SOURCE: The St. Petersburg Times
DATE: Issue #1325 (91), Tuesday, November 20, 2007
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TITLE: Deputy Minister Arrested
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — Investigators arrested Deputy Finance Minister Sergei Storchak on suspicion of belonging to a criminal ring that sought to embezzle tens of millions of dollars in state funds, the Investigative Committee, which operates under the Prosecutor General’s Office, said Saturday.
Storchak, a close aide to Finance Minister Alexei Kudrin, is the country’s top debt negotiator and oversees the $148 billion oil stabilization fund.
The high-profile arrest comes as Prime Minister Viktor Zubkov, considered a top contender to succeed President Vladimir Putin, steps up rhetoric against corruption ahead of next month’s State Duma elections and the presidential vote in March.
Storchak was detained Thursday, as Kudrin flew to South Africa to attend a meeting of finance ministers from the 20 most industrialized emerging economies. Moscow’s Basmanny District Court approved the arrest Friday, Interfax said.
In South Africa, Kudrin defended his deputy and urged a fair investigation.
Storchak was held along with a businessman and a bank director “on suspicion of attempting to embezzle large sums from the state budget,” said Vladimir Markin, spokesman for the Investigative Committee, an agency formally under the auspices of the Prosecutor General’s office, 
Russian news agencies reported. Markin cited the two other detained men only by first initial and last name — V. Zakharov, general director of Sodexim, and V. Volkov, the president of Interregional Investment Bank, or MIB.
Several sources said more arrests were likely.
Storchak’s arrest was linked to irregularities in the state’s repayment of Soviet-era debt to Sodexim, an unidentified Finance Ministry source told Russian news agencies on Sunday. Law enforcement authorities suspect that the size of the state’s liabilities to the company may have been miscalculated, the source said.
“Storchak was detained because he was signing all [the debt-related documents]. A number of banks are involved ... and people in the government administration,” a source close to the investigation told Reuters.
The investigation may also be linked to Iraq’s repayment of debt to Russia, Reuters cited the source as saying. Russia has forgiven most of Iraq’s debt, but Storchak was negotiating the repayment of the $10 billion still owed by Baghdad. He had hoped to sign a deal on the repayment by the end of this year.
Sodexim, a little-known Moscow-based firm headed by a Viktor Zakharov, undertakes “various trade operations” and carried out 13 million rubles ($530,000) worth of business last year, Interfax said. MIB, headed by Vadim Volkov and Russia’s 129th-largest bank by assets, lists the firm as one of its top clients on its web site.
Storchak, who was appointed Deputy Finance Minister in 2005, oversaw the country’s repayment of $22.5 billion worth of debt to the Paris Club of creditor nations, as well as negotiations of other countries’ Soviet-era debts to Russia.
Kudrin would take over Storchak’s duties, Kudrin spokesman Pavel Kuznetsov told Itar-Tass. He also said the arrest was not connected to the case of Denis Mikhailov, the former deputy head of the ministry’s debt department, who was arrested in 2004 and convicted last year for accepting a bribe and leaking classified documents.
In a statement released after the arrest became public late Friday night, the ministry tried to distance itself from the case and said it hoped the investigation would be objective.
“The detention took place outside the ministry. It may be related to criminal cases against a third party, not Finance Ministry officials,” the statement said.
Kudrin, who has also held the post of deputy prime minister since a Cabinet reshuffle in September, appeared caught off guard by events, and told reporters in South Africa that he was informed of the arrest only after it had happened.
“I don’t yet understand these charges, which I will, of course, study in detail,” Kudrin said, adding that “I think that the finance minister’s opinion of this situation will be taken into consideration.”
Kudrin said Storchak, one of three deputy finance ministers, was someone who “everyday struggled for every kopek, for every cent, defending the interests of Russia in all debt negotiations.”
Anatoly Kucherena, a top Public Chamber official, hailed the arrest as “real proof that the country’s leadership has stepped up the fight against corruption in government agencies.”
Kucherena denied that the move was an election-year ploy, noting that Zubkov, who was head of the Federal Financial Monitoring Service until Putin named him prime minister in September, had promised to wage a campaign against corruption.
“It is obvious that it is not an election move on the part of the country’s political leadership but a clear sign that a promise to rid agencies of corrupt and dishonest officials is being fulfilled,” Kucherena said, Interfax reported.
UralSib chief analyst Chris Weafer likened the arrest to the 2003 campaign against the “werewolves in epaulets,” a group of police officers investigated for running an extortion ring. The campaign, led by Duma speaker Boris Gryzlov, boosted the popularity of the newly formed United Russia party ahead of the Duma vote that year.
“We expected to see a more intense campaign against corruption in the bureaucracy” ahead of the coming elections, Weafer said. The move would allay popular concerns over corruption, as well as concerns by investors, he said, noting that Transparency International ranks Russia 143rd out of 179 countries on its corruption perception index.

TITLE: OSCE Cancels Monitors
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW — In an unprecedented move, the OSCE’s democracy watchdog on Friday canceled its planned observer mission for the upcoming State Duma vote, saying Moscow had prevented election monitors from receiving visas.
The decision prompted an unusually angry reaction from the Foreign Ministry, which accused the organization of inventing an excuse to cancel the mission, in the latest rift between Russia and the West.
Diplomats said Russia’s already-fraught relations with the Organization for Security and Cooperation in Europe might deteriorate into outright crisis. President Vladimir Putin chided the OSCE in February for interfering in the internal affairs of former Soviet states.
The OSCE’s Warsaw-based Office for Democratic Institutions and Human Rights, or ODIHR, said it would be unable to deliver on its mandate “due to delays and restrictions.”
“Despite repeated attempts ... visas have continuously been denied,” the office said in a statement posted on its web site.
Apart from ODIHR, Russia has invited the parliamentary assemblies of the OSCE and of the Council of Europe to send observers.
ODIHR spokeswoman Urdur Gunnarsdottir said repeated attempts to get visas for the mission, reduced to 70 observers this year from 450 in 2003, had proved futile. “We started to send accreditation forms last week, the last ones earlier this week,” she said by telephone from Warsaw on Friday.
Gunnarsdottir said she had made at least four phone calls to the Russian consulate in Warsaw to inquire about the visas. Each time a representative said they could not proceed with issuing the visas until Moscow gave the green light, which never happened, she said.
The Foreign Ministry on Friday called the OSCE’s explanations a fabrication and harshly criticized ODIHR’s director, Austrian diplomat Christian Strohal. 
The organization had “invented references to alleged difficulties in obtaining Russian visas,” the ministry said in a statement posted on its web site.
Foreign Minister Sergei Lavrov had promised on Thursday that the monitors would receive their visas. His ministry has argued that the applications were received late, and in Friday’s statement it blamed confusion at the ODIHR.
“If anything hindered the observers from coming to Russia, it is the muddle inside that organization and the contemptuous behavior of its leadership, which has ignored generally accepted procedures,” the statement said.
The ministry also argued that Russia was only required by its OSCE agreements to invite observers, and Moscow had fulfilled that commitment.
It accused ODIHR of making up rules not set out in those agreements: “Attempts to force the organization’s member states to obey rules they have never signed up to look, frankly, absurd.”
The OSCE’s current chairman, Spanish Foreign Minister Miguel Angel Moratinos, said in a statement Friday that Strohal had “clearly explained to me, and to the Russian authorities, the reasons why the ODIHR has had to decline the invitation. I regret the conditions that meant this decision had to be taken.”
“Unencumbered election observation is one of the cornerstones of any democracy and the ODIHR is rightly regarded as setting the standard in this area,” Moratinos said. “I think there is still time for the Russian authorities and the ODIHR to work together to overcome the present situation.”
The Central Elections Commission added its voice to the controversy Friday, with a member of the commission accusing the ODIHR of not being impartial.
“The ODIHR ignored our invitation,” commission member Igor Borisov said, Interfax reported. He added that such a step was logical, as the organization’s judgments regularly contained “offensive political bias.”
Konstantin Kosachyov, head of the Duma’s international affairs committee, called the ODIHR’s decision an “attempt to create a scandal out of nothing” and added that the organization had taken a “politicized, opportunistic, one-sided approach” in previous elections, Interfax reported.
But Gunnarsdottir was adamant that her organization was only acting according to its mandate.
“Either we monitor the elections properly or we don’t monitor them at all,” she said. “We really care about our credibility. We would rather not be in Russia at all than be there for one day on Dec. 2.”
She also said there were “worsening signs” that conditions on the ground would also be unacceptable and that there were indications that the monitoring mission would not have been allowed to make any public statements upon arrival in the country.
Repeated calls to the Foreign Ministry seeking comment about the purported additional restrictions were not answered Friday.
Gunnarsdottir said the ODIHR had only once pulled out an observer team, from municipal elections in Albania in 1996.
The body has observed more than 150 elections. It has raised red flags about the fairness of polls in former Soviet republics, calling the 2003 Duma elections a step backward in Russia’s transition toward democracy.
In 2004, it found violations in the Ukrainian presidential election where pro-Russian candidate Viktor Yanukovich came out ahead of his pro-Western opponent, Viktor Yushchenko, adding pressure on Kiev to hold a revote, in which Yushchenko ultimately triumphed.
ODIHR protocol dictates that the organization only apply for visas after receiving invitations from the country holding the elections.
Moscow had angered the organization by limiting its observers to 70 and sending invitations less than five weeks before the poll, when, ideally, a preliminary team of observers would already be in the country preparing the mission.
For the 2003 Duma elections, the ODIHR received invitations Sept. 19, more than two months before the Dec. 7 vote. The monitors, then numbering 450, received visas on Oct. 23.
Nikita Belykh, leader of the opposition Union of Right Forces party, said Friday that the authorities had compelled the organization to pull out its observers. “From the beginning, the authorities have prepared to violate the law and falsify the results of these elections,” Belykh said, Interfax reported.
Western diplomats expressed alarm.
“It is extremely unfortunate that the Russian government put up all these obstacles to the OSCE sending a monitoring mission to Russia,” U.S. State Department spokesman Sean McCormack told reporters. “I am not sure that you can find a case in the past where a member country had put up such obstacles.”
“The situation is certainly very much without precedent, and it will entail a great deal of high-level concern, especially since this is taking place just before the OSCE summit,” an envoy at the OSCE headquarters in Vienna said Friday on condition of anonymity because he was not authorized to comment on the issue.
Apart from ODIHR, the OSCE and the Council of Europe, the Commonwealth of Independent States, the Shanghai Cooperation Organization and the Nordic Council had also been expected to send monitors.
But Western governments stressed that they ranked the ODIHR’s observers the most significant by far. Both the United States and Britain said the office’s work amounted to the international “gold standard” in election observation.
A Western diplomat in Moscow agreed, saying the ODIHR was authoritative. “It is they that represent the OSCE,” he said, requesting anonymity because of the sensitivity of the issue.
The diplomat said the office had faced a dilemma. “If they accepted, the restrictions would have set a precedent for other countries,” he said, adding that there were doubts about the organization’s future.
It is no secret that Moscow has been extremely unhappy with ODIHR for some time.
Earlier this fall, Russia forwarded proposals to reform the OSCE observer missions that Western experts and the current ODIHR leadership say would seriously undermine its ability to impartially observe elections. The proposals, also signed by some other former Soviet states, include a provision that observers’ reports must be approved by the OSCE’s governing body before publication. This would give each member state, including the host country, veto power over the reports.

TITLE: Parties Feel Financial Strain of Election Campaign
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: Two weeks before Dec. 2 Duma Elections, financial strains have forced the majority of the 11 regional political parties to withdraw from the media phase of the campaign.
They will have no access to about 130 media outlets licensed to run commercial campaign adverts and to 148 non-media organizations and individuals assigned to prepare, design, print and publish campaign materials. 
However, the parties will reserve their right to free media time on state-run St. Petersburg Television and Radio Company channels as long as they have candidates on the federal list.  
A 2005 election law requires regional party branches to register its campaign funds that not exceeding 30 million rubles ($1.2 million) with the regional election commission to reserve the right to conduct media and outdoor billboard campaigns. 
Only five regional parties, topped by United Russia with 12 million rubles ($490,000) in its coffers, followed by Just Russia with slightly more than 4 million rubles ($160,000) left and the nationalist Liberal Democratic Party (LDPR) with about 500,000 rubles ($20,400) have the funds to conduct media campaigns. Others in the list include Russian Patriots and Civil Power with about 100,000 rubles and 11,000 rubles respectively.
United Russia had 30 million rubles at the beginning of the media campaign phase earlier in the month, followed by LDPR with about half that.
Out of the race are Union of the Right Forces registering no funds at all in its account and the Agrarian Party, which has not opened an account. 
Others who either did not put money into their accounts or had their funds exhausted are the Communist Party of the Russian Federation, Democratic Party of Russia, Party of Social Justice and Yabloko.
But financial problems have compelled Yabloko into resorting to other legitimate ways to wage its pre-election campaign, according to Maxim Reznik, head of the St Petersburg regional party branch. 
“We are recruiting our 300,000 potential voters we have been selecting from random phone calls since the beginning of the year on individual basis,” he said. 
Meanwhile, the St. Petersburg Election Commission has announced it will prepare 3,703,500 ballots, slightly more than the expected number of voters. 
But it has also issued about 6,000 special ballots for voters in special categories including overseas travelers, visitors to the city, city residents in the countryside, sailors, sea passengers, soldiers, researchers at polar stations, round-the-clock shift workers, and the registered homeless people to enable them vote at nearby polling stations.
 The commission has also installed an extra polling station at Gostiny Dvor, the city’s largest department store, in response to the request by the store workers who work on the round-the-day time shift, making 1,804 total polling stations. 
“Similar polling stations may be opened elsewhere before Nov. 29 where necessary,” said Alexander Gnyotov, head of the local eleciton committee. 
The commission has no plan to launch an extra polling station for homeless people beside the Moskovsky train station, citing little demand. 
“Our experience showed that hardly 100 homeless people will turn up to vote... they don’t give a damn! They are too busy looking for bread and vodka,”, Dmitry Krasnyansky, the commission’s deputy head, said when asked if one polling station was enough for the city’s estimated 50,000 homeless people.

TITLE: English-Language Students Keep in Contact
AUTHOR: By Ashley Cleek
PUBLISHER: Special to The St. Petersburg Times
TEXT: Tired of English classes held at universities, Russian students and professionals have taken to the Internet to find new ways of learning English. VKontakte, a Russian online social networking site, similar to Facebook, is now making it easier to find English language conversation groups in St. Petersburg. 
VKontakte allows individuals registered on the site the opportunity to create groups based on their general interests. Speaking English is one of the most popular. One such group, called “I Speak English,” created in September, is described on its Vkontakte page as a club for “those who want to be able to converse fluently in English with foreigners.”
English-language student Katya Butomo founded the group after a disappointing search for English language conversation clubs in St. Petersburg. After returning from a trip to New York, Butomo realized “that the only way to improve her English was through constant practice,” but she could not find a suitable outlet in the city. Butomo noted that, while the Mayakovsky branch of the public library has three free discussion groups that meet for an hour and a half during the week, each attracts upwards of thirty to forty people, which she considered to be too many. 
“There is often only one native speaker leading the discussion and too many people come, so you don’t get a chance to talk.” Other options, like the conversation group run by Language Link, can be expensive for students. “Many people, including myself, just can’t pay those kind of prices for classes,” Butomo said.  
Better than simply word of mouth tactics, VKontakte allows grassroots conversation groups a forum to advertise and directly contact students and alumni. Like Facebook in its early stages, users are asked to select their university and department when registering on VKontakte. Once registered, they are immediately connected to other students and alumni who are registered under the same department and university. This was a conscious choice of VKontakte’s creator, Pavel Durov, a graduate of St. Petersburg State University. In an email, Durov said that he wanted to form the site specifically for the Russian university system “in order to help Russian students ‘see’ and ‘find out about’ each other.” 
Facebook wouldn’t have originally worked for Russian students, Durov said, “because only students who had an email address at American universities could register.” Presently, VKontakte has over 130 million pages and over one million users visit the site daily. 
The organization of users based on their department was a great help to Butomo when she was inviting people to join her group. Through VKontakte, she was able specifically to target philology students in St. Petersburg, the group of students “most likely to want to practice their English.” 
While “I Speak English” is a private group, others, like “English Speakers!” are open to all VKontakte users. “English Speakers!” was formed by Dimitri Solomin and boasts that, “now, all who want to ask native English speakers questions have the opportunity.” The group’s message board, or “wall” shows strings of questions about everything from where to take language classes to how to use different phrasal verbs. 
Yulia Khalemskaya, creator of the VKontakte group “English Teachers — get together!,” wrote in a message that she is “happy to have an opportunity to gather lots of interesting people” and that, while at first she invited them all herself, “now they find my community themselves.” 
Furthermore, through VKontakte, these groups are able to exist and advertise for free, a plus for small, informal groups like Butomo’s, which is organized at her house. 
Judging from the numbers, such groups are filling a long-standing void. “English Speakers!” is by far the most popular, with 13,740 members, while groups like “MSL English Readers,” a group for those who “like reading in English” has 859 members, and “I Speak English” has 582 members. 
These numbers not only highlight the growing need for English language in Russia, but a growing initiative among Russia’s young people themselves to learn English. While most university students are required to take classes in phonetics, grammar, and business English, many students, like Marina, are looking for a way to practice their English outside of class. 
“We have a conversational English class at the university, but the language is sort of artificial” Marina said. Marina has been on VKontakte for more than a year, and, when she saw the advertisement for “I Speak English,” she was immediately interested. “It is a way to learn slang, to talk with a native English speaker, to get over the language barrier,” she said. 
The early response to such groups is overwhelmingly positive. Alya, a businesswoman and member of the “I Speak English” group that meets on Sunday nights, claims that she likes the group because “it’s informal.” She is able to speak “simple, everyday English” that she can use, and, she added, learn how to “use [expressions] correctly.” “I Speak English” does not teach grammar, though there is talk of adding exercises in the future. John King, a student and English teacher who runs the Wednesday night group, thinks that “homework would be helpful” but that “the laid back attitude is all right because most of the students are driven and want to learn.”
“I Speak English” has conversational classes every weekday from seven to ten at night and two classes on Sunday, one in the afternoon and evening. The classes average no more than six students and costs 300 rubles for a three-hour session. 
Butomo says that this is only the beginning of her work to bring English speakers and Russians together. 
“In the future, I would like to create a database on Vkontakte, or some other site, which lists the contact information of all the English language teachers in the city who would like to give individual lessons or run conversational groups. This would allow every one, both students and teachers, to get in touch with each other easily, without having to go through a school.”

TITLE: With Zhirinovsky, Take No Remarks at Face Value
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW — If politics is a world of paradox and scandal, then Vladimir Zhirinovsky is the poster boy.
Zhirinovsky’s boisterous talk is full of ultranationalism, yet his party is called liberal-democratic. He is notorious for starting fistfights in parliament, yet his deputies resemble low-key bureaucrats more than thugs.
He relishes throwing slander at opponents, yet even liberal political analysts grudging admit that he is a gifted populist.
Zhirinovsky also only accepted that his father was Jewish after years of denial and anti-Semitic tirades. And he is accused of being a KGB tool used to create a pseudo-opposition in the waning days of the Soviet Union.
“He will say this to one audience and that to another,” said Vladimir Kartsev, who served as Zhirinovsky’s boss at the Mir publishing house in the 1980s. “If there is one lesson that I have learned from him, it is not to take anything he says at face value.”
Zhirinovsky’s antics have paid off well. He has played a significant role in politics since 1990, and his current position as deputy speaker in the State Duma has guaranteed him a national audience. Now he is running for president for a fourth time, although pollsters predict that he won’t win more than 5 percent of the vote.
Always the headline-grabber, Zhirinovsky’s latest coup brought him international attention: He signed up Andrei Lugovoi, wanted by Britain in the poisoning death of former KGB agent Alexander Litvinenko, to run with his Liberal Democratic Party for the Duma elections on Dec. 2. The decision appears to be an attempt to raise the profile of the party, with opinion polls giving it less than the 7 percent it needs to win Duma seats.

The Public Zhirinovsky
While the Western media like to paint Zhirinovsky as an ultranationalist, linking him to neo-fascist movements in Europe, those who know him well say this portrayal is shortsighted.
At a pre-election LDPR convention in September, the ultranationalism seemed confined to Zhirinovsky’s hour-long speech. No skinheads or other unruly-looking people could be seen among the delegates gathered in Moscow’s lavish Surikov Hall for a exquisite buffet of mushroom julienne, veal chops and smoked fish. Rather, the crowd looked distinctly bourgeois, wearing gray suits and old-fashioned dresses, with the sole exception of one short man flaunting military epaulettes.
Zhirinovsky took a schoolmasterly approach with his speech, using a telescope pointer and a school map to explain world politics. His speech, titled “Global Civil War,” was pure Zhirinovsky, a trademark harangue against a West bent on destroying Russia. Zhirinovsky argued that Western models of democracy were designed to bring down Russia and had led to the Soviet Union’s demise. Russia, he said, was historically special, always governed top-down “like a correctional center where the director decides all.”
Fewer than half of Zhirinovsky’s supporters are believed to be ultranationalists. “The rest are disgruntled with politics and alcoholics,” said Vladimir Pribylovsky, a political analyst with Panorama, a think tank.
Zhirinovsky, 61, declined repeated requests over two months to be interviewed for this report. His party’s press service first cited a lack of time and later said he was not giving interviews before the Duma elections.

Scandalous From Birth
Scandal seems to have followed Zhirinovsky from the cradle. His birth certificate caused an international uproar when it was published in the 1990s, revealing that he had a Jewish father and his real name was Vladimir Volfovich Eidelshtein.
Zhirinovsky, born in Kazakhstan, had by that time made a name for himself with his anti-Jewish proclamations, accusing Jews of ruining Russia, selling Russian women abroad as prostitutes, hawking healthy Russian children and organs to Western bidders, and provoking the Holocaust.
When confronted with the facts, Zhirinovsky put on a stone face and told reporters that the birth certificate was forged, said Nick Moore, the U.S. journalist who found the birth certificate during a month-long investigation in Kazakhstan, financed by CNN and The Associated Press.
“He really did not look surprised at all,” Moore recalled.
Infamously, Zhirinovsky later said his mother was Russian and his father was a lawyer. Only in 2001, seven years after Moore’s investigation, did he acknowledge his Jewish roots.
In 2006, he made a public visit to his father’s grave outside Tel Aviv. There, he told reporters that he had not known anything about his father for all the 60 years of his life.
Zhirinovsky was born in 1946 in Alma-Ata, now Almaty, in Kazakhstan. His father, Volf Eidelshtein, was a Polish Jew from Kostopol, now part of Ukraine. When Nazi troops invaded Kostopol in 1941, they killed most of his family. Eidelshtein managed to escape to Kazakhstan, where he met Alexandra Zhirinovskaya. When Zhirinovsky was a few months old, his father left and ultimately moved to Israel. His mother later changed his last name to Zhirinovsky.
Zhirinovsky came to Moscow in the 1960s and completed a degree in Turkish studies in 1970. The next year he married Galina Lebedeva, a biologist whom he met at a summer camp while they were both university students.
After carrying out his two-year military service in Tbilisi, Zhirinovsky held a series of positions that involved international relations — evidence, observers said, that he was connected to the KGB. For five years, he worked in the international department of the Soviet Committee for the Protection of Peace and in the foreign relations department of the Higher School of Trade Unions.
In 1977, he earned a law degree while attending evening classes and took up a post in the International Law College at the Soviet Justice Ministry.
From 1983 until 1990, he worked in the legal department of the Mir publishing house, where practically all scientific books for Soviet readers were published.
Zhirinovsky was probably recruited by the KGB while taking Turkish studies, said Andreas Umland, a scholar at Kiev’s Taras Shevchenko University who has written extensively about Russian ultranationalism. A clue to that connection, he said, is the fact that Zhirinovsky spent some time in Turkey as a student. “This was not possible for ordinary Soviet students,” he said.
Turkey actually ended up deporting Zhirinovsky on charges of spreading “communist propaganda.”
Zhirinovsky has repeatedly denied ever working for the KGB.
Umland said Zhirinovsky’s early political activism likely stemmed from a KGB desire to create a pseudo-democratic movement to discredit the more serious opposition in the heyday of perestroika.
But Kartsev, who served as a director at Mir when Zhirinovsky worked there, expressed doubt about any KGB links, saying the secret service had disliked Zhirinovsky for years.
“The KGB representatives at Mir were absolutely opposed to Zhirinovsky and actually strongly advised us to get rid of him immediately,” Kartsev said in a telephone interview from Yonkers, New York.
Local Communist leaders also demanded his removal, he said.
Zhirinovsky, a knowledgeable legal expert, seemed to be searching for his place in society, said Kartsev, who wrote a book about Zhirinovsky titled “Zhirinovsky!” in 1995.
“He was looking all the time for something better for himself and did not see a bright future in his profession,” Kartsev said. His job at the publishing house was to secure reprint rights from foreign publications.
Perestroika, Kartsev said, gave Zhirinovsky “a tremendous chance to begin a new life.”

Foray Into Politics
In an expression of his early interest in politics, Zhirinovsky participated in a rally on Pushkin Square against Mikhail Gorbachev and the Afghan War. “He was arrested and returned [to work] severely bruised with black eyes — obviously after having been beaten by the police,” Kartsev said.
These 1980s events clearly helped shape Zhirinovsky’s political views, which remain fiercely anti-Communist. On the 90th anniversary of the October Revolution last week, he denounced the Communist ideology as “hatred” and called the Revolution “the worst in mankind.”
On March 31, 1990, Zhirinovsky founded the Liberal Democratic Party of the Soviet Union. It was the first officially sanctioned opposition party and was probably closer to the traditional meaning of its name than its current successor.
In the Duma elections of 1993, Zhirinovsky sent shockwaves through the West by gaining his biggest political victory, placing second and securing 65 seats for his party. Many observers noted at the time, however, that Zhirinovsky had largely won protest votes from people opposed to Yeltsin, who that fall had ordered the shelling of the White House to prevent a parliamentary coup. First place went to the Communists.

A Change in Ideology
It was after the LDPR’s entry into the Duma that many associates broke ranks with Zhirinovsky because, some said, his political statements were growing increasingly erratic. “He only became a populist after he entered the State Duma in 1993,” Umland said.
Kartsev said Zhirinovsky saw himself as a “huge demagogue.”
“He once told me, ‘If I am not a demagogue, I will not be elected, and if I am not elected, I cannot serve the people’s interests,” Kartsev said.
Zhirinovsky’s performance in presidential elections has worsened significantly over the years. In 1991, he took third place with almost 8 percent. In, 1996 he collected 5.7 percent, and in 2000 he had 2.7 percent. He opted not to run in 2004, leaving the job to his former bodyguard Oleg Malyshkin, who scored 2 percent.
The LDPR has long been accused of blatantly selling out to business interests. In the mid-1990s, Zhirinovsky reportedly helped Mikhail Gutseriyev, the Ingush billionaire founder of Russneft, become a deputy speaker in the Duma. Dagestani billionaire Suleiman Kerimov became an LDPR deputy in 2004.
Gutseriyev, who left the Duma in 2000, fled the country this summer after facing accusations of tax evasion. Kerimov switched to United Russia earlier this year but did not make it on the party’s list for the Duma elections.
Zhirinovsky has repeatedly denied allegations that his party sells Duma seats. But critics say he runs the party like a family business.
His only child, Igor Lebedev, head of the LDPR’s Duma faction, acknowledged in a recent interview that his aunt owns 300 UAZ trucks. “And I do not remember how many apartments and cars I own already,” he told the Russia Profile magazine.
Pribylovsky said Zhirinovsky treated the LDPR like a private company. “His family owns party property all over the country,” he said.
Kartsev suggested that despite his political and financial success, Zhirinovsky ultimately has few close friends and associates. In addition to the one son, Zhirinovsky has two grandchildren.
“Maybe he is quite a lonely person,” Kartsev said.
Whatever the case, Zhirinovsky does have an enthusiastic following, which includes two fan clubs in the Facebook online community. As of Thursday, the clubs had an accumulated membership of 27.
In the last entry on “Vladimir Zhirinovsky for World Leader,” Natasha from Vancouver writes: “He’s so damn annoying ... yet he brings so much drama!!! Gotta love him.”

TITLE: Russian Suspected in Sex Tourism Case
PUBLISHER: The Associated Press
TEXT: PHNOM PENH, Cambodia — Nineteen girls have claimed they were sexually abused by a Russian businessman who was arrested in Cambodia last month — the largest number of Cambodian children to allege abuse by one person in a pedophilia case, police said.
Alexander Trofimov, 41, the chairman of Koh Puos Investment Group, was detained in the southern resort town of Sihanoukville and accused of raping at least six girls. He was charged Oct. 17 with debauchery — a Cambodian legal term for sexual abuse of children.
Investigations since his arrest indicate that he may have abused as many as 19 girls, said police Major General Bit Kimhong.
“This is a first,” Bit Kimhong said, noting that most pedophile cases in Cambodia involve the abuse of up to three victims. “Never has there ever been anything like this.”
The victims are now aged from 11 to 18 but were younger at the time of the alleged abuse, said Samleang Seila, director of child advocacy group Action Pour Les Enfants, an organization that has been investigating Trofimov since 2005.
It was not immediately clear if all the girls were under 15 — the age of consent — when the alleged abuse occurred. If convicted of debauchery, Trofimov could be sentenced to up to 20 years in prison for each offense.

TITLE: Egyptian Vacations Threatened
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Thousands of Russian tourists have been forced to cancel vacations to Egypt since the beginning of October, Russian Tourist Council, or RTC, has said.
“Russian tour operators who offer vacations in Egypt and their clients have been in a jam since the beginning of October when many Egyptian hotels resold pre-paid rooms,” Irina Tyurina, spokeswoman for Russian Tourist Council, told Interfax.
“As a result some Russian tourists were booked in other hotels in a lower category,” she said.
Some tourists had to spend nights in hotel lounges and in airports, she said.
Tour operators have lost millions of dollars, Tyurina said. 
“The current situation may seriously damage the image of Egypt as a popular tourist destination,” Tyurina said.
On Nov. 9 the Egyptian Tourism Minister Mohamed Zoheir Garana demanded Egyptian hotels and tour firms strictly follow all contracts signed, Fontanka.ru said.
Hala al Habib, a representative of the Egyptian Tourism Ministry, said all the problems at the resorts should resolved in coming days, and before the New Year’s holidays.
Ismail Abdul Hamid Amer, a representative of Egyptian Tourism Ministry in Russia, said that the issue is to be solved with the help of the ministry’s representative office and through negotiations.  A compensation deal is also being worked out, Fontanka.ru reported. 
However charter flights to Egypt have been hit, the RTC said.
“After Nov. 20 [Tuesday] they [tour operators] plan to cut down the number of charter flights to Hurghada by 50 percent and to Sharm-al-Sheikh by 35-40 percent.  It means that on traditionally high winter season tourism flow from Russia to Egypt may be significatly limited,” Tyurina said.
Competition for rooms this year came from European operators, Sergei Zalivin, deputy director of Egyptian company ALS-tour told the Marketing and Consulting information agency, said.
Leading Russian tour company Tez Tour said that normally European reservations for rooms in Egypt make up 30 percent of the total available, but this year they accounted for 80 percent
Zalivin said only 20 percent of Egypt’s hotels were overbooked but these were among the most popular on the Russian market.
“There’s no biased attitude against Russian tourists in Egypt — overbooking happens to German, Italian and Polish companies, too,” Zalivin said.
He said prices for vacations in Egyptian resorts will probably rise by between 15 and 30 percent. Demand will be dampened but 100 percent occupancy will be assured.
Yelena Sadkova, deputy head of St. Petersburg tour company Neva, said on Wednesday that the situation is improving.
“The biggest problems with overbooking happened in the first two weeks of October, and now it’s getting better,” Sadkova said.
She said that during the disruption about 7 percent of Neva’s clients were booked into different hotels while 10 percent canceled their vacations all together.
However, Egypt is unlikely to lose its place in hearts of vacationing Russians any time soon.
“Egyptian resorts remain the cheapest and closest warm resorts for this time of the year,” Sadkova said.
According to the Egyptian Tourism Ministry, the number of Russians traveling to Egypt in the period to the end of September this year was up by 45 percent compared to the same period last year.

TITLE: Sect Refuses To Speak to Orthodox Priests
AUTHOR: By Mikhail Metzel
PUBLISHER: The Associated Press
TEXT: NIKOLSKOYE, Penza Region — Russian Orthodox priests sought Sunday to convince more than two dozen members of a doomsday cult to leave their underground forest hideout in the Penza region, but they stayed to await what they say is the end of the world.
The cult members have threatened to blow themselves up with about 400 liters of stockpiled gasoline if authorities force them out of what officials described as a cave or bunker near the village of Nikolskoye, about 640 kilometers southeast of Moscow. 
Yevgeny Guseynov, a spokesman for the regional government, said officials were searching for experienced negotiators to try to coax the group out of their hiding place.
On Sunday, church clergymen visited the refuge, but the cult followers refused to listen to their arguments, said a security official monitoring the crisis, who refused to be named because he was not authorized to speak to reporters.
Police were guarding the site, but there are no plans to forcibly remove the 29 people — including four children, one only 18 months old. Russian television broadcast footage Saturday of what appeared to be a snow-covered hillside or mound with smoke coming from two stovepipes poking through the snow.
“There is no talk at all of storming” of the site, Guseynov said.
Pyotr Kuznetsov, who established his True Russian Orthodox Church after he split with the official church, has not joined his followers. He underwent psychiatric evaluation Friday, a day after he was charged with setting up a religious organization associated with violence.
Russian television on Friday showed Kuznetsov speaking at the clinic where he was being examined.
The group has stocked the hideout with food and other supplies. 
Kuznetsov said on the Rossia television channel that he had not gone into the hide-out himself because he “had to meet others who were yet to arrive.”
On Thursday, black-clad Russian Orthodox monks carefully descended into the snow-covered gully to try to make contact with the cult, but members refused to speak with them. They were exchanging letters with Kuznetsov, however, and were in contact with doctors and officials, who promised food or medical supplies if needed.
Kuznetsov blessed his followers before sending them into the cave earlier this month. Most of the adults are women, Izvestia reported.
Kuznetsov, 43, a trained engineer from a deeply religious family, declared himself a prophet several years ago, left his family and settled in Nikolskoye. 
He began writing books, borrowing from a mixture of established beliefs and visited monasteries in Russia and Belarus, recruiting followers, Guseynov said.
Kuznetsov said his group believed that, in the afterlife, they would be judging whether others deserved heaven or hell, Izvestia reported Friday. Followers of his group were not allowed to watch television, listen to the radio or handle money, media reports said.

TITLE: Duma’s Final Session Ends In Blaze of Self Satisfaction
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — The State Duma on Friday met for its final session, passing 19 bills and dissolving itself ahead of the Dec. 2 Duma elections.
The outgoing lawmakers gave drastically different appraisals of their work over the past four years, ranging from harsh criticism to pompous commendations.
“I think we have worked professionally, successfully and have made a significant contribution to Russia’s development in all of the most important aspects,” Duma Speaker and United Russia leader Boris Gryzlov told some 400 deputies.
Gryzlov went on to heap praise on deputies for, among other things, “having been able to build good relations with the executive branch of power.”
Deputies “often argued with ministries, but we all had one goal: creating a great Russia,” said Gryzlov, whose speech was periodically greeted by thin applause.
The heavy applause came when Gryzlov referred to President Vladimir Putin, who is running alone on United Russia’s federal ticket in the upcoming elections, as well as when he boasted of the giant sums of money to be allocated by the federal government for social projects and various sectors of the economy in the coming three years.
“I am convinced that the policies of our national leader will be safely secured in the [new] parliament,” Gryzlov exclaimed.
Meanwhile, the few opposition and independent deputies slammed the inefficiency of the outgoing Duma.
Independent deputy Nikolai Kuryanovich, a hardcore nationalist, said the Duma had “only dishonored itself” and denounced it as “decorative body that doesn’t decide anything.” He suggested a Constitutional amendment abolishing the lower house.
Friday’s session, which lasted almost five hours, ended with a recorded rendition of the national anthem while deputies stood solemnly, some of them singing along.
Journalists watching the session on large televisions in the pressroom saw an exhausted Gryzlov halfheartedly singing along, with despondent eyes and slouching shoulders.
Awards granted by Putin were handed out at the end of the session to 13 deputies, including billionaire businessman Alexander Lebedev from A Just Russia, who received an award for distinguished state service.
Liberal Democratic Party leader Vladimir Zhirinovsky arrived at the Duma in a motley, colorful outfit, telling reporters that he was sick of wearing the black suits preferred by deputies.
“As if we were all in mourning,” Zhirinovsky said, adding that he had bought a cheap jacket for Friday’s occasion.
Zhirinovsky said the outgoing deputies were “more mature” than their predecessors. “There are fewer extremists, the Communists have become quiet, the democrats are gone,” he said.
Speaking on behalf of his party, Communist leader Gennady Zyuganov took credit for successful legislation passed by the outgoing Duma.
“We made them think of a new economic policy and take social programs seriously,” Zyuganov said.

TITLE: In brief
TEXT: <b>New Years Gifts</b>
ST. PETERSBURG (SPT) — Books, CDs, DVDs and souvenirs do not make the best New Year gifts, according to experts contacted by Interfax.
Research has shown that most people do not want such items as gifts.
Money was the most popular gift, with 28 percent of those questioned saying that’s what they wanted most. Jewelry and watches (23 percent), and cosmetics and perfume (20 percent) were the next most popular items.
In addition, 17 percent expressed the desire for a travel voucher, and 13 percent want a computer or a laptop.
The research showed that Russian women receive expensive gifts for New Year more often than European women. 

<b>Drunken Sailors</b>
ST. PETERSBURG (SPT) — Two Algerian sailors were hospitalized with different injuries after a fight in St. Petersburg on Sunday, Interfax reported.
The sailors, who were drunk, misbehaved in the center of the city and provoked a fight, police said.

<b>Staying Away</b>
n ST. PETERSBURG (SPT) — The number of foreign tourists who visited Russia this year was down by 400,000 people compared to last year, Federal Tourism Agency said, Interfax reported, with a total of 4.5 million foreign making the trip.
The biggest drop in tourist numbers was recorded among tourists from Poland, while Spanish tourist numbers increased by 50 percent.
The agency said the drop was mainly in commercial travel.

TITLE: Ministry Clarifies Visa Reforms
AUTHOR: By Dave Nowak and Max Delany
PUBLISHER: Staff Writer
TEXT: MOSCOW — Foreigners in Russia will have to apply for visas in their home countries or in a country where they can stay 90 days or more, a Federal Migration service official said Monday.
The clarification came as government officials attempted to explain the restrictive new rules after foreign business associations were swamped with inquiries about the new system.
Puzzled company representatives packed out events held by the American Chamber of Commerce and Association of European Businesses on Monday, where officials spoke from the Foreign Ministry and Federal Migration Service.
Confusion has reigned among expatriates over an Oct. 4 decree issued by Prime Minister Viktor Zubkov that shook up the application process and slashed the length of time foreigners can stay in Russia on multiple-entry business visas.
Speaking at the AEB meeting, Alexander Aksyonov, head of the migration service’s visa and registration department, said foreigners could now only receive a new visa in countries where they are legally entitled to stay for more than 90 days.
This would essentially mean that many non-EU citizens could not get new visas in European countries and would have to return home.
Aksyonov also clarified another contentious part of the new legislation.
Multiple-entry business visas received before Oct. 17, the day the decree was adopted, will not be affected by the new legislation. But multiple-entry business visas issued after that date will now only allow stays of up to 90 days at a time.
Under the new rules, such visas will still last one year. But they will only let foreigners stay in Russia for up to 180 days of that visa year, and for no longer than 90 days at a time. Moreover, if a foreigner stays in Russia for 90 days straight, he or she is then required to leave and not come back until another 90 days have passed.
Aksyonov said the primary reason for implementing the new legislation was to bring Russian visa practices into line with “the European system,” referring to the Schengen visa regime used by about half the countries in Europe. Under that system, Russians can get a single visa that allows them to travel freely between those countries.
Aksyonov said the new rules were in line with those in 33 countries that had the same rules for Russians traveling on business visas. He called the new rules a “liberalization” of Russia’s migration policy.
Paul Vandoren, deputy head of the delegation of the European Commission to Russia, told the meeting that there remained a number of “outstanding issues” on visa policy but that dialogue was continuing between Russian and foreign officials.
“So many individuals have difficulties with visa legislation and are uncertain about the rules. It is too difficult for each individual to voice their concerns to the Russian authorities,” Vandoren said.
Andrew Somers, president of the American Chamber of Commerce, said the organization had received a large number of e-mails and phone calls on the matter.
Russian officials had agreed to come and field questions at a members’ meeting on the matter at very short notice, Somers said.
“It looks like the spirit is willing to resolve this situation,” he said.
Somers said the chamber’s lawyers were digesting the latest pronouncements from Russian officials and would produce a report later this week.
In the end, however, it seemed that some businesses were left just as confused as ever.
“It seems the officials don’t understand the rules completely themselves,” said Natalya Komoltseva, head of human resources at Nissan.
And despite the official reassurances, telephone calls to a number of Russian consulates around Europe on Monday showed that the system was by no means applied evenly.
A spokeswoman for the Russian Consulate in London said they were currently still issuing same-day visas and visas to U.S. citizens not residing in Britain but that the system was likely to change sometime next year.
“Either you will have to be a resident here or apply for the visa in your own country,” the spokeswoman said.
“In the future anything is possible,” she said.
A spokesman for the Russian Consulate in Dublin said U.S. citizens were currently only being given visas if they are resident in Ireland. She was uncertain if other EU citizens not resident in Ireland could receive visas in the country.
The consulate in Helsinki is currently refusing to issue visas to U.S. citizens or citizens of non-Schengen countries, said one U.S. businessman, who recently applied for a visa there. 
He added that there were even discrepancies between the various consulates within Finland.

TITLE: Residents Regret Result of Bulgaria Resort Boom
AUTHOR: By Anna Mudeva
PUBLISHER: Reuters
TEXT: BANSKO, Bulgaria — The citizens of Bansko, a ski resort in Bulgaria’s Pirin mountains, are selling their land with gusto to buy fancy cars and replace communist-era furniture.
The same is true of other mountain resorts, as well as Bulgaria’s Black Sea coast, as foreigners snap up cheap second homes, sending the price of resort and farming land to 250 euros ($360) per square meter from just 20 euros five years ago.
But this growth comes at a cost. The once idyllic little town with cobblestone streets and traditional architecture, which in the 1980s was popular among skiers and hikers from the former Soviet bloc, has changed beyond recognition.
It is now crammed with concrete hotels. Roads are damaged, infrastructure is insufficient and pressure over water resources grows.
Dozens of aging, roaring trucks carry concrete and bricks over unpaved tracks to Bansko’s mushrooming new districts. Dust and huge cranes mar the view to the mountain.
“Our beautiful Bansko has been spoiled. Look at all these blocks and buildings,” said Danka Spaseva, 83, who has lived in Bansko through world war and communism.
The cost also includes corruption, illegal land deals and construction of ski pistes involving local officials and property developers.
“Corruption is rampant. The state has abdicated its functions to exercise control and the rule of law,” said Ivan Sirleshtov, 60, a member of a local civil group to fight graft.
“Bansko is being built in a very barbaric, outrageous way. There is no urban planning whatsoever,” said Sirleshtov, who once published newspaper adverts to attract tourists to his town.
The tale of Bansko is a microcosm of the property boom in mountain resorts and along Bulgaria’s Black Sea coast, where corporate appetites grow and laws, rules and environmental protection are often compromised.
The promise of high profits after the Balkan country joined the European Union in January has lured investors from Britain, Ireland and Russia to buy property at a fraction of the price they would have to pay in Spain or France.
Pristine nature and sunny weather in what was once the favorite holiday destination for former communist countries are also strong magnets.
Visitors are amazed to discover that Bulgaria, relatively unknown in the West, has 220 kilometers of Black Sea beaches, and its mountains boast 130 peaks over 2,000 meters with excellent skiing and hiking.
But the flourishing corruption means that many hotels, holiday homes and other investments are built on illegally acquired land or without necessary permits.
“In all too many cases, foreign investors from Great Britain and other countries are silent accomplices,” environmental group WWF said in an article aiming to raise awareness among buyers.
Real estate agents in Bansko say many foreigners buy property via the Internet and try to rent it without ever visiting the resort.
The names of politicians, businessmen and even criminal groups who invest in real estate and bypass the law are an open secret in Bulgaria, but court charges are very rare.
The EU has repeatedly criticized Bulgaria for its ineffective judiciary and lack of vigor in fighting graft.
“For a mayor or a town architect, the more construction there is, the more bribery opportunities exist,” said Toma Belev, who heads the association representing Bulgaria’s nature parks.
In many cases, mayors give away construction permits before roads, sewage and water infrastructure are in place.
The mayor of Bansko, who has issued over 400 construction permits, had to impose a two-year building moratorium this summer because of lack of infrastructure.
The rush for quick profits is also affecting quality.
Over 130 foreign vacationers were evacuated when the roof of their newly built hotel in the Black Sea resort of Golden Sands collapsed in September. Such incidents are not isolated.
Property developers are now casting their eyes on Bulgaria’s protected areas.
Conservation groups that have repeatedly challenged the construction of ski facilities in Bansko say half of them were built illegally on the territory inside the Pirin Nature Park, a UNESCO world heritage site.
Several consecutive governments, which made tourism a priority, have promised to crack down on illegal building, but little has been done in practice.
“It is very difficult to exercise control at this stage,” said Valeri Vulchinkov of Bulgaria’s Environment Ministry.
But some note that external factors may put a damper on development.
Bansko was unable to fill its 100,000-bed tourist capacity last winter, as unusually warm weather brought too little snow, while over the summer many hotels at the Black Sea resorts were unfilled and suffered a sharp drop in revenue.

TITLE: China, Russia Reach  Gas Price Agreement
AUTHOR: By Emma Graham-Harrison
PUBLISHER: Reuters
TEXT: BEIJING — Chinese oil company CNPC and Gazprom have agreed a gas pricing deal that should unlock a major pipeline plan, but it may come at a higher cost than Beijing wanted, the Xinhua news agency cited a Russian executive as saying Saturday.
Alexander Medvedev, Gazprom’s deputy chairman, said the two sides had reached consensus on the pricing mechanism for fuel piped from Russia to China after months of wrangling that had held up the start of work.
However he added that negotiations “would not be influenced by China’s low natural gas import prices,” Xinhua said, without giving further details.
Beijing holds state-set gas prices below international market levels, while Gazprom had demanded the gas export price for China should be at least comparable with supplies to Europe, after taking transportation costs into account.
Russian media have reported that China was refusing to pay more than $100 per 1,000 cubic meters, similar to current Russian domestic prices and far below the European price of around $250 per 1,000 cubic meters.
Gazprom, which has a monopoly on export of the fuel, was waiting for a deal to be reached to start construction.
But eventually, under a deal signed last year, two pipelines either side of Mongolia could deliver up to 80 billion cubic meters of gas per year — almost double the amount the company sells to Germany, its top customer in Europe.
Moscow has agreed in principle to begin pumping gas to China through the west link in 2011 and by the east link in 2016, the country’s top energy official said this summer.
The first pipeline would be fed with output from western Siberian fields, Gazprom said last year. Gas for a second pipeline could come from Sakhalin and maybe the Kovykta field in East Siberia.
China has hedged against the slow-going Russian deal and upped pressure on Moscow by pushing for imports from Turkmenistan and Myanmar. CNPC, parent of listed PetroChina, has agreed to import an annual 30 billion cubic meters of gas, or 60 percent of the country’s total consumption last year, from Turkmenistan with the first gas flow targeted for as early as 2009.
Turkmen media reported in August that construction had begun on a 7,000-kilometer pipeline to take the fuel to China by 2009, bypassing its traditional export market of Russia.
In China, the gas will be fed through a pipeline linking the sparsely populated west with booming coastal regions, which can more easily afford to replace dirty-burning coal.
Beijing wants to more than triple the use of the cleaner fuel, which now provides barely 3 percent of China’s energy, to 200 bcm per year by 2020.
Its domestic output is growing by around 20 percent per year, but cannot meet demand and import deals have been hampered by price controls as international markets soared.

TITLE: Expat Promoting Russian Technology in the West
AUTHOR: By Emily Fertig
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — Thomas Nastas, a pioneer of venture capital in Russia and the founder of Innovative Ventures Incorporated, advises his aspiring colleagues to “expose yourself to as much randomness as possible.”
A glance at his resume shows that he lives by his word. Bouncing from small-town Michigan through Canada, Europe, sub-Saharan Africa, Kazakhstan and finally to Russia, Nastas has scraped together chance encounters, seemingly unrelated personal experiences, momentary opportunities and relentless energy to help develop Russia’s technology sector and introduce it into the economic fray of North America and Europe.
So how did Nastas get here? When asked about his origins, he holds up his hand — fingers together, palm facing out — and points out his hometown, a “tiny village” in the glove-shaped state of Michigan.
After earning a dual bachelor’s degree in engineering and advertising and an MBA from Michigan State University, in 1982 Nastas set up Innovative Ventures. His purpose was to help Fortune 500 companies diversify their products and enter new markets. It was an uphill battle at first: “One of the things I realized was that sometimes it’s easy to do the work, but it’s difficult to get the work.”
Perhaps Nastas has the Michigan government to thank for setting him on his path towards Moscow. Amidst the technology boom of the 1980s, Michigan funded attempts to jump-start the state economy by developing a tech sector similar to that of Silicon Valley or Boston’s Route 128.
Working as part of that initiative, Nastas said he “applied the concept of royalty-based financing” — he provided a company with funds in exchange for a portion of its revenues.
It didn’t take long for Nastas’ innovation to raise eyebrows in the financial community. The Canadian office of Boston-based Venture Economics soon advised him to take his royalty-based scheme to international markets.
Many developing countries had either inefficient capital markets or none at all. “So a big light bulb went on in my head, and I said ‘Hey, that’s a great idea, that’s a very sexy suggestion. But how do you go from Michigan to working internationally?’”
Soon after the lightbulb moment, Nastas took his scheme on the road. In 1992 he was hired as an adviser to the World Bank Group in Africa, where he set up three different funds. He entered the Commonwealth of Independent States a few years later as an advisor to USAID in Kazakhstan.
“It was a big shock to the system,” Nastas said of working in Kazakhstan. “I got exposed to working in that kind of an economy ... where everyone was basically being paid by barter mechanisms and there was very little cash flow going back and forth. How do you jump-start an economy in that kind of environment?”
Not one to settle for long, Nastas moved to Volgograd in April 1997 to serve as an advisor with H.P. Russia L.P. When his contract ended in 1999, he was recruited to join an investment management company in London, but this job unexpectedly fell through. He decided to come to Moscow and arrived in the city for the first time on Christmas day 1999, jobless.
“I knew one person in Moscow, my marriage was falling apart in America, the U.S. economy at that time was starting to see some bubble situations, I had no prospects, no infrastructure at that time, and the question is, what do you do?” Nastas said.
His solution was to set up a business-plan competition. He sought out Russian information technology and telecom entrepreneurs, trained them to pitch to international investors in English, and brought the two groups together for a two-day conference.
Recent highlights of Nastas’ work in Moscow include partnering with Shell Technology Ventures to evaluate Russian oil and gas technologies for venture-capital investment, and being elected to the board of directors of Sotsgorbank. He shares his business savvy with MBA students in Moscow’s American Institute of Business and Economics as well as the Pericles ABLE Project, which prepares young English-speaking Russians to enter Western MBA programs.
Nastas, who gives his age as “early 50s,” has taken to Moscow life easily.
“Culture and business-wise, this place is fine,” he said. “Some people come to Russia, and they absolutely hate it. That’s never been an issue for me.”
Alexander Dmitruk, chairman of Sotsgorbank, said Nastas “is creative, has initiative, and a desire to get ahead.”
“He always has new ideas and new offerings,” Dmitruk said. “We can’t predict him.”
To Westerners seeking to rise through the ranks of Russian business, Nastas said: “People always say find good Russian partners, and that’s true. Just find good partners. Things take longer than you would expect here. If you’ve got the patience and the long-term perspective, you can do very well here financially.”
Despite conventional wisdom, though, your network isn’t everything. “There’s always the saying ‘it’s not what you know, it’s who you know,’ but to a large extent who you know is a function of what you know,” he said. “Personal connections ... will probably get your foot in the door a little bit easier than in Europe or America, but ultimately it’s the value of the idea that gets you through the door.”

TITLE: Investors Begin To Cash In On Boom in Infrastructure Spending
AUTHOR: By Catrina Stewart
PUBLISHER: Staff Writer
TEXT: As Muscovites bundle up warm this week with the onset of winter, investors are still looking for exposure to this year’s big story, the government’s infrastructure spending.
President Vladimir Putin last week backed plans to plow $191 billion into the power and railway sectors, and $53 billion of that for transportation, by 2011.
But it is the metals sector that is tugging on investor sentiment, and since Putin first started talking in July about the government’s plans to sink lots of cash into the infrastructure of the country’s Olympic bid-winning city, Sochi, steel stocks have enjoyed an impressive run.
Renaissance Capital investment bank said Friday that the increased spending plans would be good for rail stocks and the suppliers of railways, particularly steelmaker Evraz.
“It’s not a massive amount of money,” said Tom Mundy, equity strategist at Renaissance. 
“But it’s certainly enough to draw attention to the story again. The key question is when will the companies actually see this filter down,” Mundy said.
While the bank identified a couple of transportation picks — Far East Shipping Co. and Rhythm — steel, and Evraz especially, remains the obvious entry card for most investors.
“If you are looking for access to the story, the steel sector is one of the few liquid stories you can play,” said Michael Kavanagh, a metals analyst at UralSib.
Goldman Sachs was similarly positive on the steel sector this week, reiterating its “Buy” recommendation on Severstal and initiating a “Buy” on Mechel, which has shot to the forefront of investors’ minds lately through some attractive coal acquisitions.
Evraz, which has a monopoly over steel supplies to the rail industry, might have been expected to rise on this wave of positive sentiment, but like the Russian market in general, its Global Depositary Receipts were trading down at $68.60 on Friday afternoon in London. And it is still some way off its October high of $83.50 per share.
James Fenkner, a managing partner at Red Star Asset Management, said metals stocks are beginning to look pretty expensive.
“Metal stocks have had a fantastic run,” he said. “Based on their financial ratios, they are not cheap. You have to believe in infrastructure growth.”
Indeed, analysts warned that steel stocks could be reaching the top of their run for now.
“We think the stocks have run pretty hard, and it is difficult to see a catalyst to take them to the next level from here at this stage,” Kavanagh said.
For the first time in several weeks, both the city’s exchanges showed losses over the week.
The MICEX fell 1.2 percent Friday to 1,833.28, closing 3.1 percent down on the week, while the RTS Index fell 1.3 percent Friday to 2,189.37 points, down 3.3 percent on the week.
Analysts said a combination of factors were in play, not least the falling oil price that has pushed down the liquid blue chip stocks.

TITLE: New Strike Scheduled at Ford Factory
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Ford Motor Company is ready to negotiate with the trade union at its plant in Vsevolozhsk in the Leningrad Oblast, if the workers do not strike, the company said in a statement distributed Friday. Workers said they do not trust the management of the plant and plan to strike in any case.
On Nov. 7 the trade union of Ford plant in Vsevolozhsk held a one-day “warning” strike. The workers demanded an increase in salary and the introduction of a new collective labor agreement. If their demands are not satisfied, the workers plan a permanent strike on Tuesday.
“The strike, which the trade union plans for Nov. 20, will not lead to the realization of their demands. The collective labor agreement signed at the beginning of this year will be in force until the end of February 2008,” said Teo Streit, director of the Ford plant in Vsevolozhsk.
“As for a new agreement, the management and the trade union should start discussing it on Nov. 26. We are ready for negotiations. But I have already said to the leaders of the trade union that the administration will not negotiate during a strike or under the threat of a strike,” Streit said.
In a telephone interview Monday, Alexei Etmanov, chairman of the trade union at Ford Motor Company, confirmed that the strike was due to start at midnight on Monday.
“We will start a strike tomorrow. We have been waiting for four months, since the end of July, but it’s all gone nowhere. The management of the plant has not cooperated with the reconciliation committee,” Etmanov said.
“Now they’re trying to win some time. On Dec. 15, the Christmas holidays will start. Then we will see no negotiations until mid-January. We have already seen that trick played before,” he said.
The management of the plant criticized the radical demands of the workers.
“The demands of the trade union, including a demand for an increase in salary of over 30 percent, are excessive. They need to be discussed in detail,” Streit said.
He said that the company had announced an increase in production. Ford plans to start producing a second car model, the Mondeo, at the Vsevolozhsk plant.
“We have stuck to our investment policy in Russia. But to realize it, we need a stable working environment and normal negotiations on a new collective labor agreement,” Streit said.

TITLE: Dussmann Quits St. Petersburg
PUBLISHER: The St. Petersburg Times
TEXT: ST. PETERSBURG — Peter Dussmann, a subsidiary of the German facility management company Dussmann, which used to service about 130 residential buildings in St. Petersburg, will quit the market as it faces debt claims from local authorities.
All the houses formerly serviced by Peter Dussmann will be auctioned off in January 2008. In the interim, the buildings will be handed over to state managing company Zhilkomservis, Regnum news agency reported earlier this month.
“Zhilkomservis will probably remain a facility management company for those houses. Several companies could take part in the tender,” said Konstantin Schmelev, head of Admiralteisky district, Regnum reported.
Peter Dussmann has serviced buildings in the Admiralteisky district since 2005.
The Admiralteisky district housing agency maintained that Peter Dussmann owed them 31 million rubles ($1.26 million) for electricity and water supplies.

TITLE: Report: Production Rises 8.9%
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Economic growth in St. Petersburg is based mainly on the development of processing enterprises, construction and retail, according to a report released Tuesday by the Committee for Economic Development, Industrial Policy and Trade (CEDIPT).
“From January to September of this year, intensive investment and construction and steadily increasing consumption of consumer goods provided economic growth in St. Petersburg,” said Alexei Sergeyev, chairman of CEDIPT.
In the first nine months of 2007, production in St. Petersburg increased by 8.9 percent compared over the same period last year. Combined turnover of St. Petersburg enterprises increased by 41.8 percent, up to about $90 billion.
Industrial growth, which was reported at 7.7 percent, was driven mainly by processing industries. Turnover of processing enterprises amounted to $14.6 billion, increasing by 27.6 percent.
Turnover of industrial construction enterprises increased by 18.1 percent up to $3.8 billion. The most spectacular growth was seen in the production of steel pipes, which increased tenfold, and rolled steel, which increased by 70 percent. Total production at metallurgy enterprises accounted for $1.9 billion, providing an increase of 50 percent.
Construction grew by 22 percent up to $5.9 billion. A total of 215 new buildings were completed (1.39 million square meters of residential property). Total housing stock increased by 39.6 percent.
Real per capita income increased by 8.2 percent up to $640. Nominal salary increased by 26.5 percent. In September, the average salary in St. Petersburg was $681 as opposed to $563 across all of Russia’s regions.
Retail turnover increased by 17.2 percent up to $12.8 billion. Consumer services increased by 8.3 percent up to $5.8 billion.
Investment into fixed capital increased by 3.4 percent. Foreign investment increased by 30.9 percent, up to $2 billion. By the end of 2007, Sergeyev expects foreign investment to amount to $6.3 billion. Last year foreign investment was reported at over $5 billion.
Several strategic projects have been approved by the city government recently. One of the largest producers of electronics, Foxconn, will invest $50 million into a new plant in St. Petersburg. Severstal will invest 8.556 billion rubles ($349.4 million) into reconstruction of a rolled metal plant in Kolpino. Magnitogorsky Metal Plant will invest three billion rubles ($122.5 million) into its production facilities in the city.
By Oct. 1, 2007, city budget profits stood at $8 billion, increasing by 37.8 percent compared to the same period last year. Profit tax provided 29.9 percent of the budget profits, income tax — 25.1 percent, property tax — 8.4 percent, excises — 4.2 percent, state property management — 14.6 percent.
Budget expenses amounted to $6.19 billion. However, that amounts to only 56.6 percent of the total expenses planned for this year. Communal and housing services consumed 28.9 percent of the budget funds, health care and sport — 19 percent, social programs — 12.2 percent, education — 17.2 percent, national economy — 11.9 percent.

TITLE: Khodorkovsky Gets Evidence Deadline
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — A court has set a tight deadline for Mikhail Khodorkovsky and his business partner Platon Lebedev to read the voluminous cases against them on money-laundering charges.
Defense lawyers said the move was an attempt to put the two jailed former Yukos owners on trial anew before March’s presidential election.
The court in the Siberian town of Chita, where Khodorkovsky and Lebedev await trial, ruled Friday that Lebedev must complete reading his case by Dec. 22. A day earlier, it set the same deadline for Khodorkovsky.
The men, who are both serving eight-year sentences on charges of fraud and tax evasion, have to read evidence against them in separate money-laundering cases. The initial, politically charged cases against them, brought in 2003, were widely seen as part of an effort by President Vladimir Putin to rein in the country’s oligarchs.
Prosecutors complained to the court earlier in the week that the defendants were trying to drag out the time before the trial by reading their cases too slowly and by refusing to study them on weekends, Interfax reported.
Each of the men has to read 130 volumes that together number more than 30,000 pages. They began reading the cases in February, but had a pause of two months because prosecutors were battling a Moscow court decision to move the defendants to Moscow for a trial.
Khodorkovsky has 70 volumes yet to read, more than he has read since February. Lebedev has 40 volumes remaining.
By hurrying the defendants, prosecutors could try to start the hearing before the presidential election, said lawyer Yury Shmidt, who represents Khodorkovsky.
Yelena Liptser, a lawyer for Lebedev, said she saw no reason in the urgency, adding that it was hardly possible to finish the reading by the deadline.
Lebedev will appeal while Khodorkovsky will not, their lawyers said.

TITLE: In brief
TEXT: <b>Fund IPO Delayed</b>
MOSCOW (Bloomberg) — Investment firm Prosperity Capital Management said Friday it has postponed the London listing of its New Russian Generation electricity fund, due to poor market conditions.
“The initial offering of ordinary shares in New Russian Generation Limited and its plan to list the ordinary shares on the London Stock Exchange will not take place in 2007 due to the current challenging market conditions,” it said in a statement. 

<b>Fund to Hike Pensions</b>
MOSCOW (Bloomberg) — Legislators approved budget amendments to allow the government to take as much as 138 billion rubles ($5.63 billion) from the nation’s oil fund next year to finance higher pensions, Interfax reported Friday.
The Federation Council voted Friday to allow the government to tap the National Welfare Fund to cover the shortfall that may result from higher pensions payments, the news service said. The basic state pension will increase by 300 rubles per month from Dec. 1, 2007. 

<b>$2Bln for Norilsk Nickel</b>
MOSCOW (Bloomberg) — Norilsk Nickel raised $2.14 billion from a share sale, the company said Friday on its web site.
Norilsk agreed to sell 7.5 million shares at $285 apiece to institutional investors and Morgan Stanley and Deutsche Bank managed the sale, the company said. The shares represent a 3.9 percent stake in Norilsk. 

<b>Fishing Restriction</b>
MOSCOW (Bloomberg) — The State Duma on Friday passed a bill banning foreign companies and ships from commercial fishing in the country’s waters, RIA-Novosti reported Friday.
Only companies registered in the country will be allowed to fish in Russian waters on a commercial basis. Foreign companies and foreign-owned boats are banned, the state news service reported, citing the fisheries law passed by the State Duma. 

<b>KamAZ Postpones</b> 
MOSCOW (Reuters) — Truck maker KamAZ said Friday it has postponed a 6.5 billion ruble ($266 million) bond issue originally planned for this autumn to 2008.
Asked when KamAZ might issue the bond, corporate finance department director Yelena Milinova said, “Not this year. Possibly next year, if more liquidity appears on the market.” 

<b>KamAZ Sets Goal</b>
MOSCOW (Bloomberg) — KamAZ will spend $2 billion over five years upgrading and expanding production to meet surging demand in its home market, Yelena Milinova, head of corporate finance, said Friday.
The truck maker plans to boost output next year to 65,000 vehicles, from an estimated 53,000 this year, she said. 

<b>OPEC Invite to Russia</b>
RIYADH, Saudi Arabia (Bloom-berg) —  Algeria’s Oil Minister Chakib Khelil said Friday he will urge Russia to join the Organization of Petroleum Exporting Countries when he becomes president of the group.
Russia’s membership “would be very good for OPEC,” Khelil said. Russia attends OPEC meetings as an observer. 
<b>Yugraneft Liquidator</b> 
MILAN (Bloomberg) — Sibir Energy, the oil producer controlled by Shalva Chigirinsky, said Friday that London’s high court named a liquidator for Yugraneft.
The court also granted powers to issue proceedings against tycoons Roman Abramovich and Boris Berezovsky, London-based Sibir said.  

<b>Oil Output Growing</b>
MOSCOW (Reuters) — Oil output will jump 5.2 percent between now and 2010, Industry and Energy Minister Viktor Khristenko said, The Wall Street Journal reported Friday.
The country will produce 10.4 million barrels per day (517.9 million tons per year) by 2010, Khristenko said. He previously said this year’s output would rise 2.4 percent compared with 2006 to 492 million tons. 

</b>Kalina Profit Up</b>
MOSCOW (Bloomberg) — Concern Kalina, the cosmetics manufacturer that controls the German Dr. Scheller brand, said on Friday that third-quarter earnings more than tripled after a factory sale improved profitability.
Kalina sold its detergent plant in the city of Omsk last year to bolster profitability. Net income jumped to $3.72 million from $1.18 million a year earlier, the company said. Sales advanced 21 percent to $81.7 million. 

<b>TMK Scaling Down</b>
MOSCOW (Bloomberg) — Billionaire Dmitry Pumpyanksy is willing to scale down his holding in TMK in the event of a merger, Vladimir Shmatovich, head of strategy for TMK, said Friday.

TITLE: Nord Stream To Be Assessed
PUBLISHER: Reuters
TEXT: HELSINKI — Applications for building the Russia-Germany Nord Stream gas pipeline under the Baltic Sea will be filed after the environmental impact assessment is finished next spring, a senior official at Nord Stream said Friday.
The participants confirmed last week that the project would enter service by the end of 2010, but the environmental impact assessment has taken longer than expected.
“We have the environmental impact evaluation ongoing and this will be finished during the spring,” Nord Stream permitting manager Sebastian Sass said Friday in Helsinki. “After that we will submit the applications.”
He said Nord Stream took additional investigation requests from the authorities very seriously, and added that the schedule for a start-up had not been changed.

TITLE: In brief
TEXT: <b>$100M Raven Venture</b>
LONDON (Reuters) — Raven Russia, a Guernsey-registered property firm, said Monday it had set up a joint venture to develop a 100,000-square-meter warehouse and logistics complex near Kiev.
Raven Russia, which is listed on London’s AIM market, has teamed up with conglomerate Asnova Holding to build the property, which is expected to have an end value of around $100 million and produce a net rental income yield of around 14 percent.
<b>Deripaska to Build Plant</b>
MOSCOW (Bloomberg) — Oleg Deripaska will build a plant near St. Petersburg to produce 2 million tons of cement per year, Vedomosti reported last week.
Deripaska’s Basic Element holding company will construct the plant at the Pikalyovo alumina refinery, owned by United Company RusAl, the newspaper said, citing unidentified people familiar with the plan.	
<b>Blavatnik Eyes NYC Hotel</b>
MOSCOW (Reuters, SPT) — Russian-born businessman Leonard Blavatnik has signed a letter of intent to buy The Mark Hotel on East 77th Street in New York for $150 million, The New York Post newspaper reported last week.
The three-story, 2,787-square-meter apartment has 7.9-meter-high ceilings, a library with fireplace, a gym and a spacious terrace with a rooftop pavilion.
But sources close to Blavatnik said no deal had been reached on a purchase for the property, ABC News reported Friday. 
Louise Sunshine, the hotel’s developer, and Blavatnik’s spokesman could not be reached for comment.
<b>Lafarge Buys Cement Mine</b>
MOSCOW (Bloomberg) — France’s Lafarge, the world’s biggest cement maker, paid 701 million rubles ($29 million) for the rights to mine cement rock in southern Russia as builders’ lack of cement drives up the cost of licenses, Vedomosti reported Friday.

TITLE: Basic Element to Ready IPOs
PUBLISHER: Bloomberg
TEXT: MOSCOW — Billionaire Oleg Deripaska’s Basic Element holding company, which controls the world’s largest aluminum producer and the country’s second-biggest automaker, said Friday it plans to have all of its units ready for initial public offerings within three years.
Individual decisions will be made on whether to go ahead with the sales once the units are prepared, Basic Element chief executive officer Gulzhan Moldazhanova said.
“We do have plans to bring all our companies into the market,” Moldazhanova said. Developments can be expected in the second half of next year and “you might be surprised” by which unit is offered first, she said.
Moldazhanova’s remarks suggested that the planned sale of shares in aluminum maker United Company RusAl may not be first. The company has said it plans to hold an IPO by March 2010 as part of an agreement between owners Deripaska, Viktor Vekselberg, Len Blavatnik and Swiss commodity trader Glencore International.
Basic Element expects to retain 50 percent of any unit that is listed and float on the stock market a stake of about 20 percent to 25 percent, Moldazhanovna said.
Deripaska has a fortune estimated by Forbes this year at $13.3 billion.

TITLE: Siemens Accused of Paying Millions in Bribes
PUBLISHER: Bloomberg
TEXT: Combined Reports
MOSCOW — German telecommunications giant Siemens paid 77 bribes totalling 12 million euros ($17.6 million) to officials in Russia, Nigeria and Libya, the Wall Street Journal reported Friday, citing an Oct. 4 Munich court ruling.
In Russia, 38 bribes totalling about two million euros went to senior managers at nearly two dozen regional state-controlled phone companies around the country, it said.
A Siemens employee identified only as Mennenga distributed the bribes to officials in Ryazan, Vladivostok, Samara, Yaroslavl and other Russian cities and regions, the report said.
The court concentrated on bribes from 2001 to 2004 connected with Reinhard Siekaczek, formerly a manager at the German company’s telecommunications equipment division. Siekaczek has been indicted on embezzlement charges and is likely to face trial early in 2008, the Journal said.

SPT, Bloomberg

TITLE: Ex-Wimm-Bill Dann Execs Set Up New Milk Venture
AUTHOR: By Robin Paxton
PUBLISHER: Reuters
TEXT: MOSCOW — Two former managers at dairy firms Wimm-Bill-Dann and Nutritek have left to set up a new milk venture, Russagroprom Holding, which will invest $550 million in the next five years buying land and producing milk.
Deputy general director Nikolai Dyachkov said the new firm would seek bank loans to finance a huge agricultural complex to supply a shortfall in the country’s milk market and that the company would consider an initial public share offering in three years.
“This year we will determine where to acquire land. The project could start as soon as May or June next year,” Dyachkov, the former chief executive of dairy and baby food company Nutritek’s agricultural business, said in an interview.
Milk powder prices have doubled this year in the country and bread prices have risen sharply in line with world grain markets, fueling inflation that is set to overshoot the government’s 2007 target of 8 percent.
Dyachkov’s partner in the project is Vladimir Alginin, a deputy agriculture minister from 1996 to 2002 and the former head of the agricultural division of Wimm-Bill-Dann, the country’s largest dairy and fruit juice company.
“In the space of five years, we intend to create one of the biggest agricultural holdings in Russia,” Alginin, the new company’s general director, said in a statement announcing the creation of Russagroprom.
Russagroprom plans to acquire about 250,000 hectares of arable land and to build a major complex to house at least 50,000 to 100,000 head of dairy cattle, which will allow for production of about 1,000 tons of milk daily.
Dyachkov said the firm would grow feed crops and was looking at sites in several central and western regions, including Kaluga, Penza, Tambov, Voronezh and Belgorod. The project could be built in several of these regions, he said.
Russia has named agriculture as one of four priority areas for development as it seeks to introduce modern technology and boost production that had slumped after the Soviet Union collapsed.
Dyachkov said Russagroprom, through its participation in the national project, would seek financing from state-owned banks, including Russian Agricultural Bank and Sberbank. He said an initial public share offering was possible in two or three years. “It will depend on how efficiently we realize our projects.”
Nutrinvestholding, the parent of Dyachkov’s previous company Nutritek, floated its shares in April.
Russia is suffering from a deficit of milk as dairy cattle numbers have slumped in the last few years, although they are now beginning to stabilize, Dyachkov said.
On a world level, India and China are now consuming more milk that might previously have been sold to Russia, while Belarus is supplying some milk to Venezuela that it previously shipped across the border, he said.
Russia’s top two dairy companies, Wimm-Bill-Dann and Unimilk, also have plans to expand milk production to meet the shortfall.

TITLE: In brief
TEXT: <b>CIT-Finance Stats Up</b>
ST. PETERSBURG (SPT) — CIT-Finance investment bank increased assets by 80.7 percent during the first ten months of 2007, Interfax reported Friday. Balance profit increased by 40.9 percent compared to the same period last year — up to 5.5 billion rubles ($224.5 million).
By the end of October the assets of the bank increased to 89.2 billion rubles ($3.64 billion). Net loans increased by 98.6 percent up to 65.77 billion rubles ($2.68 billion). Deposits more than doubled, increasing up to 63.3 billion rubles ($2.6 billion).CIT-Finance’s own capital increased by 55.3 percent up to 13.3 billion rubles ($543 million).

<b>Cars From Kaliningrad</b>
ST. PETERSBURG (SPT) — Kaliningrad based auto firm Avtotor plans an increase in production to  110,000 cars by year end, Interfax reported Friday.
Last year Avtotor produced 39,800 cars under KIA, BMW, Hummer, Chevrolet and Chery brands. This year the company could produce up to 112,000 cars by increasing the production of the popular Chevrolet and Chery models.

<b>Vagonmash Profits</b>
ST. PETERSBURG (SPT) — Vagonmash, a St. Petersburg based plant for the production of railway carriages, earned net profit of 40.65 million rubles ($1.66 million) in the first nine months of 2007, contrasting with a net loss last year, Interfax reported Friday.
Revenue was reported at 1.5 billion rubles ($610 million), production costs  at 1.3 billion rubles ($530 million) and profit before taxes was 52.26 million rubles ($2.13 million).

TITLE: A World of Runaway Energy Demand
AUTHOR: By Martin Wolf
TEXT: The increase in China’s energy demand from 2002 to 2005 was equivalent to Japan’s current annual energy use.”  This nugget of information, buried in the International Energy Agency’s latest “World Energy Outlook” study tells one almost all one needs to know about what is happening to the world’s energy economy. 
Neoclassical economics analyzed economic growth in terms of capital, labor and technical progress. But, I now think, it is more enlightening to view the fundamental drivers as energy and ideas. Institutions and incentives provide the framework within which the development and application of useful knowledge transforms the sunlight on which we depend into the stream of goods and services we enjoy. 
This is the world of abundance that China and India are now joining. Nothing short of a catastrophe will stop them. For the pessimists, however, particularly climate-change pessimists, catastrophe will follow. What is certain is that the challenges ahead are huge. 
Here are a few highlights of the new report: 
•If governments stick with current policies, the world’s energy needs will be more than 50 percent higher in 2030 than today, with developing countries accounting for 74 percent — and China and India alone for 45 percent — of the growth in demand. 
•This huge increase in overall demand will occur even though the energy intensity of gross world product falls at a rate of 1.8 percent a year. 
•World oil resources are sufficient to meet demand at prices close to $60 per barrel (in 2006 dollars). But the share of world supply coming from members of the Organization of the Petroleum Exporting Countries will rise from 42 percent to 52 percent. 
•China will become the world’s largest energy consumer, ahead of the United States, shortly after 2010. 
•Under the reference scenario, emissions of carbon dioxide will jump by 57 percent between 2005 and 2030. The United States, China, Russia and India alone will contribute two-thirds of this increase. China will become the world’s biggest emitter this year and India the third largest by 2015. 
The rest of the world, then, wishes to enjoy the energy-intensive lifestyles that have hitherto been the privilege of less than a sixth of humanity. This desire does, however, have big consequences for the world’s economic, strategic and environmental future. 
The obvious economic question concerns future prices. Today, the price of oil, deflated by the unit value of exports from the high-income countries, is the highest it has been since the beginning of the 20th century. Barring big technological breakthroughs in energy supply or unexpectedly large finds of oil and gas, energy would seem likely to remain relatively expensive. 
Yet, to many, a surprise of the 1980s was how much supply finally came on stream and how low demand growth became after the price shocks of the 1970s. Might such an adjustment happen again and, if so, how quickly? Or should we regard the combination of fast-growing, giant emerging economies and the dominance of national energy suppliers as fundamentally different? 
The big strategic questions concern energy security and the shift in the balance of power toward unattractive regimes, whether they are Vladimir Putin’s Russia, Hugo Chavez’s Venezuela, Mahmoud Ahmadinejad’s Iran or the House of Saud’s Arabia. 
The shift in the balance of power occurs in two ways. First, a growing proportion of the fuels vital for what we now think of as civilized life come from just a few, not necessarily friendly, suppliers. Second, these countries are becoming vastly richer. Thus, OPEC revenues are forecast to triple (admittedly, in depreciating dollars) between 2002 and this year. 
The challenge to security comes partly from the difficulty of replacing oil as a transport fuel. Thus, the concentration of likely supply in the Middle East is, inevitably, a concern. So, too, is Europe’s growing reliance on Russian gas. 
Concerns over energy security also come from the potential for competition for supplies among the big consumers. The sensible approach is to rely on the market. But that may be hard when prices shoot up. At some point, U.S. politicians may ask why Washington expends blood and treasure in order to achieve security in the Middle East for the benefit of China. True imperialism — the attempt to seize energy resources for one’s own benefit — would be a ghastly error. But to err is all too human. 
Finally, we have global warming. Three points shine out on this. First, despite the blather, nothing effective has been done or yet seems likely to be done. Second, effective policy will require big changes in incentives across the globe, including, not least, in the large emerging economies. Third, dramatic changes in technology will also be required, the most important of which will be towards carbon-capture-and-storage at coal-fired power plants. 
What is the bottom line? It is simple: Commercial energy is the staff of our contemporary life. As demand for energy rises, nothing is more important than ensuring increased supply and efficient use, while curbing environmental damage. Today’s high prices are a start. Fundamental innovation and high prices on greenhouse gas emissions must follow. 

Martin Wolf is a columnist for the Financial Times, where this comment appeared.

TITLE: Becoming a Motor of the Global Economy
AUTHOR: By Martin Gilman
TEXT: The International Monetary Fund’s latest annual report on Russia describes a remarkable trajectory no less exceptional than that of post-World War II Germany or Japan.
Russia’s contribution to world growth, in terms of purchasing power parity, will be half as large as that of the entire European Union and much higher than Japan’s or Brazil’s, the report says.
“Russia’s macroeconomic performance continues to impress. Much is owed to high oil prices and large capital inflows but also to good economic management. Most important in view of the dependence on oil prices, the stabilization fund is providing a notable measure of stability,” the report says.
The IMF goes on to underscore the factors behind this success: “High oil prices and sound fiscal policy underlie Russia’s long spell of robust growth.”
It attributes this growth to the country’s still considerable catch-up potential, as resources are reallocated to more dynamic sectors in the economy. “The resulting nexus of strong productivity growth, rising real incomes and higher consumption has been a key source of self-sustaining growth, especially in recent years as capacity constraints have slowed energy exports,” it says.
Indeed, the IMF explains that gross domestic product growth has strengthened and become better balanced. But it goes on to note that although the ruble is still undervalued in real terms, competitiveness is eroding.
The IMF also confirms that Russia’s external vulnerability is low by most measures. It is as if Finance Minister Alexei Kudrin and Central Bank chief Sergei Ignatyev, having taken the lessons of the 1998 financial crisis to heart, have ensured that the country has impeccable security provisions and margins of safety.
With foreign exchange reserves now at almost $450 billion, Russia’s reserves stand at 400 percent of short-term debt, which is higher than any emerging-market economy except for China and India. And in terms of another indicator of precaution — reserve coverage relative to broad money, or money supply including ruble bank deposits — Russia has the highest of all emerging-market economies at about 80 percent; China and India are at about 25 percent.
Of course, the IMF has its concerns, most of which seem justified. These pertain chiefly to the relatively low level of investment, the uncertainty in the investment climate, the back-loading of spending cuts in the medium-term fiscal plan and the need to remove legislative and regulatory obstacles to the future development of the financial sector.
But the IMF’s major preoccupation is inflation — and with good reason. The IMF observed that the decline in inflation halted after March; it was cut in half from almost 14 percent in April to 7.4 percent in March. In fact, since the IMF report was issued, the inflation situation has deteriorated.
Inflation rose last month by 1.6 percent, which brings the 12-month inflation rate to 10.9 percent. Food inflation was 3.3 percent in October (13.5 percent for the 12-month period). The price surge can be partially explained by the exceptionally large increases for some food products: In October alone, vegetable oil rose by 26.3 percent and butter by 12.7 percent. Global food-price inflation is of course outside the control of the authorities and presents a worldwide challenge.
Food-price growth, however, is not the only reason for the acceleration in inflation. For instance, the services price index has risen even faster over the 12-month period.
As much as the Central Bank would like to place the blame on world agriculture, they cannot ignore Milton Friedman’s insight that “inflation is always and everywhere a monetary phenomenon.” Generally, the price level cannot rise unless fed by an accommodating monetary policy.
Sure enough, monetary policy has been lax with negative real interest rates, and money supply has been explosive: Ruble broad money rose by 52 percent in the year to the end of October.
Consistent with classical monetary theory, the IMF is convinced that rapid appreciation of the nominal ruble is the only available tool for disinflation. Although, in principle, there is a tradeoff between control of the money supply and a relatively fixed exchange rate, in fact, it may not be so simple. The problem is that guaranteed ruble appreciation encourages capital inflows, including foreign borrowing, which, in turn, accelerates money supply growth. Unlike the oil trade surplus, these inflows are not sterilized into the stabilization fund.
This is exactly what happened when the Central Bank inadvertently encouraged a massive increase in capital inflows by stating its view that the ruble should strengthen, which effectively created a “one-way” bet by speculators. The accelerated money-supply growth clearly created inflation potential and turned into an actual acceleration of inflation in the period from August to October, triggered by higher global food prices.
The law of unintended consequences thus asserted itself as the Central Bank’s policy of ruble appreciation effectively helped “import” the current bout of inflation. The IMF, in recommending that “keeping inflation on target would require returning to a more flexible exchange rate,” has no easy remedy for avoiding a feeding frenzy by speculators on an appreciating ruble.
That said, it would be hard to argue with the IMF and others that the ruble is set to appreciate in the long term, certainly in real terms. The question is how fast and whether nominal ruble appreciation is desirable in view of the one-way bet problem. After a hiatus in the third quarter owing to global financial market tensions, renewed capital inflows are again fueling reserve growth. And this will continue to translate into loose monetary conditions.
Clearly this is unsustainable, and the Central Bank will have to adjust its policy to control the surge in inflation soon. We have already seen a sharp drop in the dollar in recent weeks in ruble terms, while the euro strengthens. Eventually, the Central Bank will have to introduce more flexibility into the ruble around an appreciating trend. The IMF is unlikely to be satisfied by the pace.
Overall, the IMF assessment of Russia is almost overly positive, attributing perhaps too much importance to internal factors. Of course, things could go wrong, but this is unlikely since the new government has been strengthened recently with the addition of several smart and competent ministers.
The more likely major influence in the next couple of years will be from outside, where a more volatile and recessionary global economy could upset even the best plans of a government trying to pursue growth in the context of financial stability.

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

TITLE: Freedom Is a Wonderful Thing
AUTHOR: By Andrei Illarionov
TEXT: When Milton Friedman died one year ago on Nov. 16, the world was inundated with remembrances and reflections of the most influential economist of the last century. “There are many Nobel Prize laureates in economics,” former U.S. Federal Reserve Chairman Alan Greenspan once said, “but few have achieved the mythical status of Milton Friedman.”
The world lost a great economist and, as most obituaries emphasized, the world lost a great American economist. Why the emphasis on American?
Of course, a genuine scholar does not belong to one country but to all of mankind. In the world of academics and science, there are no national borders. Nonetheless, the host country of an outstanding academic gains a unique victory. This has less to do with “national pride” than it does with the contribution the extraordinary scholar makes to his home country — to his colleagues and students, to the general exchange of ideas and to society as a whole.
In theory, Friedman could have become a Russian economist if his parents, who were born in the small Carpathian Ukrainian town of Berehove, did not emigrate to the United States at the end of the 19th century, but instead ended up in the former Soviet Union. History, of course, is written in the past tense only. But it is nevertheless interesting to pose the question, “Could Friedman have worked the same wonders in Russia?”
The honest answer to that question is disappointing. In the last century in the Soviet Union and Russia, there was virtually no chance for some of the world’s greatest creative minds to survive, develop and prosper. Although the factors that decide who will be a genius are not written in stone, there are certain objective criteria that are necessary for a person to develop his talents: good family, quality education, challenging work, an intellectual circle of friends and colleagues, the ability to travel and to share knowledge with foreign colleagues, the ability to express one’s opinion freely, an open exchange of ideas and society’s general recognition of the scholar’s talent and achievements.
It would be difficult to overstate the principal difference between the study of economics in the United States and in the Soviet Union. Even in the late 1970s and early 1980s, an economics professor who wrote a study on a seemingly harmless subject like price determination, for example, could have easily been fired. Thus, Friedman’s study of the nature of money and its significance would have definitely meant, at a minimum, that he would have been banned from his profession — or much worse. Friedman’s passionate preaching of the virtues of free-market economics, liberal democracy, personal freedom, as well as his opposition to the military draft, would have been classified in the Soviet Union as anti-government or even traitorous behavior.
It is difficult to fathom what colossal intellectual resources were destroyed in the Soviet Union and Russia because of the fundamental lack of freedom in society — including the inability to think and express one’s opinions freely.
There are huge differences between Russian and Soviet economists and their U.S. counterparts. This concerns not only the difference in pay, or access to scholarly literature and professional contact with other economists, which are some of the most important components of what constitutes intellectual freedom. U.S. economists also have had higher life expectancy than their Soviet and Russian colleagues.
It is also not surprising that since 1969, of the 61 laureates of the Nobel Memorial Prize in Economic Sciences, 47 are from the United States, and only one is from the former Soviet Union. Of the 18 laureates of the Nobel Prize in Economics who moved permanently to a new country from their place of birth, 15 of them moved to the United States, and several left countries such as Britain, Germany, France and Italy. Two of these laureates, Russian-born Simon Kuznets and Vasily Leontyev, emigrated to the United States, which probably saved their lives. This, one could say, is a vivid example of leading global scholars “voting with their minds and feet” by moving to a country that offered the type of intellectual freedom necessary to prosper.
There is another side to the issue of freedom: the contribution that scholars make to the development of the country to which they emigrated. Of course, this contribution is made not only by Nobel laureates, economists or other scholars, but also by every new immigrant. Whoever these immigrants are, whatever they do professionally, in the overwhelming majority of cases, they make a direct contribution to their new country of residence, making the nation even more free, wealthy and successful.
At the end of the 19th century, when Friedman’s parents made their journey from provincial Ukraine to Brooklyn, Russia’s population (based on the territory of the modern-day Russian Federation) was 66 million people, which was 3 percent lower than that of the U.S. population of 69 million. In 1912, when Friedman was born in the United States, the difference in population between the two countries had grown to 8 percent. In 2006, when Friedman died, the population gap was more than 52 percent — 142 million people in Russia versus 298 million people in the United States. The yawning gap is even more pronounced in economic indicators. In 1894, Russia’s gross domestic product was 39 percent of the U.S. GDP. In 1912, it had dropped to 26 percent, and in 2006, Russia’s GDP had dropped even more to 13 percent of the U.S. GDP.
Of course, free countries are not free of their own problems. They also have crises and catastrophes. Their elected leaders also make serious mistakes and commit crimes. But in contrast to autocratic countries, in free countries serious problems are not ignored or swept under the carpet. As a rule, opposition politicians, the mass media and civil society as a whole in free countries investigate problems like the misuse of power or corruption, and they take concrete measures to correct them. Mediocre and incompetent leaders are usually swept out of office in elections. And in those cases when politicians and bureaucrats are found criminally negligent or liable, they most likely will end up in prison. But in authoritarian countries, government officials are rarely held accountable.
Freedom is a wonderful thing, whether it is economic, political or intellectual in nature. Citizens who are able to work in a liberal and free environment — where the rule of law is an unbiased regulator and guarantor of stability, fairness and open competition — are able to create tremendous tangible and intellectual wealth. It is sometimes hard to fathom how much wealth is created in free societies. Authoritarian societies, on the other hand, can never produce as much wealth as free societies, regardless of their rich natural resources, the number of nuclear missiles or the amount of hard-currency reserves in their central bank. In authoritarian countries, there is monopoly control of information and power, but it is not sufficient to create wealth through violence, fear or terror. Slavery — whether it is economic, political or intellectual — is doomed historically to chronic backwardness.
I once asked Friedman and his wife, Rose, who is also a leading economist in her own right, if they would have had the same views on individual freedom and free-market economics had they lived in Russia.Their answer was a firm no. Every time I think about their answer, my rational side coldly recognizes the fact that Rose and Milton Friedman were correct. Had they tried to live their professional lives in the Soviet Union, their unique talents — and perhaps their lives — would have been lost.
When Friedman’s parents arrived in the United States, his mother, Sara Landau, started to sell goods at a tiny shop outlet. No one asked her about her previous citizenship as a condition for employment. In Russia, however, authorities have recently placed quotas on employing “non-native” nationalities in retail trade. The most serious problem in modern-day Russia is neither the lack of investment or the “resource curse.” Its most fundamental problem is that there are few places for people. This is true not only in universities, which could be producing new Nobel laureates, but it is even true for would-be laureates’ parents, who are seeking work in open-air markets.

Andrei Illarionov, former economic adviser to President Vladimir Putin, is president of the Institute of Economic Analysis and a senior fellow at the Cato Institute.

TITLE: Deciphering Both Sides Of Sarko the American
PUBLISHER: The New York Times
TEXT: The picture of a French president who jogs, vacations in New Hampshire and even seems comfortable around U.S. President George W. Bush is so unusual that it has earned Nicolas Sarkozy the nickname of Sarko the American. That, along with France’s toughened stand against Iran’s nuclear appetites, won Sarkozy bipartisan applause in Washington this month. 
It is certainly a relief to have a French leader who wants to improve relations with the United States. The two countries have plenty of common interests, including fighting terrorism, keeping Iran from developing nuclear weapons and nurturing democracy in Lebanon. 
Washington and Paris still differ on other issues, though more amicably. Sarkozy sees no military solution for Iraq, and he would like Washington to do a lot more to address the serious dangers of global warming. 
On both, Sarkozy clearly has the better arguments. When it comes to trade and the future of the European Union, he just as clearly does not. 
Last week, days after his return from Washington, Sarkozy addressed the European Union Parliament, where he offered a worryingly old-style French program for building protectionist walls around an economically and demographically exclusive Europe. His approach would discriminate against foreign companies and Third World farmers. And, as he has previously made clear, he will do all he can to keep Turkey out of the European Union. 
Many Europeans, like many Americans, feel threatened by globalization. But the challenge can’t be met with Sarkozy’s misconceived ideas, including designating threatened European companies as nationally backed contenders and giving them special legal and economic privileges. That approach will see sheltered European firms fall even further behind newer and more efficient competitors from India, China and elsewhere. 
The costly European system of agricultural subsidies that Sarkozy favors rewards France’s shrinking pool of farmers, at the expense of other French and European taxpayers, while punishing Third World economies and adding to the streams of desperate illegal immigrants that so alarm Sarkozy and other European conservatives. On Turkey, Europe can encourage the development of a democratic and prosperous Muslim partner and neighbor — or force a spurned Turkey to look for other friends like Iran, Russia or China. 
It would be nice to welcome a new U.S.-France alliance. But first, Sarkozy will have to resolve the conflict between his enlightened trans-Atlantic overtures and his narrow protectionist vision for Europe. 

This comment appeared as an editorial in The New York Times.

TITLE: Putin’s Deceptive Adoration
AUTHOR: By Alexei Bayer
TEXT: Josef Stalin, Nikita Khrushchev and Leonid Brezhnev are riding in a train when the engine suddenly stalls. Stalin has the engineer shot. The train doesn’t move. Khrushchev posthumously rehabilitates the engineer, but the train still doesn’t move. Brezhnev then draws the curtains and says: “Good. We’re moving.”
This Soviet-era joke reveals the enduring surrealism of Russian society. You can easily imagine everyone on the train falling in with the charade, checking the schedule to see when the next station is due, commenting on the passing scenery and praising the special nature of Soviet motion.
When I was growing up, the founder of the Soviet state was presented to us as Grandpa Lenin — a kind, gentle and all-knowing sage. Yet, Lenin was just 47 years old when he seized power in November 1917 and died before his 54th birthday.
Compare him to another Vladimir — Putin — who, curiously enough, became Russian president at the same age. When Putin turned 55 in October, the main theme of the celebrations was his image as a man of action. He seems proud of his muscular torso and, like Mussolini, has been known to bare it before the camera. None of that kind, gentle Grandpa-Putin stuff for the current president.
With prominent Russians — ranging from State Duma deputies of various political hues to athletes and artists — calling on Putin to stay in power, constitutionally or not, there is a good chance that hale and healthy Putin could rule Russia for the next three decades. This is certainly what his critics dread.
In fact, there is little reason to doubt that he will leave office in the same way as the overwhelming majority of his predecessors — in a casket. There is no effective opposition to his one-man rule and no popular discontent capable of spilling onto the streets, a la Tbilisi or Kiev. Property and cash flows have been divvied up among the elites, who see Putin as guarantor of stability, continuity and the preservation of their property. He is protecting the elite from outsiders who would love to have a turn at the feeding trough. In addition, Putin is trying to prevent one overly greedy clique from grabbing too much wealth, thus protecting the elite from infighting among themselves.
In Russia, there can be plenty of continuity, drift and stagnation. A Stalin or a Brezhnev could rule forever. But what seems in short supply is certainty, and, like Khrushchev, any ruler may get the boot in a blink of an eye.
I have often wondered why so many prominent Russians have been willing to sing patently insincere, Soviet-style hosannas to Putin. In Stalin’s times, you did so because you feared for your own life and for the safety of your loved ones. Even under Stalin’s successors, expressions of loyalty could be forgiven because the party routinely stripped the unreliable of their positions, privileges and even livelihoods.
But not today. These are wealthy, self-assured people. They have large fortunes salted away abroad. Their children, almost without exception, have studied in the West and often live there. In a worst-case scenario, they too could emigrate and enjoy safe, comfortable lives. Nor are self-abasing public oaths of fealty de rigueur in Putin’s Russia — at least not yet. Still, they can’t help themselves.
Putin might revel in these expressions of love and admiration. I hope for his sake he doesn’t take them too seriously. This is Russia, after all. Tomorrow, without drawing a breath, the same chorus might shift their flattery to Prime Minister Viktor Zubkov, First Deputy Prime Minister Dmitry Medvedev, Chechen President Ramzan Kadyrov or anyone else.
When Khrushchev fell, official adoration building up around him ended overnight. Instead, a dirty doggerel began making rounds: “What a nasty surprise / How could we have been so gullible / For a full decade we’ve been kissing a backside / But it apparently was the wrong one.”

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

TITLE: Putin’s Multiparty System
AUTHOR: By Neil Buckley
TEXT: Russia, say supporters of President Vladimir Putin, must find its own way to democracy. The country needed strong rule to recover from the chaos of its 1990s dash to the market. Its vastness, cultural diversity and complex history mean it cannot transplant overnight a fully functioning copy of U.S., French or British democracy. Cut us some slack, say Kremlin spin doctors. 
The arguments have some merits. Yet watching the run-up to the country’s State Duma elections on Dec. 2, it is becoming ever more difficult to take them at face value. 
Russia’s last elections, four years ago, were heavily stacked in favor of United Russia, the dominant pro-Kremlin party, in terms of access to state media and official support. But parties and individuals who wanted to take part could generally do so. With half the 450 seats elected from single-member constituencies, about 100 went to smaller-party or independent candidates. 
This year’s elections, by contrast, are sliding toward the standards of authoritarian neighbors such as Belarus or Kazakhstan. Friday’s decision by the Organization for Security and Cooperation in Europe to cancel its observer mission after Russian foot-dragging and lack of cooperation is testimony to this. 
Much has changed since 2003. Russia has made legal requirements for parties so tough (50,000 members even to register; 200,000 signatures to contest elections) that the Kremlin can, in effect, choose its opponents. Among more than half a dozen parties excluded is the Republican party, led by Vladimir Ryzhkov, a young, liberal Kremlin critic elected as an independent last time. 
A shift to full proportional representation means Ryzhkov will not get in this time; candidates outside approved parties cannot run. Russia has also raised the minimum voting share to win seats from 5 percent to 7 percent. If United Russia wins an expected two-thirds majority, even many well-established parties — like the 1990s-era liberals, Yabloko and Union of Right Forces — will struggle to get 7 percent. The result may be a two-party parliament with only the rump Communists opposing an overwhelming pro-Kremlin majority. 
Putin’s supporters defend the rule changes as strengthening party politics. Tough registration requirements, they say, prevent the merry-go-round of tiny parties seen in the 1990s. But Russia’s rules are stricter than in most, even undeveloped, democracies. Its voting threshold for seats in parliament is also higher than most other countries’, except Turkey’s 10 percent — though Turkey permits independent candidates. 
Assuming half of Russia’s 100 million voters turn out, a party could poll nearly 3.5 million votes and win no seats. Opposition parties report the kind of dirty tricks seen in other former Soviet republics, from mysterious cancellations of meeting venues to confiscation of campaign literature. The Union of Right Forces said this month police seized 14 million copies of its manifesto to check whether it violated laws against “extremism.” Kasparov and others have been pursued using the same laws. 
The pullout of OSCE observers means what is generally seen as the most authoritative election monitoring organization will not be in Russia to chart this. The Kremlin had already said it would slash the total number of international observers by three-quarters, and the OSCE contingent from 450 to 70. When it found itself still waiting for visas barely two weeks before the polls, it decided on Friday to pull the plug. 
The irony is that Putin’s sky-high popularity means United Russia — whose candidate list he is heading — could almost certainly win free elections subjected to full scrutiny. Much of what is happening now seems a response to Ukraine and Georgia’s “colored” revolutions. The Kremlin sees those as coups engineered by an unholy alliance of Western observers, diplomats, security services, non-governmental bodies and exiled Russian “oligarchs,” eager to do the same in Russia. 
In those cases, however, unpopular regimes attempted to retain power by rigging elections — not the story in Russia today. Even the Kremlin’s staunchest critics do not believe widespread poll-rigging is needed to ensure victory for the pro-Putin party. 
Putin told visiting foreign experts in September that he was committed to creating a “multiparty system” and “normal political parties.” If he does remain the country’s guiding figure, he may one day fulfill that pledge. But Russia’s 2007 Duma elections seem an odd and inauspicious way to start. 

Neil Buckley is the Moscow bureau chief of the Financial Times, where this comment appeared.

TITLE: Jimmie Johnson Successfully Defends Nextel Cup
PUBLISHER: The Associated Press
TEXT: HOMESTEAD, Florida — After 10 months, 36 races and endless questions about defending his Nextel Cup championship, Jimmie Johnson could finally relax.
“South Beach, here we come,” said Johnson, who promised to “watch the sun come up and smile.”
Another title was his, and he was going to savor it, too.
Johnson became the first driver to win consecutive championships since Jeff Gordon in 1997 and ‘98, wrapping up the title by finishing a trouble-free seventh in the season finale at Homestead-Miami Speedway. Matt Kenseth won the race.
When it was over, Johnson and crew chief Chad Knaus were already thinking about a third.
“We’re just really hitting our stride,” Johnson said. “I think that we have a lot of good years ahead of us and we’ll be fighting for more championships and certainly winning more races as the years go by, and hopefully be a three-time champion in the near future.”
This Sunday drive was a coronation, and Johnson knew it. Deep down, so did everyone else, too. NASCAR is changing eras next season, but the Johnson era atop the sport is just getting started.
Team owner Rick Hendrick was along for the ride when Gordon ruled the sport, and said it’s clear this is Johnson’s time now.
“Jimmie’s just getting better and better, phenomenal,” Hendrick said. “He’s as determined as anybody I’ve ever seen sit down in a race car. I don’t see anything that’s going to slow Jimmie down. I hope that we can keep it together. We can do some phenomenal things in the future.
“Can we get 10, guys?” Hendrick asked, looking at Johnson and Knaus. “OK, we’re going to get 10.”
Johnson came into the event with a cushy 86-point lead over Gordon, his friend, mentor and teammate at Hendrick Motorsports. Although Johnson only needed to finish 18th or better, he refused to play it safe and Knaus gave him a pole-winning car.
Johnson led the first lap to earn a quick five-point bonus, then settled in for the 400-mile ride into the record books. At a time when no single team is supposed to dominate, the No. 48 crew did just that in leading Johnson to 10 victories and a stout 5.0 average finish during the Chase for the championship.
It put it out of reach for Gordon, who was hoping to add a fifth Cup title to his dream season. He became a father in June, won six races and his fourth-place finish Sunday was his NASCAR-record 30th top-10 finish of the year.
“It’s an awesome year, but you know what? We wanted to win a championship and we got beat,” said Gordon, who pulled alongside Johnson for a celebratory nudge and pumped his fist in excitement during Johnson’s burnout.
Gordon was also terrific in the Chase, winning twice and averaging a 5.1 finish. Yet it wasn’t enough against Johnson, his hand-picked teammate who wound up surpassing him as the sport’s dominant driver.
Johnson became the first driver since Gordon to win double-digit races, four in a row and the consecutive titles. His 77-point victory margin was the largest in the four years of the Chase.
“I’ll be honest, I really thought that as aggressive as they were being, it was going to bite them,” Gordon said. “I guess I was just a little bit too confident in the old consistency thing. ... Man, if they didn’t pull it off. That’s how good they are.”
It was a far different approach from last year, when Johnson fretted over everything, especially the outcome. He had lost the championship in 2004 and 2005, and the stress of it made him unable to relax.
“Losing those two championships taught us a lot. It was painful,” Johnson said. “And there were points there where we went back, looked at it and tried to adjust. And it’s led to these two championships.”
Finally winning last year chilled him out, and the California kid had a “no worries” attitude during the entire Chase. He packed a quick trip to Mexico into his schedule two weeks ago, spent time hanging out in New York City and even made plans for his championship party a week in advance.
“After what I experienced last season and coming into this season, and even this night, it just went so much smoother for me,” he said. “I was in the right frame of mind, was focused on the right things. I had great support from the crew guys, great support from my loving wife and everything came together. We’re rocking.”
The attitude was infectious for the entire team.
Before the Super Bowl in South Florida nine months ago, Colts quarterback Peyton Manning said he slept for 12 hours the night before the game, and knew that was a good sign.
Same thing here. This was Johnson’s Super Bowl, and his team couldn’t have been more relaxed.

TITLE: British Royals Mark 60 Years Together
AUTHOR: By Paul Majendie
PUBLISHER: Reuters
TEXT: LONDON — Queen Elizabeth, the first reigning British monarch to celebrate a diamond wedding anniversary, marked the milestone on Monday with a service of thanksgiving alongside her husband Prince Philip.
The royal octogenarians, whose family have been buffeted by a string of scandals, divorces and tragedy, retraced their steps up the aisle of Westminster Abbey to hail 60 years of marriage.
The family’s German relations were not invited to their 1947 wedding because of strong anti-German feeling in Britain after World War Two. This time they were on the guest list.
The 2,000-strong congregation included playwright Tom Stoppard and opera singer Joan Sutherland, as well as four other British couples also celebrating diamond wedding anniversaries.
The service was staged the day before the actual anniversary — Nov. 20. On Tuesday, the royal couple will mark the day by flying to the Mediterranean island of Malta where Prince Philip was serving as a naval officer at the time of their marriage.
The wedding of Elizabeth, who had been in love with Philip since she was a child, offered a rare burst of colour and pageantry in an austere post-war world of rationing and shortages in Britain.
On her wedding day, the 21-year-old princess wore an ivory silk Norman Hartnell gown decorated with 10,000 seed pearls.
In sharp contrast to their own marriage, three of the royal couple’s four children have divorced.
Prince Andrew, the queen’s second son, said in an interview last week that his own divorce from Sarah Ferguson had disappointed his parents who firmly believe in the “old-fashioned idea” that marriage is a partnership for life.
The 81-year-old monarch and her 86-year-old husband were greeted at the doors of Westminster Abbey by a fanfare of trumpets. Five choristers who sang at their wedding as schoolboys carried candles in the anniversary procession.
Archbishop of Canterbury Rowan Williams, spiritual head of the world’s 77 million Anglicans, praised the royal marriage as a faithful and creative partnership lived “in the full light of publicity.”
“We are probably more aware than ever these days of the pressures this brings and the costs it involves,” he said.
“Before we complain too loudly about a world of disposable relationships and short-term policies, a world of fracturing and insecure international bonds and the decline of trust, we should remember today that we have cause for thanksgiving.”
Among those who gave readings was Oscar-winning actress Judi Dench, who recited a poem by Poet Laureate Andrew Motion, and Prince William, the queen’s grandson.

TITLE: Supreme Court Clears Challenges to Musharraf
AUTHOR: By Kamran Haider
PUBLISHER: Reuters
TEXT: ISLAMABAD — Pakistan’s Supreme Court, packed with government-friendly judges since the imposition of emergency rule, dismissed on Monday the main challenges to President Pervez Musharraf’s re-election last month.
Once the court clears Musharraf’s Oct. 6 victory, he has promised to step down as army chief and be sworn in as a civilian president as soon as possible.
A bench of 10 judges struck down the five main challenges to Musharraf’s right to have contested the election while still army chief. The sixth and final petition will be heard later this week.
“One is pending and it will be heard on Thursday,” Attorney-General Malik Qayyum told Reuters.
Musharraf’s main aim in assuming emergency powers was to purge the Supreme Court of judges he feared were about to annul his re-election as president.
On Sunday Musharraf said he was asking the Election Commission to call a parliamentary election on Jan. 8.
“Inshallah [God willing], the general elections in the country would be held on Jan. 8,” the official Associated Press of Pakistan news agency quoted Musharraf as saying late on Sunday.
But he gave no date for lifting the state of emergency, despite U.S. pressure over the weekend to put nuclear-armed Pakistan back on a democratic track.
Negroponte warned Musharraf on Saturday that the election’s credibility would suffer unless the state of emergency announced on Nov. 3 was rolled back.
Negroponte, who left Pakistan on Sunday, was careful not to undermine General Musharraf, a crucial U.S. ally in the fight against al Qaeda and the Taliban. But he stuck to Washington’s stated position that thousands of people detained in the last two weeks should be released and curbs on the media should be lifted.
Pakistani newspapers were disparaging of Negroponte’s failure to back up words with some kind of threat unless Musharraf complied.
“To see the U.S. stick it out on the wrong side of the fence will not win the latter any approval with the people of Pakistan,” Dawn said in an editorial on Monday.
Negroponte said reconciliation was “very desirable” between moderate political forces, apparently referring to the breakdown of an understanding between Musharraf and opposition leader Benazir Bhutto for possible post-election power sharing.
U.S. Ambassador Anne W. Patterson was in Karachi on Monday to meet Bhutto, who spoke to Negroponte by telephone during his visit to Islamabad.
“I am meeting the former prime minister and other political leaders to confirm American interest in free, fair and transparent elections and to assure her and all others that we will do everything possible to ensure that the electoral process takes place,” Patterson told journalists at Bhutto’s residence.
Bhutto said she had reiterated her concerns that polls under present conditions would not be fair.
Pakistan has received an estimated $10 billion of U.S. aid, mostly for its military, since joining a war on terrorism in late 2001.
The New York Times reported on Sunday that almost $100 million had been earmarked for a secret program to help Musharraf keep his nuclear arsenal secure in a country threatened by rampant militancy.
Musharraf said emergency rule would remain in place for longer to reinforce the fight against Islamist militants threatening Pakistan’s stability and ensure security for polls.
However, opposition leaders, including Bhutto and Nawaz Sharif, the prime minister ousted by Musharraf in 1999 and later sent into exile, are considering boycotting the elections.
Meantime, the Pakistan army was expected to launch a major operation to crush a militant movement in Swat, a valley in North West Frontier Province (NWFP) where hundreds of people have been killed in clashes with security forces in the past few weeks.
Around 80 people were killed in an outbreak of sectarian violence over the weekend in Parachinar, the main town in the Kurram tribal agency bordering Afghanistan, as the security situation in the frontier region continued to deteriorate.
Parachinar has a history of clashes between Sunni Muslim tribesmen sympathetic with al Qaeda and Shi’ite Muslims, less friendly to the presence of Osama bin Laden’s followers in their lands.
The army was taking control in Parachinar on Monday, while in Swat there was no sign of an operation, according to reporters in both areas.

TITLE: Israel Beats Russia, Gives England Hope
PUBLISHER: Combined Reports
TEXT: As Dmitry Sychev’s 90th-minute drive headed toward the goal, it appeared England would be virtually eliminated from European Championship qualifying.
Then the ball bounced off a post and Omer Golan scored in injury time, giving Israel a 2-1 victory over Russia on Saturday night that could allow the England to join next summer’s 16-nation field.
All the English have to do is tie or beat Croatia on Wednesday at Wembley. And Croatia has little incentive to play all out, having clinched a berth because of Israel’s victory.
“We have been given another chance to qualify, and that has to motivate every player on Wednesday evening,” England midfielder Steven Gerrard said. “If we don’t get there it will be so frustrating, and we have to make sure we have the right mentality on Wednesday.”
Croatia (8-1-2) clinched a berth despite a 2-0 loss at Macedonia and leads Group E with 26 points, followed by England (7-2-2) with 23. Russia (6-2-3) is third with 21 but England has the tiebreaker because of a better goal difference in splitting its two games against the Russians.
Russia, which had put itself in control of gaining a berth with a come-from-behind 2-1 victory over England in Moscow last month, could have virtually eliminated the English with a victory over Israel but now must win at last-place Andorra on Wednesday and hope the English lose.
Elyaniv Barda gave Israel the lead in 10th minute, but Diniyar Bilyaletdinov tied it in the 61st.
“Of course we are very, very disappointed,” Russia coach Guus Hiddink said. “We were close. We were the team who was dominating the game.”
The English enter Wednesday’s game missing Wayne Rooney, Michael Owen and John Terry because of injuries and Rio Ferdinand due to a suspension.
“It will be difficult, but I am convinced we will get the result we need,” England coach Steve McClaren said. “I always believed it would come down to the Croatia game and, thankfully, it has.”
Russian Football Union (RFU) chief Vitaly Mutko defended his players following the defeat to Israel.
“The players did their best in Israel,” he said. “I have nothing to reproach them for.”
Mutko said that everyone involved with football in Russia should continue to work hard to raise the level of the game in the country.
“We should continue to develop football in Russia and raise its infrastructure up to the level of the world leaders,” he added.
“Meanwhile, our team still doesn’t have a top-level training base. In these conditions, it would take a miracle to qualify for the European finals. This time we failed to produce a miracle but we should keep on working.”
Mutko added that Russia’s young international players lacked experience in high-stakes matches like that against Israel.
“They do not have enough experience playing such matches as there are few games of such an importance in our domestic league,” he said. “And it’s tough to win such a match without experience.”
However, Hiddink said he was still hoping that Croatia could also produce a miracle and beat England in London to give Russia a chance to advance to the Euro 2008 finals.
“I believe the Croats are true professionals and will play at their top in London,” Hiddink said. “And I also believe they are capable of winning the match, while we should win at Andorra.”
The Russian press meanwhile criticized the team for their dismal performance in the first half of Saturday’s match adding that Russian international players did their best in the qualifying campaign. 	               (AP, AFP)

TITLE: Iraqis Plea For Asylum In Australia
PUBLISHER: The Associated Press
TEXT: BAGHDAD — Three members of Iraq’s Olympic soccer team and their assistant coach left the team during a trip to Australia and are seeking asylum in the country, Iraq’s soccer federation said Monday.
The soccer federation’s secretary-general, Tariq Ahmed, said the four disappeared at dawn Sunday from the home of colleagues in Australia, where they were staying after playing Australia’s Olympic team a day earlier.
They did not show up at the airport for their scheduled departure with the rest of their team a few hours later, he said. The assistant coach, Saadi Toma, later phoned team officials and told them he and the three players were seeking asylum in Australia, Ahmed said.
“It’s because of the deteriorated security situation and violence against athletes in Iraq,” Ahmed told The Associated Press by telephone in Baghdad.
“We all face the same danger, but it doesn’t mean one should so easily abandon his team and defame his country’s reputation,” Ahmed said.
A spokeswoman for Australian Immigration Minister Kevin Andrews, speaking on condition of anonymity in line with government rules, said the players were still holding valid visas and had not applied for asylum in Australia. Regular visas are for three months, so the players would have some time before they need to submit asylum applications.
She refused to identify the players. On Saturday, Australia beat the Iraqi team 2-0 in a qualifying round ahead of the Beijing Olympics, which begin next August. Iraq is scheduled to play Lebanon and Syria this week.
“This will cause poor morale, and have a bad psychological effect on the other players,” Ahmed said of the asylum request. “They should have waited until finishing the qualifying round, and then they could go wherever they want,” he said.
“This only shows disloyalty to the country,” Ahmed said.
Soccer is popular in Iraq, where the national team’s successes in the past three years have provided a joyous distraction from the daily violence. When Iraq won the Asian Cup in July, Baghdad erupted in raucous street parties to celebrate the victory despite the precarious security situation.
But athletes and sports officials have been frequent targets of violence — threats, kidnappings and assassination attempts that are either part of retaliatory violence between Shiites and Sunnis, or for ransom.
Three members of the national team, which differs from Iraq’s Olympic team but shares some of the same players, refused to return home to Iraq after the Asia Cup.

TITLE: Bangladesh Reeling From Deadly Storm
AUTHOR: By Pavel Rahman
PUBLISHER: The Associated Press
TEXT: BARGUNA, Bangladesh — Dhalan Mridha and his family had ignored the high cyclone alert issued by authorities until just before midnight, when he says “the winds came like hundreds of demons” in the fishing village of Galachipa.
“Our small hut was swept away like a piece of paper, and we all ran for shelter,” said Mridha, a 45-year-old farm worker, weeping.
On the way to a shelter, Mridha was separated from his wife, mother and two children. The next morning he found their bodies stuck in a battered bush.
The coast abounded with such grim tales Monday following Tropical Cyclone Sidr, the worst cyclone to hit Bangladesh in a decade. Many grieving families buried their loved ones in the same grave because no male member was available to dig them.
The official death toll from the cyclone that hit Thursday had reached 2,579 on Monday, according to the Disaster Management Ministry. However, there were fears it could be much higher.
The Bangladesh Red Crescent Society, the Islamic equivalent of the Red Cross, warned the toll could hit 10,000 once rescuers reach outlying islands.
The society’s chairman, Mohammad Abdur Rob, said the estimate came from the assessments of thousands of volunteers involved in rescue operations across the battered region.
The country’s interim leader Fakhruddin Ahmed toured some of the worst-hit areas Monday, handing out food to survivors and promising, “We will help you as best as we can.”
Helicopters airlifted food to hungry survivors while rescuers struggled to reach remote areas. The army helicopters carried mostly high-protein cookies supplied by the World Food Program, said Emamul Haque, a spokesman for the WFP office in Bangladesh’s capital, Dhaka, which is coordinating international relief efforts.
International aid organizations promised initial packages of $25 million during a meeting with Bangladesh agencies Monday, Haque said.
But relief items such as tents, rice and water have been slow to reach many. Government officials defended the relief efforts and expressed confidence that authorities are up to the task.
“We have enough food and water,” said Shahidul Islam, the top official in Bagerhat, a battered district near the town of Barguna. “We are going to overcome the problem.”
UN Secretary-General Ban Ki-moon said in a statement that several million dollars were available from the UN’s emergency response funds, depending on the need.
He expressed his “profound condolences to the people and government of Bangladesh for the many deaths and the destruction involved, and the full solidarity of the UN system at this time of crisis,” the statement said.
The government said it has allocated $5.2 million in emergency aid for rebuilding houses. Many foreign governments and international groups have also pledged to help.
The United States offered $2.1 million.
An American military medical team is already in Bangladesh and two U.S. naval ships, each carrying at least 20 helicopters, among tons of other supplies, will be made available if the Bangladesh government requests them, Secretary of State Condoleezza Rice said in a statement.

TITLE: French Workers Stay On Strike
AUTHOR: By Swaha Pattanaik
PUBLISHER: Reuters
TEXT: PARIS — French transport workers voted to extend a six-day strike on Monday, but union leaders offered a glimmer of hope as talks could resume soon to end a dispute that poses a challenge to President Nicolas Sarkozy’s reform plans.
Early indications were that grass roots members of the rail unions were inclined to extend the strike for another 24 hours, which would ensure their industrial action overlaps with Tuesday’s separate protest by public sector workers.
But their leaders have agreed to reopen talks on plans to do away with privileges that allow some public sector workers to retire 2.5 years earlier than the norm.
Talks were originally due to resume on Wednesday but in a move that intensifies pressure on the government, more unions, including the militant Sud Rail, said on Monday they were ready to get back to the negotiating table sooner.
“We are today in a pretty astonishing situation where we are striking while waiting for negotiations which will take place in a few days,” Francois Chereque, head of the moderate CFDT union, told RTL radio.
“More and more travellers are being bothered... people are really suffering when we could speed up the pace and negotiate as of this morning.”
Even so, few expect any return to normal until after a separate protest by teachers, postal workers, and other public sector employees on Tuesday over job cuts and what they say is a progressive erosion in their purchasing power.
The SNCF said one out of two fast TGV trains were running on Monday, up from one in seven at one point last week. Eurostar trains to London were expected to be running normally.
Paris metro operator RATP said it expected practically no trains on routes to and from the capital’s airports. Metro, bus and tram services were all running at reduced capacity.

KEY REFORM TEST
Reform of the special pension regimes is an important test of President Sarkozy’s ability to implement his election promises to overhaul the euro zone’s second biggest economy and introduce the flexibility he says it needs to grow faster.
With much at stake, a public relations battle is underway between the government and trade unions over who is responsible for prolonging a transport strike that looks set to overlap with Tuesday’s strike by teachers and other public sector workers.
“It is a takeover of their [public sector workers’] strike,” Andre Santini, Secretary of State for the Civil Service, told RMC radio.
Opinion polls show the rail strike is unpopular with most French voters but the government is also under pressure to show it is working for a breakthrough.
A CSA survey in Monday’s Le Parisien showed confidence in Sarkozy’s ability to tackle the country’s main problems fell to 51 percent, its lowest since his May election and down from 56 percent in October.
While the government has said it will not budge on the key principles of the reform, it looks like it may be willing to compromise on some elements in order to end a strike that is causing travel chaos, hurting business, and deterring tourists.
“From an industrial point of view, the freight situation is dramatic. There is a real risk of temporary shutdowns in firms which use our services, as is the threat of a break in fuel supply,” SNCF president Anne-Marie Idrac told La Tribune daily.

TITLE: Federer Crowned No.1
AUTHOR: By Alastair Himmer
PUBLISHER: Reuters
TEXT: SHANGHAI — When asked what advice Roger Federer the coach would offer any player facing him in a match, the imperious Swiss joked: “Don’t even try, pal!”
But after watching the world number one capture his fourth title in five years at the season-ending Masters Cup on Sunday, none of his rivals will be laughing.
Federer produced a vintage display to beat Spain’s David Ferrer 6-2 6-3 6-2 in a one-sided final in Shanghai — and then warned he will only get better.
“It’s been a fantastic year,” said Federer, having made a mockery of suggestions he was in crisis following his shock loss to Chile’s Fernando Gonzalez in his opening Red Group match.
“It’s been in some ways a breakthrough year for me. Not losing a set during the Australian Open, beating (Rafael) Nadal for the first time on clay.
“I still would like to play a little more offensive, you know, come to the net a little bit. I’m in a great position for next year as well.”
When Federer was ambushed by Gonzalez in his round-robin opener it was his ninth defeat since January, the Swiss having lost only nine times in total throughout 2005 and 2006.
It also marked back-to-back losses for Federer — the first time that had happened for more than four years — and triggered some fanciful headlines.
The only person not panicking was Federer.
Another three grand slam titles in 2007 and finalist at the French Open, Federer smiled: “Some might think that’s a disaster. I don’t.”
Unruffled, he beat Russia’s Nikolai Davydenko before destroying American Andy Roddick 6-4 6-2 and nemesis Nadal 6-4 6-1, his most emphatic win over the Spaniard to date.
“I didn’t read the press that closely or listen to what people said,” smiled Federer. “Once I get on a roll it’s hard to stop me. It’s always been like this.”
Federer may transcend his sport, in the way Tiger Woods does golf, or Michael Jordan did basketball, but his hunger remains as fierce as ever.
“When I prove myself again and again now, it’s not as big a surprise because this is why I work my tail off basically,” said the 12-times grand slam champion.
“The red carpet stuff is interesting but I’m trying to cut it down as much as I can because in the end my big focus is tennis.”
Federer’s off-season preparation will now be geared towards breaking Pete Sampras’s record of 14 grand slam singles titles in 2008.

TITLE: New Kosovo Leader Says He Will ‘Declare Independence’
AUTHOR: By Nebi Qena
PUBLISHER: The Associated Press
TEXT: PRISTINA, Serbia — A former rebel leader who says he will declare independence from Serbia next month is likely to become Kosovo’s next prime minister, but will have to strike a deal with a rival party after failing to win a majority, officials said Sunday.
Unofficial vote tallies from Saturday’s parliamentary elections in the province gave ex-rebel Hashim Thaci’s Democratic Party of Kosovo the lead with 34 percent of the vote. The League of Democratic Kosovo, or LDK — traditionally the province’s largest political bloc — trailed with 22 percent.
A senior official in Thaci’s party told The Associated Press that a coalition with the late President Ibrahim Rugova’s LDK was the most likely outcome — although an uneasy one because of a rivalry between the two parties. He spoke on condition of anonymity because he was not authorized to discuss the issue.
Thaci, once a leader of the Kosovo Liberation Army that fought Serbia in the 1998-99 war, often clashed with Rugova, a pacifist. Rugova’s death in early 2006, however, split the LDK and weakened its performance in the elections.
Official preliminary results were not expected until late Monday, but the independent observers’ tally showed voters strongly supported Thaci, who has pledged to deliver swift independence from Serbia. He declared victory shortly after midnight.
Thaci, 39, told the AP that if he becomes prime minister, Kosovo’s leadership will declare independence from Serbia after Dec. 10 — the deadline for international mediators to report back to U.N. Secretary-General Ban Ki-moon on efforts to resolve the dispute over Kosovo’s future status.
“Immediately after Dec. 10, Kosovo’s institutions will declare the independence of Kosovo,” Thaci said Saturday.
Decisions on Kosovo’s status are made through a forum of ethnic Albanian leaders, who include the province’s prime minister as well as opposition politicians. However, any declaration of independence has to be formally endorsed by the province’s parliament.
Some of Kosovo’s leaders have recently sought to move back from promises for an immediate declaration of independence if no deal is reached by the deadline. Instead, they are saying Kosovo will wait until after the mediators’ report is delivered before considering when a declaration of independence might be made.
Serbia has warned that unilateral moves that curb its formal sovereignty over the province would endanger the region’s stability.

TITLE: Khmer Rouge President Seized in Cambodia
AUTHOR: By Ek Madra
PUBLISHER: Reuters
TEXT: PHNOM PENH — Rifle-toting Cambodian police arrested ex-Khmer Rouge President Khieu Samphan on Monday, the latest member of Pol Pot’s inner circle to be detained by the UN-backed “Killing Fields” tribunal.
The French-educated guerrilla leader was whisked from a Phnom Penh hospital by police convoy to the court compound to face Cambodian and international judges probing one of the 20th century’s darkest chapters.
“An initial appearance will be held today during which he will be informed of the charges which have been brought against him,” the tribunal said in a statement.
A close confidante of Pol Pot, the 78-year-old Khieu Samphan has denied knowledge of any atrocities committed by the Khmer Rouge during its four-year reign of terror from 1975-79.
An estimated 1.7 million people were executed or died of torture, disease or starvation under the ultra-Maoist revolution. His 24-year-old daughter said she was not allowed to see her father, who was flown to the capital after suffering a fall last week at his home in the former Khmer Rouge stronghold of Pailin on the Thai border.
“I don’t know why they won’t let my father go back home,” Khieu Maly told Reuters.
Khieu Samphan is the fifth person to face the long-awaited Khmer Rouge tribunal, which started work in earnest a few months ago after nearly a decade of delays caused by wrangling over jurisdiction and cash.
Former Foreign Minister Ieng Sary and his wife — both life-long friends of “Brother Number One” Pol Pot — were arrested and charged last week with crimes against humanity.
“Brother Number Two” Nuon Chea, who had also lived in Pailin, is in the custody of the court on similar charges, as is the Beijing-backed regime’s chief jailer, Duch, who ran Phnom Penh’s “S-21” torture and interrogation centre.
Duch will be the first to make a public appearance at the tribunal when he appears for a bail hearing on Tuesday.

TERROR ADVOCATE
Khieu Samphan will be co-defended by the controversial French lawyer Jacques Verges, who knew Pol Pot in Paris in the early 1950s and flew into Phnom Penh on Monday, and Say Bory, a former president of Cambodia’s lawyers’ association.
Verges, known as the “Terror Advocate” whose previous clients include international guerrilla Carlos the Jackal and Nazi war criminal Klaus Barbie, said in 2004 that Khieu Samphan had no blood on his hands and was just a young idealist embroiled in the extremist politics of the Cold War.
Khieu Samphan was the leading intellectual among the small group of Cambodian students in 1950s Paris who became imbued with communism and returned home to the southeast Asian nation to form the core of the guerrilla movement that became the Khmer Rouge.
However, he published a book three years ago portraying himself as a virtual prisoner of the regime and denying knowledge of any atrocities as Pol Pot drove his dream of creating an agrarian peasant utopia.
Pol Pot died in 1998 in the final Khmer Rouge redoubt of Anlong Veng.

TITLE: Investigation Into Davydenko May Takes Months to Settle
PUBLISHER: Reuters
TEXT: SHANGHAI — Nikolai Davydenko, under investigation over a betting scandal, faces a long wait to clear his name, ATP Tour chief Etienne de Villiers said on Friday.
Men’s tennis has signaled its intent to get tough on match-fixing and gambling with a new integrity unit soon to be set up to investigate accusations of corruption.
Its launch cannot come soon enough for Davydenko, who has been under almost constant scrutiny since a match he was involved in during August was the subject of irregular betting patterns.
“We’ve not finished the investigation,” de Villiers told an invited group of journalists. “Until we have finished we are not prepared to rule anyone in or rule anyone out.
“When we asked the BHA (British Horseracing Authority) and two former investigators from Scotland Yard to get involved, they said don’t expect a quick result. We have to look at a wide web.”
De Villiers added: “I’m sorry we can’t give you a quick result. This is not Hollywood. This is reality. It’s complicated, it’s time-consuming. We need to be thorough and methodical.”
Italy’s Alessio Di Mauro was banned for nine months earlier this month after becoming the first professional to be caught in the ATP’s crackdown on betting.
Under pressure to act, the tour has approved a new 48-hour rule under which players who fail to report information relevant to the tour’s anti-corruption code could face sanctions.
Davydenko, playing at this week’s season-ending Tennis Masters Cup in Shanghai, has been sharply critical of the ATP’s chairman in the past.
But De Villiers insisted the Russian was not a marked man.
“We never made this the Davydenko investigation. All Betfair said was that the betting patterns were suspicious and they were not prepared to pay out on the bet,” he said.
“And we said we’d better investigate this. We never once said it was about Davydenko but we can’t rule anyone in or anyone out.
“This man’s reputation is now in play. You’re innocent until proven guilty. But if you’re not obeying the rules, expect to be punished. We need to connect the dots.”
Punishments for players found guilty of match-fixing could include to life bans.
“When it comes to contriving to fix a match — and that has to do with wanting to lose something — then the rules are draconian,” said de Villiers.

TITLE: Report: U.S. Prison System is Failing
PUBLISHER: Reuters
TEXT: WASHINGTON — The number of Americans in prison has risen eight-fold since 1970, with little impact on crime but at great cost to taxpayers and society, researchers said in a report calling for a major justice-system overhaul.
The report released on Monday cites statistics and examples ranging from former vice-presidential aide Lewis “Scooter” Libby to a Florida woman’s two-year sentence for throwing a cup of coffee to make its case for reducing the U.S. prison population.
It recommends shorter sentences and parole terms, alternative punishments, more help for released inmates and decriminalizing recreational drugs as steps that would cut the prison population in half, save $20 billion a year and ease social inequality without endangering the public.
“President [George W.] Bush was right,” in commuting Libby’s perjury sentence this year, the report says. “But while he was at it, President Bush should have commuted the sentences of hundreds of thousands of Americans who each year have also received prison sentences for crimes that pose little if any danger or harm to our society.”
The report was produced by the JFA Institute, a Washington criminal-justice research group, and its authors included eight criminologists from major U.S. public universities. It was funded by the Rosenbaum Foundation and financier George Soros’s Open Society Institute.
Its recommendations run counter to broad U.S. public support for getting tough on criminals through longer, harsher sentences and to the Bush administration’s anti-drug stance.
But the report cites state and local trends such as medical-marijuana laws as signs attitudes toward punishment may be shifting.

TITLE: After OPEC Summit, Chavez Foresees Fall of ‘Dollar Empire’
PUBLISHER: Reuters
TEXT: TEHRAN — Venezuelan President Hugo Chavez said on Monday the “empire of the dollar is crashing”, a day after his country and anti-U.S. ally Iran advocated action over the weakening U.S. currency during an OPEC summit in Riyadh.
Chavez, who on Saturday said oil prices could double to $200 per barrel if the United States attacks Iran over its disputed atomic ambitions, spoke to reporters after talks with his Iranian counterpart Mahmoud Ahmadinejad.
“Soon we will not talk about dollars because the dollar is falling in value and the empire of the dollar is crashing,” Chavez said in comments translated into Farsi from Spanish.
“Naturally, by the crash of the dollar, America’s empire will crash,” Chavez said at a joint news conference with Ahmadinejad. The two presidents share the same viewpoint in denouncing U.S. influence in the world.
The final statement of the oil cartel’s Nov.17-18 summit in Riyadh did not include any reference to the falling dollar, in an apparent victory for U.S.-allied moderates led by Saudi Arabia.
But Iran and Venezuela made clear before and after the summit that they would press for action, which could include pricing oil in a basket of currencies, with Ahmadinejad on Sunday calling the dollar a “worthless piece of paper.”
A fall in the value of the U.S. dollar on global markets helped fuel oil’s rally to a record $98.62 on November 7 — causing the West to call for more OPEC supplies to cool prices — but it has also eroded the purchasing power of OPEC members.
Fears the United States or its ally Israel could attack Iran — over a nuclear energy programme Washington says is a cover for seeking atomic weapons — have also contributed to higher crude prices. Tehran denies the charge.

TITLE: Saakashvili Appoints New Prime Minister in Reshuffle
AUTHOR: By Niko Mchedlishvili
PUBLISHER: Reuters
TEXT: TBILISI — Georgian President Mikhail Saakashvili reshuffled his cabinet on Monday but left economic portfolios unchanged in pursuit of stability following a wave of street protests.
On Friday, Saakashvili appointed a new prime minister and lifted a state of emergency he had imposed on the volatile southern Caucasus nation that met wide criticism in the West.
The American-educated Georgian president has said he is certain his mandate will be approved in January elections and has instructed his new government to spend more time on resolving social problems.
Saakashvili nominated 36-year old Lado Gurgenidze, head of Georgia’s largest private credit institution, as Prime Minister.
“We didn’t change ministers from the economic bloc because we want to retain continuity of economic policy,” Gurgenidze told journalists on Monday
Gurgenidze said the government planned to change “social policy.”
The government’s parliamentary secretary Georgi Khuroshvili said Saakashvili had proposed two changes to his cabinet: Bela Tsipuriya as Minister of Education and Science, and Koba Subeliani as Minister for Refugee Affairs.
Saakashvili said former Minister of Education and Science Kakha Lomaia would become Secretary of the National Security Council, an organization headed by the President.
Under the Georgian constitution, the head of the government forms a cabinet of ministers in consultation with the President, after which the candidates, including the Prime Minister-designate, are confirmed by parliament.