idea that the protest could also indicate the support for recent events in Prison No. 5 in Metallostroi, a village in the Leningrad Oblast.
Last Thursday, inmates in Prison No. 5 broke windows at the prison’s administration building and made a fire at a sight tower, Interfax said.
Eduard Petrukhin, deputy head of federal penal service, said the prisoners demanded “the impossible.”
“They wanted to have their meal not in the cafeteria but at the places where they live and also to wear their own clothes. In that case, the prison would look like a so-called ‘thieves’ den’,” Petrukhin told Komsomolskaya Pravda.
Panteleyev said by his information up to 2,000 prisoners were involved and some of them were beaten by staff and their parcels were cut into pieces. 
However, the authorities said only about 200 people took part in the disorder.
Panteleyev said the toughening of the regime in many St. Petersburg and Leningrad Oblast prisons began when new leadership came to power, including Vladimir Malenchuk, the new head of St. Petersburg and Leningrad Oblast Federal Penal Service.
Malenchuk was appointed by President Vladimir Putin in August.
Leningrad Oblast prosecutors opened a criminal case under Article 212 of the Russian Criminal Code part 2 (participation in mass disorder) after the events at Prison No.5.
Malenchuk said Monday that three people not held in the prison were detained under suspicion of organizing the riot. He said the detained people all had previous convictions.
The situation at the prison was normalized without using physical strength and special means, Malenchuk said. 
Nikolai Yegorov, deputy head of the Leningrad Oblast prosecution office, said that prosecutors are currently checking if violent actions by the prison staff occurred during the disorder.
“We have received seven applications from prisoners who at that moment they were put into solitary confinement they were beaten up,” Yegorov said, Interfax reported.
Yegorov said that if the beatings are confirmed a criminal case under article 286 of the Criminal Code (exceeding service authority) will be opened.
Malenchuk also said the disorders in Metallostroi and in Kresty were provoked and organized by criminal authorities, some of whom are held in the prisons and some who are not.
Meanwhile, media reported that on Oct. 25 there was also disorder at Prison No.3 in Fornosovo, Leningrad Oblast.
Governor Valentina Matviyenko said she considered the latest riots at prisons and detention centers as “planned actions by certain forces.”
“You understand that if such disorder is happening in different cities at all the same time it can’t be just a coincidence,” Matviyenko said to reporters on Saturday.
“I think certain forces, that are interested in such actions, stand behind it. The investigation will reach the final conclusion,” she said.
Matviyenko said the reports from penal service representatives showed that living conditions in prisons were not violated and nothing extraordinary was happening there to provoke the actions.
Meanwhile, human rights experts were split over the reasons why unrest had broken out in the nation’s prisons. Some said it was because of tough new rules, while others suggested prisoners just want to have a more comfortable life.
Human rights expert Yuli Rybakov said he was concerned about the official version that criminal leaders were organizing such riots from outside the prisons.
“I get concerned that every time disorder happens in prisons, officials of those prisons begin to talk about some criminal authorities who allegedly organize the riots from some Seychelles hideaway,” Rybakov said, according to Rosbalt news agency.
According to Rybakov, criminal leaders could not make teenagers go on a hunger strike or a riot if they live in good conditions. He said riots can be provoked either by prison staff or by poor living conditions.
Panteleyev said it was hardly possible that criminal leaders could be organizing such actions.
“It seems the wave of disorders in the country’s prisons could be caused by toughening of the regime is most prisons. I can’t exclude that it was an order from Moscow,” Panteleyev told The St. Petersburg Times on Monday.
Gennady Chernavsky, head of the St. Petersburg branch of the For Prisoners’ Rights movement, said the riots in Leningrad Oblast prisons happened due to the toughening of rules.
“There are no planned actions as the authorities say. It was just silly actions by penal service staff who toughened the prisoners’ conditions,” Chernavsky said, Interfax reported.
Chernavsky said that he spoke to inmates of Prison No.3 in Fornosovo that held a riot last Thursday.
“The prison authorities ordered to give food to prisoners in the same crockery that inmates with AIDS use. That is forbidden. They also began to check the products [that the inmates receive from relatives],” he said.
Chernavsky said it was difficult to say what exactly happened in Metallostroi’s Prison No. 5 because prison authorities silenced prisoners’ mobile phones — also against prison rules.
However, he said that recently the prison has a new administration and conditions were toughened.
Meanwhile, Igor Mikhailov, a human rights representative in St. Petersburg, said the riots in prisons were “not about violation of human rights but a struggle to have a comfortable life,” Regnum news agency reported.
“Russia has some sort of criminal subculture in which people begin to see prisons as badly equipped sanatoria [holiday resorts],” Mikhailov said.
On Oct. 17 a group of teenage prisoners in the Kirovograd Penal Colony in the Yekateninburg Oblast made an attempt to break through the prison’s fence. The guards used guns and two teenagers were killed. One duty guard also died from severe wounds, and 15 more teenagers were hospitalized with different injuries.
On Sept. 12 a group of 17 teenagers kept in Kresty also organized a riot demanding that new rules be softened, particularly a rule about the examination of parcels. The situation was stabilized without the use of strength.

TITLE: Foreigners Face Wait Of 10 Days For Visas
AUTHOR: By Alexander Osipovich and Svetlana Osadchuk
PUBLISHER: Staff Writers
TEXT: MOSCOW — The minimum wait time for a new Russian visa has risen to 10 days at many embassies in Europe where expatriates previously could get them in just a day.
The consulates in Tallinn and Riga, once popular destinations for expats on visa runs, said Friday that U.S. and British citizens must now wait 10 days to receive any kind of visa.
“I’m in shock,” said Paul Goncharoff, a Moscow-based U.S. businessman who learned of the change last week as he prepared to make what had become his annual trip to the Latvian capital for a new visa.
The consulates in Paris and Berlin have also slowed down processing to 10 days, according to visa agencies and foreign businessmen familiar with the situation. Repeated phone calls to the consulates were not answered Friday.
But the consulates in Madrid and London are apparently still offering one-day turnaround.
“Unfortunately, different consulates are doing it differently,” said Tatyana Bondareva, general director of the Visa Delight agency.
The longer waiting times stem from an agreement between Russia and the European Union that was meant to simplify visa procedures and went into effect in June. “The agreement says consulates have up to 10 days to issue the visa,” Bondareva said. “But some consulates have taken that to mean a set period of 10 days.”
The agreement also has lengthened waits because of a provision that has changed the process for issuing invitations, Bondareva said. According to that provision, any Russian company can now write a letter of invitation, a document that has always been required for a foreigner to obtain a visa. Previously, such invitations could only be issued by the Federal Migration Service after the service got a request from an organization authorized to invite foreigners.
The problem, Bondareva said, is that consulates now have to do the work of verifying the facts on the letter of invitation, a task that was previously done by the migration service.
London and Madrid may be among the bright spots for expatriates in Europe. An employee who answered the phone at the Russian Embassy in Madrid said the consulate was still offering 24-hour and three-day processing there. 
At the London embassy, a man who answered the phone said most visas were taking about a week to process and asked a reporter to call back for more information. Nobody answered repeated phone calls afterward. But visitors to the expat web site RedTape.ru said the embassy was still offering expedited processing.
Repeated phone calls were not answered Friday at the consulates in Berlin, Paris, Rome, Prague, Warsaw, New York and Washington. The consulates in Kiev, Vilnius and Brussels were closed Friday afternoon. A spokesman for the Foreign Ministry said requests for comment had to be submitted in writing. Questions sent by fax were not answered as of Sunday.
The EU-Russia visa agreement is the reason behind another change that has caused anxiety in the expat community: a new requirement that foreigners who enter Russia on multiple-entry business visas stay for no longer than 90 days at a time, and for no more than 180 days out of one year. In the past, such visas could be used to stay in Russia year-round.
Bondareva said the EU-Russia agreement had made things easier despite the longer waiting times.
“It has become simpler,” she said. “The inviting party just writes a letter, in a certain format, saying that some person needs a visa, and he will get that visa. But maybe not as fast as he wants it.”

TITLE: Spirit of Halloween To Haunt St. Petersburg
AUTHOR: By Jessica Bachman
PUBLISHER: Special to The St. Petersburg Times
TEXT: Too old for Halloween? Consider celebrating the holiday Russian style.
This Wednesday, on Halloween night, there won’t be many little ghosts, witches or goblins prowling the streets of St. Petersburg for candy.  
Instead there will be stylish young adults — some in costume, most not — making their way to offices, stores, cafes, nightclubs and restaurants, where Halloween parties have become increasingly popular and extremely profitable during the past two years. 
“Of course we’re celebrating Halloween,” said Sofia Gulina, 17, who was busy looking at tiaras and mouse ears with her friends at Vesyolaya Zateya, a costume and party shop on Pereulok Grivtsova near Sennaya Plochshad. 
“We’ve been celebrating it for three or four years now. At first we just got together and watched scary American movies but now that it’s come to clubs we go there.”
“There’s no other holiday in Russia that let’s you get dressed up in funny costumes and go out, so we love it,” added Katya Latipova, 16.
In 2000, Halloween began to trickle into Russia through major city nightclubs. Their haunted decorations, dark interiors and special Halloween lineups — all based loosely on American models — quickly hooked city youth looking for a reason to revel. 
Vladimir Trudov, concert coordinator for the alternative music club Tsokol, is organizing the club’s second annual Halloween party. 
“I like Halloween, from an aesthetic point of view. I like it that people are dressed up,” Trudov said. “But it’s really just a reason to throw a party. Most people don’t really know what it is or take it seriously as a holiday. They exploit it to get high.”
Trudov also organized Halloween parties at the club Moloko before it shut down in 2005 and reopened in 2006 under the new name Tsokol. 
Although barely anyone came in costume to Moloko’s 2004 Halloween party, “last year, 30 out of about 150 people were dressed up,” Trudov noted. 
“Between Tsokol and Moloko, we’ve been holding Halloween parties for the past five years. Before that, I don’t remember anyone celebrating it, but maybe I just wasn’t paying attention.”
Companies and their marketing departments certainly were. 
In 2002, the popular Russian gift and furniture chain, Krasny Kub, began selling Halloween decorations. 
“Our Halloween sales are high, but of course not as high as our sales for other holidays such as New Year’s, Women’s Day [March 8] and Valentine’s Day,” said Anastasia Ugrumova, spokeswoman for Krasny Kub.
Nevertheless, this fall’s big-ticket item at Krasny Kub is none other than its Halloween collection. 
Since early October, each of the chain’s stores has greeted customers with large Halloween displays: small paper jack-o-lanterns, orange and black crepe paper, ceramic witches and pumpkin garlands hang from every storefront window.
“Some buy the items for private parities, others to decorate clubs and cafes,” said Olga Platonova, a sales associate at the Krasny Kub store on Nevsky Prospekt. 
“But many of our customers don’t know about Halloween at all. They just come into the store, see the display and decide to buy something cute to decorate their house with.”
According to Ugrumova, Krasny Kub is trying to keep its Halloween collection up to speed with Russians’ surging interest in the holiday. 
“An extra holiday a year has never bothered anyone,” said Ugrumova with a smile. “Russians love celebrating; the reason for celebration is just not as important. Nightclubs have been responsible for getting the youth interested in it. Clubs have been the most active in celebrating Halloween so far.”
But this year there are signs that Halloween may attract an even wider adult audience in St. Petersburg.  
Halloween decorations and paraphernalia for sale at the holiday party store Vesyolya Zateya are mostly being bought up for office parties, said Yana Azubkova, the store’s head sales associate. 
“ Halloween has come to occupy second place in sales for us after New Year’s,” said Azubkova. “This year there are lots of organizations and companies looking to decorate their offices.”  
Fuat Yabbarov, general director of the Russian costume and party supply company, Carne Vale, expects their Halloween sales to be up by 100 percent from last year.
“This is a profitable business. In Moscow, I’m expecting to take in no less than $10 million for Halloween.”
Carne Vale, according to Yabbarov, will be opening a store in St. Petersburg in November — it already has two in Moscow. But if the store’s costume prices are anything like Carne Vale’s on-line prices — 420 rubles ($17) for a simple black paper cat mask and 1,500 rubles ($60) for a pair of mediocre fairy wings — shoppers should be prepared to spend some money. 
While the emerging Russian Halloween business is mainly targeting club-going youth and curious, working adults, many young children are still celebrating the holiday in St. Petersburg schools, both public and private.
Iliya Ivanov, 11, who attends a private school in the city, has been going to after-school Halloween chaiyepitiye —  tea-drinking parties — since 2001.
“The students change into their costumes and all the parents are invited,” said his mother, Svetlana Ivanova. 
“But we don’t just celebrate Halloween, we also learn all about the history of the holiday. I know that it has to do with honoring our dead parents, our dead ancestors,” she added.
Seventh graders from the St. Petersburg public school No. 222, on Nevsky Prospekt, have been celebrating Halloween in school for three years. 
According to Sasha Boon, 12, the students — holding candles and flashlights — enter a dark school gym where a ghost chorus sings and costume and other contests are held.
“After a while the teachers tell us, ‘be quiet’ and scary noises start coming out of nowhere,” said Boon.

TITLE: Correction
TEXT: The article “3Q – 2007 Investment Report, St. Petersburg” printed in the Fall Real Estate Catalogue should have been attributed to Colliers International, which provided the material for the report. The St. Petersburg Times apologizes for having failed to provide this attribution.

TITLE: Activists March Against Intolerance, Hatred
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Less than a thousand activists, human rights advocates and liberal politicians took part in a demonstration and meeting on Sunday to protest against intolerance, witch-hunting and all forms of hatred. 
Titled the March Against Hatred, the rally commemorated the birthday of the late hate-crimes expert Nikolai Girenko, who would have turned 68 on Wednesday. Girenko, Russia’s leading ethnographist and expert on ethnically motivated crimes, was gunned down at the doorway of his apartment on June 19, 2004. The murder has not been solved.
The expert and his philosophy figured prominently in the march and the subsequent meeting on Sakharov Square. The rally’s participants held portraits of Girenko and slogans reading “Shame on a City That Murders its Guests,” “Russia Without Fascism,” “Fascists Get Out.”
While some of the demonstrators were surprised to see a large group of about 200 members of the pro-Kremlin party United Russia and its youth wing The Young Guard and the atmosphere initially grew tense, the march took place without major incidents.
Russia’s ombudsman, Vladimir Lukin, welcomed the event but did not show up. The only prominent Moscow politician to attend the rally was Nikita Belykh, the leader of the Union of Right Forces.
“We would like this initiative to evolve into a relevant nationwide event,” said Anton Bogatushin, an SPS politician. “The presence of our leader is meant to encourage other Moscow politicians to join us in the future and raise the status of the demonstration.”
Governor Valentina Matviyenko had been invited to participate in the event but did not turn up, and the organizers did not receive any communication from City Hall.
Alexander Vinnikov, a senior official at the St. Petersburg Union of Scientists and regional coordinator of the nationwide non-governmental movement Russia Without Racism, said since the first event of this kind in 2004, the authorities have continuously boycotted the rally. Ombudsman Lukin, has been the only state official to encourage the movement.
“The only response I ever received from a local official was a letter from Ilya Klebanov, then presidential envoy in the north-western federal district, who informed us that he could not take part,” Vinnikov recalls.
The organizers stressed that officials would be welcomed at such a demonstration. The presence of top officials would have boosted media coverage, increased the profile of the rally and sent a signal to the general population, the activists say.
“In Europe and the U.S. we see city mayors fronting such demonstrations, while in Russia the officials ignore them, showing that they consider the issue [of tolerance] as a low priority or of little importance,” Vinnikov said. 
In Vinnikov’s opinion, the low turnout is a compelling illustration of the fact that the issues of racism, ethnic intolerance and extremism are neglected in St. Petersburg and Russian in general, with citizens remaining indifferent about issues that they don’t believe personally concern them.
Nevertheless, this protest, despite its modest turnout, is very important, activists said.  
“It shows that civil society does exist in St. Petersburg, that it manifests itself and is ready to tackle society’s painful problems,” said Vinnikov. “The civil society is here to develop a response to the challenges thrown by nationalists.”
Participants in the meeting urged local citizens to be more supportive, sympathetic and cooperative with regard to victims of abuse and violence.

TITLE: Pichushkin Given Life For Brutal Murder of 48
AUTHOR: By James Kilner
PUBLISHER: Reuters
TEXT: MOSCOW — Russia’s “chessboard murderer” was sentenced to life in prison on Monday for killing 48 people, after the supermarket worker told a court last week he felt like God as he decided whether his victims should live or die.
The 33-year-old Alexander Pichushkin stood with his head bowed inside a glass cage in the courtroom as the judge, Vladimir Usov, read out the sentence.
Asked if he understood, Pichushkin without lifting his head replied: “I’m not deaf. I understood.”
Pichushkin was given his nickname by the Russian media because he told detectives in a confession that he had hoped to put a coin on every square of a 64-square chessboard for each of his victims.
He is Russia’s deadliest serial killer since Andrei Chikatilo, who was convicted in 1992 and executed for killing more than 50 people. Russia is now observing a moratorium on carrying out the death penalty.
Room number 507 at the Moscow City Courthouse in the suburbs of the Russian capital overflowed with journalists, television cameras, police officers and some of the relatives of Pichushkin’s victims.
Some struggled to catch sight of their loved ones’ killer. About 20 relatives of his victims, including many elderly mothers, listened intently to the judgment, fighting back tears.
One young woman, who appeared to be in her late 20s, stared directly at Pichushkin with red, tear-stained eyes. Pichushkin kept his eyes fixed on the floor.
Pichushkin claimed during his trial to have killed 63 people, but prosecutors only charged him with 48 murders and three attempted murders. They are investigating the other cases.
After the verdict, a smartly dressed, red haired woman called Tatiana, stopped to talk to the journalists.
She pulled a neatly kept photograph of herself hugging her husband and her 31-year-old son, Vladimir. A month after the photograph was taken Vladimir was dead, she said.
“I feel bad,” she said, her voice breaking. “It’s good that it’s all over but I don’t have a son any more. Where is he?”
Most of Pichushkin’s victims were from the margins of society: homeless people, alcoholics and the elderly.
He would often invite his victims to drink vodka in a park in southern Moscow. When they were drunk he would smash their skulls in and throw their lifeless bodies into a swift-moving sewage canal.
Pichushkin said he killed his first victim, a friend, in 1992, an experience he said was like first love: “You never forget it.”
He killed an average of one victim a month from 2002 onwards, once taking three lives in 10 days.
During his own testimony, Pichushkin said he felt like a god. “I took the most valuable thing, human life,” he said. “I didn’t take anything else of value from them. Money, jewelry, I didn’t need it. I felt like God.”
“I tried to collect their spirits, their souls,” he said. “I felt no emotion when I killed them.”

TITLE: Eleven Parties Registered For Parliament Vote
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Central Elections Commission has confirmed the registration of 11 parties to take part in State Duma elections on Dec. 2, Interfax reported Sunday.
Commission chief Vladimir Churov said three parties were denied registration because of problems with their applications.
The registered parties are: the Agrarian Party; A Just Russia; Citizen’s Power; the Communist Party; the Democratic Party; the Liberal Democratic Party; the Party of Social Justice; Patriots of Russia; the Union of Right Forces; United Russia; and Yabloko. It refused to register the Russian Party of Peace and Unity, the National Union and the Russian Green Party.
The 450 seats in the Duma will be distributed on a proportional basis among parties that receive at least 7 percent of the vote.

TITLE: Three Men Arrested Over Failed Bomb Attack on City Rock Club
PUBLISHER: The St. Petersburg Times
TEXT: Three men have been detained by the local police in connection with an attempted bombing at a rock concert at the ROKS music club earlier this month, the local news service Fontanka.ru reported Monday.
A man aged 21 was detained on Thursday and two other men aged 21 and 22 were detained on Saturday, according to Fontanka.ru. The diagram of the explosive device and bomb-making manuals were found when their apartments were searched. One of the three, who the police think was the leader, was a Muscovite.
A bag with an explosive device containing 200 grams of TNT and an amount of screw-bolts was thrown on stage during the performance of Swedish punk band Blisterhead. The bag, which started to smoke when it landed, was promptly extinguished and taken away by a guard.
The concert, which drew an estimated 400 fans, was stopped by the police as headlining local ska-band Spitfire was performing. “They checked the bomb and said that it didn’t explode because it was clumsily made,” said Spitfire drummer Denis Kuptsov on Monday.
“They stopped our performance after the eighth song and told everybody to leave.”
A case has been opened according to Article 222 of Russia’s Criminal Code (illegal possession of weapons and ammunition), which was later changed into Article 205 (terrorism), according to the agency. 
Although Fontanka.ru claims that police have not defined that the detainees were connected to any nationalist group, the agency earlier reported skinhead attacks near the club on the night of the concert. 
It also interviewed musician Pavel Menshikov who was hospitalized with serious wounds after being attacked with knives and metal rods on his way to the concert. The police was not available for comment when contacted on Monday.

TITLE: Small Firms Join Forces
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: A pioneering group of prominent public figures, lawyers, accountants, legislators and City Hall officials have taken up the challenge of retrieving the missing funds in St Petersburg’s coffers, allegedly amounting to half of the city’s total income.
Citing concerns over what they described as the city’s possible economic decline in the near future, as a result of “the adopted policy of ruining small businesses, who are the would-be contributors of more than half of the city’s budget,” the group announced the founding on Thursday of the Union of Small Businesses, aimed at lobbying the interests of small enterprises. 
“The city loses up to 55 percent of contributions from small businesses, just because it has been systematically ignoring the core sector of its economy in favor of less productive, larger businesses,” said Alexander Doronin, president of the newly-formed umbrella entity uniting the city’s once disparate tiny organizations in support of small businesses.
“The tendency has led to the false portrayal of St Petersburg as a prosperous city, which is experiencing a boom in manufacture, construction and transport industries, but in fact consumer and service markets have been dealt a serious blow as a result,” he said.
His views were echoed by a member of the Union’s Council, Anatoly Simonov, who is also the head of the Council of Small Business Accountants’ Association, who said, “While small businesses account for more than half of the city’s economic activities, which is typical of a commercially developed European city, they have of late poured only 23- 27 percent in taxes into the city budget.”
Simonov based his assertion on official statistics, indicating that small business outputs account for only a quarter of St. Petersburg’s gross income.
The lobby group condemned the state authorities’ infamous practice of conducting raids on business targets to “fight corruption and collect taxes.” 
“As a rule, it is small businesses that become easy and frequent targets for corrupt officials and for raids by both bandits and law-enforcers, because they lack the resources necessary to protect their interests,” said Alexander Tolokonnikov, a member of the Union’s Council, who heads the city’s “Alliance-Consult” Legal Group, a member organization of the Union. 
At issue, according to Tolokonnikov, is a shortage of resources, such as lack of financing which leads to low credit rating, and a lack of stable, consistent administrative resources. Such obstacles mean that small enterprises will never be a match for large corporate businesses. “Even the general public tends to look down upon these businesses, and the media turns a blind eye to their harassment, like the unfounded raids carried out on them,” he said.    
To fight these evils, leaders of the newly-formed lobby say they will focus on coordinating the activities of small business structures with state organs and other public organizations, represent their interests in legislative circles and help guarantee their security. The Union will also coordinate a system of checks and balances and lobby for bank loans, investment funds, sponsorship and media coverage for its members.
 Despite the short span of its activities, the Union boasts of having recruited about 500 member organizations, which, according to Doronin, are desparate for support, and expects to win more in the near future in a city that comprises about 800,000 small enterprises.

TITLE: Miller New Chairman of Gazprom Media
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Gazprom CEO Alexei Miller on Friday was elected chairman of the board of Gazprom-Media, the media holding said.
Miller, who was also recently elected the chairman of Gazprom’s pension fund, replaced Alexander Dybal, the previous board chairman, who earlier left for a post at Gazprom Neft.
Gazprom-Media general director Nikolai Senkevich said Friday that the company was sure that the board’s new composition would make it “even more effective.” 
“That Alexei Borisovich is heading Gazprom-Media’s board of directors is not only a big honor for us but also a huge responsibility,” he said in a statement posted on the company’s web site.
Irina Zenkova, a Gazprom-Media spokeswoman, said there was nothing surprising about Miller’s appointment, as he also chaired Gazprombank and Gazprom Neft. “This is just a recognition that the holding is a sound business,” she said.
Some analysts suggested Friday that the move could be part of an exit strategy for Miller, who has suffered from poor health this year and was hospitalized with a kidney ailment in the summer.
Alexei Mukhin, a media analyst with the Center for Political Information, said Miller’s new job was not related to the upcoming State Duma and presidential elections. “I believe it is a golden parachute for Miller, whose health has deteriorated recently,” he said.
Gazprom spokesman Sergei Kupriyanov said the Gazprom-Media appointment was strictly a business decision. He said Miller had been involved in the media holding before the appointment and that Friday’s move meant that he would now do it formally.
Kupriyanov dismissed claims that the appointment was a perk for Miller.
“How many golden parachutes does one person need?” Such speculation was “nonsense,” he said.
Miller has been Gazprom CEO since 2001 and is seen as a close ally of first deputy prime minister and Gazprom board chairman Dmitry Medvedev.
Zenkova denied that the new post would be a sinecure for Miller, saying Gazprombank would be a better place if Miller was looking for a cushy job.
Chris Weafer, chief strategist at UralSib, said that because of his recent illness, Miller had been less involved in Gazprom recently. “It is expected that he will leave as part of Gazprom’s move to the much more active expansion phase expected from next year,” Weafer said in e-mailed comments. 
He added that there had been speculation that Medvedev would change his role in the company to that of chief executive for the second quarter of 2008. 
“But the Kremlin will not want to lose Miller’s experience entirely, and hence, this may be to accommodate him in a different role but still within the group,” Weafer said.
In addition to NTV and TNT entertainment television channels, Gazprom-Media controls, among other media outlets, Ekho Moskvy radio, Izvestia newspaper and Itogi magazine.
Gazprom-Media reported revenues of $883 million and net profit of $120 million in 2006.

TITLE: Kudrin: Russian Economy Stable, Capital Flows Have Resumed
PUBLISHER: Combined Reports
TEXT: MOSCOW — Capital flows into Russia have resumed and stand at $6 billion over the last month and at $60 billion for the year to date, Finance Minister Alexei Kudrin said Friday.
“We have secured the financial stability of our economy,” Kudrin told a conference of the Academy of National Economics.
The country saw record high capital inflows of $70 billion in the first half of 2007 as companies went on a borrowing spree abroad, while foreign investors bet on the appreciating ruble.
The trend reversed in August, when international investors fled emerging markets in the face of the global credit crunch.
Kudrin said Russia had coped well with the crunch thanks to prompt action by the Central Bank, its large foreign exchange reserves and low external debt.
Kudrin said low external debt of only 31 percent of gross domestic product put the country in a much stronger position to withstand financial shocks than neighboring Kazakhstan, whose total external debt equals 95 percent of GDP.
“We have managed to lower this risk thanks to our understanding of this significance,” Kudrin said.
Kudrin also told the Federation Council on Friday that the consumer price index rose by 1.3 percent in the first 22 days of October, Interfax reported.
Kudrin said CPI had risen by 8.9 percent since the start of the year. Officials earlier said inflation would end the year at about 10 percent due to a global rise in food prices.
The government, seeking to calm public discontent over rising prices ahead of the State Duma elections in December, has introduced a series of administrative measures, which include intervention sales of government grain stocks. Food companies and retailers this week signed a pact to freeze the prices of basic staples such as milk, bread and eggs until the end of January, a measure described by economists as Soviet-style state intervention.
Kudrin said that in the last 10 days, food price growth rates had halved and promised more administrative measures to break up monopolies on local food markets that are controlled by local authorities. “In many cases these monopolies are municipal enterprises. There is a conflict of interest,” Kudrin said.
Federal Anti-Monopoly Service chief Igor Artemyev said Friday that his agency would carry out a series of checks into food price hikes in 75 regions, RIA-Novosti news agency reported. The service plans a total of 500 checks, he told the Federation Council, RIA-Novosti reported. 
Artemyev said the checks had to be carried out because some traders were abusing their monopolistic positions, RIA-Novosti said. In some regions, traders have been speculating on prices for basic foodstuffs, the official said. The service has so far uncovered 40 cases of abuse of monopolistic positions, RIA-Novosti said. It will publicize results of the checks in the next several weeks.
The service’s deputy head Andrei Tsarikovsky said last week that his service had already checked markets selling milk, butter, meat and cheese in the Krasnoyarsk, Tomsk, Perm, Penza, Rostov and Ivanov regions. 
(Reuters, SPT)

TITLE: Refinery Back In Business
PUBLISHER: Bloomberg
TEXT: MOSCOW — Moscow Oil Refinery, the only crude processor in Russia’s capital, will resume normal operations on schedule this week after a month of maintenance reduced output.
The refinery will resume operations Tuesday or Wednesday, spokeswoman Zoya Smirnova said by phone. The refinery used reserves to meet demand in October, Smirnova said, declining to specify how much the maintenance work curbed production. 
Moscow Oil & Gas Co., a venture owned by the city of Moscow and billionaire Shalva Tchigirinsky’s Sibir Energy Plc, halted exports from its share of the refinery’s output in the third quarter, Tchigirinsky said in a statement Oct. 19.
Fuel supplies in the Moscow region have been tight in the past month after traders shipped more crude and products abroad before an increase in Russia’s export duties on Oct. 1, Tchigirinsky said in the statement.

TITLE: Severstal Appeals To Investors
PUBLISHER: Bloomberg
TEXT: MOSCOW — Severstal, Russia’s largest steelmaker, said the management of gold miner Celtic Resources Holdings Plc “has a history of destroying shareholder value’’ and urged investors to accept its 161 million-pound ($330.9 million) hostile offer.
“Celtic’s financial performance has been erratic and is punctuated by poor profitability and a volatile production record,’’ Severstal said Friday in an e-mailed statement sent to Celtic shareholders.
Severstal, controlled by billionaire Alexei Mordashov, wants to diversify by acquiring the London-based producer of gold and molybdenum, a steelmaking ingredient. The Moscow-based steelmaker said on Oct. 8 it would run Celtic as though it were a subsidiary even if the bid to buy the whole company fails.
Celtic has urged shareholders to reject the offer of 540 cents a share because it undervalues the company. Severstal needs 80 percent of the shares for its bid to become compulsory.
“Severstal is trying to buy Celtic cheaply through this opportunistic and unsolicited offer,’’ Celtic Chairman Peter Hannen said Friday in a statement. “We expect record production levels for the company in 2007 with substantial increases in 2008, against a background of a sustained rise in the price of gold.’’
Celtic’s stock was unchanged at 277.5 pence in London, valuing the company at 154.9 million pounds. The shares have advanced 64 percent this year, compared with the FTSE AIM All Share Index’s 8.7 percent gain.

TITLE: In Brief
TEXT: <b>Shtokman Stakes</b>
MOSCOW (Bloomberg) — Total SA and StatoilHydro ASA will each pay $800 million to take part in Gazprom’s Shtokman natural-gas project, Kommersant reported, citing an unidentified official from the Russian energy company.
For that money, Gazprom’s two foreign partners may also get the right to book Shtokman reserves in proportion to their stakes, the Moscow-based newspaper said.
Gazprom will hold 51 percent of the Shtokman operating company, while Total will own 25 percent and StatoilHydro 24 percent. Preliminary estimates of project costs are $15 billion, Kommersant reported, with 40 percent of the funding coming from the three partners and 60 percent from loans.

<b>Multi-Million Vodka</b>
MOSCOW (Bloomberg) — Synergy, a Russian distiller, was valued at as much as $980 million before it holds an initial public offering, Interfax reported, citing MDM Bank.
Synergy is worth between $810 million and $980 million, the news service said, citing a report by Moscow-based MDM, one of the share sale’s organizers.
The vodka producer will seek about $150 million in the offering, Interfax cited an unidentified person familiar as saying.

<b>Crude Tax Set To Rise</b>
MOSCOW (Bloomberg) — Russia, the world’s largest energy producer, will raise its tax on crude-oil exports as much as 9.5 percent to a record on Dec. 1 after world fuel prices rose in September and October, a Finance Ministry official said.
The tax will probably increase to about $272 to $274 a metric ton because of high world oil prices, Alexander Sakovich, deputy head of the Finance Ministry’s customs department, said by telephone in Moscow on Friday. The current duty is $250.30 a ton, or $30.55 a barrel.
Russia revises its export taxes on crude and oil products every two months based on the previous two-month average price for Urals, the country’s benchmark export blend.

<b>Sberbank Profits Fall</b>
MOSCOW (Bloomberg) — Sberbank, Russia’s biggest bank, said profit fell 21 percent in the second quarter from the first three months of the year as smaller rivals gained a bigger share of the country’s retail lending market.
Net income slipped to 21.2 billion rubles ($857 million) from 26.8 billion rubles in the previous quarter, state-run Sberbank said on its web site Friday. Sberbank was expected to post a profit of 23.9 billion rubles, according to a Bloomberg News survey of seven analysts.
“We anticipate a slight decline in Sberbank’s market share of retail loans and deposits, as competition has significantly intensified,’’ said Leonid Slipchenko, an analyst at UralSib Financial Corp., before the results were released.

<b>Georgian Baths Sold</b>
MOSCOW (Bloomberg) — The famous Tbilisi Sulphur Baths, Chreli Abano, Gogirdis Abano and Samepo (Royal) Abano, in the ancient part of Georgia’s capital, were sold to three private investors at a government auction for more than $3 million.
The government will receive more than $1 million for each of the three baths within 10 days, and the new owners will invest money to overhaul the system, according to the Ministry of Economic Development.
The buyers, investor Kakha Kurdgelashvili and Shako Ltd., have agreed to preserve the facilities for a fixed period of 10 years and to coordinate any future changes with the Ministry of Cultural Heritage, Minister Giorgi Arveladze told reporters after the auction, according to BS Press news agency.

<b>Putin Declares Income</b>
MOSCOW (Bloomberg) — Russian President Vladimir Putin earns 2.01 million rubles ($81,300) a year, more than 12 times the country’s average annual income, the Central Elections Commission reported Friday.
Putin has another 3.7 million rubles in the bank. He owns a 78 square-meter apartment in his hometown of St. Petersburg and a 1,500 square-meter plot of land in the Moscow region, according to the commission.
The president owns two Soviet-era cars, dating from 1960 and 1965, and a trailer built in 1987, which he inherited from his father, the commission said.
Putin was required to provide financial information as a candidate in Russia’s Dec. 2 parliamentary election. 

<b>Sistema Changes Head</b>
MOSCOW (Bloomberg) — Vitaly Savelyev, who resigned as a Russian deputy economy minister last week, will head AFK Sistema’s telecommunications department, Vedomosti said, citing unidentified people familiar with the situation. Savelyev, 53, will replace Sergei Shebetov, the former head of Sistema Telecom, the Moscow-based newspaper reported Monday. Shebetov quit in the spring after Sistema Telecom was turned into a department within the Sistema holding, Vedomosti reported.
Savelyev was chosen for his experience in the telecommunications industry as vice president of Gros from 2002 to 2004, Vedomosti said.

<b>TNK-BP In Venezuela</b>
MOSCOW (Bloomberg) — BP Plc’s Russian unit, TNK-BP, will begin exploring for oil in Venezuela after reaching an agreement with the government, Interfax said.
The agreement allowing TNK-BP to begin exploration was signed during talks between Venezuelan President Hugo Chavez and Russian First Deputy Prime Minister Alexander Zhukov on Oct. 26, the Russian news service reported Monday from Caracas.
Under the deal, TNK-BP will explore the Ayacucho 2 block in the Faja del Orinco heavy-crude-producing region, Interfax said. The company joins Russian competitor Lukoil, which already has a project in Venezuela.

<b>Vegetable Duties Cut</b>
MOSCOW (Bloomberg) — The Russian Economy Ministry may cut the import duty on vegetable oil and some vegetables as inflation accelerates.
The duty will be lowered to 5 percent from 15 percent for an “indefinite time period,’’ pending the Cabinet’s approval, the Economy Ministry said in an e-mail Monday.
The ministry also proposed lowering the import duty on carrots, beets and cabbage to 5 percent from 15 percent from Jan. 1 until July 1, 2008.
<b>Skype Goes Mobile</b>
LONDON (Reuters) — EBay division Skype and mobile phone group 3 said on Monday they have launched a mobile handset that allows users to access Internet calls provider Skype while on the move.
The companies said in a statement that the new 3 Skypephone would allow Skype users to make free calls to each other from the mobile and also send free Skype instant messages.
In the U.K., the phone will cost $100 on a pay as you go basis, or free for 3 contract users. It will be on sale in 3’s high street stores on Friday Nov. 2.

<b>African Investment</b>
HELSINKI (Reuters) — The mobile telecoms industry in sub-Saharan Africa plans to invest more than $50 billion over the next five years in new network gear, industry lobby the GSM Association (GSMA) said on Monday.
The GSMA, a global trade association representing more than 700 GSM mobile phone operators, said the estimate is based on mobile operators’ investments plans as collected by Frontier Economics.
Africa is the key growth market for handset makers and could ease some pain for the ailing telecom network gear sector, where the largest player Ericsson shocked investors with falling profits earlier this month. The GSMA said mobile-specific taxes are still levied in Ghana, Kenya, Tanzania, Uganda and Zambia, but lowering or removing them would actually increase tax receipts as more people will connect and use mobile services.
“High license fees and other regulatory bottlenecks, such as international gateway monopolies, constrain the competitiveness of African business,” GSMA said in a statement.

<b>3G Licence Bid</b>
PARIS (Reuters) — French broadband Internet provider Iliad said on Monday it expected a political decision soon regarding its bid for France’s last remaining 3G licence as it posted a 29.4 percent rise in third-quarter sales.
“We think that we are not very far from a political decision ... The ball is clearly in the government’s camp,” Iliad Finance Director Olivier Rosenfeld said in a telephone interview.
Iliad’s bid for the country’s fourth 3G licence had been rejected by the telecoms regulator for not meeting set financial criteria. The operator was asking, among other things, for new licence terms such as a split of the $889.7 million licence fee into deferred annual payments.
“We are doing all the lobbying possible to obtain this licence under the conditions we have asked for,” Rosenfeld added. 
His comments came after the company posted revenues for the three months to Sept. 30 of 307 million euros ($441.1 million), up from 237.2 million euros a year earlier.
Iliad said it had won 141,000 new consumer broadband subscribers in the quarter which brought the total to 2.767 million.
Rosenfeld said Iliad would have more than 2.8 million residential broadband subscribers by the end of 2007 and 4 million by 2010.

TITLE: MegaFon Launches 3G Services in Russia
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: A long distance video-call between Governor Valentina Matviyenko and IT and Telecommunications minister Leonid Reiman organized to mark the launch of 3G (Third Generation) services from mobile phone operator MegaFon last week signaled that Russia’s national mobile operators are determined to introduce 3G services, which allow mobiles to carry data-heavy applications such as video conferencing and Internet access, to the country.
As 3G pioneers are still struggling to make profits in Europe, their Russian counterparts believe that by launching the service now they have learned from the mistakes of others and can be realistic about 3G’s economic viability.
“The IT and Telecoms minister did not hurry to sell 3G licenses because in Europe such operators were not particularly successful,” Sergei Soldatenkov, general director of MegaFon, said last week at a press conference. “Voice transmission still accounts for 70 percent to 80 percent of the profits of operators in Europe.” 
MegaFon plans to spend over $100 million during the next year on development of 3G in St. Petersburg and the north-west region. Over three years, the company will invest up to $1 billion.
“We see high demand for Internet, high-speed data transmission and file downloading and mobile commerce,” Soldatenkov said.
MegaFon operates 30 3G-ready transmission stations in St. Petersburg and Leningrad Oblast, and, according to its license, the company must create 3G networks in 16 Russian regions during the next year, Soldatenkov said. The company will build 2,000 transmission stations including about 1,000 stations in St. Petersburg, he said.
Soldatenkov said that tariffs for 3G services are a quarter of those in Europe, and Average Revenue Per User (ARPU) is expected to be a tenth of that in Japan.
“Economic calculations on this new service are still ambiguous, but we will move towards higher speeds of data transmission,” said Maxim Gorokhov, general director of Telecominvest, a shareholder in MegaFon.
Aimo Eloholma, president of TeliaSonera International and chairman of the board of MegaFon, was also optimistic. He forecasted that 3G could result in a communications breakthrough similar to the introduction of mobile networks in 1990s.
3G enables mobiles to handle video telephony, high-speed Internet access and high-quality digital television transmission. MegaFon’s service runs at 3.6 megabits a second. Video-calls cost five rubles per minute. In service packages data transmission costs 1.5 ruble per megabit.
MegaFon analysts estimated that about 200,000 mobile devices in the north-west region are compatible with 3G networks. In St. Petersburg, MegaFon signs up between 6,000 and 8,000 new subscribers each day.
In Russia between 5 and 7 percent of mobile devices are 3G compatible and about half of them are registered in Moscow and St. Petersburg.
During InfoCom-2007 last week, another national mobile operator — Mobile TeleSystems (MTS) — installed a test transmission station and demonstrated how a television program could be downloaded from the web site of Vesti television channel on a mobile phone through a 3G network. Video files were received and played at a speed of 3.6 megabits a second.
“Our joint project with Vesti proved that soon MTS subscribers will be able to receive the most relevant information at any time from web sites of television channels. High-speed 3G networks will make the picture quality similar to standard television broadcasting,” said Leonid Melamed, president of MTS.
A third national operator, Vympelcom, which also has a license for 3G, is working to create a 3G network in the Russian regions.
Matviyenko backed the development of 3G and put the authority of the office of St. Petersburg governor behind the plans.

TITLE: Verizon Wireless Posts Better-Than-Expected Results
PUBLISHER: Reuters
TEXT: NEW YORK — Verizon Communications reported a better-than-expected quarterly profit on Monday driven by strong wireless subscriber growth, though analysts were unimpressed by its Internet subscription sales.
Depsite the threat of subscriber losses to Apple’s iPhone, which is only available on AT&T, Verizon Wireless’s customer growth exceeded Wall Street expectations and made up for slowdown in Verizon’s landline, or wireline, business.
“It’s a story of tremendous strength in wireless and continued deterioration in wireline,” said Sanford C. Bernstein analyst Craig Moffett.
Verizon Wireless, a joint venture with Vodafone, added 1.8 million net retail customers in the quarter, taking total subscribers to 63.7 million. It accounts for about half of Verizon Communications’ revenue.
“If I was AT&T I’d be a little disappointed I wasn’t able to take more market share from Verizon Wireless,” said Stifel Nicolaus analyst Chris King.
Verizon’s third-quarter net income was $1.27 billion, or 44 cents per share, compared with $1.92 billion, or 66 cents a share, a year earlier.
Excluding items such as merger integration costs, access line spinoff-related charges and international taxes, profit was 63 cents per share, a cent above the analysts’ average forecast of 62 cents, according to Reuters Estimates.
Operating revenue rose to $23.77 billion, slightly above the $23.6 billion forecast by Wall Street.
The company also said it would increase its 2007 share buyback target by 25 percent to $2.5 billion. Verizon repurchased nearly $800 million of its shares in the quarter.
Verizon shares rose 0.6 percent to $45.85 on the New York Stock Exchange. Analysts said the gains were muted since the shares had already risen around 10 percent in 3 months.
In addition to the wireless venture, Verizon has been banking on growth in a high-speed Internet service called FiOS to make up for a slowdown in its traditional phone business.
The all-fiber network also allows it to offer video, enabling it to compete against cable operators’ all-in-one packages of television, phone and Internet.
Verizon added 202,000 new FiOS TV subscribers in the third quarter, taking the total to 717,000. It added 229,000 FiOS Internet subscribers.
“What’s kind of changed in my view of Verizon is that they’re putting up some real TV numbers. We’re almost getting to a point where the revenue is almost going to offset consumer access line losses,” said Patrick Comack at Zachary Investment Research.
Analysts, however, were unimpressed by sales in DSL, which offers high speed Internet over traditional phone lines. Including DSL and FiOS, Verizon said it added a net 285,000 new broadband connections, less than many expected.
“If there was one weak spot in the numbers that’s on the DSL side,” said King at Stifel Nicolaus, although he added that growth in FiOS and Verizon Wirelesss was “far more important.”
Chief Financial Officer Doreen Toben said the shift showed consumers were favoring speed.
“Clearly FiOS is certainly taking share from DSL,” she said. “I think you’ll see us do more upgrades to speed in a larger piece of our footprint.”
The cost of deploying FiOS hurt quarterly earnings by 9 cents per share, down from 10 cents in the previous quarter. Verizon said in September it expected to invest $18 billion from 2004 through 2010 to deploy the FiOS network.
Chief Operating Officer Denny Strigl told analysts that Verizon was on track to post a 2008 profit for FiOS before interest, tax, depreciation and amortization.
Most analysts have said the investment, while costly, was necessary to offset a decline in home phone subscribers. But critics have said it was a risky bet, preferring AT&T’s more cost-conscious approach that uses less fiber.

TITLE: Russians Close Gap With Expats
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: At the beginning of the 1990s there was a popular saying – “Help will come from abroad.” Russians adopted foreign political institutions, adjusted foreign business models to Russian conditions and hired foreigners as consultants to supervise the changes taking place in both politics and business.
Are expats still in demand in Russia in the 21st century? Experts say that foreign specialists still have some advantages compared to their Russian colleagues. However, the young generation of managers in Russia could soon win back jobs that so far have been traditionally occupied by foreigners.
“Previously, western companies operating in Russia had to hire expats for top management positions. Now, hiring expats is an image decision rather than a necessity,” said Yekaterina Protasova, consultant at AVANTA Personnel.
However, the continuing difference in salaries proves that expats are still highly valued in Russia. “As a rule, foreign specialists are paid a higher salary than their Russian colleagues,” said Alexei Zelentsov, regional manager for the Northwest region at Kelly Services CIS.
“But the difference isn’t so dramatic. Most foreign specialists and mid-range managers expect a monthly salary of 3,000 euros to 6,000 euros. Only about 10 percent of expats enjoy an annual income of 200,000 euros to 300,000 euros. Most of them are senior managers, heads of local branches of multinationals or partners of consulting and audit companies,” Zelentsov said.
According to Kelly Services, expats are paid 20 percent to 50 percent more than Russians. However, this gap is gradually diminishing.
“Specialists from Eastern Europe are hired more and more often, and they have moderate claims compared to Americans or Western Europeans,” Zelentsov said.
While in the mid-1990s, foreigners could earn several times as much as Russians in similar positions, the situation is changing with the general growth of salaries in the country.
“During the last 10 years, salaries in Russia have increased by eight- to ten-fold, which is far ahead of the salary growth in the West,” Zelentsov said.
Protasova indicated that hiring expats for senior management jobs became a common practice in Russia in the early 1990s, when Coca-Cola, Pepsi, Philip Morris and other international corporations entered the country.
“At that time, Russian managers knew nothing about western business models, quality control systems and other “essentials” of foreign production companies,” Protasova said. Besides the FMCG companies, foreign financial institutions hired expats to manage their Russian branches and subsidiaries.
“Almost all foreign banks in Russia were run by expats. Russian financial specialists simply lacked experience and knowledge of international banking standards, products and distribution systems,” Protasova said.
Later, expats were welcomed into Russian retail companies.
“While the retail industry was underdeveloped, the market unsaturated and consumers unspoiled by numerous stores and shopping centers, the retail techniques exercised by Russian managers were quite acceptable,” Protasova said.
“However, the market is still growing. If a company lacks qualified managers, competitors will force this company out of the market by taking a considerable part of its profits. Business owners in Russia understand this very well. They started hiring foreign managers soon after foreign retail chains like Auchan, Obi, Castorama and Leroy Merlin entered the Russian market,” Protasova added.
Expats have the obvious advantage of knowing how to organize shopping areas and buying operations and how to use merchandising techniques.
Another industry where expats are welcomed is premium class hotels.
“Traditionally, expats are employed as general managers, food and beverages managers and chefs in luxury hotels. The quality of service in Russia still does not quite correspond to the price, and foreign specialists are still in demand. Besides, foreign managers could be “a special offer” that to some extent justifies the high prices in the hotel,” Protasova said.
However, in general Russian managers and specialists are not a priori inferior to expats any more.
“Business growth is important, but it’s not the only objective of a top manager. Managers have to develop businesses and then sustain the achieved level, which could be very tricky if a person has a poor understanding of the region and the national mentality,” Protasova said.
She suggested that the combined efforts of Russian specialists and expats in project management could be beneficial since, “there are still a number of business areas in Russia where the skills and knowledge of foreign managers are necessary for success.”
“We are seeing a new generation of Russian managers with considerable business background and knowledge of the local market. It’s a strong competitive advantage, in addition to a complete understanding of the national mentality,” Zeletsov agreed.
Nevertheless, according to Kelly Services, approximately 70 percent of international companies prefer expats to run their Russian branches.
“My personal view is that Russian managers are able to perform any jobs in Russian subsidiaries of international companies. But multinationals keep hiring expats. Foreigners still do not quite understand Russia. It’s easier for the companies to have their compatriots in top management, because it is less risky in their opinion and allows them to understand what is going on in the Russian subsidiaries,” Zelentsov added.
“But practice shows that Russian managers are able to cope with the responsibilities of a top manager and often decide on non-typical steps, which push the company forward,” Zelentsov said.
However, in some specific positions foreign specialists are still preferred. “Russia is introducing new technologies in production and business. In some areas there are only a few specialists, and in such cases, experienced professionals are hired from abroad,” he said.

TITLE: Going the Extra Mile:
Tempting Employees
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: Nowadays, more and more employers understand that the basic size of their salary is not the only thing that concerns their employees. Modern job seekers know that they can demand more at work and look for the best social benefits packages on the market. 

According to Begin Group, companies on the Russian labor market offer a wide choice of social benefits packages, which besides base salaries and bonuses, usually cover fully or partially the cost of lunches at work and running a cell phone, as well as transport and medical insurance costs.  Fortunate employees can also drive a company car and go to a fitness center at the company’s expense. “However, due to the high standard of competition in the labor market, especially in “narrow” markets which suffer from a lack for professionals, many companies rush for the best candidates by offering them over 50 benefits in one social package, which can include, for example, discounts on different services, such as photo printing, dry cleaning, dressmaking, and medicine delivery,” said Marianna Slivnitskaya, executive director of Begin Group. “There are fewer social packages that include benefits for an employee’s family members, for instance, that cover trips for children, the medical insurance of an employee’s parents or pension bonuses and medical insurance for retired employees”.
The various package components are either compulsory benefits, depending on the employees’ professional groups, or are chosen by employees themselves. “Although alternative packages, parts of which can be chosen according to employees’ taste, are considered to be more attractive to them, at the same time, it is more difficult to administrate such social packages,” said Slivnitskaya. 
“So the company can cover all the package services or just a part of them. Partly financed, such benefits can motivate employees even more effectively, because the value of free products, in spite of their high quality and necessity, turn out to be quite low for the customers.”
As for long-term incentives, some companies also offer employees their stock options as part of a social benefits package. “Although such practice is not so popular among Russian companies, some corporations consider it to be the most effective way of motivating top managers. Some employers offer stock option programs to personnel at all levels of the organization, but such companies are rare in Russia,” said Alexandra Evseyeva, branch manager of the St. Petersburg office of THI Selection.  
But how can employers know what their employees really want to get from them? There is no simple answer to this question, and for many employers it can be a real problem. “In theory, many employers would like to take into account what every employee thinks about the social benefits packages, but it is very hard to do so in reality — it would require more HR specialists to analyze a huge number of package components, and it is not usually approved by the company’s top management, since the employees’ interests are very changeable too,” said Slivnitskaya. 
“So only really big companies are able to take into account the employees’ personal wishes. The staff of most companies are not usually very satisfied with their social benefits packages,” Slivnitskaya said.
For example, in DHL International or InterComp — international companies which have branches in St. Petersburg — surveys on issues such as medical insurance and payment for food covered by the company are conducted among employees on an annual basis. The data collected from the survey is used to create employee-oriented social benefits packages.
At the moment, the best social benefits packages available on the market are offered by the oil producing companies, finance and loan corporations and insurance companies, said Evseyeva. 
Analysts say that the number of “payments under the table” is gradually decreasing in Russia. More and more candidates are demanding that legal salaries be added to their benefits package.  One reason for this is that loan and credit services are usually only available to candidates with high offical incomes. 
Many Russian companies now often offer equal or even better social benefits packages than foreign ones. 
“There are such Russian companies among our clients that have better social benefits packages for some positions than the average offers of international companies. However, most of them are specifically given to top managers,” said Olga Kapralova, PR & Marketing Manager at InterComp, St. Petersburg.
According to research conducted by Avenir this year, top managers usually name company shares, compensation for relocation and a company car as their primary benefits requests.

TITLE: Theft At Work On The Rise
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: Company employees in Russia are now stealing more from their companies than they did two years ago, contributing to a quadrupled cost of $12.8 million per company — more than five times the global average, PricewaterhouseCoopers said earlier this month.

In 2007, company insiders were responsible for 38 percent of economic crimes, up from 13 percent two years ago, said the auditor, citing a biennial survey of 5,400 companies, including 125 leading companies in Russia.
“An alarming finding” was that senior managers at firms in Russia were responsible for 41 percent of economic crimes — more than twice the proportion two years ago — according to the global study.
The direct cost of economic crime in the country has more than quadrupled to $12.8 million per company — five times higher than the global average of $2.4 million. Of the companies surveyed, 63 percent had losses from fraud of more than $1 million and 20 percent of the companies lost more than $10 million.
Asset misappropriation is considered the most common type of fraud (43 percent), followed by corruption and bribery. Overall, 59 percent of the companies surveyed in Russia said they were subject to one or more significant economic crimes in the past two years. This is a 10 percent increase from 2005 and above the global and Central European averages of 43 percent and 50 percent.
Most company employees and business partners steal due to greed (73 percent), because they had a low temptation threshold (30 percent) or did not realize they were doing something wrong (33 percent). A low level of commitment to the company was responsible for 21 percent of the cases.

TITLE: Employing Foreign Employees in Russia
AUTHOR: Julia Frolova, lawyer at BEITEN BURKHARDT St. Petersburg
TEXT: According to the Russian constitution, foreigners have the same right to work as native residents of Russia. However, employers are obliged to observe numerous formal requirements required by Russian legislation.
The employment procedure depends on the citizenship of the person in question and their residential status in Russia. Foreigners from western countries who do not hold residency permits may be employed only if they hold a work permit and the employer in question has a permit to recruit and employ foreign citizens.
To employ non-CIS citizens, a company must obtain a special permit to employ foreigners as well as a work permit for each foreign employee. These permits are limited by the annual quota established by the Russian government. This year, the annual quota is set at 308,842 invitations.
Employers must notify the regional departments of the Federal Migration Service of their foreign employees within three working days of the employees’ arrival in the country.
Companies are also obligated to notify the regional tax authorities about the hiring of foreign employees. If a foreign employee breaches the employment agreement or in the event of anticipatory repudiation of the employment contract, the company must also notify the Federal Migration Service of such facts.
The employment contract should be in writing, signed in two counterparts, and may not infringe the rights and freedoms of foreign employees.
The procedures for signing an employment contract, amending and terminating it do not depend on the residency of the particular employee. However, an employment contract with a foreigner may be signed for a period of no longer than one year, as the permit to recruit foreign citizens is issued for this period.
Russian legislation does not prohibit transferring foreign employees to other companies or moving them to other regions. However, in any of these cases the employer must obtain all the required permits.
An employment contract with a foreigner may be terminated for the same reasons as with a Russian citizen. Upon the termination of a contract with a foreigner, the permit to employ foreign citizens becomes invalid.
Practice shows that most problems in employing foreigners arise in obtaining the required permits.

TITLE: Ask the Boss
TEXT: Q; When it comes to staff “borrowing” or taking home office supplies, where should a boss draw the line? In which cases is some kind of action required and what should that action be?

Michael Bartley, director, Four Squares real estate agency: 
“Four Squares’ managers spend a lot of time out of the office with clients, and draw on office supplies and equipment when necessary — including laptops and digital cameras for photographing properties. Although office supplies are a steady cost to the business, we take a liberal view on their use as long as the work is carried out to a high standard. It is a balancing act, maintaining internal financial discipline while encouraging creativity and responsibility. 
“If a manager took company equipment for private use on more than one occasion and did not notify their line manager in advance, then we would definitely call a meeting to clarify the situation and serve notice that it should not happen again. “I do not have a problem if a manager takes a company digital camera to a wedding or christening as long as they ask in advance — it is all about respect.”

TITLE: Salaries Raised To Retain Staff
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Most St. Petersburg companies increased staff salaries this year in an attempt to retain and motivate personnel. According to research issued by AVANTA Personnel recruiting company, 60 percent of local companies increased staff salaries in the first half of 2007.

The research showed that salaries increased by 12 percent on average, compared to the end of 2006. Some employers increased salaries by 20 to 25 percent in six months.
In St. Petersburg, the average sales manager earns 360,000 rubles ($14,482) as a basic salary, plus bonuses of 150,000 rubles ($6,034). Sales representatives earn 350,000 rubles ($14,080) plus bonuses of 85,000 rubles ($3,420). In Moscow sales managers earn 780,000 rubles ($31,379) and sales representatives 535,000 rubles ($21,523).
In many companies, sales representatives and sales managers also provide service support to clients.
According to AVENIR, 31 percent of sales managers in Moscow and 21 percent in St. Petersburg were headhunted by their current employers. However, sales people are now in position to be able to pick and choose their place of work. Among employers’ competitive advantages, Alimova indicated the size of the company, popularity of its brand and market position.
Sales people are focused on money, and they are likely to choose a company that offers a more attractive system of bonuses and does not limit the total monthly income of its employees, Alimova added.
In St. Petersburg, 97 percent of sales managers (79 percent in Moscow) indicated opportunity for personal development as an important factor. 
“Officially declared salaries, additional health insurance policies and corporate mobile phones don’t motivate personnel anymore. They are considered ‘basics.’ Candidates may be attracted by corporate educational programs or subsidies for education and loans,” Alimova said.

TITLE: HR Experts Debate Networking Sites
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: Over the last few years, the popularity of social networking websites such as Facebook.com, LinkedIn.com and their Russian equivalents VKontakte.ru and MoiKrug.ru has soared, particularly among office workers.  What could be more tempting when sitting in front of a computer all day than messaging your friends, looking at their holiday pictures, seeing who their friends are and cyber-stalking people you dated or went to school with long, long ago?  In fact, the popularity of such websites has become such that a third of employers in the U.K have banned social networking sites in the workplace entirely, on the basis that e-networking reduces productivity.  The online publication HR Zone recently reported that Facebook users who access the site during office hours are costing UK companies $264 million a day.
Yet in the field of HR and recruitment, such sites are not only not banned, but employees are often actually encouraged to make use of them — for professional purposes, naturally.  Headhunting and recruitment firms use such sites to find possible candidates, to build impressions of them and keep in contact with them.  Being a relatively new phenomenon, professionals are still divided over the value of e-networking and its various advantages and disadvantages.  The St. Petersburg Times asked some local experts for their opinion on the contentious issue.
Sergei Streltsov, recruitment manager at ARCADIA:
“The most popular sites can be divided into two categories: sites aimed at personal contact, such as VKontakte and odnoklassniki.ru, and sites oriented toward professional contact, such as LinkedIn and its Russian analogue moikrug.ru.  The former category is sometimes banned at the work place to stop employees wasting time on unproductive contact.  The latter type is far more interesting from an HR point of view.  Such sites are usually characterized by a more formal design, very helpful brief resumes on user profiles, the chance to search users’ profiles and put up vacancy advertisements.  All these factors make such resources a powerful and convenient executive search tool.   

Tatjana Kuznetsova, PR manager of THI Selection:
“We’re currently witnessing a boom in on-line networking. This has opened new opportunities for employers facing a deficit of candidates. The site VKontakte.ru has existed for less than a year, but already has around 2 million users, being in the top three most visited Russian sites.  Moikrug.ru has half as many users, but there are more than 20,000 job vacancies posted on the site, since one third of its users have a higher education.
Social networking sites can be an extremely effective business strategy for recruiters and HR managers — the line between job-searching sites and social networks is becoming increasingly blurred.  Often, social networking sites can prove more effective than ordinary job sites.  For one, once you have access to a candidate’s profile, recruiters and potential employers can not only see information about a candidate’s professional achievements, but also more personal data, as well as whom they know. The sites can therefore be used to check a candidate’s references at no cost, thus saving the company time and money.
In large Russian companies, access to such sites is banned, as employers fear that employees’ work will suffer as a result of time spent on them. Exceptions are made for employees who may need to use such sites for work purposes, such as PR and HR managers.
It would be foolish to ignore such sites.  Any company wishing to keep up to date with current trends and work with the best candidates should know how to make use of the opportunities presented by the contemporary market.”
Natalia Pantukhova, consultant for IT/Telecom market, TRIZA EXCLUSIVE St. Petersburg:
“While searching for candidates in the IT/Telecom sphere I often use such social network websites as VKontakte or MoiKrug.ru.  It helps when the search focus is quite specific and traditional job websites do not work.  There are proven examples in my experience of finding candidates with the required professional experience by means of these websites.  What’s interesting is that their CVs cannot be found on specialized job sites.  If VKontakte.ru was originally designed for students to communicate, then MoiKrug.ru is a network oriented around professional contacts — its users indicate their place of work, position and sphere of professional interests.  Therefore it can serve as a good alternative to standard searches for candidates.  One disadvantage is that the information presented here is not complete compared to traditional job sites.  

Olga Petrovskaya, Group Leader, IT/Telecom ANCOR:
In Russia, professional sites such as Webby.ru and MoiKrug are becoming more and more popular every year.  Professional communication websites are an excellent opportunity for people to share their experience with their colleagues.
For recruiters, social and professional networking sites are a source of candidates and are also one of the most commonly used search methods, since the range of specialist sites and popular social sites attract a vast circle of specialists in various fields.
Many Russian companies block access to such sites for their employees to stop them simply wasting time on them without any professional purpose, but it’s well known that networking sites are a source of candidates for recruitment agencies and allow recruiters to approach candidates directly.  On the other hand, such sites are to some extent actually a form of competition for recruitment companies, since now companies can find the required specialist themselves by using specialized forums and leaving announcements on the sites, without using the services of a recruitment agency.

Kseniya Zdor, business development manager at Avenir:
“The information on VKontakte, for example, can be useful in searching for candidates. Often we search for potential candidates according to the university or institute requested by the employer, and for this purpose VKontakte is useful.  On the other hand, the information available is not always complete — for example people may not include their place of work, which makes it hard to assess a person’s career.

Natalia Martikainen, business development manager at BusinessLink Personnel:
“The advantages of such sites are that you can see a person’s photos and interests, which allows you to get a general impression of a candidate.  Networking sites also allow you to reach a wide circle of candidates, including candidates with whom contact for some reason may have been lost, and those who are actively looking for a new job.  On the other hand, not everybody takes such sites seriously which can be a problem.”

Yury Mikhailov, managing partner, Consort St. Petersburg:
“Online communication creates a distraction from work duties and can be viewed by employers as a major time-waster and threat to productivity, causing a natural reaction to forbid access to such sites.  Of course, some of the most developed, such as e-xecutive.ru or hh.ru could be used as a recruiting technique, but it is in no way a very efficient one.”

TITLE: Hunting Season Underway
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: With the Russian economy in rude health and new employment opportunities opening up, the vexing question of what time of year is best to move jobs has become more and more relevant. Russians traditionally believe that the fall is the time to find the best opportunities, but as the economy matures this nostrum is being challenged.
Many candidates believe that the fall is the most favorable time of year to look for a new job. “Traditionally, activity in the labor market increases at the end of summer. There is a group of companies that stop operating in summer and resume their work in the fall, and this dynamic affects all categories of personnel,” said Oksana Pochtivaya, head of recruiting at AVANTA Personnel recruitment company. “For most Finnish companies, July is a holiday month, after which they start new plans.”
Postponing recruitment interviews until the end of summer could have some advantages. “As a rule, HR managers and other decision makers return from vacation and the recruitment process goes faster than in the summer, when some of them could be out of the office,” said Marina Gorina, consultant at Consort Petersburg.
“Employers want to choose between several candidates, but in summer they can’t find enough people. Potential candidates are also on holiday. Employers wait and the recruitment process slows down. Ultimately, candidates should decide whether they are ready to sacrifice holiday time for job seeking.
“People rarely quit companies in summer. They take a vacation to rest and gain strength before attending interviews,” Gorina said. However, highly-qualified specialists consider another motive.
“People who have something to lose in terms of their current job often use the summer to find a new employer,” said Olga Samarina, deputy director of Arbat-Nevsky recruitment agency.
But several factors make job searches in the fall more effective. Many Italian companies start recruiting in September. “August is a holiday month in Italy, and Russian managers of Italian companies also take holidays in August. Until September, nobody can approve new subordinates recruited for them,” Samarina said. 
“I know several foreign companies that approve their annual budget in August. As a result, the volume of work and staff increase, and the companies start looking for additional personnel,” Samarina said.
Russian companies are also in need of new staff in the fall.
“Sometimes, after the summer period, business owners introduce innovations,” she added. “It could be restructuring of the company or changes in incentive schemes. Such decisions often provoke employees to quit or move to other departments. As a result, the company will need to hire additional staff.”
Some specialists resign seasonally due to the specific requirements of their job. “Accountants often quit the company after the summer holidays. They have certain obligations, so they complete quarterly reports and then move to a new employer,” Pochtivaya said.
Other specialists are also prone to seasonal shifts. “I know a couple of very highly qualified and high-ranking human resources managers who regularly change their job in the fall. They complete the projects they were working on and then leave the company,” Pochtivaya said.
Too late… or too early?
Most industrial plants shut down for the summer, and therefore it is a convenient time for them to start recruiting workers. February-March and the four months from September until December are usually the most active recruitments periods for industrial enterprises.
Regardless of the season, candidates should not expect that there will be no competition, or that vacant places are simply waiting for them.
“As a rule, large enterprises have long term strategies for personnel development to compensate for seasonal labor shortages,” Oksana Pochtivaya said.
Most pharmaceutical companies start training programs for new staff in the fall. However, they recruit people for these programs at the beginning of the summer.
Olga Samarina forecasts that by the fall, the number of candidates in the market increases, but not the number of top managers looking for new jobs.
“Decision makers and business owners are wealthy people. Usually they take holidays in September, in the ‘velvet season.’ Without them, top managers cannot be employed. And top managers also normally take a break in September,” she said.
For senior professionals, she suggested October as the best time to look for jobs.
Personnel welcome
Some companies, such as retail chains, are constantly looking for employees, regardless of the season. The fall only increases the shortage of basic personnel. IT and telecom companies recruit new specialists when they start a new project, not necessarily in the fall. New investors coming to the city offer attractive job opportunities. 
“From time to time in the auto industry, retail chains, car dealerships, banks and insurance companies, up to 30 percent of personnel quit for a new employer when a new plant, shopping center, car center, bank branch or insurance office opens,” said Yury Mikhailov, Managing Partner of Consort Petersburg.
According to Consort Petersburg, in St. Petersburg there is demand for construction specialists, engineers for production companies and technical personnel as a result of the growing volume of production and opening of new enterprises.
“A number of automakers are to come to the Leningrad Oblast,” continued Mikhailov, “and the question is: Where will all these companies get so many new employees? Will the specialists simply migrate between the plants, worsening the labor shortage and fueling salary increases?”

Individual choice
Season is not the only factor that the candidate ought to consider. Any time of year can be favorable if the person knows what he or she wants and what they can offer a potential employer.
“People look for a new job in any season, if they have serious reasons for doing so,” Mikhailov said.
He considered the fall to be a risky period for job hunting.
“After a summer of relaxing, people are not in top form, while finding an interesting and highly-paid job requires intellectual effort and time. The same is true for the beginning of the year. In Russia, the first half of January is a never-ending feast and frosty stagnation,” he said. Mikhailov considered March-May and October-November the best periods to look for new jobs.
Marina Gorina warned against waiting for a good season to look for new employment. “Interesting vacancies could appear in any season, but candidates miss them if the time is unfavorable. You have to be constantly aware of what is going on in the market, which companies are expanding their staff, which companies are opening up and advertising new vacancies,” she said.
She recommended never giving up. “Job searches can last for several months and even years. Seeing this, and starting the search all over again after three to five rounds of interviews, candidates lose heart and start to appear defeated. But employers want to find a person who radiates success.” Regardless of the season, Olga Samarina advises candidates not to be hasty in making their choice and to carefully analyze the new job, potential bosses and tasks.
“You must find out why the vacancy emerged, and analyze whether you can realize your priorities and ambitions in this particular company,” she said. Mikhailov advised candidates to analyze their strengths, competencies, skills and goals and then investigate the market. “You need to not only analyze the existing vacancies, but actively promote yourself through online resources, directly applying to potential employers and recruiting agencies,” he said. “You should prepare an effective self-presentation and behavioral tactics during the interview, taking into account your previous experience. You have to predict possible questions and prepare short but convincing and irrefutable answers.”
Other important things to consider are the level of responsibility you will have in your new position, employer’s expectations, and compensation packages for similar positions, he added.
“You should be ready for several interviews with employers’ representatives, and know how to negotiate if you are interested in this position and the employer is interested in you.”

TITLE: Navigating Russian Labor Law
AUTHOR: By Alexander Karpukhin
PUBLISHER: Special to The St. Petersburg Times
TEXT: When entering the Russian market, foreign companies run up against a whole range of problems involving the management of personnel, and industrial disputes count as one of the most awkward. This is mainly the result of the nature of Russian labor law, the mindset of employees and the increased activity of trade unions, especially at factories partly run by foreigners. The purpose of this article is to deal with the thorniest problems for foreign employers operating in Russia, as which, for the purposes of this article, we shall classify local divisions and representative offices of foreign companies operating in the Russian Federation, as well as daughter companies of foreign corporations in Russia.

What legislation is in force
According to Article 11 of the Russian Federation Labor Code (to be referred to below as simply ‘the Code’), all employers involved in employer-employee relationships are obliged to follow Russian labor law. The consequences for a foreign employer are as follows: firstly, the parties involved in these relations cannot choose of their own accord the jurisdiction by which the employment contract will be governed and a foreign employer cannot enforce on his employees the provisions enshrined in labor law of another country. 
Secondly, a foreign employer cannot enforce in Russia documentation which is used by the company in foreign jurisdictions (for example, internal company rules drawn up in accordance with English law) without first bringing them into conformity with the norms of the Russian Federation’s labor laws. Moreover, a foreign employer in Russia has to apply only those instruments and means of regulating labor relations in the organization which are permitted under Russian legislation. For example, Russian labor law does not allow for a local normative act to be placed on the company’s internal computer network and for the employer then to claim that an employee was supposed to have familiarized himself with it of his own accord.
It should be noted that, in accordance with the Code and the Civil Procedural Code of the Russian Federation, labor relations involving foreign employers in Russia fall exclusively within the jurisdiction of Russian courts. Therefore a foreign employer involved in the resolution of a labor conflict with an employee through the courts will be required to have the case reviewed in accordance with the rules of civil judicial proceedings established in Russia.

Current trends
There are several recent tendencies in lawsuits involving foreign employers that can be singled out here. Firstly, the number of lawsuits involving foreign employers, especially in the industrial sector, is increasing, which is the result of growing activity of the trade union movement in the automobile and FMCG sectors. Secondly, the number of out-of-court settlements in disputes involving foreign employers is growing, the consequence of a reluctance to draw attention to the conflict by going through the courts. One more reason behind their resorting to out-of-court settlements is a reluctance to set a negative legal precedent if the case is not resolved in the employer’s favor, as this could exacerbate future employee disputes. It needs to be said that it takes a fairly long time for a case to be heard in court, which increases the legal fees borne by the employer and acts as an incentive to resolve the matter amicably in the early stages of the process.
Court cases involving foreign employers usually involve the challenging of a dismissal or imposition of a disciplinary measure. Apart from demands that the dismissal or disciplinary measure be declared unlawful, in conflicts such as these the employee also demands to be paid compensation for moral injury and for lost earnings to be paid back. 
As a rule, Russian courts do not decide in favor of large pay-outs in compensation for moral injury, limiting the sum to 5000-15,000 rubles (approximately $200-$590), although there are precedents for exceptions. It is also essential to point out that Russian legislation does not provide for large fines to be exacted from companies for breaking labor laws and the maximum fine is limited to 50,000 rubles ($2,050), as per Article 5.27 of the Russian Federation Law Infringement Code. Instead of a fine, however, the relevant state organ may obtain a court order to have a company closed down for up to 90 days in the event of an infringement of the labor law being discovered. 
This is a fairly harsh sanction which, in theory, could be imposed on an employer for any infringement of the labor code at all. But in practice labor inspectors very rarely use it, as closing down a company could entail serious consequences out of proportion to the seriousness of the infringement committed.
Out-of-court settlements
As was said earlier, foreign employers most frequently use out-of-court or amicable settlements to resolve labor disputes. But in contrast to other jurisdictions, there is a whole range of problems stemming from this in Russia, which can come as a shock to foreign employers, and these need to be borne in mind. Firstly, legislation does not make any direct allowance for an out of court settlement to be reached before the case reaches court.
The only exception to this is terminating the employment contract, as allowed for by Article 77 of the Code. This means that even if an employee reaches an out-of-court settlement, he or she still has the right to take the matter to court and demand the payments over and above the out-of-court settlement to which he or she is entitled as per the Code. Secondly, in Russian labor law there is no concept of “disowning one’s rights,” which in other words means that there is no possibility of an employee declining the payments due to him when he is dismissed (unpaid wages, holiday pay, bonuses and so on). The result is that the employer and employee are unable to draw up a formal agreement to terminate employment, stating that the employee will be paid an agreed sum and will leave the company and waive his claims against it. In the event of a settlement such as this being brokered, there is a risk that it will then be disputed by an employee as not conforming to current legislation. Moreover, in principle any settlement in a labor dispute before the conflict reaches court (such as compensation for moral damage or for injury caused by an accident) can be disputed by an unscrupulous employee after it has been reached since the Code does not provide for any such instrument, and it could infringe the employee’s rights and interests. 

Settling a dispute in court
As a rule, conflicts between an employer and employee fairly quickly end up in the courts because Article 392 of the Code provides for only a limited period for filing a court case: to be exact, three months from the moment when the employee found out or was supposed to have found out that his rights had been infringed, or, in the case of dismissal, within one month from the day when he was served with written notice that he was to be dismissed, or else when his record of service book was returned to him (thus signifying that his employment with the company has been terminated). If he does not file a claim before this deadline, then the employee loses his right to have his claim heard. 
When the case is heard in court, a foreign employer can run up against a whole range of material and procedural problems to which he should pay attention.
First and foremost, many foreign employers lack any proper system for keeping files on employees, i.e. a system for keeping staff records carried out where necessary in accordance with current Russian standards. Many foreign employers forget about the necessity of getting staff to sign statements saying that they are familiar with orders and local normative acts and about the necessity of documenting any misconduct correctly and within the correct time frame and the like. The result is that many documents constituting employee records presented by the foreign employer in court end up being declared invalid. 
Moreover, the overwhelming majority of foreign companies use documents not written in Russian, which makes it significantly harder for them to be used as evidence when resolving a conflict in court. Firstly, it is mandatory for these documents to be translated into Russian in order to be used in court. What is more, it takes time and effort to produce a translation that conveys the exact sense of the document, and this can delay the hearing even further. When a document such as this is used in court, the employee will always be able to claim that his knowledge of the language was not sufficient for him to be able to understand it, that as a result he was not acquainted with its contents and that therefore it does not apply to him.
The use of policies and procedures by foreign companies operating in Russia, which are drawn up in forms not traditionally used for keeping employee records — especially step-by-step procedures, flow charts and the like — raises a lot of questions in court. Often these documents are authorized at the level of the head office of a foreign company outside Russia and are sent out to all the companies in the group without being separately authorized as a local normative act in the Russian branch. The question therefore arises as to whether these documents have any binding force for the company’s Russian employees. As a rule, it is very difficult to prove in court that such an act has any validity in law, which means that the court will refuse to recognize it and ultimately this weakens the defendant’s position. It should also be noted that, as stated above, Russian labor law and legal precedent do not recognize the posting of a local normative act or sending it out by e-mail as sufficient for acquainting employees properly with it. Documents such as these should be handed to the employee and signed to show that he or she has read and understood them. If this has not been done, then proving in court that the employee was served with this local normative act because it had been stored in the internal computer network on open access is all but impossible. 
Once in court, foreign employers can run up against all sorts of procedural difficulties stemming from the process of proving their position and explaining to the court the circumstances of the case. Complications primarily arise when explaining the internal organizational structure of the company to the court and providing documentary proof of the powers of executives acting at the various levels of this structure. Foreign companies have a pyramidal hierarchy in which some of the powers of top managers are delegated to line managers, such as the power to authorize internal documents or sign employment contracts and so on. Therefore in court the need arises to prove which powers were transferred to the manager in question and on what basis. Very often these rights are delegated without any sort of formalized document (such as a warrant or power of attorney).
Thus, any document signed off by any responsible person in the company, to whom the necessary powers were not formally delegated to authorize him to do so, will be viewed by the court as invalid and unable to be used.
Moreover, a large number of foreigners are employed in Russia who could be summoned by the court at the initiative of either the plaintiff or defendant to give evidence. There is a whole host of difficulties associated with involving such employees in a court case. Firstly, their evidence has to be accurately translated into Russian. In addition, the agenda for the witness’s participation in the case has to be accurately explained to him, as do the cross-examination and the circumstances on the basis of which he will provide evidence. It has to be said that foreign managers are not often sufficiently familiar with the essentials of Russian labor law, which can make a bad impression on the presiding judges. As a result, before filing a request for a foreign employee to be invited as a witness, it is essential to weigh up all the pros and cons which his participation in the case will entail, and only after that to take a final decision.
The most difficult part of a case like this is the need to prove that the employer acted in good faith when dismissing the employee. In other words, the employer needs to prove to the court that the dismissal was carried out in strict conformity with the procedure laid down in the Code. The employer also has to prove to the court that dismissal was the only possible disciplinary measure left to be taken given the circumstances and that he had previously made every reasonable effort to rectify the employee’s conduct through more lenient means, such as verbal reprimands, alternative punitive measures and so on. It is essential to bear in mind that courts take a very dim view of the dismissal of an employee for misconduct if other employees had previously done something similar but were not dismissed as a result. There is no provision made in current legislation for an obligation on the part of the employer to prove that he acted in good faith. However point 3 of the Decree of the Plenum of the Supreme Court of the Russian Federation from March 17, 2004 concerning the application of the Labor Code by Courts of the Russian Federation states that it is obligatory to take into account the degree of seriousness of the misconduct and the motivation for it. In practical terms this means that when putting together a body of evidence concerning a dismissal, an employer has to prove not just that formal procedure was duly observed, but also demonstrate to the court proof of his actions aimed at correcting the employee, as well as that disciplinary measures for like misconduct are uniformly imposed on all employees in the organization. 
It seems likely that the number of industrial conflicts will increase in the future as a result of trade unions becoming more active, a greater number of collective labor conflicts in the industrial sector and also an easing of the procedure of taking on employees from neighboring foreign states. Therefore employers should already be consulting their lawyers to draw up strategies for governing relations with employees, policies on possible industrial conflicts at any level and methods for sorting them out. 

Alexander Karpukhin is an associate at Baker and McKenzie

TITLE: Brain Drain Reversal: Repats Welcome
AUTHOR: By Tremayne Elson
PUBLISHER: Special to The St. Petersburg Times
TEXT: If the financial results of major multinational recruitment firms and the number of vacant internal recruiter jobs are anything to go by, global employment markets are humming with activity. The good times are here and — fingers crossed — things are going to stay that way for the foreseeable future. The Russian employment market, as usual, has been the trailblazer, even though the rest of Europe is finally catching up. We’re nowhere near to market peak, with even the most pessimistic observers saying we’re looking at another two to three years of growth in demand for human capital. Despite even the current global market wobbles in inter-bank lending rates and the resulting liquidity crunch, Russia marches ahead steadfastly. The rapid growth of Russian domestic companies and the influx of Western investors have put pressure on the domestic candidate pool that has quickly resulted in major headaches for employers in Russia. 
We have a situation where the demand, particularly for experienced managers — let’s say with two to five years’ post qualification experience — is increasing at a much faster rate than supply can ever meet. The resultant increase in market pressure has caused one major change in the market in the past 18 months: the top 25 percent of mid-level managers active in the employment market used to be happy to be made one job offer. Now it’s common for them to get two or three. The result is that the candidate plays off one offer against the other. A bidding war entails, often involving the existing employer as well. The result? Salaries go up, packages are enriched with extra benefits and the market is distorted, with newcomers earning the same or even more than existing employees in identical or similar jobs.
This puts HR directors in an untenable position. Staff naturally discuss details of their salary and benefits package with colleagues and friends in other companies. If newcomers are paid more then existing staff start putting pressure on management for pay rises, yet without paying a premium it is impossible to attract them in the first place. Experience shows that Russian companies have not reached the level of sophistication (some might say inflexibility) in pay grades and structure as some of the multinationals. They tend to be more comfortable with paying whatever it takes to secure and retain the best talent. It’s still an unfortunate feature of the market that, despite the low level of income tax, a surprising number of Russian businesses, and, even more surprisingly, certain Western businesses don’t declare full salaries for tax purposes. But these dinosaurs left over from the crazy 1990s are losing out, because the most intelligent employees with the highest potential want to take out bank loans or are simply feeling increasingly uncomfortable with defrauding the state. 
Given this state of affairs, repatriates, or repats as they’re more usually known— Russian nationals who emigrated some time ago, and who are now returning in larger numbers than ever before — are being very proactively sought out by headhunters. Faced with an increasingly competitive fight for local talent, recruitment firms who have global reach through large office networks are now increasingly being asked to search internationally for Russian nationals. Repats have the added value of international experience, widely perceived as adding weight to any CV, and can integrate much faster into the Russian work place. That said, many people who stayed put in the Motherland and weathered the storms of the 1990s consider that repats sold out when they left and that the international experience they gained is really not all it’s cracked up to be. The bottom line is that actually not all repats are able to fit straight back in and be accepted by co-workers.  
The core group of repats, who are also the ones most keenly recruited, consists of those who have been out of Russia for between two and eight years; that is to say, the cut-off point is the financial crisis of 1998. Many astute Russians used the immediate post-crisis period and their severance packages — if they were made redundant by companies generous enough to pay them anything — to invest in their education. But right now it’s sheer madness to leave the employment market as the stakes are simply too high when it comes to the opportunities on offer. The biggest demand naturally comes from employers seeking the skills that are most lacking in Russia, generally commercial or sales disciplines, or else in rapidly growing areas of the market — retail, investment banking, and other financial services. There is also a great demand for technical professionals with any kind of oil, gas or mining experience, although Russian specialists already established in this field are themselves being lured in the opposite direction.
Tanya Tikhonova, head of recruitment at Troika Dialog, says that she “will always search locally for talent, but where there is a lack of talent locally the next best option is a repat. Repats represent a very attractive option for us and they generally integrate smoothly back into the Russian professional work environment.” Through its international offices, particularly New York and London, Troika is actively scouring international markets for global best talent to fuel their growth, particularly in capital markets and corporate finance.
Not only is the demand for repat employees high, it makes perfect sense at the moment to relocate back to Russia in any case. Careers are being forged right now, people are having responsibility thrust on them, are being promoted at a pace they can only just keep up with, and if this isn’t happening, then they don’t have to look far for a new job in order to jump up a level in responsibility and salary. That, at any rate, is the perception, but perception can be a very distorted thing, and in reality this only applies to the very best, the top 10 per-cent of the white collar workforce. Everybody knows somebody who has doubled his or her salary, but probably at an early stage in a career, or else compared to a previous salary that was fairly modest. Spring-boarding a salary from $300 per month to $600 is still possible for someone who is underpaid yet very good, but jumping from $1,000 to $2,000 is unlikely. Nonetheless, it’s perceived as possible, because everybody knows at least somebody who’s done it, and these urban myths then get exaggerated every time they get passed on.
One major reason why repats are open to the idea of moving back to Russia is that, despite the fact that Moscow has made the headlines for being one of the most expensive cities in the world, it’s actually not. For the vast majority of Muscovites who shop at Auchan, eat 180-ruble ($7) set-menu lunches and grow vegetables at their dacha, the idea that it’s impossible to live more cheaply in Moscow than in London or Tokyo is simply preposterous. Compare living costs in Moscow with London, for example. Salaries over £33,000 (approx $5,500 per month) are taxed at 40 percent. You can’t afford to live in central London unless you are an exiled oligarch or married to one, so every day you have to commute at least 30 minutes by train, metro or bus, or a combination of all three, and that works out at £120 ($240) each month. Don’t even consider driving into central London — with the congestion charge of $16 and parking costs of over $40 per day, this is only an option for the super rich or plain stupid. Even in the suburbs your accommodation will still cost you £1000 (around $2000) per month for very modest shared accommodation, and on top of that you’ll have to pay council tax of between £150 to £220 per month, depending on the part of London where you live and how much the property is worth. So from your $5,500 monthly gross salary you’ve got less than $700 left to spend on food and entertainment. Forget saving — there’s always too much month left at the end of the money. 
Not only does your money go further in Moscow, even with a lower salary than overseas — there are simply more jobs here and far fewer qualified candidates. It’s easier to get a good job and one where more responsibility is placed on you. In Britain and other Western European countries you, the potential repat, will be up against local nationals, so unless the job requires Russia-specific skills you will probably find it quite difficult to compete. As for the interval between promotions, 18 months appears to be the norm. In Western European countries it can take you five to ten times longer to achieve the same level of responsibility and seniority as in Moscow. In Moscow it would be realistic to expect to reach the post of finance director within six years of joining a company, and if you haven’t achieved this, or don’t at least have some sort of managerial title on your business card, then you’re lagging behind. Contrast this with Britain, where you’ll be lucky to make assistant finance manager in that time.
No wonder then that Russia is attracting so many repats. But how many people are we talking about? Does this really represent a major exodus back to Russia? Our experience is that for every 100 mid-level management positions we will attract two or three candidates currently working overseas. Around 10 percent of every 100 CVs submitted to us are from candidates based overseas, but many of them do not meet what we would class as the target profile. Emigres who left before the Soviet Union collapsed in 1991 are now so far removed from current-day Russia as to offer very little to modern day employers. In fact, even in the early and mid 1990s, when  employers would consider hiring anybody willing to work who had even only average qualifications, many of the repats found the transition too difficult and would upset the cultural balance by constantly referring to how things were done in the West.
Employers may very well consider paying more — significantly more in certain sectors — for a repat than for a locally-based candidate, but only provided that person brings value added skills to the table. A Russian national working for an investment bank in New York or London with knowledge of a financial product new to the Russian market could command a significant premium and may be in a position to get his or her potential employer to bid an astronomical remuneration package. A would-be repat whose experience lacks an international remit involving Russia is not going to be as attractive as a native candidate with local experience. 
The chances of being able to conduct a successful job search in Moscow from a distance are not great, so any repat contemplating the move should factor in at least one or two trips back, and should also prepare the ground in advance with phone calls and internet research. Recruitment firms can help immensely in this process as they generally have a good overview of the market and can help to assess potential salary levels. But choose carefully — make sure your recruitment partner is international and has offices locally. 
If you’re a potential repat working overseas, then it’s fair to say that your market worth is greater in Russia than it is on the market where you’re currently based. Like any career move, there are plenty of other factors to be weighed up, but from a purely commercial and career point of view it has a lot to offer.

Tremayne Elson is the managing director of Antal International Russia.

TITLE: Putin Places Popularity Over People
AUTHOR: By Boris Nemtsov
TEXT: On Tuesday, Russians began gathering around the Dubrovka theater to mourn the fifth anniversary of the hostage tragedy that shook the world. On Friday, the day the theater was stormed by special forces, about 1,000 people gathered outside the theater complex, and 129 balloons were released for every hostage who died in the rescue operation.
I will remember this tragedy all of my life. I arrived at the theater on Oct. 24, after 42 armed Chechen militants took 800 people hostage. The first thought I had was to reach some kind of agreement with the terrorists to free the children, women and elderly hostages. I was prepared to give the hostage takers any possible personal guarantee.
Several hours before the theater was stormed by members of the Emergency Situations Ministry and the Vimpel and Alfa special forces, Alexander Voloshin, then-chief-of-staff under President Vladimir Putin, asked me for the phone number of Abu Bakar, a leader of the terrorist group in the theater. When I spoke with Bakar by telephone, he stated his conditions for freeing the hostages: All federal military personnel must leave Chechnya. I suggested to Bakar that for every day in Chechnya without violence, he should free 20 hostages.
I was in close contact with the Kremlin during these talks with Bakar because in these extreme situations, the country must be united around one person — the president — regardless of political differences. As it turned out, during the hostage crisis, Chechnya experienced one day without zachistka, the term used to describe indiscriminate violence against Chechens. As a result, the terrorists released several hostages.
The terrorists were willing to continue negotiations with me and with Mayor Yury Luzhkov, but Putin asked us not to speak any more with them. “In this tragic moment, I answer for the fate of our country and I ask you to listen to me,” he said. We had an obligation to heed his wishes.
Soon after the rescue operation was executed, Voloshin explained to me the secret behind Putin’s request. One of the main issues at stake was Putin’s popularity. Voloshin told me openly, “If you or Luzhkov are the ones who save the hostages, you will turn into strong presidential candidates.” It is horrifying to think that during this hostage crisis, the presidential administration was willing to place Putin’s popularity rating above everything else. There should have been only one concern for all of the authorities — how to save the hostages.
There was another tragic aspect of the hostage crisis. At daybreak on Oct. 26, 2002, special forces stormed the theater. The Union of Right Forces, the political party that I headed in the State Duma until December 2003, tried to create an independent parliamentary commission to investigate the rescue mission of the hostages. But pro-Kremlin deputies defeated our attempts to do this.
Despite the political pressure from the Kremlin and its allies in the Duma, the Union of Right Forces created its own private, nonparliamentary commission. We gathered testimony from the Emergency Situations Ministry, witnesses and journalists. We collected a tremendous amount of material, video and medical expertise. Doctors in particular were very willing to participate in our private investigation.
Based on our investigation, we learned that many hostages died from asphyxiation. The rescuers were grossly negligent in the way they treated the hostages who became unconscious from the gas pumped into the ventilation system by special forces. After the victims were carried out of the theater, they were placed on their backs. As a result, many suffocated when their tongues fell back into their throats. To make matters worse, victims were then loaded onto city buses — instead of ambulances — in a reckless manner; they were dumped into seats or on the floor of the buses.
Moreover, we do not know to this day the exact type of gas that was used in the rescue mission. The Kremlin still treats this as a state secret. Western and Russian toxicologists who examined the urine of several victims believe that the substance used by the special forces was an FSB-made version of carfentanyl, an opium-like derivative of fentanyl. Carfentanyl, which is 10,000 times more potent than morphine, is so powerful that a drop of it can knock out an elephant. Excessive amounts of carfentanyl were pumped into the building to make sure that this substance made its way to all of the terrorists stationed throughout the theater. The worst aspect of this tragedy is that the doctors who attempted to treat the hostages were not informed by the authorities about the type of gas used. Thus, they had very little idea how to treat the victims properly or what antidote to use, and this ignorance led to many otherwise preventable deaths.
I approached Putin with the results of our investigation, and I told him that the people who were responsible for this negligence needed to be brought to justice and punished if found guilty. After thinking for a couple of minutes, Putin told me, “We can’t return the lives of those who died in the rescue effort.”
“We need to punish the wrongdoers for those who are still alive,” I said, “so that, God forbid, if there is another incident like Dubrovka, the rescuers will have learned from the prior mistakes and will know how to save hostages in similar circumstances.”
But Putin did not agree. He did not want to disturb the survivors and relatives of those who died. He was also concerned about negative publicity resulting from a public investigation that included our incriminating findings.
No city or federal government official has been charged with criminal negligence in the grossly mismanaged rescue operation, and an investigation by the Prosecutor General’s Office was suspended within a year after it had been opened.
And what happened after the Kremlin refused to investigate the Dubrovka rescue mission? Beslan — only two years later. In this hostage crisis, 334 civilians died, of which 186 were children. In both cases, the Kremlin’s prevailing concern was upholding its distorted definition of a “great power” by killing the terrorists at any cost. Elementary measures to avoid unnecessary civilian deaths were slighted, if not outright ignored.
Since Sept. 11, there has not been a single global terrorist attack on U.S. territory. Why? Because the United States created an independent commission that thoroughly investigated the CIA, FBI, National Security Agency and the entire system of airline and airport safety measures. After this investigation, U.S. authorities drew very important conclusions from the mistakes that they made.
Is the United States so much smarter than we are? I don’t think so. But, because the United States is an open society with an independent press and legislative branch, it was able to determine who was right and who was wrong. Moreover, the United States was able to punish those who were criminally negligent. As a result, Americans live without terror. But in Russia, few lessons are ever learned from our gross mistakes. Instead, we only give Hero of Russia awards to victims — posthumously.
How did terrorists, who were armed to their teeth, freely make their way from Chechnya to Moscow? No one within the Kremlin or Duma has bothered to answer this important question.
Ever since the Beslan tragedy traumatized our country three years ago, millions of Russians worry that the country will experience another terrorist attack when they send their children to school on Sept. 1. They have very little faith in the government’s ability to provide security within the nation’s borders.
Survivors and relatives of the victims of the Dubrovka tragedy have joined me in demanding that the federal and city government take responsibility for the gross negligence during the rescue of the hostages. But no one listens to us. After Dubrovka, I became very disappointed in Putin as a leader. In such a critical and tragic moment in our history, Putin thought above all about his ratings. This I will never be able to understand.

Boris Nemtsov is a member of the federal political committee of The Union of Right Forces.

TITLE: A Squandering Nation
AUTHOR: By Alexei Bayer
TEXT: There has always been great irony in the fact that Peter the Great chose Holland as a model for reforming Russia. The imperial tricolor, which is derived from the Dutch flag, is the only thing he managed to transplant successfully onto Russian soil.
The two countries couldn’t have been more different. Nature gave Holland few riches — not even enough land. But the Dutch cultivated wisely whatever they had and won more territory from the sea. They quickly learned to husband their one resource, natural gas, after first spending wildly in the 1970s and endangering their industrial infrastructure.
Russia has always had plenty of everything, and it has always been extremely careless with its reserves, even under the tsars. But squandering on a monumental scale started only after Russia, ironically once again, imported Marxism from Germany — the land of thrift, industry and the Protestant work ethic.
Soviet leaders were especially wasteful with the people, long viewed as the country’s most abundant resource. Tens of millions were killed outright or fed as cannon fodder into the maw of World War II. 
Equally insidious, a social crisis still decimates the nation’s population, producing low birth rates, high mortality rates and very low life expectancy.
Perversely, the Soviet regime specifically targeted the most educated and productive citizens, eliminating most of those who could read and write in the 1920s, killing productive peasants in the 1930s and purging able managers, scientists and doctors until the early 1950s. It also encouraged a brain drain from the 1970s to the 1990s by pushing about 2 million Soviet Jews to emigrate.
But ordinary people were destroyed by the millions as well — not just by dislocation and starvation, but through alcoholism and poverty in towns and, especially, in the countryside. Coupled with harebrained collectivization, this turned one of the world’s breadbaskets into a massive grain importer by the 1970s.
The country’s profligate ways changed little with the collapse of communism. During the 1990s, Russia managed to lose the few genuine achievements of the Soviet Union, such as its education system, science establishment and universal — albeit rickety — health care network.
Despite the loss of its empire, Russia still has plenty of resources, including its land and population, to go on wasting and to resist pressures for rational management. The old ways persist under the leadership of President Vladimir Putin. On paper, the country has restored strong centralized authority. In reality, however, little of the social or physical infrastructure has been rebuilt, while the plundering of assets continues unabated. For instance, predatory logging in the Far East, run by organized crime with lumber being exported to China, has been destroying the natural habitat of the endangered Amur tiger.
This is a minor example, but it is indicative of what happens on a national scale. In the Soviet Union, most oil was consumed wastefully by the country and its satellites in Eastern Europe and elsewhere. Industry was run to pump oil and mine iron ore to build machines in order to pump more oil and mine more iron ore to build more machines... Now this vicious cycle has been broken, and Russia is exporting a lion’s share of its oil — as well as natural gas, metals and other commodities — for hard cash. Some of the money has been squirreled away in the form of Central Bank reserves, which have surpassed $400 billion. In addition, the stabilization fund is nearing $150 billion.
But if commodity prices crash — which may very well happen if the global financial crisis spreads — Russia will have little to show for a decade of spectacular petrodollar windfalls. Except, of course, for the fat Swiss bank accounts held by its bureaucrats, sweet memories of debauches in Courchevel and receipts from airport duty-free boutiques.

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

TITLE: Andy Murray Wins St. Petersburg Open
AUTHOR: By Gennady Fyodorov
PUBLISHER: Reuters
TEXT: Briton Andy Murray crushed Spaniard Fernando Verdasco 6-2 6-3 in the final of the St. Petersburg Open on Sunday to win his second title of the year on his debut appearance in Russia’s second city.
The second seed broke Verdasco twice in each set to claim a comfortable victory after one hour 18 minutes.
The Spanish sixth seed, who had not dropped a set in his four previous matches on his way to the final, made far too many unforced errors to put up a good fight. Murray faced only one break point against him, in the fourth game of the second set, while converting both of his chances in the first set and going two for five in the second.
He earned the first break in the third game and repeated the trick in the fifth to take a one-set lead, then broke the Spaniard again at the start of the second.
The world number 16 held his nerve to maintain his advantage before breaking Verdasco once more in the final game to earn the third title of his career, after winning twice in San Jose.
“I played a pretty solid match, not too many mistakes,” Murray told a news conference.
“I came to the net at the right time and put a lot of pressure on his serve, so over all, it was a pretty comfortable match for me.”
Verdasco, who was appearing in his first final in over two years, blamed his slow start on bad lighting at the SKK sports arena near Park Pobedy on Moskovsky Prospekt.
“I wasn’t nervous, and I didn’t play too bad,” the world number 30 told reporters.
“The problem was that not all the lights were on at the start of the match and by the time we had decent lighting, I was already a break down,” he said. “It was difficult for me to get the serve back because he was serving very well and was gaining confidence as the match progressed.”     
The win greatly enhanced Murray’s chances of qualifying for next month’s season-ending Masters Cup in Shanghai, featuring the world’s top eight players.
“So I’ll just go into [this week’s Paris Masters] hoping to perform as well as I did here,” Murray said.

TITLE: Saudi King Slams U.K. Over Terror
AUTHOR: By Thomas Wagner
PUBLISHER: The Associated Press
TEXT: LONDON — King Abdullah of Saudi Arabia accused Britain on Monday of failing to act on information the Saudis provided that might have averted London’s July 7, 2005, suicide bombings.
Abdullah told the BBC that Britain was not doing enough in the war on terror. He made the comments in Jeddah, Saudi Arabia, hours before arriving in London for a state visit.
“I believe that most countries are not taking this issue too seriously, including, unfortunately, Great Britain,” he said through a translator. “We have sent information to Great Britain before the terrorist attacks in Britain, but unfortunately no action was taken and it may have been able to avert the tragedy.”
The BBC reported Abdullah’s remark was linked to a long-held Saudi leadership claim that it gave Britain information that might have averted the 2005 attack.
Months before the July 7, 2005, attack in which four suicide bombers killed 52 people and wounded hundreds on London’s transit network, Saudi Arabia told the British and U.S. governments that it had arrested a young Saudi man who confessed to raising money for a terrorist attack in crowded areas of the British capital, officials said.

TITLE: Red Sox Sweep Rockies
AUTHOR: By Larry Fine
PUBLISHER: Reuters
TEXT: DENVER — The Boston Red Sox beat the Colorado Rockies 4-3 Sunday to win the World Series and record their second four-game sweep of the Fall Classic in four years.
Boston, who had gone 86 years without winning a World Series before sweeping the St. Louis Cardinals in 2004, repeated the feat by outscoring the Rockies a cumulative 29-10.
Starter Jon Lester took the win, Jonathan Papelbon notched the save and World Series MVP Mike Lowell paced a nine-hit attack with a double and home-run in the final chapter of this year’s best-of-seven Major League Baseball championship.
Papelbon struck out Seth Smith for the final out, touching off wild celebrations at the mound that started with catcher Jason Varitek leaping into the reliever’s arms.
“This team has got a lot of heart,” team captain Varitek told reporters. “We just beat a very, very good team, an excellent team. We had to do the little things, and we were able to.”
The Rockies, who won 21 of 22 games to storm into the postseason and their first World Series, never found their stride after waiting eight days for the Series to begin.
“They executed better than us all four games,” said Rockies manager Clint Hurdle. “They deserve all the credit. We just got beat by a better team in this Series in every way.”
Left-hander Lester went five and 2/3 scoreless innings, giving up three hits in his first postseason start.
“The way he pitched, the way he composed himself, the way he competed, I thought it was very appropriate that he got the win,” Red Sox manager Terry Francona said about Lester.
Boston scored single runs in the first and fifth innings and made it 3-0 on Lowell’s homer in the seventh off starter and loser Aaron Cook.
Colorado’s Brad Hawpe skied a solo shot to the right in the bottom of the seventh to bring the Rockies to 3-1 before Boston restored their three-run cushion on the first pitch of the eighth, Bobby Kielty hitting a pinch-hit homer.
But Colorado would not go down without a fight.
Garrett Atkins clubbed a two-run homer off Hideki Okajima, as the Rockies got back to 4-3 in the eighth before hard-throwing Papelbon was summoned to get the last five outs for his third save of the series.
“It doesn’t get old,” Francona after his second title in four years. “I’m so proud of our organization.”

TITLE: Argentina’s First Lady Wins Presidency
AUTHOR: By Niko Price
PUBLISHER: The Associated Press
TEXT: BUENOS AIRES, Argentina — President Nestor Kirchner and first lady Cristina Fernandez are poised to switch jobs in December, with partial results indicating Argentines elected a female president for the first time and launched their country’s most powerful political dynasty since Juan and Evita Peron.
Fernandez is a lawyer and senator who followed her husband as he rose from an obscure governorship to the presidency, drawing comparisons to Senator Hillary Rodham Clinton, with some claimings she would bring a feistier style to the Pink House, Argentina’s presidential palace, in which she has already spent the last four years.
But it is unclear how much change she will bring. Analysts say a strong win gives Fernandez an opportunity to right the problems of her husband’s administration, including high inflation, an energy crisis and a shrinking budget surplus. Some warned her not to see it as an endorsement of all of Kirchner’s policies.
In her victory speech Sunday night, Fernandez, 54, pledged not to let that happen.
“We have won amply,” she said. “But this, far from putting us in a position of privilege, puts us instead in a position of greater responsibilities and obligations.”
With 86 percent of polling places reporting, Fernandez had about 44 percent of the vote, compared with 23 percent for former lawmaker Elisa Carrio and 17 percent for former Economy Minister Roberto Lavagna. Eleven others split the rest.
According to Argentine electoral rules, Fernandez avoids a runoff with at least 40 percent and a margin of 10 percent over the runner-up.
Carrio spokesman Matias Mendez said seven parties had filed a complaint alleging missing or stolen ballots. One representative of the ruling party was arrested on suspicion of trying to vote twice, and a judge extended voting by an hour in the capital because many polling stations opened late.
Argentina’s 27.1 million registered voters also filled dozens of House and Senate seats and nine governorships. Vice President Daniel Scioli won the race for governor of Buenos Aires province, the country’s second most powerful post.
Kirchner oversaw a dramatic recovery from a crippling 2001 economic crisis, repaying Argentina’s entire $9.5 billion debt to the International Monetary Fund, although critics say Argentina would be riper for sustainable development if he had better managed the income from soaring commodity prices.

TITLE: Zenit Take Pole Position In Final Stretch of Title Race
PUBLISHER: The St. Petersburg Times
TEXT: Spartak fell two points behind Zenit St. Petersburg for first place in the Premier League on Sunday, after managing only a scoreless away game to Moscow region side FK Saturn, Sport Express reported.
Zenit picked up a full three points with a convincing 3-0 blanking of home team Spartak Nalchik to move out alone on top of the standings with just two weeks to play in the season, the newspaper said.
The much improved Saturn club — which is undefeated in it last 11 matches — a stretch that has included eight wins, looked like it could dominate the visitors from the opening whistle. Alexei Ivanov had a chance from just to the right of the penalty spot that was saved by Saturn’s Croatian keeper Stipe Pletikos.
Spartak continued to dominate into the second half, with forward Nikita Bazhenov missing on a chance from in close in the 49th minute.
Spartak also upped the tempo in the final minutes looking for the winner, but the Saturn defense managed to prevent the visitors from mounting any real threat.
Zenit, meanwhile, managed to win despite awful conditions on a Nalchik field that resembled a swamp more than a field. Most of the water was in the Nalchik end for the first half, which ended scoreless.
Drier conditions in the second half allowed Zenit to play more constructively, and Belgian Nicolas Lomberts, Argentine Alejandro Dominguez and Turkish international Fatih Tekke each scored to give their team a priceless win.
In other games Sunday, CSKA Moscow beat visiting Krylya Sovietov 4-2, and Lokomotiv and Tom Tomsk played out a scoreless draw in Moscow.

TITLE: Israeli Prime Minister Olmert Says He Has Prostate Cancer
AUTHOR: By Steven Gutkin
PUBLISHER: The Associated Press
TEXT: JERUSALEM — Prime Minister Ehud Olmert announced Monday that he has prostate cancer and would soon have surgery, but said the disease is not life-threatening and he would continue to perform his duties. Speaking to a packed news conference in Jerusalem, the Israeli leader said the disease was caught at an early stage and that he would have surgery “over the next few months.”
“I will be able to carry out my duties fully before the treatment and within hours afterward,” Olmert said. “My doctors ... informed me that there is a full chance of recovery and there is nothing about the tumor which is life-threatening or liable to impair my performance or my ability to carry out the mission which has been bestowed upon me.”
“It is a matter of a microscopic growth, it hasn’t spread and can be removed by a short surgical procedure. According to the medical opinion, there will be no need for radiation treatment or chemotherapy,” Olmert said.

TITLE: Giants Beat Dolphins in London
PUBLISHER: Reuters
TEXT: LONDON — The New York Giants held off a late rally from the winless Miami Dolphins at Wembley Stadium for a 13-10 win on Sunday in the NFL’s first regular season game outside North America.
Giants quarterback Eli Manning scampered for a 10-yard touchdown in the second quarter as both teams struggled to generate much offence in slippery conditions that led to seven fumbles and a missed field goal by each team.
Miami responded late when quarterback Cleo Lemon connected with wide receiver Ted Ginn Jr. for a touchdown with less than two minutes remaining. But the onside kick attempt dribbled out of bounds, and New York was able to run out the clock.
The injury-ravaged Dolphins, who have now lost all eight games this season, are off to the worst start in the franchise’s 42-year history. The Giants are 6-2 after winning six in a row.
The game at the new 90,000-seat stadium in northwest London was the first regular season NFL match-up played outside North America as part of the league’s push to find new fans and expand its marketing base.
New York piled up 238 yards with running back Brandon Jacobs leading the way with 131 yards on 23 carries. The Dolphins outgained New York with 254 yards but could not move the ball when it counted.
“The opportunities were there. We just didn’t make the most of them,” Dolphins head coach Cam Cameron told reporters.
He also said the near constant rain and slick field did not factor into the final result, though Miami was forced to put the ball in the air late to try and mount a comeback.
“The conditions were the same on both sides. There was nothing there unusual, just a couple of plays that got away from us,” he added.
Fans at Wembley cheered and stayed in their seats, encouraging the NFL to stage more games abroad.