SOURCE: The St. Petersburg Times
DATE: Issue #1353 (17), Tuesday, March 4, 2008
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TITLE: Marchers Condemn
‘Coronation’
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Anti-Kremlin political coalition The Other Russia held a protest demonstration and a subsequent meeting Monday in reaction to Sunday’s presidential election, which its members perceive as a “coronation” of the Kremlin-backed candidate Dmitry Medvedev.
More than 1,000 protesters, led by former chess champion and head of the United Civil Front Garry Kasparov and National Bolshevik leader Eduard Limonov, marched on Monday afternoon from Oktyabrsky Concert Hall to Chernyshevsky Gardens. 
The so-called Dissenters’ March, which had been sanctioned by city authorities, was also supported by the democratic opposition party Yabloko.
The crowd chanted “We Are Not Slaves,” “Your Elections are a Farce,” “Russia is us,” “Freedom to Political Prisoners” and “This Is Our City.”
The National Bolshevik Party has been outlawed as an extremist group since 2007 and all their symbols, including flags, are banned, but its activists have designed a new flag that they used on Monday. The flag has a red background with a white circle and the word “censorship” appearing in bold black capitals in the center.
Coincidentally, Sunday’s election was held on the 91st anniversary of the abdication of Russia’s last tsar, an irony not lost on Monday’s protesters.
At the beginning of March in 1917, Tsar Nicholas II transferred power to the All-Russian Constituent Assembly, ending the 300-year rule of the Romanov dynasty.
Speeches made at Monday’s protest made use of imperial imagery including coronations, autocracy, successions to the throne and even references in connection with Medvedev to the False Dmitrys of Russian history.
False Dmitry is the name given to three mysterious pretenders to the Muscovite throne who emerged from obscurity at the turn of the 17th century, known as The Time of Troubles.
Activists spoke of Sunday’s vote as a shameful and illegitimate act that failed to offer the Russian people a fair alternative and honest competition. 
Limonov branded the election “The Great Deception.”
“Russians are very brave people; Russian history has many examples of our courage and our generation will prove it yet again by showing resistance to this unjust regime,” Limonov said. “Just as eight years ago Yeltsin sneaked Putin into Russian politics through the back door, Putin has now swindled us with Medvedev and tricked people into voting for this obscure third-rate bureaucrat who has done nothing for our country.”
Limonov said he was disgusted with what he called the coronation of a stooge. 
“We must be able to elect our leader from a circle of worthy politicians who really have experience and who we can judge and asssess by what these politicians have done for Russia,” he said. “It is a question of self-respect.”
Typically for opposition rallies, the demonstration was heavily policed but unlike in previous events, there were no mass arrests or beatings of protesters by the police. 
However, Maxim Reznik, the leader of the St. Petersburg branch of Yabloko, was detained under suspicious circumstances on Sunday night as he tried to stop a fistfight outside his party’s local headquarters. Reznik’s fellow politicians complained at the rally that the police have restricted contact between Reznik and his lawyer and maintained a cloud of secrecy around the arrest.
Blaming the Kremlin for creating a climate of fear in Russia, Kasparov stretched his hand and pointed to the hundreds of police surrounding the Chernyshevsky Gardens and blocking  the nearby streets. 
Public support for Dissenters’ Marches has been modest since the first event was held in December 2006 but the authorities across Russia have been banning the rallies, sending police from other regions to patrol them and setting riot police against protesters. Most of the rallies resulted in police violence against the activists and dozens of protesters being arrested.
On Monday in Moscow hundreds of activists were detained during an attempt to hold a Dissenters’ March in the capital. Moscow City Hall had denied permission for the event. 
“The Kremlin claims Putin enjoys a 70 percent approval rating; it claimed Medvedev garnered the support of 70 percent of voters — but if these politicians are so damn popular, why are they so afraid of hearing a critical opinion at a peaceful protest like ours,” Kasparov said. 
“This is because their high ratings are based on manipulations and lies, and we stand up to it. The Kremlin politicians are most afraid of free-thinking people, and they dread this narrow stream of dissent growing into a wide river of people’s anger and dissatisfaction.”
The speeches were explosive, full of bitterness, passion and rage. Kasparov branded the Russian authorities as criminal, unjust and illegitimate.
“On Sunday night, national television shamelessly showed Putin, Medvedev and Zubkov heading to some jolly joint to celebrate their victory over us, the Russian people,” Kasparov said. “It is a matter of honor and pride to shake these parasites off our back! And it is up to us how soon we will stop them throwing feasts at our expense.”
Well-known rock musician Yury Shevchuk of the group DDT said at the rally that he stayed at home on Sunday and did not vote. 
“I would not call that an election; they gave me no choice as to who to vote for and so I came here instead,” Shevchuk said in an interview before the meeting. 
“To me rock music means freedom. Freedom does not need idols of any kind. I am a free man, and I came to this meeting because the more free people we have out here the better future our country will have.”
Meanwhile, at 5 p.m. on Monday, about 200 pro-Kremlin youth activists gathered on St. Isaac’s Square for an organized post-election celebration in front of a small stage bearing the “Russia, forward!” campaign slogan.
The activists were mostly young men wearing black leather coats and black caps carrying flags representing United Russia and Young Guard.
The crowd watched a rap act, a troupe of marching schoolgirls and listened to state officials reading congratulations to Putin and Medvedev with  muted cries of “hurrah.”

TITLE: Medvedev Signals No Changes After Victory
PUBLISHER: The Associated Press
TEXT: MOSCOW — Just hours after Russia elected a new president, the Kremlin sent two strong signals that it doesn’t plan to back down from its pull-no-punches foreign policy — a coalition of pro-government youth groups marched on the U.S. Embassy and the state-controlled gas monopoly reduced gas supplies to Western-looking Ukraine.
The decision to squeeze Ukraine and to use street protests to attack American foreign policy may be an early indication that Dmitry Medvedev, the president-elect, intends to continue the course set by his mentor, President Vladimir Putin — who has reasserted his country’s power abroad while keeping a tight grip on society at home.
Nearly final results — from 99.45 percent of precincts — showed that the 42-year-old Medvedev had received 70.2 percent of the vote, the head of the elections commission said Monday. Shortly after almost all the votes were counted, hundreds of young people marched through Moscow toward the U.S. embassy to criticize American policies in Kosovo, Iraq and the Muslim world.
While they toed the Kremlin line, Gazprom, the Russian gas monopoly, made good on a promise to reduce gas supplies to Ukraine. In addition to serving as first deputy prime minister, Medvedev is chairman of Gazprom.
Russia says the dispute over natural gas with Ukraine is strictly a financial one, a result of the alleged nonpayment by Ukraine for past gas deliveries. But the timing of the cutoff suggests a possible deeper motive: telling the world that despite his purported liberal leanings, Medvedev plans to rule with a firm hand — one perhaps guided by Putin himself.
The last time Russia cut gas supplies to Ukraine was in January 2006 in a move widely seen as punishment for the Orange Revolution that blocked a Kremlin-backed candidate from gaining Ukraine’s presidency. Since then, Russia has expressed continuing anger over Ukraine’s attempts to join NATO and forge stronger links with the European Union.
Chris Weafer, chief strategist for UralSib investment bank, said Medvedev may have been motivated by the need to appear tough in the face of Russia’s dispute with Ukraine over gas payments.
“He found himself in that situation,” Weafer said. “He didn’t want to be seen as backing down.”
Meanwhile, election observers from the Parliamentary Assembly of the Council of Europe, said Monday that unequal access to the media called into question the fairness of the vote.
Andreas Gross, who led the 22-member mission, described Sunday’s vote as a “reflection of the will of the electorate whose democratic potential unfortunately has not been tapped.”
Two of Medvedev’s three challengers alleged there were violations and threatened to challenge the results in court.
The influential Organization for Security and Cooperation in Europe refused to send observers, saying restrictions imposed by Russian authorities monitors made it impossible to work in a meaningful way.
Zyuganov, Medvedev’s nearest challenger with almost 18 percent in the nearly complete results, said he would dispute the result. Zhirinovsky, with 9 percent, threatened to do so as well.
Liberal opposition leaders Kasparov and Mikhail Kasyanov were barred from running after authorities decided they had not met the strict requirements for gaining a spot on the ballot. Voters across Russia say they were being urged, cajoled and pressured to vote in an effort to ensure that Medvedev scored a major victory.

TITLE: Local Boy Medvedev Gets Vote Out in Hometown
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: President-elect Dmitry Medvedev fared better in St. Petersburg than in the national vote, according to figures released Monday, receiving 72.27  percent against a national vote of 70.23 percent.
Communist leader Gennady Zyuganov came second with 16.77 percent (compared to 18.77 percent nationally), Liberal Democratic Party of Russia leader Vladimir Zhirinovsky came third with 7.34 percent (compared to 9.75 percent nationally), and Democratic Party leader Andrei Bogdanov came last with 1.86 percent, almost the same as his Russia-wide results, the St. Petersburg election commission said on Monday.
Turnout in St. Petersburg was recorded at 68.33 percent, statistically similar to the national figure. 
The commission said that 33,000 ballots were invalid, calling the amount “scanty.” The committee did not register major violations at the elections.
Alexander Gnyotov, head of the St. Petersburg Election Committee, said the presidential election in St. Petersburg was “calmer and cleaner than the Duma one” held in December, Interfax reported.
Governor Valentina Matviyenko said residents “demonstrated unexampled political activity and in this way they refuted pessimistic predictions from some experts that people would not go to vote because everything was predetermined.”
Matviyenko said turnout was 7 percent higher than at previous presidential elections and 14 percent higher than at the Duma election in December.
“For the first time in recent decades in Russia, elections took place without barricades, revolutions and upheavals,” she said, Interfax reported.
However, some incidents involving the police were reported. 
Police detained Grazhdansky Golos newspaper reporter Tamara Rozunkova at a polling station on Sunday and escorted her to a police department, the head of the youth wing of liberal opposition party Yabloko, Alexander Shurshev, told The St. Petersburg Times on Monday. She was later released with no official explanation. 
Rozunkova said she came to polling station No. 58 in the Moskovsky district at 7.20 a.m. with the intention of covering the election, but at 10.30 a.m. the police demanded she leave the building because she did not have the correct accreditation. When Rozunkova refused to leave, the police took her to police department No. 77.
Shurshev said that only 10 out of 80 freelance reporters from Grazhdansky Golos who tried to report from city polling stations were able to stay there until the end of the day.
“If they didn’t allow the Grazhdansky Golos reporters to stay, are we to understand that there was something to hide?” Shurshev asked.
Shurshev said he could hardly call the elections “elections” in the generally understood sense of the word.
“Why did they have to commit such violations if the results of the elections were basically clear?” Shurshev said, referring to Medvedev’s almost guaranteed victory ahead of Sunday’s vote. 
Police also detained Yabloko’s St. Petersburg leader on Sunday, Interfax said.
Maxim Reznik was detained after a fight broke out between unknown persons near Yabloko’s office on Ulitsa Mayakovskogo, and Reznik tried to stop it. Policemen appeared and detained Reznik and others, Shurshev said.
On Saturday, St. Petersburg police also detained five members of an extremist organization who were planning a terrorist act on Sunday, Interfax reported. The police said they had information that the leader of the organization was making an explosive device for possible use on Sunday, Interfax reported.
A polling station observed by The St. Petersburg Times on Sunday seemed busier than it had been in December when it was observed for the Duma election. As in December, many voters were middle-aged or elderly with fewer young people coming to vote. 
Many people said they had voted for Medvedev.
Yelena Belyayeva, 46, a state bureaucrat, said she voted for Medvedev because “she trusted him.” 
“I voted for Dmitry Medvedev because I think out of all candidates he is the one who can really work well,” Belyayeva said.
Darya Tsvetkova, 28, a sales manager, said she also voted for Medvedev because she wanted “the country’s course toward economic stability to continue.”
“I now have a good job, financial stability, and the opportunity to travel, and I want to have all that in the future,” Tsvetkova said.
Tsvetkova said she didn’t feel any pressure from anyone to vote.
“I went to vote because I didn’t want someone to make the choice for me, and elect someone I don’t like,” she said.
As at many city polling stations, music — including nostalgic children’s songs from the 1970s — was played to enhance the festive atmosphere. Cheap traditional pirozhki or pies and other convenience food were on sale. After voting, some people, especially those with children, sat at tables and ate pancakes. Some men also drank beer.
The price of food and drink at some polling stations was reportedly nominal, with a polling station on the Petrograd Side selling pirozhki for 1 ruble (4 U.S. cents) each. In villages in the Leningrad Oblast, pancakes were free and bottles of beer were sold for 1 ruble each.

TITLE: Barred Journalist Denied Entry, Goes Home
AUTHOR: Reuters, AP
TEXT: MOSCOW — An investigative reporter denied entry into Moscow last week as a threat to national security returned to her native Moldova on Saturday after her health deteriorated in the Domodedeovo Airport transit area.
Natalya Morar had refused to leave the transit area since Wednesday, when she was turned away despite what she said was her legal right to entry as the newly wed wife of a Russian citizen.
“Natasha felt unwell. Her kidneys started aching,” her husband, Ilya Barabanov, said on Ekho Moskvy radio.
“I believed that by that stage we had done whatever we could and that we simply couldn’t risk her health any more,” said Barabanov, who like his wife works for The New Times magazine.
The newlyweds flew to Moldova’s capital, Chisinau. Attempts to reach the couple by phone did not go through. The New Times has been harshly critical of President Vladimir Putin. Supporters say the decision by the Federal Security Service to bar Morar is tied to her reports on illicit cash transfers to pro-Kremlin political parties.
Morar said Friday that she had not been allowed to speak with her lawyer or recharge her cell phone, and that officials refused to provide food.

TITLE: Complaints of Pressure,
Bribery and Fraud in Vote
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — Voters and opposition parties complained of ballot stuffing, bribery and intimidation in Sunday’s presidential election, in which Kremlin-backed candidate Dmitry Medvedev appeared set for a landslide victory.
Golos, the only independent Russian monitoring group, said that a majority of the violations occurred not at the ballot box, but rather in the run-up to the election and during the tallying of votes.
Authorities, meanwhile, either denied any voting irregularities or dismissed them as negligible.
“These are free and democratic elections, and they were preceded by a free and democratic campaign,” Kremlin spokesman Dmitry Peskov said by telephone Sunday evening.
Numerous observers and voters called the Golos hotline and reported incidents of ballot boxes being stuffed ahead of the vote, according to the election watchdog’s web site, which was being updated with fresh allegations of fraud all day Sunday.
“Most fraud occurs when election officials compile lists of voters, including people who are not eligible to vote in their district,” Golos head Lilia Shibanova said.
Observers at polling stations simply cannot distinguish repeat voters — who visit numerous polling stations to cast ballots for a candidate backed by authorities — from real voters, Shibanova said.
One independent observer told The St. Petersburg Times that a less subtle approach was used at Polling Station No. 1513 in the Pechatniki district in southeast Moscow.
The observer, Roman Udot, said he peered through the slots of both the sealed ballot boxes at the polling station and saw neatly stacked ballots, despite the fact that voting had not yet begun.
The top ballot in each stack had a mark next to Medvedev’s name, Udot said. He managed to take a photograph of the stack of ballots in one of the boxes and posted the pictures on his blog, romanik.livejournal.com. The photographs appear to support his claim.
“I reported this to the election officials,” Udot said in a telephone interview. “I called police, and they came here for a while. What drives me nuts is that no one cares or takes any action.”
City elections commission officials from the opposition party Yabloko were investigating Udot’s claim, the party said.
A city police spokesman said there were no incidents of police being called to polling stations over purported fraud.
The telephone at the Pechatniki district elections commission was switched off Sunday.
Election officials later disqualified the ballots in question, Udot said. “There was a real crime committed here that now will turn into a minor irregularity,” he said.
The liberal Union of Right Forces party reported a similar case of ballot stuffing in central Moscow and filed a report with city prosecutors, the party said.
Employees in state-run institutions also said in interviews that they had been bribed or pressured to vote by their bosses.
Two doctors at local hospitals said in separate interviews that their superiors demanded they come to work and vote at the polling stations set up there. One of the doctors was threatened with dismissal if she did not comply.
“Everyone is scared in this election,” the doctor said on condition of anonymity, citing fear of retribution.
Doctors were also ordered to keep patients at the hospital until Monday, regardless of medical necessity, so they could vote there.
The other doctor said she was rewarded with two days’ vacation for coming in to vote.
Irina, a 30-year-old teacher who declined to give her last name, said she voted for the first time in her life Sunday — and only because her school’s principal demanded that every employee cast a ballot.
In the North Caucasus republic of Karachayevo-Cherkessia, which had one of the country’s highest official turnouts in the Dec. 2 State Duma election — reaching 100 percent in several districts — Sunday’s results seemed to have been decided in advance, said Ismail Bidzhev, head of the local branch of the Communist Party.
Bidzhev produced a list which, he said, showed the percentage each candidate would receive in the republic: 86.7 percent for Medvedev, 10.2 percent for Communist leader Gennady Zyuganov, 2.5 percent for Liberal Democratic Party leader Vladimir Zhirinovsky and 0.4 percent for Andrei Bogdanov, head of the tiny Democratic Party of Russia.
“If there were a real election, Medvedev would get between 25 and 30 percent,” Bidzhev said. It was impossible to verify his claim Sunday.
Both Zhirinovsky and Zyuganov threatened to contest the election in court. Zyuganov said he had evidence of some 200 violations, “each one being more cynical than the next.”
Central Elections Commission chief Vladimir Churov said at the commission’s headquarters that he was prepared to defend the election in court against the candidates’ allegations.
Some measures to get voters to polling stations were more subtle. For example, some schools in Moscow and the Moscow region that served as polling stations held student plays.
Western election observers said they did not see any blatant violations.
“There does not seem to be any voter intimidation,” Nigel Evans, a British parliamentarian, said after visiting eight polling stations in Moscow.
Evans is one of a 23-member mission from the Parliamentary Assembly of the Council of Europe, the only regular Western observation team that came to monitor Sunday’s election.

TITLE: Students Protest Uni Closure
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Students, graduates and teachers of the European University in St. Petersburg staged a theatrical event in the city on Friday to protest against the closure of the university last month.
They laid a 50-meter long fire hose, coiled to resemble the university’s snail logo, at the foot of a monument to Russian scientist Mikhail Lomonosov, often seen as the father of Russian higher education, which stands near St. Petersburg State Univsersity. 
Atop the fire hose the students placed a symbolic mourning ribbon that said “To the European University from Students.” Then, participants hugged each other to express their sympathy to each other and to say goodbye.
The European University was closed last month after a court said its premises broke fire regulations, although a political motive on the part of the authorities has also been alleged. 
The students wanted to express their sorrow “that a fire hose has tied the hands of scientific and educational activities,” a press release from the organizers of the event said. 
“We came here because we want the university to re-open, and we want to continue our studies there,” said Yulia Marinichyeva, 23, student of the University’s Ethnology Faculty.
Marinichyeva said she didn’t know what the real reasons for the closure of the university were but she said the students did not want “to believe there were political reasons.”
Dmitry Mukhin, 24, another ethnology student, said he could not “see any political reasons,” behind the closure. 
“We are busy only with science, and we’re not in opposition to anybody,” he said. 
Artur Mogun, teacher of political philosophy at the University, said that fire safety problems at the institution were “clearly only the formal excuse” to close the university.  Mogun said the university did not know “the real reason for the closure” but he said the situation “definitely looks like a game.”
“I’m afraid it was a method to completely subordinate the country’s education system,” Mogun said.

TITLE: Tiny District Looks to Keep Its Perfect Record
AUTHOR: By Catrina Stewart
PUBLISHER: Staff Writer
TEXT: KHABEZ, Karachayevo-Cherkessia — The tiny district of Khabez in the North Caucasus would barely merit a mention were it not for one rather interesting fact.
In the recent State Duma elections, every one of its 18,282 registered voters turned out to cast a ballot, and every single one of them checked the box for the pro-Kremlin United Russia party, according to official results.
It looked Sunday like the district in the republic of Karachayevo-Cherkessia would be hard-pressed to pull off a similar feat in the presidential election.
The streets of the district’s main town, Khabez, nestled in a valley about 40 kilometers from the regional capital, Cherkessk, were nearly deserted Sunday afternoon.
“You’ve arrived at a quiet time. You should have seen the lines this morning,” said Mukhadin Mazukabzov, the election official in charge of Polling Station No. 229.
He said 1,457 out of the 2,077 voters registered at the station had cast ballots by 3 p.m. That represented roughly 70 percent of the voters.
“Most of the others will come between 5 and 6,” Mazukabzov said.
Over a 30-minute stretch in the afternoon, only one person came in to vote.
It was not much different at another polling station across town. By 4 p.m., 1,289 out of its 2,107 registered voters had passed through the doors, election officials said. Two voters left as a reporter entered. Nobody came in for the next half hour.
Turnout is extremely important in the North Caucasus because it enables local leaders to show Moscow that they have the troubled region under control, a local journalist explained.
The town’s mayor, Sultan Turashchev, predicted that turnout would be high and that Dmitry Medvedev, President Vladimir Putin’s preferred successor, would win the most votes.
“There is always a high turnout in our region,” he said. Karachayevo-Cherkessia posted 93 percent turnout in the Duma elections on Dec. 2.
The mayor praised Putin’s eight years in office.
“Life has gotten better. Pensions have risen, and wages are higher. There is no crime. Things have improved in every respect,” he said.
This town has seen a transformation in recent years, thanks in part to the efforts of Mikhail Gutseriyev, the disgraced former owner of the Russneft oil company, and Nazir Khapsirokov, who rose through the ranks of the Prosecutor General’s Office to become its household directorate chief before leaving for a post in the presidential administration.
A new cultural center — for now Polling Station No. 229 — sits uneasily alongside ramshackle houses, while across the main street is a new park named in Gutseriyev’s honor. The residents have also benefited from a new day-care center and medical facilities. Women, meanwhile, are paid 10,000 rubles ($420) for each newborn, ensuring the highest birth rate in the republic.
In a local store, Lena, the shopkeeper, laughed when told of the 100 percent turnout for the Duma elections. But, she said with a smile, “If they say it was 100 percent, then it must have been 100 percent.” She would not say whom she had voted for Sunday.
A customer in the shop said he had not voted at all. “No, of course I didn’t vote. What’s the point? They have already chosen the president,” he said, refusing to give his name. “If these elections were fair and free, then why didn’t Medvedev ... take part in any debates?
“But if I had voted,” he added, “I would have chosen Medvedev.”
Outside, three elderly men were passing the time. All three said they had supported the Communist candidate, Gennady Zyuganov.
“Medvedev’s an idiot. And so was Putin, and so was Yeltsin. They all stole from us. I have never seen anything good in this country,” said Mukhadin Bykov, one of the elderly residents. “It is difficult to live in these times.”
While the men were speaking, a policeman walked over and took down the details of the car used by this reporter, a British citizen. The presence of a foreign reporter also seemed to alarm local Federal Security Service officials. Earlier in Cherkessk, two FSB representatives questioned this reporter at length in the hotel lobby about the purpose of the visit, who had been interviewed and what had been discussed.
Khabez was not the only district to report high turnout and support for United Russia in the Duma elections. Several towns in the republic of Mordovia initially reported that 104 percent to 109 percent of all votes had been cast for United Russia, according to the Communist Party’s local branch.
Meanwhile, the Communist Party’s head office in Cherkessk was a hub of activity, but the mood was gloomy. Party officials said the republic’s turnout during the Duma elections had been closer to 40 percent and predicted that Sunday’s would be similar.
Ahmed Abazov, the local representative for the liberal Yabloko party, which did not field a candidate for the presidential election, sounded tired and uninterested on the eve of the election. “Is it tomorrow? I’d forgotten.” He said he would not vote.

TITLE: Not Even Weather Can Dampen Putin’s Spirits
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — With his protege widely expected to be elected president in a landslide victory, not even the miserable Moscow weather could dampen President Vladimir Putin’s mood as he cast his ballot Sunday in southwest Moscow.
His wife even said the freezing rain was a blessing.
“Today when we were leaving home, Lyudmila Alexandrovna said, ‘It’s raining — a good omen,’“ Putin told reporters at Polling Station No. 2074 at the Russian Academy of Sciences.
After he and his wife had cast their ballots, Putin said he was in a “good, festive” mood, a disposition apparently not disturbed by an elderly woman on crutches who unexpectedly approached him as he tried to submit his ballot.
The poker-faced Putin was caught off guard by the woman, an observer from the Liberal Democratic Party who appeared to be complaining about something. When a security guard attempted to remove the woman, Putin motioned to him to stay back and proceeded to hear her out, at one point placing his hand on her shoulder in an attempt to comfort her. After Putin left the polling station, election officials identified the woman as Tula resident Valentina Morozova. She ignored repeated requests by reporters to reveal the contents of her brief conversation with Putin. “She’s late. He’s no longer president,” said Anna Soinova, an observer from the pro-Kremlin United Russia party, which formally nominated Putin’s handpicked candidate, First Deputy Prime Minister Dmitry Medvedev, for president.
Putin, in fact, does not officially leave office until May.
Many voters at Putin’s polling station said they were satisfied with the choice of candidates and that they had cast their ballots for Medvedev.
“It’s time to be responsible people,” said Yelena Odina, a preschool teacher. Odina declined to say which candidate she had chosen, saying only that she had voted for stability and continuity. People are tired of political upheavals, she said.
Gennady Zaitsev, former head of the Federal Aviation Service, said he voted for Medvedev because there were no other worthy candidates.
“Who else? The Communist Party? Been there, done that,” Zaitsev said.
And LDPR leader Vladimir Zhirinovsky would put everyone in prison if he were to become president, Zaitsev said, referring to Zhirinovsky’s promise to jail thousands of officials.
Pensioner Vladimir Sysoyev said he had voted for Medvedev because the Kremlin-backed candidate would continue Putin’s effort to keep Russia strong. He said he was not concerned that Medvedev’s victory was largely a foregone conclusion. “It’s done this way everywhere,” Sysoyev said.
After Putin voted, he dined with Medvedev, Prime Minister Viktor Zubkov, Federation Council Speaker Sergei Mironov and State Duma Speaker Boris Gryzlov at the central Moscow restaurant Expedition, which specializes in Arctic cuisine and is frequented by government officials.
Nina, a manager at the restaurant, said the staff learned of the august visit roughly 30 minutes before the guests arrived. The senior officials dined for about 90 minutes, said Nina, who described the ambience as “very good.”
“They joked in a carefree manner,” she said.

TITLE: Bikinis, Pies Used to Pull In Polar Voters
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: NARYAN-MAR, Nenets Autonomous District — Galina Vladimirovna put on her nicest dress and best fur coat Sunday morning, and told her 70-year-old mother to do the same.
There was no wedding or holiday to celebrate — they were going to vote.
“We simply ran to the voting booth,” said Galina, 35, a mother of two. She spent the entire morning at the House of Culture in Iskatelei, a village in the heart of the Nenets Autonomous District, inside the Arctic Circle.
Even in one of Russia’s most isolated regions — no trains or roads connect Nenets with what locals call “the mainland” — Dmitry Medvedev emerged as the clear favorite following a sustained campaign that focused on his endorsement by President Vladimir Putin.
“We voted for Putin the first time around and the second, now we voted for Medvedev and we’ll continue this way,” Galina said. “The very fact that he cares is something, that his policies reach our small town.”
In the last Duma elections, Nenets registered the country’s lowest voter turnout and United Russia support after St. Petersburg, the city where Putin and Medvedev come from. In Nenets, the ruling party took 48.75 percent of the vote — a far cry from the near-100 percent numbers recorded in some North Caucasus republics.
Officials and residents in this oil-rich region blamed the poor showing in the Duma elections on a budget dispute with the neighboring Arkhangelsk region that erupted just before the vote. This time, they said, things would be different.
The House of Culture in Iskatelei, the region’s second-biggest settlement, was full of children and voters who had been invited to a free daylong entertainment program after casting their ballots.
Feasting on freshly cooked shashlik and homemade pies sold on the premises, Galina and her mother had just left the next room, where six young women clad in small white bikinis danced and cavorted for an audience of all ages in front of a Russian flag made out of red, white and blue balloons.
“Did you see how wonderfully the kids danced?” Galina’s mother said, smiling.
Efforts to get out the vote Sunday, amid a light snowfall and a temperature of minus 28 degrees Celsius, appeared to be successful here. Officials reported a turnout of 45.76 percent of registered voters by 2 p.m., soon before the short day in this polar region — which sees no sunlight between December and February — begins drawing to a close.
At another voting site in the back of the House of Culture, music was blaring away and the food was plentiful. Tatyana Medvedeva, the official in charge, was loudly enthusiastic. She gave the day’s first voter a calendar, and presented a Russian flag to a woman who was celebrating her birthday on Sunday.
Marina Obdurazakova, 19, a first-time voter, got a pin proclaiming: “I am going to vote in the March 2 presidential elections,” a pen saying, “The North is cool!” and a hearty handshake from Medvedeva.
“Be healthy and happy and come vote again!” Medvedeva said, after presenting the gifts to the shy teenager.
Dozens of voters, including Obdurazakova, said they voted for Medvedev, but few could give concrete reasons why. Their answers sounded like cheery slogans borrowed from United Russia, the party created to back Putin and now his successor, Medvedev.
“I voted because this is for the future of our country,” Obdurazakova said.
“I voted for Medvedev because our current president, Putin, supported him,” said Dmitry, 37, a lawyer voting at School No. 1 in Naryan-Mar, the nearby town of 18,000 people that serves as the region’s administrative capital.
Another voter, Viktor Shirokov, 51, said: “I voted for Medvedev because we need stability. The most important thing a president must take care of is stability inside the country and the fight against corruption.”
As voters turned out enthusiastically, the head of the regional United Russia branch, Maxim Gorelik, appeared relaxed about the vote.
“There’s less pressure this time,” he said in an interview in a local restaurant on Saturday. “For the Duma elections, the key was to achieve a constitutional majority.”
Gorelik said he had received no instructions from party headquarters this time. “During the Duma elections, they would call us every two hours asking about turnout,” he said.
Nenets, although an area twice the size of Portugal, is home to just 42,000 people.

TITLE: Two of Three Losing Candidates Slam Election
AUTHOR: By Anatoly Medetsky, Nikolaus von Twickel and Max Delany
PUBLISHER: Staff Writers
TEXT: Gennady Zyuganov arrived at the press center of his Communist Party’s headquarters a few minutes after national television started broadcasting initial results at 9 p.m. Sunday.
The 63-year-old Communist leader looked tense and said he had been hoping to win. But with some 20 percent of the vote in early returns, he conceded defeat to Dmitry Medvedev and promised to go to court.
“If there had been a direct debate, I would have won this election,” he exclaimed loudly.
Medvedev, poised to win a landslide victory after being endorsed by President Vladimir Putin, refused to participate in televised debates with Zyuganov and the other two presidential candidates, Liberal Democratic Party leader Vladimir Zhirinovsky and Andrei Bogdanov, an independent.
Zyuganov said his supporters had uncovered numerous violations and that he should have gotten at least 30 percent of the vote.
“I have a list of 200 violations, each one being more cynical than the next,” he said.
He said he would challenge the results in court.
Zyuganov said he had seen the defeat coming due to the “unfair campaign.”
During his 15-minute speech, Zyuganov also called for reforms to make the Kremlin more accountable to the State Duma. After delivering the speech and taking several questions, Zyuganov walked to a nearby two-story yellow mansion that houses the party’s headquarters. A spokesman said Zyuganov “didn’t see any point” in further contact with reporters and denied a reporter entry to the building at 3 Maly Sukharevsky Pereulok.
Zyuganov, the most popular of the three outside candidates going into the election, appeared on track to score significantly better than the 11 percent projected in the most recent opinion poll by the independent Levada Center. The poll had a margin of error of 3 percentage points.
Still, the results were a far cry from 1996, when Zyuganov trailed the incumbent Boris Yeltsin by a mere 3 percentage points going into a second round of voting. Zyuganov ended up losing to Yeltsin by 13 percent in the runoff.
In the 2000 election, Zyuganov got 29.21 percent of the vote, losing to Putin’s 52.52 percent. He skipped the 2004 election after the Communists faired poorly in Duma elections the previous December. The party instead fielded Nikolai Kharitonov, who won 14 percent of the vote. The Communists won 11.57 percent of the vote in Duma elections last December.
Zhirinovsky — who looked set to make his best showing with his fourth presidential bid — criticized the election as unfair and insisted that he had beaten Zyuganov.
“I know that more people voted for me. A majority of the civil servants, even a majority of journalists, voted for me,” he said at his party’s headquarters on 9 Lukov Pereulok.
Preliminary results gave Zhirinovsky some 12.5 percent of the vote.
“I had hoped to win three times more votes,” he said.
Zhirinovsky also vowed to dispute the results in court.
“We have always sued even though it is useless, and we will sue this time too,” Zhirinovsky said.
He said the violations were similar to those his supporters had detected during the Duma elections in December, but did not elaborate.
Zhirinovsky, however, said it would be useless to organize street protests.
Reverting to his trademark colorful style, he lashed out at his rivals. “Medvedev is the official candidate of power. He gets all the administrative resources,” he said.
“Zyuganov is the old song of communism. And then there is this tramp,” he said, referring to the long-haired Bogdanov.
A senior party official said the election results did not spell the end of Zhirinovsky’s career, noting they were much better than the 2.7 percent he received when he last ran in 2000. “This man has his electorate,” the official said, speaking on condition of anonymity.
The 61-year-old veteran politician took third place with some 8 percent of the vote in 1991 and 5.7 percent in 1996. He opted not to run in 2004, leaving the job to his former bodyguard Oleg Malyshkin, who scored 2 percent. His party won 8.14 percent in the last Duma election.
The recent Levada survey gave Zhirinovsky 9 percent.
On Sunday night, Zhirinovsky loudly complained about the unfair allocation of airtime on state television.
“I want to serve my electorate. I know they voted for me, and these numbers are just paper,” he said.
Over at Bogdanov’s campaign headquarters, the mood was distinctly relaxed, even though early results showed he had finished a distant fourth with less than 2 percent.
“Before now, absolutely nobody knew who I was. The old generation of democrats is finished. This is the time for the new generation,” Bogdanov told a small group of reporters, including about 10 television cameras, at his headquarters on 18 Poltavskaya Ulitsa.
Holding a plastic cup of vodka, the 38-year-old leader of the little-known Democratic Party said he was “satisfied” and “happy” with the result.
He then toasted his young staff of fewer than 15 people before a small, alcohol-heavy buffet was then made available to party activists and reporters. The reporters soon became more interested in the beverages than the candidate.
Alexander Bogdanov, the 28-year-old brother of Bogdanov and a campaign activist, said his family was proud. “Of course our family is proud. We all work for the party anyway,” he said. Among the other members of the family who campaigned was Bogdanov’s grandmother.
Bogdanov ran as an independent because his Democratic Party did not make it into the Duma in December, capturing around 0.13 percent of the vote, or less than 90,000 votes. The party, whose roots go back to the early 1990s and which Bogdanov has headed up since 2005, claims to have more than 75,000 members nationwide. Bogdanov had to obtain 2 million signatures to get on the ballot.
The Levada poll indicated he would get about 1 percent.
Medvedev, meanwhile, was supposed to arrive at his campaign headquarters at 11 p.m., but state television showed live footage of him and Putin attending a rock concert on Red Square around that time.
The Moscow/St. Petersburg Times was among media outlets denied accreditation to Medvedev’s campaign headquarters. Medvedev’s spokesman, Alexei Pavlov, linked the decision to a prohibition on foreign media. No foreign newspapers were accredited, and “we consider you a foreign newspaper,” Pavlov said.
The Moscow/St. Petersburg Times is legally a Russian media outlet and is registered with the authorities as such.
The Moscow/St. Petersburg Times also was barred from Polling Station No. 2614 in western Moscow, where Medvedev cast his ballot earlier Sunday. A spokesman for Medvedev said the decision was due to of lack of space at the polling station.
Spokespeople for Medvedev have rejected repeated requests over the past six months to join his media pool for working trips to various regions.

TITLE: BlackBerry Gets The Go-Ahead
PUBLISHER: Bloomberg
TEXT: MOSCOW — Mobile TeleSystems and VimpelCom, Russia’s biggest mobile-phone companies, got permission to import BlackBerry e-mail devices after overcoming opposition from the main successor agency to the Soviet-era KGB.
The Economy Ministry notified the companies on Thursday that their applications were approved, Mobile TeleSystems spokeswoman Irina Osadchaya and VimpelCom spokeswoman Yekaterina Osadchaya said by phone in Moscow on Friday.
“We will be able to offer this service to customers at the start of the second quarter,” said Irina Osadchaya, who isn’t related to Yekaterina. 
The  FSB refused to allow the unlimited use of the BlackBerry handsets until it gained the ability to read messages sent to and from the devices. Mobile TeleSystems and VimpelCom granted access to their e-mail servers after Research In Motion Ltd., the Waterloo, Canada-based maker of the BlackBerry, refused to provide its source codes, Vedomosti newspaper reported Friday, citing unidentified executives from the Russian companies.

TITLE: Goodyear Opens Store in St. Petersburg
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Goodyear, one of the world’s largest producers of tires, opened its first store and service center in St. Petersburg on Friday. The store, located at Prospekt Morisa Toreza, will operate under the Premio brand.
The store will sell a wide range of Russian and foreign brand tires, car accessories and cleaning equipment. In addition, the store will offer car repairs and maintenance services, a car wash and seasonal storage for tires.
“The decision to open a tire store in St. Petersburg was based on the good economic prospects of the Northwest region. It’s a logical continuation of our development in Russia,” said Bogdan Postolatiy, director for development of the Premio chain store.
The first Goodyear store opened in Russia in 2005, and the company currently operates 34 stores across the country. “Our company will soon operate Premio stores all across Russia,” Postolatiy said.
Russia is a priority market for Premio, he indicated. According to estimations by Deloitte, by 2010 the share of premium-class tires on the Russian market will increase from a current level of 26.1 percent to 31 percent.
“Increasing the share of premium-class tires on the market is a direct result of the growing number of foreign cars sold in Russia, both imported and produced on the territory of Russia,” Postolatiy said.
“The proportion of foreign cars in Russia is growing every year. According to forecasts, by 2010 foreign cars will account for 65 percent of sales of new cars in the country,” Postolatiy said.
In St. Petersburg, in addition to the local Ford plant and a Toyota plant that started operating in December last year, three foreign automakers are constructing car assembly plants — General Motors, Nissan and Suzuki.
On Friday the St. Petersburg government released a statement saying that a Hyundai plant will be constructed by 2010.
According to the latest report by PricewaterhouseCoopers, in 2007 the Russian automotive market increased in monetary terms by 67 percent to $53.4 billion. Sales increased by 35 percent or 2.79 million cars.
The proportion of people’s total expenditure on cars grew from 4.38 percent of their disposable income in 2006 to 5.15 percent last year.
According to PwC, Russian brands are being replaced by foreign ones. New foreign cars increased their market share in monetary terms from 26 percent in 2002 to 76 percent last year, and foreign car sales rose from $2.8 billion in 2002 to $40.8 billion in 2007.
“We can forecast that the Russian automotive market will demonstrate more record growth in the future,” said Stanley Root, Automotive Industry Group Leader at PricewaterhouseCoopers.
According to Deloitte, retail chains account for 32 percent of tire sales in Russia, competing mainly with markets (28 percent) and wholesalers (19 percent). By 2015 the share of retail chains will increase to 43 percent. Goodyear operates Premio stores under franchise agreements. In St. Petersburg the store was opened in cooperation with Shina.ru wholesale and retail company, which became a Goodyear distributor last year.
“We have cooperated with Shina.ru for two seasons and feel confident that our cooperation with this distributor will have excellent results. Hence we have decided to launch a joint project in St. Petersburg in 2008,” said Kirill Anisimov, sales manager for the Northwest region at Goodyear Russia.
Last year Goodyear sold over 100 million tires through its Premio stores chain, which comprises over 260 stores across Europe.

TITLE: BoNY Fails to Get Russian Lawsuit Dismissed in Court
PUBLISHER: Bloomberg
TEXT: MOSCOW — Bank of New York Mellon Corp., the world’s largest custodian of financial assets, failed to win dismissal of a $22.5 billion lawsuit in a Russian court for alleged money-laundering.
An investigation into the charges will be opened by the prosecutor general’s office, and the next hearing will be held on April 17, according to statement made Friday by the Moscow-based law firm representing the Russian Federation.
The Russian customs service sued the bank May 17, accusing it of helping illegally transfer $7 billion out of the country in the 1990s. Bank of New York Mellon in 2005 reached a settlement in the U.S., admitting it failed to report suspicious transactions and paying $14 million to end two criminal probes.
“Today’s court hearing was dedicated to procedural issues,” Kevin Heine, a spokesman for Bank of New York Mellon, said in an interview. “ We have strong substantive arguments and are fully prepared to argue the merits of the case at the appropriate time.”
Bank of New York Mellon fell $2.30, or 5 percent, to $43.87 at 4:03 p.m. in New York Stock Exchange composite trading. The stock has dropped 10 percent this year, compared with the 9.4 percent decline by the Standard & Poor’s 500 Index.
A former Bank of New York vice president based in London, Lucy Edwards, and her husband Peter Berlin, who ran companies with accounts at the bank, admitted in 2000 to conspiring to use the bank to launder more than $7 billion from Russia. The two Russian emigres were sentenced last year to five years of probation after cooperating with New York federal prosecutors investigating international money laundering.
Bank of New York Mellon, which oversees $23.1 trillion in custody assets, exited the retail banking business in 2006. Last year, it merged with Mellon Financial Corp. to vault ahead of JPMorgan Chase & Co. as the world’s biggest custody bank.

TITLE: Outlook Good For Sberbank
PUBLISHER: Bloomberg
TEXT: MOSCOW — Dmitry Medvedev’s victory in Russia’s presidential election on Sunday will benefit the stocks of state-controlled companies including Gazprom, Rosneft, Transneft, and Sberbank, according to Renaissance Capital.
Medvedev, the current Gazprom chairman, had 70.2 percent of the vote with 98.1 percent of returns counted Monday morning, according to the Central Election Commission.
“Medvedev has mentioned improving bureaucratic procedures, supporting new business, transferring administration functions to the private sector and improving the quality of state-owned companies,” Renaissance strategists Roland Nash, Tom Mundy and Ovanes Oganisian in Moscow wrote in a report.
Gazprom shares may benefit in the next administration as the world’s biggest gas producer spins off its banking arm, Gazprombank, its petrochemical unit, Sibur Holding, and its electricity assets, according to the Moscow-based investment bank.
In Medvedev’s presidency, Rosneft, Russia’s biggest oil producer, will probably have the same “superior access to assets,” such as the assets of bankrupt Yukos Oil Co., which it gained under Putin.

TITLE: In Brief
TEXT: <b>Power Charges Increase</b>
MOSCOW (Bloomberg) — Power prices in the European part of Russia, the more populated of the country’s two pricing zones, jumped 34 percent last month, the ATS electricity exchange said.
Electricity sold in the so-called first pricing zone, which includes the European Russian and Ural Mountains regions, climbed to a weighted average of 860.9 rubles ($35.85) per megawatt hour during January, Moscow-based ATS said Friday in an e-mailed statement.
The European price climbed to more than double that in the so-called second zone, which includes Siberia and the Far East. Power in Siberia sold for 421.3 rubles per megawatt hour in January, based on a weighted average, which represents a 6.8 percent rise on the previous month.

<b>Hyundai Plant Planned</b>
ST. PETERSBURG (Bloomberg) — Hyundai Motor Co., South Korea’s largest automaker, signed an agreement with the St. Petersburg government to build a $400 million assembly plant in the Russian city by 2010 to supply Europe’s fastest growing car market.
The company plans to make 100,000 vehicles annually at a 200-hectare site in the city’s Kamenka industrial zone, the government said in an e-mailed statement Friday. Hyundai Mobis Co., South Korea’s biggest auto parts maker, will build a plant in the same location.
Hyundai joins four other foreign carmakers with assembly plants built or operating in St. Petersburg.

<b>Usmanov Enters Nickel</b>
MOSCOW (Bloomberg) — Russian billionaire Alisher Usmanov acquired 3 percent to 4 percent of GMK Norilsk Nickel, Kommersant said, citing unidentified people close to Usmanov.
Usmanov, who is seeking to merge his iron-ore and steel producer Metalloinvest with Norilsk, bought the shares on the market, the newspaper said Monday. Usmanov owns Kommersant.
Fellow billionaire Vladimir Potanin also bought Norilsk shares to raise the stake he owns directly to about 27 percent from 22 percent, Kommersant said.
Oleg Deripaska’s United Co. Rusal, the world’s biggest producer of aluminum, is in the process of buying 25 percent of Norilsk from Mikhail Prokhorov.

<b>Finns Asked For Help</b>
MOSCOW (Bloomberg) — Nord Stream AG has asked the Finnish military for help in clearing naval mines found on the route of Gazprom’s planned natural gas pipeline in the Baltic Sea, Helsingin Sanomat reported Friday.
The Finnish navy doesn’t have the resources or a legal obligation to undertake the clearance work that Nord Stream was looking to commission in early February, the Helsinki-based newspaper said Friday, citing Commander Kari Aapro from the Ministry of Defense.
Ten naval mines and dozens of possible mines dating from World War II were found on the sea bed in the international waters of the Gulf of Finland, Helsingin Sanomat said, citing Aapro. Tens of thousands of mines were used during wartime and later sunk to clear the sea for ships, Aapro said.
The Nord Stream pipeline, a Russian-German joint venture, will stretch 1,200 kilometers (745 miles) from Vyborg in Russia to Greifswald in Germany and is scheduled to begin carrying natural gas in 2011.
Seaport Plans Upgrade</b>
ST. PETERSBURG (Bloomberg) — St. Petersburg Seaport, owned by Russian billionaire Vladimir Lisin, will spend 19 billion rubles ($791 million) through 2011 to develop infrastructure and build a container terminal.
St. Petersburg Seaport, which includes four stevedore companies that shipped 12 million tons of metal, coal, fertilizer and timber in 2007, will start building a 9 billion-ruble container terminal in the second half of this year, the company said Monday on its web site.
The port spent 546 million rubles last year to upgrade the facilities, start work on an auto terminal and relieve traffic congestion on surrounding roads, it said.

<b>Fighter Jets Delivered</b>
MOSCOW (Bloomberg) — Russia delivered four Sukhoi fighter jets to Malaysia, adding to six already sent to the southeast Asian country.
Russia delivered four Su-30MKM aircraft under a 2003 contract for 18 warplanes, Moscow-based Sukhoi Aviation Holding Co. said Monday in a statement.

<b>Carbon Credits Sold</b>
MOSCOW (Bloomberg) — Unified Energy System, Russia’s national utility, sold credits for 550,000 metric tons of carbon dioxide, raising 4.5 million euros ($6.9 million) to help pay for an upgrade of power stations.
Clean Planet Group, based in the U.K., won the credits at an auction, Moscow-based Unified Energy said Monday in an e-mailed statement. The sale, the first of its kind by Unified Energy, offered so-called emission reduction units, or ERUs, from the utility’s third carbon-credit project. Unified is Russia’s biggest producer of carbon dioxide.

TITLE: VTB Reaches Record Low
PUBLISHER: Bloomberg
TEXT: MOSCOW — VTB Group, the Russian bank that had the world’s biggest initial public offering last year, fell to a record low after Citigroup Inc. cut its price estimate on concern the credit-market turmoil will hurt earnings.
VTB, Russia’s second-biggest bank after Sberbank, sank 4.1 percent to 9.03 kopeks as of 4:20 p.m. in Moscow on Friday, on the Micex Stock Exchange. The shares have lost a third of their value since the IPO in May. The GDRs dropped 3.7 percent to $7.49 Friday in London. Citigroup reduced its estimate on VTB’s global depositary receipts 23 percent to $8.90.
The bank is “vulnerable to the continued liquidity tightening in the global credit markets,” analysts including Moscow-based Dmitry Vinogradov wrote in a report Friday. Each GDR is equivalent to 2,000 Russian shares. Citigroup helped manage VTB’s public offering. UBS AG on Thursday lowered its price forecast to $9 from $11, saying “continuing poor credit conditions” will make it more difficult for the bank to borrow. Investors should switch to Sberbank shares, the Swiss bank said. VTB’s shares dropped 2.6 percent yesterday in Moscow.
Citigroup has a “hold” recommendation on VTB, while UBS rates the stock “neutral.”
VTB raised $8 billion in May last year as President Vladimir Putin encouraged Russians to buy shares in so-called “people’s IPOs” such as VTB’s share sale.
A group of shareholders representing workmen, retirees, doctors and teachers last year asked the government, VTB’s majority shareholder, to buy back shares at the offering price of 13.6 kopeks apiece.

TITLE: Gazprom Cuts Supplies To Ukraine Amidst Row
AUTHOR: By Torrey Clark and Daryna Krasnolutska
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom cut natural-gas shipments to Ukraine after failing to resolve a debt dispute, rekindling concern about Russia’s reliability as an energy supplier.
Gazprom, Russia’s state-run natural-gas export monopoly, reduced deliveries to Ukraine by 25 percent at 10 a.m., spokesman Sergei Kupriyanov told reporters Monday in Moscow. Gazprom will supply European consumers in full, he said. The standoff echoes a pricing dispute in January 2006, when Gazprom turned off all Ukrainian gas exports for three days, causing volumes to fall in the European Union. About a fifth of Europe’s gas travels through Ukrainian pipelines from Russia.
“This still doesn’t represent a crisis, just a greater degree of brinkmanship,” Geoffrey Smith, deputy head of research at Renaissance Capital Ukraine, said in an e-mail after the announcement. “The weather is warm and forecast to stay so, and storage both in Ukraine and further west is unlikely to be depleted after another mild winter.”
Kupriyanov said Feb. 29 that the state-controlled company had warned its European trading partners about the situation.
“Gazprom is a reliable energy supplier, but we cannot and will not deliver gas without payment,” Kupriyanov said Monday.
NAK Naftogaz Ukrainy, Ukraine’s state oil and gas company, is “studying” a new offer made by Gazprom and will send a delegation to Moscow by the end of this week, spokesman Ilya Savvin said by telephone Monday from Kiev.
Ukraine averted Gazprom’s previous threat of a reduction in gas supplies through a Feb. 12 agreement reached between Russian President Vladimir Putin and his Ukrainian counterpart President Viktor Yushchenko. Putin’s favored successor, First Deputy Prime Minister Dmitry Medvedev, who is also Gazprom chairman, won Russia’s presidential election Sunday.
Gazprom said Ukraine has failed to pay its debt in full and hasn’t signed an agreement on future gas imports.
Europe has been seeking to build pipelines from Central Asia to reduce dependence on Russian gas, while Gazprom is planning routes to supply Europe directly, circumventing transit countries such as Ukraine.
“No one is innocent,” said Peter Halloran, chief executive officer of Moscow-based Pharos Financial Group. “Both Russia and Ukraine are disrupting the supply chain to Europe. This gives impetus to build alternative pipelines to avoid regional politics.”
The European Commission may call a meeting of gas coordination experts, although it expects “gas supplies to the EU will not be altered,” spokesman Michele Cercone told reporters in Brussels. He urged Russia and Ukraine “to find a quick and definitive solution.”
Ukraine’s prime minister, Yulia Timoshenko, said over the weekend that she didn’t expect Gazprom to reduce deliveries because there was no official notification of the threat.
The cutoff represents “an embarrassment” for Timoshenko, Renaissance Capital’s Smith said.
Supplies to Naftogaz were cut by 30 million cubic meters a day, or a quarter of usual deliveries, spokesman Valentyn Zemlyanskyi said by phone from Kiev.
Ukraine owes about $600 million for 1.9 billion cubic meters of Russian gas it has received without a contract, Kupriyanov said. Gazprom has been supplying Russian fuel after Central Asian deliveries declined, he said last week.
Gazprom is also demanding Ukraine approve the creation of two companies to handle the gas trade, replacing RosUkrEnergo AG, the only company allowed to import gas into Ukraine now. Gazprom and Naftogaz will equally share ownership of the new companies. RosUkrEnergo, owned by Gazprom and two Ukrainian citizens, was set up to resolve the 2006 price dispute.
Timoshenko and ministers have sought to reject the Feb. 12 deal, calling on Gazprom to sell gas directly to Naftogaz.
E.ON AG, Germany’s largest supplier of natural gas, expects to maintain normal deliveries to its customers after Gazprom cut shipments to Ukraine, E.ON Ruhrgas spokeswoman Astrid Zimmermann said by telephone. Zimmermann declined to comment on whether the company has seen any change in deliveries of Russian gas, saying that the company draws gas from several sources.
Wingas, a joint venture between BASF AG’s Wintershall unit and Gazprom, is receiving Russian gas deliveries as normal, spokesman Stefan Leunig said.

TITLE: Barclays Purchases Expobank
AUTHOR: By Ben Livesey and Denis Maternovsky
PUBLISHER: Bloomberg
TEXT: LONDON — Barclays Plc, the U.K.’s third-biggest bank, acquired Russian lender Expobank for $745 million in its first overseas acquisition since losing the bidding contest for ABN Amro Holding NV.
Barclays agreed to pay cash for Petropavlovsk Finance Ltd.’s 100 percent stake in Expobank, the London-based bank said Monday in a statement. Expobank has 32 branches concentrated in Western Russia, including St. Petersburg and Moscow.
Barclays already operates in Russia through its investment banking unit, Barclays Capital. The bank, which has lending units in Spain, Portugal and South Africa, offered about 65 billion euros ($99 billion) last year for Amsterdam-based ABN Amro before losing to Royal Bank of Scotland Group Plc. Barclays is paying about four times Expobank’s book value of $186 million.
“It looks like they are paying a big number, but you have to keep it in perspective of the size of the group,” said James Hutson, a London-based analyst at Keefe, Bruyette & Woods Ltd. “It has strategic rationale and shows the direction they are going,” said Hutson, who rates Barclays “market perform.”
Barclays fell 3 percent to 462.75 pence at 10:25 a.m. in London trading, valuing the bank at 30.2 billion pounds. The shares are down 35 percent from a year ago.
Barclays seeks to increase overseas profit amid a deteriorating U.K. economy and the collapse of the market for credit-related securities, previously a growth engine for Barclays. Expobank, with one of the largest networks of automatic teller machines in Moscow, had assets of 29.8 billion rubles ($1.24 billion) as of Jan. 1.
Russian banking, dominated by state-owned giant Sberbank, is in a consumer-lending boom, fueled by the country’s 10th straight year of economic growth. Russia grew 8.1 percent last year, compared with 2.9 percent in the U.K.
Barclay’s purchase of Expobank is the latest in a string of acquisitions by European banks. Societe Generale, France’s second-biggest bank by market value, boosted its stake in Rosbank, Russia’s eighth-biggest, to more than 50 percent last month from about 20 percent and said it will increase its holding to 58.7 percent.
UniCredit SpA, Italy’s biggest bank, raised its stake in International Moscow Bank to 100 percent last June. Raiffeisen International Bank, Austria’s biggest by market value, paid $550 million for Russian lender Impexbank in 2006, making it the country’s largest foreign bank.
The acquisition of Expobank represents a “great opportunity” as Barclays seeks to become “one of the leading retail and commercial banks in Russia,” Frits Seegers, head of consumer lending at Barclays, said in the statement.
Barclays expects to complete the transaction by this summer and generate profit on the acquisition by 2011, according to the statement.

TITLE: LCMC Introduces Auditing Service
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: London Consulting & Management Company (LCMC) has added a new service to those offered by the firm — auditing concepts for the development of commercial premises. Managers expect the new service to become popular in Russia’s regions.
Competition on the commercial real estate market is growing, which has created a demand for more professional services and more highly qualified consultants. According to LCMC, clients often ask for an examination of concepts that have been developed by regional consulting firms.
“Not so long ago, many developers rejected the very idea of turning to Moscow based consultants for market research and the development of an optimal concept,” said Dmitriy Zolin, managing partner of LCMC.
“Now experts on commercial real estate are in such demand that consulting companies have begun to work in the regions. However, the professional qualifications of many regional consultants leave much to be desired,” Zolin said.
The audit will include an analysis of the existing concept and evaluation of its efficiency. Along with comments and recommendations, LCMC will analyze architectural solutions and the market conditions.
“When we audit the concepts, we have to make a lot of radical changes to prevent the project from failing. Unprofessional recommendations do not necessarily come only from regional consultancies — global and Moscow-based consultants create concepts that are just as unrealistic and fantastical, assuming that regional clients are ignorant,” Zolin said.
The first concept audited by LCMC was for a shopping and entertainment center in Saratov. LCMC also analyzed the concept for a shopping center in the Moscow Oblast.
However, Nikolai Pashkov, director for professional services at Knight Frank St. Petersburg, indicated that auditing is not a major innovation in consulting.
“As a rule, developers ask a consultant to analyze the existing concept; its strong and weak points, and then produce recommendations on how to improve it,” Pashkov said.
Some developers want to verify their own concepts while others are looking for alternative opinions from several consultants, he added.
“Often developers ask two consultants to create concepts independently of one another. In this situation, it would not be good practice to audit the concept created by the other consultant, as the auditor would be influenced by the previous recommendations and could not produce an independent opinion,” Pashkov said.
Pashkov indicated that any large consultancy could offer the same service. Experienced developers working on large projects always engage the services of several consultancies, he said.
“If we are dealing with a project for premises covering several million square meters or a difficult project like Apraksin Dvor, any mistake could result in a disaster. The developer has every reason to minimize risks, eliminate subjectivism, consider the project from various angles and choose the optimal solution,” Pashkov said.

TITLE: Renault Acquires 25% Stake in AvtoVaz
AUTHOR: By Max Delany
PUBLISHER: Staff Writer
TEXT: MOSCOW — French auto giant Renault completed a deal Friday that could see the company pay up to $1.17 billion for a 25 percent stake in the country’s biggest carmaker, AvtoVAZ.
The companies cemented the deal, designed to reinvigorate the ailing Lada brand, at a signing ceremony in the Moscow headquarters of AvtoVAZ’s parent company, the recently formed state corporation Russian Technologies.
The agreement will see Renault pay about $1 billion now and a deferred payment of up to $166 million in late 2010 depending on AvtoVAZ’s earnings performance in 2008 and 2009, said Russian Technologies chief Sergei Chemezov, who also chairs the board at AvtoVAZ.
The deal will “preserve and protect the Lada brand,” Chemezov said at the ceremony. “Our main goal is to have a quality, competitive automobile.” 
AvtoVAZ is looking to float as much as 25 percent of its shares in Moscow and London as early as this fall, Chemezov said.
AvtoVAZ is currently controlled by state arms trader Rosoboronexport, a subsidiary of Russian Technologies. Renault is formally buying the 25 percent stake from brokerage Troika Dialog, which will forward the proceeds to Russian Technologies. 
“Russia is one of the most coveted markets for carmakers today, given the potential growth,” Renault chief executive Carlos Ghosn said at the ceremony.
Over the past few years, the country’s car market has increased spectacularly and is now poised to become the largest in Europe. Currently, Russian car ownership stands at 150 cars per 1,000 people — one-quarter the figure in France.
While AvtoVAZ domestic sales grew by 6 percent last year, foreign carmakers operating assembly plants in the country are growing faster.
Renault plans to boost production dramatically at AvtoVAZ’s mammoth Tolyatti plant to about 1.5 million cars per year by 2014. But Ghosn said the increased production would not mean increased competition for the sale of Renault models in Russia.
Under the strategic partnership agreement, Renault will get three seats on the AvtoVAZ board of directors, with four of the French firm’s managers taking senior positions at the Tolyatti plant, including the post of chief operating officer.
When asked whether he feared for the safety of the managers following the murder of AvtoVAZ’s head of procurement in Tolyatti last month, Ghosn said he had full confidence in local law enforcement agencies.
Chemezov said Renault had been chosen as AvtoVAZ’s strategic partner, out of a potential field that included U.S. General Motors, Germany’s Volkswagen, Italy’s Fiat and Canadian car-parts manufacturer Magna, in part because of Renault’s success in turning around Japanese carmaker Nissan.
“Renault did not swallow up Nissan but instead helped to develop the company’s brand,” Chemezov said.
AvtoVAZ president Boris Alyoshin, the former head of the Federal Industry Agency tapped last fall to lead the carmaker, said the first car to be jointly manufactured by Renault and AvtoVAZ would be based on the Renault Logan. Production would begin in 2009, Alyoshin said. Alyoshin has said recently that the car should sell for the equivalent of $6,000 to $7,000.

TITLE: KIT IPO Delayed
PUBLISHER: Bloomberg
TEXT: MOSCOW — KIT Finance, the Russian investment bank that considered an initial public offering this year, may instead opt to sell shares to private investors amid a slump in demand.
The company hired two international investment banks to explore options including an IPO and share placement, Deputy Chief Executive Officer Sergey Grechishkin said in a telephone interview on Thursday. The names of the banks were not disclosed.
Moscow-based KIT Finance, which ranks itself as Russia’s largest bond trader, said Sept. 20 it may seek to raise as much as 25 billion rubles ($1 billion) in a 2008 IPO. It could join another 85 companies worldwide in withdrawing or postponing IPOs this year, according to Bloomberg data, as equity markets slump and investor demand for offerings wanes.
“It will really depend on the market situation,” Grechishkin said. “We clearly need access to capital.”
The company had signaled the potential sale of stock in Russia and London late this year.
Net income was $106 million in the first half of 2007, and is estimated at $244 million for the full year, according to company documents. The expected full-year net income is little changed from 2006, though more than double the $101 million reported in 2005.

TITLE: Markets Plunge Amid Recession Worries
PUBLISHER: Agence France Presse
TEXT: LONDON — European and Asian stock markets tumbled Monday as investors reacted nervously to a steep decline on Wall Street Friday after disappointing economic and corporate news rekindled worries about a U.S. recession.
The U.K.’s benchmark FTSE 100 fell 1.3 percent to 5,808.1, while Germany’s DAX Index declined 1.5 percent to 6,652.08. France’s CAC 40 slipped 1.5 percent to 4,717.57.
U.S. stock index futures also were down, suggesting Wall Street was poised for another drop Monday.
In Asia, Japan’s benchmark Nikkei 225 index plunged 4.5 percent to close at 12,992.18. Markets in Hong Kong, South Korea, India and Australia also fell sharply, but shares in mainland China advanced.
Investors dumped stocks after a series of depressing economic and earnings reports Friday out of the United States — a vital export market and the world’s largest economy — sent the Dow Jones industrial average down 315.79, or 2.51 percent, to 12,266.39.
The bad news included poor quarterly results from American International Group Inc. and Dell Inc. and weaker-than-expected results on the Chicago purchasing managers index, which painted a dreary picture of the manufacturing sector.
“It’s all due to fears of a recession in the U.S.,” said CommSec chief equities economist Craig James in Sydney, Australia. “This is a global market sell-off.”
The dollar’s drop to a three-year low against the yen also weighed on sentiment in Tokyo as dollar weakness erodes overseas earnings at Japan’s key exporters. The dollar fell as low as 102.59 yen before recovering some to 103.10 yen, down from 103.96 yen late Friday in New York.
Asian markets, which have fallen much of the year so far, had staged a modest recovery through the middle of last week, with Tokyo’s Nikkei climbing to a seven-week high last Wednesday.
But pessimism returned Monday, sending Hong Kong’s Hang Seng index down 3.1 percent to close at 23,584.97. India’s benchmark Sensex tumbled 5.3 percent to a provisional close of 16,639.54.
U.S. economic growth slowed to a 0.6 percent pace in the fourth quarter and some analysts believe the economy is already shrinking.
“The biggest economy in the world is mired in recession and everybody suffers,” said Francis Lun, a general manager at Fulbright Securities in Hong Kong, summing up regional feelings.
Testifying before Congress last week, Federal Reserve Chairman Ben Bernanke signaled that the central bank sees weak growth as the main threat and is prepared to further cut interest rates.
Hours before Wall Street was to resume trading, Dow index futures were down 80 points, or 0.65 percent, to 12,204, while Standard & Poor’s 500 futures were down 5.1 points, or 0.4 percent, to 1,326.2.
Global investors are bracing for two key U.S. economic reports due this week: Monday’s release of the Institute for Supply Management manufacturing survey report and Friday’s jobs numbers. On average, economists are forecasting a slight increase in non-farm payrolls, but many believe they will decline for a second straight month.
In other markets in the region, the Korea Composite Stock Price Index fell 2.3 percent to 1,671.73, while Australia’s benchmark S&P/ASX200 index slid 3 percent to 5,405.8.
Markets in China, however, defied the trend. The benchmark Shanghai Composite Index rose 2.1 percent to close at 4,438.27, on expectations for possible market-boosting measures from the national legislative session, beginning this week.

TITLE: VW To Control Scania
PUBLISHER: Agence France Presse
TEXT: FRANKFURT — Europe’s biggest auto firm Volkswagen said Monday it has won control of Scania, a step that could dramatically reshape the heavy vehicle industry via an eventual merger of the Swedish truck maker with German rival MAN.
VW will hold 68.60 percent of the voting rights in Scania and increase its direct stake to 37.73 percent after buying shares from the Wallenberg family, the German company said in a statement.
Prior to the deals, VW owned 20.89 percent of the shares in Scania and held 37.98 percent of the voting rights.
“Scania is a strong premium brand which has a prosperous future,” VW chairman Martin Winterkorn said in the statement.
Scania boss Leif Ostlin told a press conference in Stockholm: “I very much welcome VW as the majority shareholder. It’s good for Scania to have the stability” following months of speculation over the company’s future.
VW is also the leading shareholder in German conglomerate MAN, another manufacturer of heavy trucks and buses that tried to take over Scania in late 2006.
A merger of Scania and MAN would create the biggest European manufacturer of heavy trucks and Volkswagen reportedly favours a three-way tie-up that would also include VW’s Brazilian truck activities.
VW agreed to pay 200 Swedish kronor (21.4 euros, 32.4 dollars) per Scania share to the Wallenberg Foundations and Investor AG, which is controlled by the family, bringing the cost of the deal to around 2.87 billion euros.
Investor chief executive Borje Ekholm said his company had held a stake in Scania since the truck maker was founded in 1916, adding that the deal with Volkswagen would aid Scania’s future development.
“VW has proven to be a very good owner of industrial companies ... and this transaction is the best solution for Scania,” Ekholm said.
VW has been increasing its voting rights in Scania for the past several months by exchanging shares with fewer rights for others that had more.
It has pursued the same strategy with MAN.
MAN welcomed the news of VW’s Swedish move, with a spokesman telling AFP: “We foresee better conditions for the cooperation we seek with Scania and the heavy vehicle activities of Volkswagen.”
But VW financial director Dieter Poetsch told the Stockholm news conference that a merger of Scania and MAN was not likely in the short term.
While there was potential for savings with other groups, it was not the order of the day, Poetsch said.
Volkswagen also said Monday that it did not plan to make changes at Scania “that would affect adversely the employees of the company” while its headquarters and research centres would remain in Soedertaelje, near Stockholm.

TITLE: HSBC Sees Profits Rise Despite Subprime Crisis
AUTHOR: By Steve Slater
PUBLISHER: Reuters
TEXT: LONDON — HSBC’s profits rose 10 percent last year as buoyant growth in Hong Kong and elsewhere in Asia helped Europe’s biggest bank absorb $17.2 billion in bad debts as the U.S. housing crisis deepened.
Profits in Hong Kong rose 42 percent and earnings jumped 70 percent in the rest of Asia, but the bank’s North American arm barely scraped a profit as past risky loans to U.S. homeowners now in trouble hit it hard.
The London-headquartered bank reported record pretax profit of $24.2 billion for 2007, up from $22.1 billion in 2006. This was below an average forecast of $24.7 billion from a Reuters Estimates poll of analysts, but results were distorted by some one-off items and did not include a $1.3 billion property gain expected by many analysts.
Underlying profit growth was 5 percent for the year, which analysts said was in line with forecasts.
The bank’s impairment charge jumped $6.7 billion from 2006, or 63 percent. Bad debts had been expected to come in at $15.8 billion, based on the average of forecasts from eight analysts.
By 6:35 a.m. EST Monday, HSBC shares were up 0.8 percent at 772 pence, one of the top performing stocks in a weak U.K. share market and lifting the bank’s value over 91 billion pounds ($181 billion).
“If ever proof were needed about the benefits of diversification, these numbers from HSBC fall squarely into that category,” said Richard Hunter, head of U.K. Equities at stockbroker Hargreaves Lansdown.
“Its performance in the ever-strengthening markets of China, India and Hong Kong proved a more than ample buffer against its U.S. subprime woes.”
HSBC said the outlook for 2008 was uncertain and that the U.S. economic slowdown and credit outlook “may well get worse”.
It said its conservative balance sheet and international spread left it well positioned and it expects to improve margins and will “continue to invest in building market presence at a time when others with weaker capital positions are constrained”.
The bank has said it may sell half its branches in France for $3.2 billion and redeploy proceeds towards emerging markets, and other businesses could follow.
“There would be a number of businesses at the periphery of the European platform we have at the moment, and the U.S. platform, where we would say if someone else thought they could make more of this than we did, we would listen,” Douglas Flint, HSBC finance director, told reporters on a conference call.
HSBC North America made a 2007 profit of just $91 million and the bank admitted to an “exceptionally weak” performance in the United States.
The problems stem from aggressive selling of subprime mortgages by its U.S. arm HSBC Finance, formerly the Household business bought for $14.8 billion five years ago. North America bad debts were $12.2 billion, up 79 percent from 2006.
“The pain is far from over — we expect more of the same in 2008 and 2009. Not so much the American dream, more an American nightmare,” said Exane BNP Paribas analyst James Eden.

TITLE: Warren Buffett: America Is Essentially In a Recession
PUBLISHER: The Associated Press
TEXT: OMAHA, Nebraska — Billionaire Warren Buffett said Monday that the U.S. economy is essentially in a recession even if it hasn’t met the technical definition of one yet.
Buffett said in an interview with cable network CNBC the reports he gets from the retail businesses his holding company owns show a significant slowdown in purchases.
The chairman and CEO of Omaha-based Berkshire Hathaway Inc. said millions of people have also lost equity in their homes because home prices have dropped.
The technical definition of a recession most economists use is two consecutive quarters of negative growth in the nation’s gross domestic product.
“I would say, by any commonsense definition, we are in a recession,” Buffett said on CNBC.
But Buffett said it’s not clear how far the recession will go because that is difficult to predict.
The technical definition of a recession most economists use is two consecutive quarters of negative growth in the nation’s gross domestic product.
On Thursday, the Commerce Department reported that the gross domestic product increased at a low 0.6 percent pace in the quarter that ended Dec. 31.
In the July-September quarter, the economy grew at a brisk rate, 4.9 percent.
Gross domestic product measures the value of all goods and services produced in the United States and is the best barometer of the country’s economic health.
A survey released last week by the National Association for Business Economics showed that 45 percent of economists are predicting a recession in 2008.
Buffett’s appearance on television came on the heels of his annual letter to shareholders, which he released Friday along with Berkshire’s 2007 financial report.
In the letter, Buffett predicted that the insurance industry will see lower underwriting profit margins in 2008 because premium prices are down, and the industry’s luck will certainly change.
“It’s a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008,” he said. “Prices are down, and exposures inexorably rise. Even if the U.S. has its third consecutive catastrophe-light year, industry profit margins will probably shrink by 4 percentage points or so.
“If the winds roar or the earth trembles, results could be far worse.”
Buffett said Berkshire’s insurance group, which includes GEICO, reinsurance giant General Re and several other firms, generated $2.2 billion net income from insurance underwriting in 2007. That’s down from the previous year when it posted a $2.5 billion underwriting profit.
Berkshire owns more than 60 subsidiaries including insurance, clothing, furniture, natural gas, corporate jet and candy companies. Berkshire also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.

TITLE: Europe Should Develop Its Ability to Lead
AUTHOR: By Joseph S. Nye
TEXT: At the World Economic Forum in Davos in January, the buzz was about Asia’s growing power. One Asian analyst argued that by 2050, there will be three world powers: the United States, China and India. He did not mention Europe, but underestimating Europe’s power is a mistake.
Yes, Europe currently punches below its weight. It is fragmented, peaceful and normative in a world of hard power, but part of the world is not about military power. The use of force among advanced industrial democracies is virtually unthinkable. In their relations with each other, such countries are all from Venus, to paraphrase U.S. political commentator Robert Kagan, and here Europe’s focus on law and institutions is an asset. 
A recent Pew poll found that many Europeans would like Europe to play a larger role in other parts of the world. To balance U.S. military power, however, would require a doubling or tripling of defense spending, and few Europeans are interested in such an increase. Nevertheless, a smart strategy for Europe will require greater investments in hard power. 
The picture for Europe, however, is not as bleak as pessimists assume. Power is the ability to get the outcomes one wants, and the resources that produce such behavior depend upon the context. In functional terms, power is distributed like a three-dimensional chess game. On the top board are military relations among states, with the United States the world’s only superpower with global reach. Here the world is unipolar. 
On the middle board are economic relations, where the world is already multipolar. Here, Europe acts as a union, and other countries like Japan and China play big roles. The United States cannot reach a trade agreement or settle antitrust cases without the approval of the European Union. Or, to take another example, Europe was able to lead the drive to remove Paul Wolfowitz from the World Bank. 
The bottom chessboard includes transnational relations outside the control of governments — everything from drugs to infectious diseases to climate change to terrorism. On this board, power is chaotically distributed among nonstate actors, and it makes no sense to call this world either unipolar or multipolar. 
Here, close civilian cooperation is important, for which Europe is well endowed. European countries’ success in overcoming centuries of animosity, and the development of a large internal market, has given them a great deal of soft power. At the Cold War’s end, East European countries did not try to form local alliances, as they did in the 1920s, but looked toward Brussels to secure their future. Similarly, countries like Turkey and Ukraine have adjusted their policies in response to their attraction to Europe. 
Recently, the U.S. National Intelligence Council published four widely different scenarios for the world in 2020: Davos World, in which economic globalization continues but with a more Asian face; Pax Americana, where the United States continues to dominate the global order; New Caliphate, where Islamic religious identity challenges the dominance of Western norms; and Cycle of Fear, in which nonstate forces create shocks to security that produce Orwellian societies. Like any exercise in futurology, such scenarios have their limits, but they help us ask which three or four major political factors will help shape the outcome. 
The first is the rise of Asia. The big question will be China and its internal evolution. China has lifted 400 million people out of poverty since 1990, but another 400 million still live on less than $2 per day. Unlike India, China has not solved the problem of political participation. If China replaces its eroded communism with nationalism to ensure social cohesion, the result could be a more aggressive foreign policy and unwillingness to deal with issues like climate change. Or it may deal with its problems and become a “responsible stakeholder” in world politics. 
Europe can contribute significantly to China’s integration into global norms and institutions. In general, Europe and the United States have more to fear from a weak China than they do from a wealthy China. 
Political Islam and how it develops will be the second factor. The struggle against extreme Islamist terrorism is not a “clash of civilizations” but a civil war within Islam. A radical minority is using violence to impose a simplified and ideological version on a mainstream with more diverse views. 
While the largest number of Muslims live in Asia, they are influenced by the heart of this struggle in the Middle East, an area that has lagged behind the rest of the world in globalization, openness, institutions and democratization. Here, Europe’s economic might and soft power have a lot to contribute. More open trade, economic growth, education, development of civil society institutions and gradual increases in political participation may help strengthen the mainstream over time, as could the way Muslims are treated in Europe and the United States. Equally important will be whether Western policies toward the Middle East satisfy mainstream Muslims or reinforce the radicals’ narrative of a war against Islam. 
The third major determinant of which scenario will prevail will be U.S. power and how it is used. The United States will remain the most powerful country in 2020, but, paradoxically, the strongest state since the days of Rome will be unable to protect its citizens acting alone. 
U.S. military might is not adequate to deal with threats such as global pandemics, climate change, terrorism and international crime. These issues require cooperation in the provision of global public good and in the soft-power technique of attracting support. No part of the world shares more values or has a greater capacity to influence U.S. attitudes and power than Europe. This suggests that the fourth political determinant of the future will be the evolution of European policies and power.

Joseph S. Nye is a professor at Harvard University and the author of “The Powers to Lead.” (c) Project Syndicate.

TITLE: Trick Transparency
AUTHOR: By Anna Shcherbakova
TEXT: The stock exchange is transforming companies by modifying their attitude to the external world. Just six months ago, a company would not respond to any questions, but now its executives are available for comment almost around the clock, and the company’s financial results for the last quarter and much other information is also freely available to any interested party. There is no mystery at the heart of such a radical change; the explanation lies in the company’s initial public offering, or IPO.
About 40 private Russian companies launched IPOs in 2007, worth a total of over $50 billion, according to research by Alfa-bank. When companies go public, they have a new party to deal with along with officials and the public — shareholders. 
The owner of a St. Petersburg construction and development company that recently went public has subsequently renounced his stepfather, who is a city official and helped him a lot by launching the company in the early 90s. “We have nothing in common and he divorced my mother several years ago,” he told the media via his company’s press-office. Why does he insist on repeating this, and who is it aimed at, I wonder. Probably he wishes to inform the new shareholders of his company that each and every success is the result of his personal achievements. However, his company’s shares have not yet shown any reaction to these announcements, and administrative support is still a big advantage of which to be proud, so why hide it from those who can appreciate it better than anyone? 
You cannot cheat the market, even if you have meetings with the Russian President on a regular basis, one banker said, disappointed by the stock exchange rate of VTB shares. VTB, Russia’s largest bank, was 100 percent state-owned until it went public last year, raising $8 billion — the largest IPO ever seen by a European bank. Newswires often report VTB’s president visiting the Kremlin and meeting president Putin. But this doesn’t matter to investors, and VTB shares went down. The bank’s operations are sometimes not transparent enough, its employees are showing signs of apathy after the IPO, and its top-management is not keen on efficiency, analysts explain. 
However, almost half of the companies that floated on the stock exchange last year trade at lower prices than that offered at the IPO. The market not only reacts to company news, but is also affected by macroeconomic forces. About 40 Russian companies are planning an IPO this year. It’s a good number, I suppose, bearing in mind that ten years ago one of the oligarchs told foreign investors at an international conference that “some Russian companies are not companies at all.” Much has changed since then. For instance, he and some of his allies have had to sell their companies. 
Many Russian companies have finally become proper companies, but still have something to hide from the public eye. After holding an IPO, they simply do it in a more sophisticated way. 

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

TITLE: A Dull and Boring Show
AUTHOR: By Vladimir Ryzhkov
TEXT: Every so often in life we come up against situations where we have to do something unpleasant and boring but necessary. Men’s daily ritual of shaving is a good example.
For many authoritarian regimes, an equally burdensome but unavoidable chore is holding elections. These are boring, embarrassing, unpleasant and pointless affairs, but they still must be staged from time to time to provide an outward appearance of legitimacy — even if it is clear to everyone that they are, in reality, a complete sham.
Another goal of these elections is to provide an ironclad guarantee that power will remain in the hands of the ruling elite. In this way, Egyptian President Hosni Mubarak, Libyan leader Moammar Gadhafi, Zimbabwean President Robert Mugabe, Uzbek President Islam Karimov and the Aliyev family in Azerbaijan, to name a few, periodically prolong their terms in office. Sadly, modern Russia has joined their dishonorable ranks.
The widespread, popular myth is that President Vladimir Putin has abided by the Constitution by stepping down from office and holding an election. Just the opposite is true: Sunday’s vote was the latest, and most significant, chapter in a whole series of actions taken by the Kremlin to eliminate free and fair elections in the country.
Why then didn’t Putin simply disregard the constitutional limit preventing him from serving a third consecutive term as president? After all, President Nursultan Nazarbayev had no problem at all doing this in Kazakhstan. The only explanation is that the country’s political elite was concerned that Western countries would initiate punitive actions against its foreign financial interests if Putin stayed on for a third consecutive term.
After all, family members of top Russian bureaucrats live in luxurious homes in the West and their children study there. The money they have stolen from the state budget and major state-owned companies sits in foreign bank accounts. Russia’s leaders are forced to act as if they were abiding by the Constitution because they fear that the West will deny them entry visas, block access to their foreign bank accounts or investigate their financial dealings. This is the regime’s real Achilles’ heel. This is where the Pied Piper’s fabled flute is capable of bewitching Russia’s high-ranking “patriots.”
The presidential election campaign, which was carried out in a classic authoritarian fashion, was a complete farce. Medvedev’s three political “rivals” were reminiscent of the three “competitors” who were propped up by Karimov in Uzbekistan’s December election. Medvedev refused to participate in the presidential debates. In the end, the “debates” were limited to the Kremlin’s three other handpicked candidates hurling insults at each other without much enthusiasm, while tiptoeing around subjects the authorities might deem too sensitive. At the same time, the Putin-Medvedev duo dominated television airwaves as usual, occupying 70 percent to 80 percent of all election coverage.
The campaign was devoid of any criticism of the Kremlin, which meticulously orchestrated every scene. Viewers were treated to a smorgasbord of staged events: Medvedev with Putin, Medvedev with children, Medvedev with pensioners, Medvedev helping the Serbs give the Americans a licking. These dishes were peppered with Medvedev’s meaningless quips about incorporating “the rule of law,” “putting people first” and “helping small businesses,” with no specifics given about how to accomplish these bold tasks.
It is no wonder that Medvedev’s success was the predictable final act of the dull and boring theatrical show that the Kremlin called the presidential election.
History shows that most authoritarian regimes agree to reforms or make concessions to their citizens only when faced with military defeat or economic catastrophe. That was true under Peter the Great and after Russia’s defeat in the Crimean War. It was also true following the chaos caused by war communism from 1919 to 1921, as well as after the Soviet Union’s failures in Afghanistan and after the economic crisis of the 1980s. These preconditions for reform do not exist under Putin’s oil- and gas-fueled eight-year economic boom, which our leaders assume will never end.
What does the continuation of Putin’s Plan under President Medvedev promise for the country? Russia will continue plodding along for the next few years, but the country’s serious and chronic illnesses will become more acute. Corruption will rise and the already large income gap will expand even more. The technological gap between Russia and other nations will continue to widen, and the country’s infrastructure will deteriorate even further. The monopolization of the economy will intensify, high inflation will remain a huge problem, and Russia will become even less competitive in world markets.
Authoritarianism has destroyed Russia several times throughout its history, and the current leaders are again leading the country down this same self-destructive path. The ruling elite’s main interest is in acquiring personal wealth, and it is willing to betray its own people to get what it wants. It has not built the modern social institutions and state structures that are necessary for the nation’s long-term development and for improving the living standards of its citizens.
In the latest survey by the Levada Center, 60 percent of respondents agreed with the statement, “Overall, the country is moving in the right direction.” They are the ones who dutifully cast their votes on Sunday in strict accordance with the Kremlin’s instructions. Once again, the majority of Russians placed their bets on a shell game in which they have no chance of winning.

Vladimir Ryzhkov, a State Duma deputy from 1993 to 2007, hosts a political talk show on Ekho Moskvy radio.

TITLE: Right-Wing Russians
AUTHOR: By Alexei Bayer
TEXT: Soon after immigrating to the United States in the mid-1970s, I got a job in a small suburban town outside New York and moved into a rented room.
It was an exhilarating experience for a 19-year-old. None of my friends in Moscow dreamed of earning a living and having a place of their own. But a thought kept bothering me: How could it be, I wondered, that the U.S. government has absolutely no idea where I am living? After all, I was a draft-age former national of the United States’ main Cold War foe. God only knew what damage I could cause if left to my own devices.
My concern for the fundamental vulnerability of the U.S. system was shared by all arriving Soviet immigrants. Nearly every one of us was an implacable anti-Communist and harbored ingrained fears about the Kremlin’s designs for world domination. Americans, in our view, were far too naive and complacent, and they underestimated the mortal peril their democracy was facing.
In Russia’s current mood of Soviet nostalgia, it has become customary to declare that immigrants were not quite representative of the Soviet people. They were Jews and therefore probably had one foot in the United States or Israel all along. But regardless of their ethnic or religious affiliation, all Soviets in the 1970s and 1980s shared those ideas, publicly summarized by Alexander Solzhenitsyn in his notorious 1978 commencement address at Harvard. The Nobel Prize-winning writer admonished the West to shed its crass materialism, but he also called upon the Americans to tighten the screws before it was too late.
Communism is no longer a serious threat to U.S. security. Nor are African-Americans who, as many in the Russian-speaking community feared, were “undermining” the United States from within by demanding equal rights, any longer perceived as a “fifth column.” But new enemies have emerged — namely Muslim terrorists and, paradoxically for first-generation refugees, illegal aliens.
Older Russian-speaking immigrants in the United States remain relentlessly right-wing in the U.S. political context. By some estimates, up to 80 percent voted for George W. Bush in the 2004 presidential election, even though most live in the Democratic strongholds of New York and other big cities. They welcome the Bush administration’s security measures, especially domestic surveillance. They want to be spied on, and they want illegal aliens deported.
A rabid Russian who takes his politics seriously and spouts dire warnings to naive Americans has become a cliche. When asked how the strict controls he demands jibe with democracy — which he presumably sought when he left the Soviet Union — he is likely to shrug ruefully and declare: “But what’s the choice? It is a question of democracy’s survival.”
These attitudes say much about Russia and about the reasons why the country repeatedly succumbs to authoritarianism. Too many Russians are willing to dismiss parliaments as talking shops that are poorly suited to effective government, especially when security is at stake. Putin has been considered an effective leader because he preferred to rule by decree. Even inflation, many Russians believe, is best defeated by an administrative fiat, not economic measures.
Needless to say, this reasoning is flawed. It is obvious that liberal democracies are the safest places to live on Earth. The argument that they achieved security first and indulged in the luxury of democracy second is wrong. Which repressive, undemocratic regime has ever achieved enough security to start implementing democratic reforms?
For all its naivite and laxity, the United States has one of the most stable political systems on Earth, one which has endured in its current form for more than 230 years. Russia, on the other hand, seems to be changing its political system every couple of years.

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

TITLE: New President Needs to Offer New Reforms
AUTHOR: By Anders Aslund
TEXT: Russia’s official economic policy rhetoric has suddenly turned liberal again. On Feb. 8, President Vladimir Putin delivered a speech to the State Council that resembled an annual address to the nation. Curiously, he had titled it “On Russia’s Development Strategy Through 2020,” as if he had no intention of leaving office. One week later, at his big news conference, he reassured us that he would go, but he threatened to stay as prime minister and remain influential for years to come.
The president bragged at length about “everything that was done during these eight years,” seemingly unaware that it boiled down to one single achievement — economic growth of 7 percent per year, as Vladimir Milov and Boris Nemtsov rightly point out in their excellent report, “Putin: The Results.” Understandably, Putin omitted that this record of growth puts Russia in 12th place among 15 former Soviet republics since 1999.
Putin arrived at a table that was already set. He has benefited from the market reforms in the 1990s, which he denigrates. Others argue that he has thrived on high oil prices, but they took off only in 2004. The abundant oil revenues have contributed to his authoritarianism, renationalization, rising corruption and the absence of reforms after 2002.
Dmitry Medvedev seemed all the more aware of Putin’s failures, as evidenced by his Krasnoyarsk speech on Feb. 15. It had the same flair of Mikhail Gorbachev’s radical liberalism when he delivered his famous ideological speech in December 1984, just before he assumed power. While overtly praising Putin, Medvedev in effect attacked his record.
Medvedev has even labeled Russia “a country of legal nihilism.” He dared to call for “a decrease in the superfluous numbers of civil servants,” and he stated in no uncertain terms that “there is no reason for the majority of state officials to sit on the boards” of state corporations. His credo appears to be: “Respect for private property must become one of the foundations of state policy.” Whatever happens after Putin’s second term, Russia badly needs to restart market reforms. But will Putin and his KGB entourage permit Medvedev to do so?
Surprisingly, in his big Feb. 8 speech Putin himself switched to Medvedev’s new liberal line on economic policy, and he named quite a few of his failures, though not blaming himself. With imports increasing by 35 percent to 40 percent per year and energy production stagnating, Russia’s current account surplus is likely to disappear in the next year, given that oil prices can hardly continue to rise in the midst of a Western economic slowdown. Therefore, the country’s next government will have to get serious about economic policy again.
Putin’s most apparent failure is that life expectancy for men has stayed at 60 years, which he rightly called “a disgrace.” Many young and middle-aged men simply drink themselves to death. An effective anti-alcohol policy is the nation’s greatest need, but Putin has done nothing.
The miserable state of the public health care system upsets everyone. Substantial reform plans were drawn up as far back as 1996, but Putin has failed to implement them, only increasing funding in some areas. Such a wealthy country should not have a Third World health care system.
Russia also suffers from a stark shortage of skilled labor. According to UNESCO’s comparative statistics, two-thirds of Russian young people attend college — more than in Europe — but public education remains poor. As in health care, corruption among bureaucrats is the main cause of these ills.
Possible cures for the problem of corruption in education include compulsory standardized national tests that should be the only criteria for acceptance to higher education. All oral exams should be prohibited to limit corruption. Moreover, both universities and hospitals need substantial financial independence. They should become independent foundations that are audited and accountable to a board of trustees to provide real services.
Corruption has grown significantly during Putin’s second term, according to surveys by the World Bank, the European Bank for Reconstruction and Development and Transparency International. This is a logical result of Putin’s policy of stifling nongovernmental organizations and the critical media while protecting his many corrupt KGB friends.
In his speech, Putin acknowledged that “the state apparatus is to a considerable extent a bureaucratized, corrupt system that does not support positive changes or dynamic development.” How true! Medvedev called for “a national plan to fight corruption,” but the best cure for corruption is democracy and a free media, as Ukraine has shown.
Putin’s second term has been characterized by the renationalization of large and successful private companies. Now even Putin realizes the problem: “A private company, which is motivated by obtaining concrete results, is often better at management than a civil servant, who does not always have even a sense of what effective management — or a result — really means.” Russia can be neither an efficient market economy nor a democracy as long as the state is dominated by a few state monopolies.
Sensibly, Putin called for an open competitive economy to attract investment, but Russia’s delayed entry into the World Trade Organization is another of his negative legacies. At the outset of his presidency, Putin promised Russia’s accession by 2003, but he has allowed bureaucratic and protectionist interests to block the country’s entry.
Until recently, Putin could claim that he had pursued a responsible macroeconomic policy, but in October he jeopardized even that achievement through populist expenditures in the midst of an inflationary surge, which brought inflation to 12.6 percent in January. The government should return to its prior fiscal policies to cool the economy down.
It can and should prohibit state corporations from borrowing funds in the West, which they use for harmful renationalization. The ruble exchange rate should also be allowed to appreciate more and Russia should move to inflation targeting. This would permit the Central Bank to achieve an active monetary policy with positive real interest rates.
The proudest economic reform of Putin’s first term was tax reform, which decriminalized most tax violations and reduced the arbitrary powers of the tax authorities. But with the Yukos affair, Putin annihilated much of these achievements, and now he has to emphasize “the need for a simplification of the tax system to minimize the opportunities for arbitrary interpretation of the legislation.” Again, Medvedev went further in his Krasnoyarsk speech. One of the few things the government of Prime Minister Mikhail Fradkov actually did was to plan large-scale infrastructure projects. Given the many current bottlenecks, this is vital strategy, but how will it be done? They are notorious boondoggles for corrupt bureaucrats; these projects require transparency and independent auditing.
Russia’s growth in the last nine years has been substantial and beneficial, but many serious shortfalls have spoiled the picture. Too many problems have accumulated because of the near absence of structural reforms after 2002. The country badly needs a new president to carry out Russia’s reforms, but the worry is that Putin will continue to block all progress.

Anders Aslund, a senior fellow at the Peterson Institute for International Economics, is the author of “Russia’s Capitalist Revolution: Why Market Reform Succeeded and Democracy Failed.”

TITLE: Chelsea’s Treble Trophy Hopes Kept Alive
PUBLISHER: Agence France Presse
TEXT: LONDON — Chelsea captain John Terry said Chelsea’s hopes of a trophy treble were very much alive after a 4-0 Premier League win at West Ham set the side up for their Champions League clash with Greece’s Olympiakos.
Terry revealed that after Chelsea’s 2-1 defeat against Tottenham in the League Cup final the previous weekend he’d shared some home truths with both players and management.
Reports after that loss said Terry had had a disagreement with Blues assistant boss Henk ten Cate while fresh speculation regarding the future of manager Avram Grant led many to wonder whether any silverware at all would be making its way to Stamford Bridge this season.
However, Terry was adamant that Chelsea had moved on from the Spurs defeat — their first in 16 games — and were ready to welcome Olympiakos on Wednesday after the clubs played out a goalless draw in the first leg of their last 16 tie.
Chelsea then face a potentially tricky FA Cup quarter-final against Championship side Barnsley on Saturday.
“Things were discussed between the players and the manager which will remain private,” said Terry, after a victory which left Chelsea just seven points behind Premier League leaders Arsenal with a game in hand.
“It is up to players like me, Frank Lampard and Didier Drogba to pick all the players up, and that is what we have done.
“We have lost the League Cup, but that is over.
“After this result, we are very positive. We are still in with a great chance of winning all three other competitions.”
Former Hammer Joe Cole, who scored Chelsea’s second goal, said victory at Upton Park had been an ideal way to end one of the most difficult weeks he’d known in football.
“It is nice to score any goal but we needed to get a result and with Arsenal dropping points (the Gunners were held to a 1-1 home draw by Aston Villa) it has brought the top of the table a little bit closer.
“This has been one of the toughest weeks I have had to deal with but you have to keep a cool head. There is so much drama surrounding this football club,” he added.
Lampard opened the scoring in the 17th minute when he converted from the penalty spot after Anton Ferdinand was ruled to have fouled Salomon Kalou.
That was the start of a spell which saw Chelsea score three goals in five minutes as they all but secured victory before half-time.
Joe Cole made it 2-0 in the with a drilled shot from the edge of the box after Nicolas Anelka has supplied the pass before Lampard crossed for Germany’s Michael Ballack to fire past Robert Green.
The only negative for Chelsea was that Lampard, like Joe Cole a former Hammers favourite, was sent-off following an altercation with Luis Boa Morte in the 36th minute.
Grant, who said he didn’t see the incident that led to Lampard’s early exit, was diplomatic when asked about referee Peter Walton’s decision to dismiss the England midfielder.
“The assistant referee said Frank slapped the face of Boa Morte,” Grant said. “If that is true, then it is a red card.”

TITLE: Israel Pulls Out of Gaza Leaving 100 Dead
PUBLISHER: Reuters
TEXT: GAZA — Israeli troops pulled out of the Gaza Strip on Monday after a U.S. appeal to end days of fighting that killed more than 100 Palestinians and rescue peace talks. 
The Hamas Islamists who control the coastal enclave declared “victory” and vowed to continue firing rockets into Israel, launching one into the main southern city of Ashkelon shortly after the troops withdrew, wounding one person.
Israeli Prime Minister Ehud Olmert said that despite the end of the five-day operation, Israel would pursue further military action in the Gaza Strip until rocket fire was reduced significantly.
“We are not willing to show tolerance. We will respond,” Olmert said in broadcast remarks.
A senior Israeli official said, however, there would be a “two-day interval” for a visit by U.S. Secretary of State Condoleezza Rice.
Israel had been under pressure from its ally in Washington to halt the violence after Palestinian President Mahmoud Abbas suspended U.S.-backed peace talks in protest at the bloodshed.
Speaking after the Israeli pullout, senior Palestinian negotiator Saeb Erekat said the talks, which Washington hopes can result in a statehood deal this year, would remain frozen for now.
“We are working hard to reach a full calm, a full cessation of hostilities. We want to make sure that what happened will not reoccur,” Erekat said.
Addressing members of his centrist Kadima party, Olmert said he hoped to continue to talk peace with Abbas, but “under no circumstances will we restrain ourselves in the face of terror from Gaza.”
In Gaza City, several thousand Hamas supporters took to the streets in celebration of the withdrawal. Some snapped festive photographs with gunmen as the chant “The invaders fled and the army of Jews was defeated” rang out from loudspeakers.
Israel’s security cabinet plans to meet on Wednesday to consider the government’s next move in the Gaza Strip.
Rice is to hold talks in Jerusalem and the West Bank city of Ramallah on Tuesday and Wednesday on moving Israeli-Palestinian peace negotiations forward.
The talks have shown little progress so far, with both sides divided over the scope of an agreement. Abbas seeks a full peace accord that would enable him to declare a state, while Olmert says the goal is an understanding of “basic principles.”
The Palestinian Health Ministry said 116 Palestinians had been killed in the Gaza offensive. Militant groups said about half of them were civilians.
Palestinian Prime Minister Salam Fayyad put the death toll at 110, with 350 people wounded, and said the situation was “unprecedented since the 1967 war of Israeli occupation.”
Many of the civilian casualties came when Israeli missiles fired by helicopters, jets and unmanned drones hit buildings and homes that the army said were being used by militants.
Two Israeli soldiers were killed in the offensive. On Wednesday an Israeli civilian was killed by a rocket, the first such death since May. 
Overnight, Israel carried out several air strikes in the Gaza Strip, killing three militants, medical workers and Hamas said. The army said it had targeted workshops making rockets. 
The Gaza violence touched off anti-Israeli protests in the West Bank, where a Jewish settler shot and killed a 17-year-old Palestinian on Monday in Ramallah after coming under attack by a crowd of rock-throwers, an Israeli police spokesman said. 
After Israeli troops left Gaza, municipal workers began repairing roads and power lines damaged in the fighting. Some grey concrete houses were pockmarked by bullets. 
In Ashkelon, residents of a penthouse apartment penetrated by a Katyusha rocket picked through the debris. 
Hamas says it fires rockets in self-defence, and that it would stop if Israel halted all military activity in the Gaza Strip and the occupied West Bank and ended its Gaza blockade. 
Israel says security concerns dictate its actions and that raids have foiled militants’ plans to attack Israelis.

TITLE: Leaders Of Iran, Iraq In Talks
AUTHOR: By Qassim Abdul-Zahra
PUBLISHER: The Associated Press
TEXT: BAGHDAD — Iranian President Mahmoud Ahmadinejad on Monday dismissed U.S. accusations that his country is training extremists and demanded that the Americans withdraw from Iraq.
Speaking in a nearly hour-long news conference at the end of an unprecedented visit to Iraq, Ahmadinejad said the U.S. allegations — that Iran is training Shiite militants who target American troops and Muslim rivals — don’t matter to the Iranians.
“Of course American officials make such remarks and such statements, and we do not care ... because they make statements on the basis of erroneous information,” said the hard-line Iranian leader, who smiled through much of the session. “We cannot count on what they say.”
He said the foreign presence in Iraq was an “insult to the regional nations and a humiliation.”
Ahmadinejad is the first Iranian president to visit Iraq, and his two-day trip highlighted one of the unintended consequences for Washington after the 2003 U.S.-led invasion of Iraq that ousted Saddam Hussein from power.
Under Saddam, a Sunni who once led an eight-year war against Iran, the two countries were bitter enemies, but Iraq’s new Shiite-dominated government has deep ties to Iran’s cleric-led Islamic republic.
Ahmadinejad was warmly received by Iraqi President Jabal Talabani, a Sunni Kurd, and other Iraqi leaders. He said Tehran and Baghdad are “brotherly” nations who share many beliefs and values.
“Of course, dictators and foreigners have tried to tarnish and undermine the emotional relations between the two states,” he said.
After meeting Sunday with Talabani, who told the Iranian leader to call him “Uncle Jalal,” Ahmadinejad drove through the U.S.-controlled Green Zone to visit Prime Minister Nouri al-Maliki, a fellow Shiite, at his Cabinet offices.
The sprawling Green Zone contains the core of the U.S. diplomatic mission to Iraq — including a massive new embassy — and is heavily protected against occasional rocket barrages. American officials have accused Iran of backing Shiite extremists behind such attacks.
“The presence of foreigners in the region has been to the detriment of the nations of the region,” Ahmadinejad said. “It is nothing but a humiliation to the regional nations.
“Their only achievements are that regional nations further dislike them, it adds to the regional nations’ hatred. No one likes them.”
Pressed by a reporter how he knows the Iraqis don’t like the U.S., Ahmadinejad said that the “Iraqi people have been anti-colonialist and anti-occupation in the course of their history.”
“If you go to the streets and talk to ordinary Iraqi people, you will be able to realize the true nature of such a claim,” he said.
Still, the Iraqis are precariously balanced between U.S. and Iran, with government officials saying in recent weeks that they don’t want the country torn apart in a power struggle between the two sides.
About 1,000 protesters in a Sunni-dominated neighborhood in Baghdad protested his visit Monday, a day after scattered demonstrations greeted his arrival.

TITLE: Russian Debutante Wins LA Marathon
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — Russia’s Tatiana Aryasova made a smashing marathon debut Sunday, taking advantage of a head start on the male runners to win a $100,000 bonus in the Los Angeles Marathon. 
She held off a group of Kenyan men and finished in 2 hours, 29 minutes, 9 seconds to win the $100,000 bonus as part of “The Challenge,” the men-vs.-women format that gave the top female runners a lead of nearly 20 minutes over the men. The time differential was chosen by race officials in hopes of creating a close finish. 
The 28-year-old Aryasova said she didn’t worry about the men catching up to her. 
“It didn’t matter to me,” she said through a translator. 
Kenya’s Laban Moiben won the men’s division in 2:13:50. Aryasova and Moiben each received $20,000 and a car for winning their divisions. 
Both the men and women had to deal with breakaways early in the race. 
Aryasova and three other woman pulled away in the first several miles. Aryasova then surged ahead of Jacqueline Nytipei of Kenya at the 12-mile mark. 
Meanwhile, Dmitry Safronov of Russia, who also made his marathon debut, set a strong pace as he distanced himself from the men’s pack in the first two miles. By the halfway mark, the group chipped away at the gap and overtook Safronov in the 18th mile. 
The men had to gain 45 seconds every mile to overtake the women. By the 13-mile halfway marker, however, the men had shaved almost nine minutes off the women’s lead. 
Moiben tried to catch Aryasova late in the race, but still finished 4 1/2 minutes behind her. 
“We saw at the 18th mile that she was going to run under 2:30 and there was no need to push anymore,” said men’s runner-up Christopher Kiprotich of Kenya. 
In the wheelchair division, Saul Mendoza won his seventh Los Angeles Marathon, finishing in 1:31:11. 
Los Angeles Fire Department spokesman Brian Humphrey said 73 people required medical attention in the race, mostly for dehydration. Twenty-three were taken to area hospitals for evaluation, but no one suffered serious injuries, he said. 
More than 25,000 people took to the course that weaved its way from Universal Studios in the San Fernando Valley and finished downtown.

TITLE: Dementyeva Downs Kuznetsova in Dubai Clash
AUTHOR: By Barry Wood
PUBLISHER: Reuters
TEXT: DUBAI — Yelena Dementyeva defeated second seed Svetlana Kuznetsova 4-6 6-3 6-2 in an all-Russian final at the Dubai Championship on Saturday to win her ninth career title.
It was the eighth seed’s first trophy since she won in Moscow in October while Kuznetsova suffered her second defeat in the final here, having also lost to Justine Henin in 2004.
“I feel so happy,” Dementyeva told reporters. “This was my first time at this event and it is such a big win.
“I think it was a great match and I played probably my best match for a long time.”
Both players struggled to gain an advantage in a closely-contested opening set of long baseline rallies that produced seven breaks of serve.
Kuznetsova went 2-0 ahead but lost the next three games before winning the following three to lead 5-3.
Dementyeva, striking her forehand to good effect, broke as Kuznetsova served for the set, only to drop her own serve for the fourth time in the next game.
The second set was also close with Kuznetsova attempting to come to the net more while Dementyeva’s pace forced a number of errors from her opponent. 
Kuznetsova had the opportunity to build on her advantage when she held a break point to lead 2-0 but hit a return long and Dementyeva punished her by breaking twice to go 4-1 up.
Although Kuznetsova recovered one break in the sixth game, Dementyeva broke again for the set when her rival made a backhand error.
Dementyeva maintained her momentum in the decider, striking a fine winner at the net to break for 2-0 before going on to claim the winner’s check of $250,000.
“I think in the first set I was playing wrong tactically,” she said. “I didn’t move Svetlana at all.
“Then I realized I had to play the whole court, I have to move her, I have to be aggressive and go more for the forehand winners.”
Kuznetsova was unhappy with her performance. “I am very disappointed because I think I got all the chances and all the possibilities today but I just didn’t take them,” she said. “I was playing within myself and my level was going lower and lower. I don’t know, with playing at night, if it was my vision or something but my level got lower and she just played consistently.”

TITLE: EU Treaty Protesters Climb Crane in Central London
PUBLISHER: Agence France Presse
TEXT: LONDON — Campaigners calling for a referendum on a disputed new EU treaty staged a protest Monday after climbing a crane next to parliament in central London. 
Two days before a key parliamentary vote, the demonstrators unfurled banners reading “Referendum Now” and “Give Us Our Vote” from atop the crane just across from the Palace of Westminster and Big Ben.
On Wednesday MPs are due to vote on an amendment proposed by the Conservative party for a referendum on the EU Treaty Bill, by which Britain will ratify the EU’s Lisbon Treaty.
The governing Labour Party promised a referendum on the EU constitutional treaty in its 2005 election manifesto, but says this is now not necessary after that text was rejected by Dutch and French voters, and a new treaty agreed.
But one of the two protesters, who would only give his first name Simon, said Prime Minister Gordon Brown should honour the manifesto pledge all the same.
“We want the government to give the people of Britain a referendum like they promised they would. It’s a very simple request,” he said. “It’s a question of democracy.”
The protesters said they had climbed the crane, which was being used at a nearby construction site, overnight despite high winds. Police sealed off the area around its base Monday morning.
On Sunday campaigners claimed massive public support for a referendum.
The “I Want A Referendum Campaign” said it was backed by 87 percent of people who took part in 10 unofficial referenda in 10 parliamentary constituencies, including those of senior government ministers.
It said that of 152,520 people polled, 133,251 called for a referendum.
In a separate question, 89 percent said Britain should not approve the treaty, and eight percent said it should.
Brown maintains that the new treaty, signed by European leaders last December, does not require a referendum as London has secured opt-outs in key areas in the treaty, which is no longer a constitution.
But opponents, including some within Labour, have raised concerns that the Lisbon Treaty is broadly similar to the constitutional text and Brown has surrendered centuries-old powers and freedoms to faceless Brussels bureaucrats.
Conservative leader David Cameron supported the protesters’ message, but not how they expressed it.
“No-one should break the law; that’s not right,” he told Sky News. “But on the issue of a referendum on the Lisbon Treaty, the constitutional treaty, of course we should have one.”

TITLE: The ‘Niceman’ Cometh For McLaren as Formula 1 Gears Up
AUTHOR: By Alan Baldwin
PUBLISHER: Reuters
TEXT: LONDON — Heikki Kovalainen smiles when people suggest he will be second among equals as Lewis Hamilton’s McLaren teammate.
The 26-year-old Finn has faced the same questions over and over since he was signed up as double world champion Fernando Alonso’s replacement at Woking and his self-belief remains undiminished.
He expects equal treatment from McLaren this season despite Hamilton’s long-standing and umbilically close relationship with the Formula One team who have backed the Briton financially for more than a decade. He also intends to do his best to win.
Even if the 23-year-old Hamilton is considered a champion-in-waiting after ending his sensational debut season as overall runner-up, Kovalainen is not in a hurry to open any doors for his colleague.
“I would not have come to the team if I didn’t think I had an equal chance to fight for the championship and at McLaren I have that,” he told reporters at the launch of the new car in January.
“At least to start with I have exactly the same opportunity that Lewis has and then it’s up to me to build a relationship with the team and be as strong as I can and then we see what happens,” he added.
“But I absolutely have equal opportunities.”
Hamilton was the talk of Formula One last season, winning four races and missing out by a single point on becoming the youngest champion and first rookie to take the title after leading into the final Brazilian Grand Prix.
He was on the podium right from the start in Australia and stayed there for nine races in a row — an unprecedented feat for a rookie driver.
While Hamilton shone, Kovalainen had a far tougher time in a poorly handling Renault: his debut race was dismissed as ‘rubbish’ by team boss Flavio Briatore. By the end of the year he had taken a fine second place behind Hamilton in the rain-soaked Japanese Grand Prix but, seventh overall, was discarded in favour of untested Brazilian Nelson Piquet junior.
Alonso’s swift return to Renault triggered what amounted to a straight swap with Kovalainen heading in the opposite direction.
The Finn is undeniably a safe bet for McLaren, eager to restore some calm after the internal feuding and bitter divisions of 2007.
Britain’s Autosport magazine recently dubbed him the “Niceman,” a play on the “Iceman” nickname bestowed on Ferrari’s world champion and fellow Finn Kimi Raikkonen when he was at McLaren.

TITLE: U.S. Airforce Targets Somali Town To Take Out Suspected Terrorists
PUBLISHER: The Associated Press
TEXT: MOGADISHU, Somalia — The U.S. launched an airstrike Monday on a Somali town held by Islamic extremists to go after a group of terrorist suspects, U.S. defense officials said. 
Three missiles hit Dobley, a town four miles from the Kenyan border, destroying a home and seriously injured eight people, police and witnesses said. The remnants of an Islamic force that had once ruled much of southern Somalia took over Dobley last week.
“It was a deliberate, precise strike against a known terrorist and his associates,” one U.S. military official said in Washington, speaking on condition of anonymity because he was not authorized to comment on the record.
He gave few other details, except to say the targets were believed staying in building known to be used regularly by terrorist suspects.
Last year, the U.S. shelled suspected al-Qaida targets in Somalia, using gunfire from a U.S. Navy ship off the shore of the east African nation.
“We woke up with a loud and big bang and when we came out we found our neighbor’s house completely obliterated as if no house existed here,” a resident of the town, Fatuma Abdullahi, told The Associated Press. “We are taking shelter under trees. Three planes were flying over our heads.”
A police officer said the eight wounded were hit by shrapnel. An aid worker in Dobley said up to six people were still trapped in the rubble by midday. It was not clear whether these victims were included in the police officer’s tally.
“A minimum of two bombs were dropped,” said the aid worker, who asked that his name not be used because he is not authorized to speak to the media. The worker spoke to the AP by telephone. “Between four and six people are in the rubble.”
Clan elder Ahmed Nur Dalab said a senior Islamic official, Hassan Turki, was in town Sunday to mediate between his fighters and a militia loyal to the government. Turki’s forces took over Dobley last week.
Somalia has been mired in chaos since 1991, when warlords overthrew dictator Mohamed Siad Barre and then turned on each other.
In early 2007, Somali troops and their Ethiopian allies drove out a radical Islamic group to which Turki is allied that had taken over much of southern Somalia. The Islamic forces have fought to regain power.

TITLE: Venezuela, Ecuador Send Troops Toward Colombia
AUTHOR: By Ian James
PUBLISHER: The Associated Press
TEXT: CARACAS, Venezuela — Venezuela and Ecuador have ordered troops to their borders with Colombia, raising concerns of a broader conflict after Colombia killed a top rebel leader on Ecuadorean soil. 
Venezuelan President Hugo Chavez on Sunday promised Venezuela would respond militarily if Colombia violates its border, where he ordered tanks as well as thousands of troops. He also ordered the closure of Venezuela’s embassy in Bogota.
Ecuador’s president, Rafael Correa, called for the troop deployment while also withdrawing his government’s ambassador from Bogota and expelling Colombia’s top diplomat.
“There is no justification,” Correa said Sunday night, snubbing an earlier announcement from Colombia that it would apologize for the incursion by its military.
Chavez called the killing of rebel leader and spokesman Raul Reyes and 16 other rebels on Saturday an attack by a “terrorist state.”
“Mr. Defense Minister, move 10 battalions to the border with Colombia for me, immediately — tank battalions. Deploy the air force,” Chavez said during his weekly TV and radio program. “We don’t want war, but we aren’t going to permit the U.S. empire, which is the master (of Colombia) ... to come divide us.”
Correa said Colombia deliberately carried out the strike beyond its borders. He said the rebels were “bombed and massacred as they slept, using precision technology.”
The Ecuadorean leader said Colombia violated Ecuador’s airspace when it bombed the rebel camp, which the Colombian military said was located 1.1 miles from the border.
Colombian officials have long complained that Ecuador’s military does not control its sparsely populated border, allowing rebels to take refuge.
The same holds true for Venezuela, where rebel deserters say the guerrillas routinely rest, train, obtain medical care and smuggle drugs. Chavez denies that his country provides refuge to the FARC.
In a statement, Colombia said FARC “terrorists” including Reyes “have had the custom of killing in Colombia and taking refuge in the territory of neighboring countries.”
Colombia’s police commander Gen. Oscar Naranjo said documents from a computer seized where Reyes was killed suggested Ecuador’s president is deepening relations with the FARC.
The two documents, copies of which were obtained independently by The Associated Press, were apparently written by Reyes in the past two months and addressed to the high command of the FARC. An Ecuadorean government spokesman called the Colombian claims a lie.
Ecuadorean soldiers recovered the semi-nude bodies of 15 rebels in their jungle camp, the corpses scattered around the site along with pieces of clothing, shoes, a refrigerator, guns and grenades.
Soldiers stood guard at the camp, saying they also found three wounded women, who were evacuated by helicopter to be treated. One was a Mexican philosophy student injured by shrapnel, while the other two were Colombians, said Ecuador’s defense minister, Welington Sandoval.
Ecuadorean officials found that there were two bomb attacks on the camp early Saturday, Lt. Col. Jose Nunez told reporters in the remote village of Angostura, where the bodies were found.
Colombian commandos removed the cadavers of Reyes and one other rebel.
Chavez called the raid “cowardly murder, all of it coldly calculated.” 
“This could be the start of a war in South America,” Chavez said. He warned Uribe: “If it occurs to you to do this in Venezuela, President Uribe, I’ll send some Sukhois” — Russian warplanes recently bought by Venezuela. 
The situation tested already tense relations between Venezuela and Colombia, though cross-border trade has not yet been seriously affected. 
Chavez did not specify how many troops he was sending to the border. A Venezuelan battalion traditionally has roughly 600 soldiers. 
“Undoubtedly the recent actions on the part of Colombia and Venezuela’s response raise the risk for armed conflict,” said Miguel Tinker Salas, a Latin American studies professor at Pomona College in Claremont, California. “Although it is unlikely we will see military confrontations, what is clear is that Colombia has been pursuing a military solution to its own internal problem, ... drawing in Ecuador and Venezuela.” 
Chavez has increasingly revealed his sympathies for the FARC, and in January asked that it be struck from lists of terrorist groups internationally. 
The leftist FARC has been fighting Colombia’s government for more than four decades, and funds itself largely through the cocaine trade and kidnaps for ransom and political ends. 
Chavez said that with U.S. support, Colombian troops “invaded Ecuador, flagrantly violating Ecuador’s sovereignty.”

TITLE: Riots in Armenia Leave 8 Dead
PUBLISHER: The Associated Press
TEXT: YEREVAN, Armenia — Troops and armored vehicles patrolled the main streets of Armenia’s capital Sunday following violent protests that left eight dead and more than 100 injured and prompted the president to declare a state of emergency. 
President Robert Kocharian declared the sweeping, 20-day state of emergency Saturday night following a day of clashes between police and demonstrators protesting alleged fraud in the Feb. 19 presidential election.
The violence — which culminated in police firing bullets into the air and tear gas to disperse some 15,000 opposition demonstrators — appeared to be Armenia’s worst since the Soviet era. The bloodshed raised concerns about stability in the country bordering Iran and lying on a transit route from the energy-rich Caspian Sea region to the West.
Eight people were killed in the clashes Saturday between protesters and police, Health Minister Arutiun Kushkian said. He said 131 people were injured, including 57 police and army troops.
A law enforcement official told The Associated Press that the deaths occurred during a shootout between protesters and police — and that seven of the dead were civilians. The official did not give his name because he wasn’t authorized to speak to the media.
Authorities claimed the protesters were armed and shot at police. The opposition vehemently denies the claim.
On Sunday, hundreds of helmeted servicemen wearing bulletproof vests and wielding Kalashnikov assault rifles patrolled the center of the tense capital, Yerevan. Police closed several major streets where the violence had occurred. Troops were warning residents by loudspeaker not to gather in groups.
Some streets were littered with hulks of burned cars. Many shop windows had been broken, kiosks looted and discarded plastic bottles and other garbage lay strewn on the street.
Overnight, opposition leader Levon Ter-Petrosian — the presidential candidate backed by the demonstrators — recorded an appeal urging protesters to go home.
“Our forces are unequal, we are surrounded by troops and our president suggests we disperse,” he said in the recording. Aides drove through the center of Yerevan playing the recording from loudspeakers.
Thousands — sometimes tens of thousands — of protesters have rallied daily since the results from the Feb. 19 election showed Ter-Petrosian finishing a distant second to Prime Minister Serge Sarkisian, a close colleague of Kocharian.
The opposition accused Sarkisian of resorting to vote-buying, ballot stuffing and pressuring media to skew coverage in his favor. Several opposition members said they were beaten on election day to prevent them from monitoring the vote.
On Friday, Ter-Petrosian appealed to the Constitutional Court to overturn the results.
Western observers issued an overall positive assessment of the election, but noted serious flaws, especially during vote count.
The government denied any wrongdoing.
The first clashes occurred early Saturday when police broke up an opposition tent camp in a central square, saying the demonstrators had weapons and were plotting a violent coup.
Opposition spokesman Arman Musinian, however, claimed that the grenades and pistols — later shown on Armenia’s state television stacked carefully in the bushes surrounding the protest square — had been planted.
Thousands of protesters regrouped later Saturday. Police broke up that gathering with tear gas and by firing bullets into the air. Groups of angry demonstrators then marched around town, looting shops and setting cars ablaze. 
At least 55 people were detained during the day’s unrest, said Sona Truzian, a spokeswoman for the prosecutor-general’s office. Fifteen people were formally arrested. 
Armenia’s parliament approved the state of emergency decree overnight in an extraordinary session. It imposes severe restrictions, including a ban on all mass gatherings and an order requiring news reports on domestic political matters to include only official information. 
“What’s going on now is not a political process. It has gone over the edge,” Kocharian said at a late-night news conference. “I appeal to the people of Armenia to show restraint and understanding.” 
Europe’s leading security organization, the Organization for Security and Co-operation in Europe, was sending an envoy to Armenia to mediate the crisis. 
The Vatican’s secretary of state, Cardinal Tarcisio Bertone, postponed a planned trip Sunday to meet with religious leaders.

TITLE: Blind Guitarist Jeff Healy Dead Aged 41
PUBLISHER: The Associated Press
TEXT: TORONTO — Blind rock and jazz musician Jeff Healey has died after a lifelong battle against cancer. He was 41.
Healey died Sunday evening in a Toronto hospital, said bandmate Colin Bray, who was in the room with Healey’s family when the guitarist died.
The Grammy-nominated Healey rose to stardom as the leader of the Jeff Healey Band, a rock-oriented trio that gained international acclaim and platinum record sales with the 1988 album “See the Light.” The album included the hit single “Angel Eyes.”
Healey had battled cancer since age 1, when a rare form of retinal cancer known as Retinoblastoma claimed his eyesight.
Due to his blindness, Healey taught himself to play guitar by laying the instrument across his lap.
His unique playing style, combined with his blues-oriented vocals, earned him a reputation as a teenage musical prodigy. He shared stages with George Harrison, B.B. King and Stevie Ray Vaughan.
Bray said he and many others expected the guitarist to rally from this latest illness.
“I don’t think any of us thought this was going to happen,” Bray said. “We just thought he was going to bounce back as he always does.”
Healey had undergone numerous operations in recent years to remove tumors from his lungs and leg.
Bray and fellow bandmate Gary Scriven remembered their frontman as a musician of rare abilities with a generous nature and wicked sense of humor.
Healey’s true love was jazz, the genre that dominated his three most recent albums.
His love of jazz led him to host radio shows in Canada where he spun long-forgotten numbers from his personal collection of over 30,000 vinyl records.
His death came weeks before the release of his first rock album in eight years.
“Mess of Blues” is slated for a North American release on April 22.
He is survived by his wife, Christie, and two children.