SOURCE: The St. Petersburg Times
DATE: Issue #1376 (40), Tuesday, May 27, 2008
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TITLE: Medvedev Joins Hu Over Shield
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — President Dmitry Medvedev denounced U.S. plans to build a missile-defense shield in Central Europe while visiting China on Friday, keeping the foreign policy course laid out by his predecessor, Vladimir Putin. 
Traveling abroad for the first time as president, he criticized the plans in a joint statement that he signed with President Hu Jintao in Beijing, one of Moscow’s closest allies and biggest trade partners. 
China has served as a counterbalance for Moscow’s relations with the West, which grew strained as Putin adopted a hawkish stance during his second term in office. Medvedev’s decision to visit China on his maiden foreign visit suggests that tensions will not immediately go away with the May 7 changeover in the Kremlin. Putin opposed U.S. missile-defense plans as a threat to national security. 
The statement by Medvedev and Hu did not identify the United States by name but said “creating a global missile-defense system, including a deployment of such a system in several regions of the world” was harmful for stability, arms control and trust between states. 
U.S. State Department spokesman Tom Casey said Washington was planning to continue efforts to overcome Moscow’s objections in line with an agreement between President George W. Bush and then-President Putin in Sochi last month. 
“I think the Russian as well as Chinese statements that came out today aren’t that much different than previous ones we’ve seen,” he told reporters in Washington. 
The United States wants to deploy parts of the missile-defense system in two former Soviet satellite states, the Czech Republic and Poland, in order to counter what it sees as a threat from “rogue” states like Iran. 
In a major business deal that highlighted Medvedev’s visit, his delegation reached an agreement on Friday to build and supply a uranium-enrichment plant in China worth more than $1 billion. 
Russian trade with China has been growing rapidly in the past eight years, reaching $40 billion last year and making China Russia’s third-largest trade partner, Medvedev said. The countries plan to increase that trade to $60 billion by 2010 but can achieve that target earlier, he said. 
Some projects, however, have not materialized quickly. Gazprom has been planning to build two pipelines to pump natural gas to China, but talks are still ongoing about the price for the fuel. 
Rosneft, meanwhile, is close to an agreement with China’s state-owned CNPC to build an oil pipeline to China, Medvedev said in an interview with Chinese media published last week. 
In Beijing, Medvedev said that in addition to nuclear energy, oil and gas, the countries would focus on cooperation in high technology, aircraft building, space, information technology and nanotechnology. 
Medvedev, visiting China as the country scrambled to help tens of thousands of earthquake victims, ordered more humanitarian aid, including tents, from Russia. The Emergency Situations Ministry earlier sent medicine and disaster relief experts to work at the site. 
Medvedev flew to Beijing after a stop Thursday in Astana, Kazakhstan, where he talked up Russia’s interest in expanding ties with other former Soviet republics. 
Wrapping up his two-day visit to China on Saturday, Medvedev delivered a speech at Peking University, spicing it with references to Chinese philosophers Confucius and Lao-tzu and including a Chinese proverb about the Yangtze River. 
Graduating from such prestigious universities, students grow to become the new elite in their countries and have to take up various challenges, he said. “As you say in China, new people come to replace the old ones like one wave of the Yangtze rolls over the other,” Medvedev said. 
Answering a question from a student afterward, he said ties between Russia and China had become a “key factor of international security” and global decision-making. 
“I can tell you frankly that perhaps not everyone likes this strategic cooperation that exists between our countries,” Medvedev said. “But we understand that this cooperation is in the interests of our people, and we will strengthen it by all means, whether somebody likes it or not.” 
As students clustered around him, he autographed Chinese-language books with his portrait on the cover. 
Medvedev kissed one student after she told him that she loved Russia like her motherland, Interfax reported.

TITLE: UN: Russia Shot Down Georgian Plane
PUBLISHER: Agence France Presse
TEXT: TBILISI— The UN concluded in a report Monday that a Russian fighter jet shot down an unmanned Georgian spy plane last month, boosting Tbilisi’s claims of Russian military interference on its territory.
The report, posted on the UN website, said evidence gathered by UN monitors “leads to the conclusion that the aircraft belonged to the Russian air force” and that the downing was “fundamentally inconsistent” with ceasefire accords.
Russia’s defence ministry rejected the findings, with spokesman Alexander Drobyshevsky telling AFP: “We deny this report. Our planes did not violate anyone’s airspace and therefore could not have fired a shot.”
The incident is one of the most serious in the region since the end of a military conflict in 1993 between Georgian troops and Moscow-backed separatist rebels in the Georgian breakaway province of Abkhazia.
Georgian President Mikheil Saakashvili said the report vindicated Georgian claims that the Russian military has been violating its sovereignty.
“Georgia today is in a very difficult situation because foreign armed forces have entered its territory,” he said in televised remarks.
“The UN has released a report in which Russia is directly accused of aggression against Georgia.... For the first time, the UN has directly, unequivocally pointed the finger at Russia.”
Russia, which backs the Abkhaz rebels in the lush Black Sea province, has denied violating Georgian airspace and says that Abkhaz forces shot down the Georgian drone on April 20 — a claim supported by Abkhaz officials.
But the report, obtained by AFP ahead of its release by the UN, stated that a MiG-29 or Su-27 warplane was used in the incident and that the aircraft then “turned back north heading... into Russian airspace.”
The text was highly critical of the drone shooting, saying it violated a ceasefire agreement between Georgian forces and Abkhaz rebels — and called into question the separation of Russian peacekeepers from the conflict.
The UN mission “considers that enforcement action by third parties — in this case the Russian Federation — is fundamentally inconsistent with the Moscow agreement and, aside from possible considerations under international law, undercuts the ceasefire and separation of forces regime,” the report said.
But it also censured Georgia for sending drones into the area, saying such flights violated ceasefire accords.
Abkhazia’s de facto foreign minister, Sergei Shamba, said the UN report was “unobjective and biased,” Russia’s Interfax news agency reported.
Analysts said the report could give a major boost to Georgian efforts to replace Russian peacekeepers in Abkhazia, whom Tbilisi accuses of siding with the rebels, with an international force.
“This is going to have a huge impact,” said Tornike Sharashenidze, a Tbilisi-based analyst.
“Now Georgia has a report from a neutral body on the Russian militarisation of Abkhazia. Georgia will be able to count on much stronger support, not only from America, but from Europe,” he said.
The text said its conclusions were based on analysis of witness statements, radar records and video taken by the Georgian drone that filmed itself under attack at close range by a warplane.
The drone footage had not been doctored in any way, the UN report said.
It said it was unclear where the jet took off from. Georgian officials have claimed the fighter jet was illegally stationed at a Russian base in Abkhazia.
Tense relations between Russia and Georgia, whose pro-Western leadership is pushing for entry into NATO, have flared up repeatedly over the last month in Abkhazia.
Georgian officials warned that the two countries had come close to war and Russia announced it was sending reinforcements to a Russian troop contingent deployed in Abkhazia as peacekeepers.
But Russian President Dmitry Medvedev appeared to strike a more conciliatory tone on Monday in a message to Saakashvili congratulating him on Georgia’s independence day.
Medvedev said he hoped for “constructive” cooperation with Georgia, promoting “good neighbourly relations” and “fostering stability and security in the Caucasus,” the Kremlin said in a statement.

TITLE: Victory Could Bring Eurovision Contest to St. Petersburg
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: With his Eurovision victory Saturday night, Dima Bilan provided the country with its first win in the song contest and his hometown in the republic of Karachayevo-Cherkessia with a street and a school bearing his name.
Bilan may also have given St. Petersburg the opportunity of hosting next year’s competition after his producer Yana Rudkovskaya expressed support for the idea in the immediate aftermath of Russia’s victory at the contest, which is often ridiculed as a freak show for its descent into camp and kitsch.
Bilan defeated contestants from 24 other countries at the pop extravaganza with the ballad “Believe,” backed by Hungarian violinist Edvin Marton and, in a nonmusical role, Olympic champion figure skater Yevgeny Plyushenko, who pirouetted around him on a small patch of synthetic ice. 
Political leaders were quick to praise the victory as important for the country — something that has become a habit in recent weeks. Zenit St. Petersburg won the UEFA Cup football final on May 14, and Russia won the World Ice Hockey Championship four days later, with both victories being treated as signs of the country’s resurgence. 
President Dmitry Medvedev called Bilan to congratulate him from China, where he was on an official state visit, while Prime Minister Vladimir Putin sent a telegram, saying the victory was “not only a personal success for Dima Bilan, but yet another triumph for all of Russia,” Interfax reported. 
Bilan received 272 points in a telephone voting system tabulating calls from voters in 43 countries, ahead of Ukraine’s Ani Lorak with 230, and Greece’s Kalomira with 218.
Russia will host the contest next year, and Putin immediately instructed Deputy Prime Minister Alexander Zhukov to start organizing a committee to prepare for the 2009 event. Bilan’s producer Rudkovskaya said that St. Petersburg’s Sport and Concert Complex (SKK) could be the venue for the contest next year, Komsomolskaya Pravda reported Monday.
Kommersant Daily reported that Rudkovskaya brought up the idea after being congratulated by Medvedev, who was born in St. Petersburg. Typically, the Eurovision host country stages the event in its capital city.
The speaker of St. Petersburg’s Legislative Assembly, Vadim Tyulpanov, also voiced support Monday for hosting the contest in Russia’s “Cultural Capital,” according to Ekho Moskvy radio.
Eurovision fans from across Europe will likely not have visa problems coming to the contest, as the State Duma passed a bill earlier this month allowing the president to wave visa requirements temporarily for foreigners coming to major events in Russia. 
The legislation, originally designed for the 2014 Winter Olympics in Sochi, was pushed ahead for the Champions League final in Moscow last week. 
The show, which started at 11 p.m. Moscow time, was broadcast live on Rossia television. When it concluded four hours later, the channel broadcast a panel discussion to dissect the implications of the outcome with celebrities such as pop singer Boris Moiseyev, dethroned beauty queen Oksana Fedorova and music critic Artemy Troitsky.
Russia had never placed higher than second in the contest, which has been held since 1956 and has developed a strong following in Eastern Europe and Scandinavian countries.
Although he sang in English in the contest, Bilan thanked the people at home and performed a shortened version of the song in Russian at a news conference after the show, to “express in the best way the intense feelings,” he said. 
“Dreams can come true,” he said. “I’m so happy.” 
Hailed as a victory for Russia, Bilan’s winning song was in fact written by American producer Jim Beanz with the help of major producer and rapper Timbaland, also from the United States. 
It is not unusual, however, for artists recruited for Eurovision competitions to come from other countries. Canadian star Celine Dion represented Switzerland in the 1988 contest, and won it.
Meanwhile Bilan was ecstatic at the victory.  
“Dima is happy to come back a winner and that all of Europe supported him,” the singer’s agent, Alexandra Tityanko, said by telephone Sunday from Belgrade, Serbia, where the contest took place this year.
Tityanko said Bilan, 26, was confident he would win the competition, as the numbers had fallen in place. 
“He was born on the 24th [of December], and the contest was held on May 24, and he was contestant number 24,” she said. “These were good omens.” 
Boris Barabanov, a music critic for Kommersant, said that despite the fact the competition’s content was “something that you wouldn’t call musical,” the victory was likely to please many in the country. 
“It is the third Russian triumph this month, and it is important for the country,” Barabanov said. “It helps to change the attitude Russians have toward themselves.” 
“It is good that people voted for us, even it is clear that they voted according to geographic principle,” he added. 
Barabanov said most of the votes Bilan received came from countries such as Ukraine, Serbia and other East European countries. 
The most positive reaction to Bilan has come from the region where he was born. 
The president of the republic of Karachayevo-Cherkessia, Mustafa Batdyev, said one of the streets in the town of Ust-Dzhegut, where Bilan was born, would be given the singer’s name. 
The head of the town’s administration, Anzor Laipanov, said the town would soon also have a music school named after Bilan. 
“Everyone in the republic was cheering for Dmitry, and when we won, we congratulated each other,” Batdyev said, Interfax reported. 
“We will [name the school after Bilan] because we want our students to know that even if you were born in a small corner of Russia, you always have the chance to reach the peak of your profession and become a star,” Laipanov said, the news agency reported. 
Laipanov said the town’s Duma was due to hold an extraordinary meeting Monday to discuss inviting Bilan back to the republic for a big party in his honor. 
“Dima is proud that he was born and grew up there,” said his agent, Tityanko. 
Named best artist at the country’s MTV Awards for the past three years in a row, Bilan finished second in Eurovision in 2006. He lost to a Finnish heavy-metal band that dressed up in monster costumes — a result that prompted outraged headlines and accusations of biased voting in Russia. 
There were also strong protests in 2003 when the country’s most commercially successful export act, the faux lesbian duo t.A.T.u., came third. 
The group, which had hit singles around the world, received “suspiciously low points” from countries like Britain and Ireland, national broadcaster Channel One said at the time. Channel One declared at the time that Eurovision “was all about politics.” 
The contest, held in Belgrade after Marija Serifovic’s ballad clinched victory for Serbia in its debut as a solo nation in 2007, was broadcast live across Europe to an estimated audience of 100 million people. 
Other artists previously representing Russia have included the country’s top pop icon, Alla Pugachyova, who took 15th place in 1997, and Bulgarian-born pop star Filipp Kirkorov, Pugachyova’s ex-husband, who ranked 17th in 1995. 
Kirkorov wrote the song performed by Ukraine’s Lorak in this year’s contest.

Staff Writers Irina Titova and Matt Brown contributed to this report.

TITLE: Parliamentary Boycott Planned in Georgia
AUTHOR: By Misha Dzhindzhikhashvili
PUBLISHER: The Associated Press
TEXT: TBILISI, Georgia — Georgia’s main opposition bloc announced Friday that it will boycott parliament and hold a street demonstration to protest a vote that gave a huge majority of seats to President Mikheil Saakashvili’s governing party, election officials said.
The announcement raised the prospect that the persistent confrontation between Saakashvili and his opponents will be played out in the streets instead of in the legislature, denting the president’s effort to portray Georgia as a stable democracy in Western eyes.
“We refuse to enter parliament — to enter that building,” Levan Gachecheladze, co-leader of the United Opposition, told a crowd outside the parliament building in Tbilisi.
He called on supporters to gather Monday, Georgia’s Independence Day, for a street protest.
A nearly complete vote count indicated that the United Opposition won just 16 of the 150 parliament seats in Wednesday’s election, the Central Election Commission said. Commission spokesman Zurab Kachkachishvili said Saakashvili’s United National Movement would hold about 120 seats.
That would give the governing party an even stronger grip than it had over the previous 235-seat parliament after it suffered defections as disgruntled Saakashvili allies went into the opposition. Saakashvili’s opponents disputed the results, claiming widespread violations.
“We do not accept the legitimacy of these elections due to total falsification, so it’s not ruled out that we will refuse to enter parliament,” David Gamkrelidze, the other top United Opposition leader, told reporters.
The growing discord between Saakashvili and his opponents has spilled into the streets repeatedly over the past year, heightening tension in the nation at the center of a struggle for influence between Russia and the West.
An election-night rally drew just a few thousand people, adding to questions about the opposition’s ability to hold the kind of large, sustained protests that could force political change.
It was not immediately clear whether the other three opposition parties would follow the United Opposition and refuse to take the 14 seats they were on track to win. The leader of the Labor Party said he would do so only if all opposition forces joined the boycott.
The opposition cannot count on the West for support of an effort to contest the overall vote, despite some criticism from international observers of an election portrayed as a test of Saakashvili’s commitment to democracy that could affect his NATO membership drive.
In a statement issued Friday by its presidency, the European Union noted that the main international observer mission said implementation of Georgia’s democratic commitments was “uneven and incomplete” and urged authorities to ensure that all complaints are “urgently addressed.”
But the EU also urged “all political forces to respect the election results.”
Meeting in Brussels with EU foreign policy chief Javier Solana, Georgian Foreign Minister Eka Tkeshelashvili said the government did all it could to ensure a free and fair election and promised to address the problems raised by observers.

TITLE: Next Soyuz Craft Also Suffering from Glitch
AUTHOR: By Dmitry Solovyov
PUBLISHER: Reuters
TEXT: MOSCOW — The crew of the international space station could have a rough return to Earth because its re-entry capsule has the same glitch that caused problems on the last two landings, a Russian space industry source said.
The Federal Space Agency would not comment on technical problems but said the Soyuz-TMA capsule was safe to carry cosmonauts Sergei Volkov and Oleg Kononenko and U.S. space tourist Richard Garriott back from orbit in October.
Concerns have been raised about the safety of the Soyuz because the last two re-entries have not gone as planned: They were so-called “ballistic” landings, where the entry into the atmosphere was steeper than usual.
In the last landing in April, the crew of U.S. astronaut Peggy Whitson, South Korean Yi So-yeon and Russia’s Yury Malenchenko landed about 420 kilometers off course, and were subjected to twice the expected gravitational forces.
The space industry source said faulty bolts were suspected of causing the last two ballistic landings, and they are also fitted on the re-entry capsule now docked at the station.
“There are explosive bolts that keep two modules attached to Soyuz capsules,” the source said. 
“They are supposed to go off right before the entry into the Earth’s atmosphere.
“For some reason, this didn’t work [on the previous two re-entries], although the unseparated modules fell off eventually,” he said. “What is bad is that another Soyuz-TMA is believed to have this faulty device and is docked at the station for the return trip.”
The Federal Space Agency declined to comment on any technical faults with the Soyuz. An inquiry has been launched into the problems with the last two landings, but its findings have not been made public.
Agency spokesman Alexander Vorobyov said even if there was a repeat of the “ballistic” landings, the crew would be safe “due to the high reliability of the Soviet-era spacecraft.”
Vorobyov said he had spoken to Vladimir Solovyov, flight director for the Russian section of the space station “and his opinion is as follows: This Soyuz is, indeed, safe for return.
“He said that in any case, even in the event of a ballistic landing, these explosive bolts burn down due to high temperatures [on re-entry], and then the descent — even if it is not so gentle — won’t be life-threatening for the crew,” Solovyov said.

TITLE: Blaze at Arms Depot Destroys  450 Missiles
PUBLISHER: The St. Petersburg Times
TEXT: A fire at an air force arms depot destroyed all 450 missiles stored there in the town of Lodeinoye Pole, Leningrad Oblast, on Friday, Interfax reported.
The missiles did not contain live charges.
The fire began at the depot that belongs to the air force garrison at Lodeinoye Pole at around 3 p.m.  
More than 10 fire trucks tackled the blaze, which was put out within two hours. Some missiles reportedly exploded in the fire.  
No casualties were reported. The cause of the fire remains under investigation.

TITLE: Unpopularity Irks Germans
AUTHOR: By Erik Kirschbaum
PUBLISHER: Reuters
TEXT: BERLIN — Germans fretted about being unloved in Europe on Sunday after their most popular band of the last decade got zero points from 40 of 42 countries in the Eurovision Song Contest and they ended up sharing last place.
“Why doesn’t anyone like us?” asked Bild am Sonntag newspaper after Germany had yet another horrendous showing in the annual contest watched by more than 100 million viewers.
“Are we too stupid to win, or is it simply we’re not liked?” the Sunday newspaper said. “The fact is Germany’s top recording artists have failed spectacularly in this contest. Do our singers simply have no chance abroad?”
Britain’s veteran Eurovision presenter, Terry Wogan, questioned whether the contest favored Eastern European countries after Britain’s highly touted entry came last with Germany and Poland.
“It’s no longer a music contest,” Wogan said, adding that he was not sure he would bother going to Eurovision anymore. “Indeed, Western European participants have to decide whether they want to take part from here on in because their prospects are poor.”
“I’m afraid nobody loves the U.K.,” he said during the show.
Germany’s No Angels — four women in skimpy dresses who sold more than 5 million albums in the past eight years — went into the contest in Belgrade with hopes of giving their country a second victory in the 53-year-old contest. Germany last won in 1982.
The Eurovision Song Contest might be dismissed as tacky and kitsch in some countries — as witnessed by novelty acts, such as singing pirates from Latvia. But it is serious stuff in Germany, where 6.5 million watched.
Aside from the highest-possible 12 points from Bulgaria — one of No Angels emigrated from that country and now hosts a pop song contest in Bulgaria — Germany got only two points from Switzerland to end up sharing last with Britain and Poland.
“We delivered a great performance, but the viewers didn’t recognize it,” said Bulgarian-born German singer Lucy Diakowska.
“It was the insult at Belgrade — what a disaster,” said Thomas Hermanns, who hosted a German after-show fest in Hamburg.
“It’s just unbelievable and so, so, so stupid,” said NDR television’s Eurovision analyst Jan Feddersen. “No Angels” was the most successful girl group in continental Europe in 2003.
“Other countries got support from their neighbors. Germany didn’t get any support at all from its neighbors.”

TITLE: Communists Angered By Latest Indiana Jones Film
AUTHOR: By Anna Malpas
PUBLISHER: Staff Writer
TEXT: MOSCOW — St. Petersburg communists are campaigning against the new Indiana Jones movie, complaining that its portrayal of the Russian villains is insulting and historically inaccurate. 
“We are really outraged by this film, which has nothing to do with reality,” Veronika Klinovitskaya, a spokeswoman for the Communists of St. Petersburg and the Leningrad Region, said by telephone Friday. 
“Indiana Jones and the Kingdom of the Crystal Skull” features Jones, a swashbuckling archaeologist played by Harrison Ford, competing with Soviet agents and soldiers to obtain a precious artifact. Cate Blanchett plays a KGB agent with paranormal powers.
The film is the fourth chapter of the highly successful Indiana Jones franchise, and it came out in Russian theaters on Thursday.
Set in 1957, “Crystal Skull” marks the first time that Jones has done battle with Russians. In two of the previous Indiana Jones films, the villains were Nazis. 
The communist group, which is not affiliated with the official Communist Party, posted a statement on its web site Thursday calling the film “a belch of the Cold War” and a “vile lampoon.”
The film depicts Soviet soldiers and agents “in a caricatured and unattractive way” and encourages “idolization of the United States,” the statement says.
Klinovitskaya criticized the “disgusting” portrayal of Soviet soldiers and said Blanchett’s depiction of a KGB agent was “warped.”
She also questioned the historical timing of the film, which is set in the same year that the Soviet Union sent the first man-made satellite into orbit. “It was a great year for the Soviet Union,” she said.
The group is going to attend film showings and make noise in protest, Klinovitskaya said. 
It is also printing 10,000 leaflets and e-mailing the film’s stars, Ford and Blanchett, whom the site calls “puppets of imperialism.”
Members may also contact the film’s director, Steven Spielberg, Klinovitskaya said. “We haven’t found his address yet.”
Alexander Yushchenko, a spokesman for Communist leader Gennady Zyuganov, said the protesters “aren’t Communists” and that he could not comment until he had seen the film.
In an interview published last week in Komsomolskaya Pravda, Spielberg described himself as “Russian” since his family originates from Ukraine. 
He said the villains had to be Russians. “The Second World War had finished, and the Cold War began. America didn’t have other enemies at that time.”
Asked why Blanchett’s character has the unlikely sounding name of Irina Spalko, the paper reported that he laughed and said, “Blame the scriptwriters.”
Nobody was available for comment Friday at the film’s Russian distributor, Universal Pictures International.
Meanwhile, critics are divided on the film’s presentation of Russians.
A critic on Gazeta.ru called Cate Blanchett’s portrayal of Spalko “caricatured,” adding that he hoped “she didn’t sell herself cheaply.” 
But a reviewer in Izvestia commented that: “We shouldn’t be offended. We are the only people in the world who can understand Blanchett’s heart-rending shrieks.”

TITLE: EU Rep Sees Hard Talks Ahead
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW — The negotiations between Moscow and Brussels for a new and wide-ranging cooperation agreement could get tougher than the cumbersome 18 months of wrangling leading up to them, the European Union’s top representative in Moscow said. 
“The talks might be more difficult than it was defining the mandate,” Marc Franco, the head of the EU delegation to Russia, said in an interview Friday. 
Given the complexity of the issues, he would not be surprised if talks were to be drawn out for more than a year, Franco said by telephone from Florence, Italy, where he was attending a conference of the European University Institute. 
He refused to give any timeline for the negotiations. 
At a meeting in Brussels on Monday, the foreign ministers of the EU’s 27 member states are expected to approve a deal reached last week to begin talks with Russia, a decision blocked for 18 months by disputes over how to deal with Moscow’s more assertive foreign policy. 
Franco singled out Russia’s accession to the World Trade Organization, a process currently fraught with political disputes, as a major hurdle for the negotiations to overcome. 
“I would not call this a precondition, but yes, Russia should be in the WTO by the end of the negotiations,” he said. Otherwise, the nature and the form of the agreement would have to be reconsidered. 
He explained that, despite the EU and Russia in 2004 bilaterally agreed on conditions for Moscow’s WTO accession, there were still outstanding trade issues between Brussels and Moscow that complicated the process. 
One of these issues is Russia’s increases in export duties on wood, which began in mid-2007 and have been raised more steeply since. Franco said this hit the wood-processing industries in Finland and Sweden very hard and that the EU would continue its negotiations under Trade Commissioner Peter Mandelson to find a compromise solution that would adequately reflect the interests of the affected industries in the EU and legitimate economic interests of Russia. 
“The European Commission does not agree with the way in which Russia is currently applying export duties on wood, which we believe breaches an agreement concluded in 2004,” he said, adding, “It also contradicts efforts to maintain open markets between the EU and Russia.” 
Other sore points were Moscow’s tariffs for rail transportation to foreign ports, including Baltic ports, and charges to foreign airlines for overflight rights, Franco said. 
Russia’s WTO accession has met stiff opposition from a number of countries, some of which have openly declared that they had political motives for doing so. Georgia recently said it would block Russia’s ambitions because of the worsening conflict over the breakaway republic of Abkhazia, which has seen renewed support from Moscow after the United States and the EU recognized Kosovo as an independent state. 
The so-called frozen conflicts over disputed territories of the former Soviet Union are also part of a list of subjects that will be included in the negotiations over the new Partnership and Cooperation Agreement, after Lithuania threatened to veto the start of the talks. 
Lithuania agreed to drop its veto only last week after winning assurances from Slovenia, which until the end of June holds the EU presidency. 
Russian officials have voiced disappointment at the assurances. If Lithuania’s demands will be heeded, “this could set a precedent that might weaken the atmosphere of strategic partnership,” Vasily Likhachyov, deputy chairman of the Federation Chamber’s Foreign Relations Committee, told Interfax last week. 
Franco downplayed the significance of the holdup over Lithuania’s objections. 
“These issues that will be put on the table would have been on the table anyway, and Lithuania just put more emphasis on them,” he said. 
Likhachyov warned that the negotiations should not descend into bartering. “If Brussels lets this happen, the agreement will just be ineffective,” he said, Interfax reported. 
Franco also dismissed fears that the often-fractious 27-member bloc would be at a serious disadvantage when negotiating with Russia’s new government, led by strong allies President Dmitry Medvedev and Prime Minister Vladimir Putin. 
“Even in a country with strong leadership there can be different opinions,” he said. “Russia can speak with one voice, but that does not mean that everybody here thinks the same thing.” 
“We have found a common position and now it is the task for the commission, for the presidency, for Mr. Solana to ensure the coordination of points of views,” Franco said. 
The EU’s six-month rotating presidency will pass from Slovenia to France in July. Javier Solana, the EU’s foreign policy chief, represents the EU abroad where there is a common foreign policy. 
Franco said the EU’s size was both a weakness and a strength. “This is the first time that so many countries [have decided] to work together,” he said. 
The talks are set to kick off at the EU-Russia summit in the west Siberian oil town of Khanty-Mansiisk on June 26-27.

TITLE: Baltika Opens In Siberia
AUTHOR: By Maria Ermakova
PUBLISHER: Bloomberg
TEXT: MOSCOW — Carlsberg’s Baltika Breweries, Russia’s biggest beer company, has opened a plant in Siberia to gain market share in a region with “huge” potential, President Anton Artemiev said.
Baltika’s 11th factory in Russia cost $211 million and can make 4.5 million hectoliters (3.8 million barrels) of beer a year, equal to about 10 percent of the company’s sales last year, Artemiev told reporters Monday in Novosibirsk, Russia’s third-largest city.
“Beer consumption in Siberia is lower than in Russia overall,” Artemiev said. “Baltika’s market share here is also lower than in the rest of the country.” St. Petersburg-based Baltika will make a new beer, Siberian Keg, at the plant to cater to local tastes.
Baltika is adding breweries as a 10th consecutive year of economic expansion in Russia fattens incomes, enabling more drinkers to buy imported brews. Valby, Denmark-based Carlsberg took over Scottish & Newcastle along with Heineken to gain control of Baltika as beer markets stagnate or shrink in western Europe, the Danish brewer’s main source of sales.
Russia’s beer market will grow “for many years to come,” Carlsberg CEO Joergen Buhl Rasmussen said in an interview after the factory opening, citing rising incomes and a trend toward drinking less vodka and more expensive beers such as the Kronenbourg lager licensed from Scottish & Newcastle.
“That’s why it’s so exciting to be in this market,” Rasmussen said. “In western Europe you don’t find this kind of market any more.”
Russian annual beer consumption may reach 120 liters to 140 liters per person, the same as in western European markets “with high consumption,” Rasmussen said, without giving a timeframe. That’s up from 78 liters last year, according to Artemiev. Moscow-based market researcher Business Analytica expects Russian beer sales to climb 5.9 percent this year.
The Novosibirsk plant is Baltika’s first east of the Ural Mountains that can make licensed beers such as Carlsberg’s Tuborg. The new local brand, Siberian Keg, “will be in the lower mainstream segment,” Artemiev said. The brewer’s competitors in Siberia include SABMiller, with its local brand Zolotaya Bochka (Golden Barrel).
Artemiev said Baltika also is increasing sales in former Soviet states, where beer markets are expanding more quickly than in Russia. Growth in the region will come via licensing agreements rather than acquisitions, he added.
Baltika agreed this month to buy Azerbaijan’s biggest brewer and to make beer in Uzbekistan with a local partner owned by Carlsberg. The company is also considering a licensing agreement with a brewery in Kazakhstan.

TITLE: Carmakers Help Boost Economy by 10%
AUTHOR: By Anatoly Tyomkin
PUBLISHER: Vedomosti
TEXT: Foreign investment increased by 10 percent in St. Petersburg during the period from January to March this year, despite falling by 43 percent in Russia as a whole, as car producers helped boost the city’s economy.
Direct foreign investment into St. Petersburg’s economy reached $266 million in the first quarter of 2008 — up 9.7 percent from the same period last year, according to City Hall’s Committee for Economic Development, Industrial Policy and Trade (CERPPiT).  
The total volume of foreign investment into the non-financial sector in the city reached almost $708 million — an increase of 6.1 percent.  The portion of direct investment increased by 1.2 percent.  About 65 percent of all investment came from Finland, Belarus, Kazakhstan, Germany and Switzerland.
According to the committee, most direct investment — around 65 percent — was directed into manufacturing, while 19 percent was invested in construction and 10 percent into real estate. Officials believe the growth of foreign investment is linked to the surge of major foreign manufacturers — particularly carmakers such as Nissan, General Motors, Hyundau and Suzuki — opening in the city, according to a representative of the committee’s press service.  
Foreign investors are also working on several large-scale building projects in St. Petersburg, such as the Baltic Pearl complex, which is being financed by Shanghai industrial investment holding company.  The complex will be located in the south-west of the city.
The situation is more favorable in St. Petersburg than in Russia as a whole, confirms Yevgeny Nadorshin, an analyst at Trust investment bank.  According to the Federal Statistics Agency, direct foreign investment into the country during the first quarter decreased by 42.8 percent from the same period last year to $5.6 billion.  
Nadorshin explains this decrease in investment as being down to the extractive industries.  “St. Petersburg’s economy has an advantageous position — it is highly diversified, which guarantees stable growth,” says Nadorshin.  In his opinion, St. Petersburg’s volume of foreign investment is comparable to that of the far eastern regions, except that in the latter, most of the money is invested in the development of one area alone — the extraction industries.
Vladimir Sergunin, senior analyst at Colliers International investment department, says that foreigners are keen to invest their money into St. Petersburg development and construction projects.  He said the profitability of such businesses in the city is 9-10 percent, while in Europe it does not exceed 4-5 percent.  The expert estimates that the growth of foreign investment in St. Petersburg real estate increases about 30 percent every year.
Vladimir Knyaginin, head of research at the Severo Zapad Center for Strategic Manufacturing, forecasts that investment will continue to grow, and the development of industry will result in the growth of investment in transport, logistics and other service industries.  
At the same time, the city’s possibilities are not unlimited, therefore attracting investors in the future will depend on how much the city authorities can ensure that their infrastructure and staffing needs are met, Knyaginin said.

TITLE: In Brief
TEXT: <b>Banking Experts Gather</b>
ST. PETERSBURG (SPT) — The 17th International Banking Congress will be held this week from Wednesday to Saturday.  The theme of the forum, which will be held at the Park Inn Pribaltiskaya hotel, is “Banks in the financial brokerage system: the situation and its prospects.” 
Among the topics to be discussed at the forum are the increased importance of banks in the development of financial brokerage and money transmission mechanisms, the competitiveness of banks on financial markets, the introduction of new bank services and technology, and increasing the quality of management and regulation of risks related to these processes in the context of the globalization of financial markets.
Participants are to include representatives from the Federation Council, State Duma, Russian government, Bank of Russia, international financial institutes, and both Russian and foreign banks.

<b>Concrete Factory Opens</b>
ST. PETERSBURG (SPT) — Titan Monolit, a subsidiary of Titan-2 holding, opened its first concrete factory in St. Petersburg last week. Investment into the construction of the plant totaled $4.7 million, according to a statement made by the company’s press service.
The planned capacity of the plant is 105 cubic meters of concrete solution per hour, and more than 1,000 kinds of concrete and mixtures can be produced at the new plant.
St. Petersburg’s regional commercial concrete market is 50-70 percent smaller than that of Moscow, the former currently standing at 3-4 million cubic meters per year, according to the statement.

<b>Mortgage Unit for Sale</b>
MOSCOW (Bloomberg) — Morgan Stanley, the second-biggest U.S. securities firm, plans to auction off its Russian mortgage unit, Vedomosti reported.
Morgan Stanley bought Moscow-based Gorodskoi Mortgage Bank in 2006 for $185 million, the Russian newspaper reported Monday, citing Morgan’s Russia chief Rair Simonyan.
Gorodskoi had 12.7 billion rubles ($540 million) of assets and 1.7 billion rubles of its own capital on April 1, Vedomosti said. Morgan is seeking 2.5 times book value for the bank, according to the newspaper.

<b>Lending Concerns Bank</b>
MOSCOW (Bloomberg) — Bank Rossii, Russia’s central bank, said it is “concerned” by the pace of corporate lending, Kommersant reported.
“Let’s slow down a gear,” the newspaper cited First Deputy Chairman Gennady Melikyan as saying at the annual meeting of the Association of Regional Banks. “This can end badly.”
The amount of loans to companies increased 14 percent in the first quarter from the previous three months and may grow 50 percent this year, Melikyan said, according to Kommersant.
Russian banks lent companies $55 billion in the first quarter, while luring $27 billion in corporate deposits and $16 billion in consumer deposits, the newspaper said. The discrepancy forces banks to increase short-term interbank borrowing using securities as collateral, the newspaper said.

<b>Tax Holidays Discussed</b>
MOSCOW (Bloomberg) — Russia may grant extraction tax holidays of as long as 15 years for offshore oil and gas fields, Interfax reported, citing Deputy Finance Minister Sergei Shatalov.
The tax holidays would last 10 years for production and 15 years if a company plans to both explore a licensing area and produce oil or gas, the news service cited Shatalov as saying after a government meeting in Moscow. Fields on the Yamal Peninsula and in the Timan-Pechora basin will come with seven-year tax holidays, he said.

<b>UES to Invest in Far East</b>
MOSCOW (Bloomberg) — Unified Energy System, the Russian state-controlled utility that is being broken up, plans to invest 165 billion rubles ($7 billion) in a new holding company to develop its assets in the country’s Far East.
The government will hold a 53 percent stake in RAO UES of the Far East, which plans to list in Moscow this year and abroad next year, Moscow-based Unified Energy said in an e-mailed statement on Friday. The new company won’t sell new shares on those markets.

<b>Moscow Sets New Goal</b>
MOSCOW (Bloomberg) — Moscow aims to become one of the world’s top-five financial centers by 2025, Interfax reported, citing the Russian capital’s mayor, Yury Luzhkov.
“In order to develop and strengthen the Russian financial system we must create an international financial center, and there is no better candidate for this than Moscow,” the Russian news service quoted Luzhkov as telling a conference Monday. This goal can be achieved by 2025, he said.
More than 50 percent of Russian banks, accounting for more than 85 percent of all banking assets in the country, are registered in Moscow, according to Luzhkov. Moscow’s budget was $44 billion in 2007, the world’s second biggest for a city, and will exceed $50 billion this year, Interfax quoted Luzhkov as saying.

TITLE: BoNY Lawsuit ‘Invalid’
PUBLISHER: Reuters
TEXT: MOSCOW — Former U.S. Attorney General Richard Thornburgh has advised a Russian court to dismiss a $22.5 billion lawsuit that the Bank of New York Mellon is facing in Moscow. 
Since last May, the Russian government has been seeking compensation after a former vice president at the bank, Lucy Edwards, helped launder more than $7 billion from Russia in the late 1990s through Bank of New York accounts and dummy companies. 
Reviving the decade-old case, lawyers for the Federal Customs Service have based their claim on a U.S. law known as RICO, which was passed in 1970 to combat the mafia. 
Thornburgh, known for fighting organized and white-collar crime in the Justice Department under five U.S. presidents, confirmed on Thursday that he had told the Russian court that its use of the law was invalid. 
“There is no basis on which to conclude that Congress intended to vest in foreign courts power to entertain suits for damages under RICO,” he said in the 24-page witness statement. 
Steven Marks, who helped design the case for the customs service, rejected Thornburgh’s comments.

TITLE: Wall Street’s Women Visit St. Petersburg
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: More than 20 businesswomen from the U.S.-based Financial Women’s Association arrived in St. Petersburg on Friday to take part in the 24th annual international conference. The event kicked off on Saturday night at the St. Petersburg Artist art gallery, where American financial leaders had the chance to meet their Russian counterparts and get insight into the most recent developments on the Russian financial and investment markets.
Established in 1956, when there were just eight enterprising women working on Wall Street, the Financial Women’s Association (FWA) now numbers nearly a thousand members worldwide, and retains its original goal of helping to promote women in finance. The association organizes annual conferences in various regions of the world in order to become familiar with the economic and business environment of specific countries and make contacts in the local financial communities. 
The Russian program, which includes events in both Moscow and St. Petersburg, includes meetings with governmental officials, business leaders and independent consultants and runs through May 31. Among the events scheduled for the Russian conference are meetings with representatives from the American consulate and embassy, American Chamber of Commerce, DaVinci Capital, MICEX, Goldman Sachs Russia/CIS, KPMG real estate, Carnegie Moscow Center, HSBC and several other financial and investment institutions. Meetings with Arkady Dvorkovich from the Russian Presidential Administration, Minister of Finance and Vice-premier Alexei Kudrin, and St. Petersburg Governor Valentina Matviyenko are also planned within the framework of the conference, according to the president of the FWA, Lily Klebanoff Blake. 
Shortly before the conference, the FWA participants attended briefings on Russia, aimed at breaking down misconceptions about the country. One briefing dealt with the theme of Russian banking, another was dedicated to the economic climate and investment opportunities, and another discussed Russian antiques and artwork, according to Klebanoff. 
Klebanoff, who is of Russian origin, admits she has a personal interest in pursuing the development of the FWA in Russia.  Born in Shanghai, she was the third generation of her family to live in China. Klebanoff spent the first part of her career in healthcare and public finance, later becoming an executive director of a consortium of Fortune 500 firms, facilitating their entry into the Soviet market. She is also currently the president of Klebanoff International, an international business consultancy specializing in business development and trade.
The St. Petersburg welcome meeting was organized and facilitated by the Center for Civic Initiatives, a Russo-American foundation which has been working for more than 15 years, providing professional internships and exchanges. According to the foundation’s director, Olga Chubarova, more than 7,000 business professionals from all over Russia have already taken part in various exchange and study programs, with 45 percent of them being women. “That was our part in promoting the role of women in business and finance in Russia, and here we can see a strong connection to what the FWA are doing,” she said.

TITLE: Ukraine Ready for More Energy Talks
AUTHOR: By Denis Dyomkin
PUBLISHER: Reuters
TEXT: MINSK — Ukraine said Friday that it would hold talks on Russian natural gas supplies with Moscow simultaneously with negotiations on Russia’s membership in the World Trade Organization. 
“I believe that simultaneously preparing a strategic agreement on Russian gas supplies to Ukraine ... there will be negotiations on the Russian Federation’s accession to the WTO,” Ukrainian Prime Minister Yulia Tymoshenko told journalists after meeting with Prime Minister Vladimir Putin. 
Ukraine depends heavily on Russian gas supplies and it also transits the bulk of Russian gas to Europe, accounting for one-quarter of European Union needs. 
Moscow and Kiev have had repeated gas pricing disputes which once led to the interruption of Russian exports to Europe, sending jitters to both EU politicians and industrial producers. 
Russia remains the biggest economy still outside the WTO. Ukraine ratified a protocol of joining the WTO last month. 
Under WTO rules, all member states can require prospective new members to make commitments about their trade rules and economic practices. 
But Tymoshenko said Kiev had no plans to hold up Russia’s accession. “Ukraine, just like Russia, will spare no effort for these two [negotiating] processes not to be linked,” she said. 
She said she had agreed with Putin to start talks on the strategic agreement on Russian gas supplies in the near future. She gave no detailed timeframe. 
“I believe that if we manage to sign this agreement for a long term — for five or ... even 10 years — this will be a great breakthrough,” she said. 
“This will ensure stability not only for our two countries, but also for the whole region, including the European Union. ... We achieved mutual understanding.” 
For Moscow, joining the WTO would make it easier for Russian exporters to sell their products while at the same time its own market would open up further for foreign companies. 
Putin also used the visit for talks on energy, transportation and military technology with Belarussian President Alexander Lukashenko, Interfax said.

TITLE: Central Bank Hikes Reserve Minimums
AUTHOR: By Gleb Bryanski
PUBLISHER: Reuters
TEXT: MOSCOW — The Russian central bank, worried about galloping inflation and fast lending growth, said on Monday it will aggressively raise bank reserve requirements from July 1 in order to curb inflation. 
The central bank said the requirements on banks’ liabilities in foreign currency would rise to 7.0 percent from 5.5 percent, requirements on retail deposits to 5.0 percent from 4.5 percent and on other liabilities to 5.5 percent from 5.0 percent. 
It will also set an averaging ratio, which allows banks to spread their reserves over time and even out periods of excess and scarce liquidity, at 0.5 percent compared with 0.4 percent before. 
“It was a timely decision. The rise is significant, I think there will be an impact,” said Natalya Orlova from Alfa Bank. The central bank said the rise of the averaging ratio will smooth the impact of the measure. 
Annualized inflation is threatening to exceed 15 percent in May, well above the government’s target of 10 percent. Mandatory reserve requirements are the money the banks should set aside and a rise in requirements slows lending growth. 
Orlova expects the measure to bring down the annual inflation rate by 0.3 percentage points and said it was equivalent to slowing expected 48 percent corporate lending growth in 2008 by about 2 percentage points. 
Corporate lending grew by 70 percent in the first quarter and the central bank’s deputy chairman Gennady Melikyan said last week he was worried about Russian banks growing too fast and lending too much despite the global economic slowdown. 
Russia’s top banks Sberbank and VTB reported healthy results for 2007 but warned of an imminent slowdown later this year.  
The rise in reserve requirements came as the largest Russian banks and corporations have returned to capital markets after a pause caused by the global credit crunch with banks like VTB issuing a $2 billion Eurobond last week. 
The Russian banks have made a lucrative business of borrowing cash at low interest rates abroad and lending it at home at effective interest rates which have in the past reached as much as 50-70 percent per year. 
The requirements are the central bank’s second most powerful anti-inflation monetary policy tool after the ruble exchange rate but the central bank has so far been reluctant to revalue the ruble due to speculative capital inflow fears.  A number of large Western investment banks advised their clients to go long on the ruble in anticipation of a revaluation after the inauguration of President Dmitry Medvedev to bring inflation in line with the governments’ forecasts.  The central bank, which runs a managed float of the ruble against the dollar/euro basket, dismissed the recommendations as talk of irrational investors and moved to introduce greater volatility in the forex market to confuse speculators.

TITLE: TNK-BP Boss Talks
To Paper
PUBLISHER: Reuters
TEXT: MOSCOW — The chief executive of BP’s Russian venture, TNK-BP, has acknowledged for the first time that the Russian and British shareholders disagree on matters, saying it could damage oil production. 
“There is of course some disagreement among TNK-BP shareholders... on the question of investment, on the question of the sale of some assets in Russia,” Robert Dudley told Monday’s edition of  Vedomosti. 
TNK-BP, which is half-owned by BP and a group of Russian billionaires, has been the subject of long-running market speculation that the Kremlin wants one of the groups to sell out to a state firm, such as gas export monopoly Gazprom. 
Russian security services have raided TNK-BP and BP offices in Moscow and arrested an employee on commercial espionage charges. 
Industry sources have said that state pressure has led to deep disagreements between the Russian and British shareholders as none of them is prepared to sell out. 
Many analysts saw a sign of such rivalry when a little-known brokerage, Tetlis, claimed in a Siberian court that TNK-BP’s use of BP specialist contractors was illegal.

TITLE: Motorists Take to Streets Over Fuel Prices
PUBLISHER: Combined Reports
TEXT: Motorists in St. Petersburg and about 50 other cities across the country protested rising gasoline prices Saturday and called on the government to take measures to punish producers of substandard fuel. 
Media reports said the protests had anywhere from a few dozen participants, including in Yekaterinburg, Kaliningrad, and Petropavlovsk-Kamchatsky, to as many as 200 in Moscow. The demonstrations, organized by the Freedom of Choice driver’s movement, involved lines of cars driving through city centers with their emergency lights on and empty fuel canisters taped to their roofs. 
The protests came amid heightened concerns over spiraling inflation, which threatens to exceed a yearly 15 percent this month, and world oil prices. U.S. oil hit a record of just over $135 a barrel last week. 
“The state should do more to hold people responsible for the production and sale of substandard gasoline, including prison terms for the heads of companies producing and selling it,” the driver’s movement wrote on its web site. The group also calls for cutting the tax on car fuel to 40 percent, from the current 70 percent, and bringing down the retail price for gasoline to 15 rubles (63 cents) per liter, from 22 rubles now. 
Vyacheslav Lysakov, head of the driver’s movement, called for the protests to be peaceful and to avoid conflicts with law enforcement officers, RIA-Novosti reported. 
Protesters banging empty fuel cans and waving placards turned out on Bolotnaya Ploshchad in Moscow, Gazeta.ru reported, despite the rainy weather. The protest was approved by city authorities, and police nearly outnumbered protesters, Interfax reported. 
Some of the other protests were hampered by local authorities, however. In St. Petersburg, traffic police were already waiting at the agreed meeting place, participants told RIA-Novosti. 
“They blocked some of the cars, started writing down our license plate numbers and threatened drivers with a trip to the local precinct,” one protester told the news agency, adding that the demonstration had not been cleared with City Hall. 
Some 30 cars took part in a protest in Nizhny Novgorod, but their intended route through the city center was blocked after the local authorities said the cars could disrupt citywide events celebrating the last day of school, RIA-Novosti said. The drivers parked their cars in a “picket” along the Volga River with signs attached to the roofs. 
In Krasnodar, a protest was canceled after local Interior Ministry officials told the organizers that it could disrupt the public order, including the movement of ambulances and fire trucks. 
“The police suggested that Krasnodar residents not participate in the demonstration, and today it didn’t happen,” Ilya Shakalov, spokesman for the local Interior Ministry, told RIA-Novosti. 
SPT, Reuters

TITLE: UES Seeking Decision Over OGK-1 Within Next Week
PUBLISHER: Reuters
TEXT: MOSCOW — Former electricity monopoly Unified Energy System will ask the potential buyer of power producer OGK-1 to make a final decision on the acquisition in early June, a source close to the sale said Friday. 
Also Friday, UES chief executive Anatoly Chubais told reporters that a deadline for the negotiations over the sale of OGK-1 had been set, although he declined to say what it was. 
“I will not tell you [the deadline] because that would influence the course of negotiations,” Chubais said. 
The source, however, said that in the first 10 days of June the buyers will have to take the firm or leave it. 
The only bidder for OGK-1, whose sale was to raise up to $7 billion, is a consortium of Russian investors led by billionaire Viktor Vekselberg’s investment vehicle, Integrated Energy System. 
The company has emerged as a major player in the country’s liberalized energy sector, buying up billions of dollars in assets from UES. 
IES has argued that OGK-1’s $4 billion development program through 2010, which the buyer would be obligated to fulfill, justified a discount to the market price. 
UES, however, has insisted on selling at a premium. 
The Soviet-era monopoly is in the process of selling off its assets, including 20 major power producers, as part of an industry-wide reform that will see UES dismantled and mostly privatized by July 1. 
After that date, its “shell,” including all of its assets and liabilities, will be transferred to the two largest UES subsidiaries that will remain under state control — the Federal Grid Company and hydroelectric giant Hydro-OGK. 
OGK-1 chief executive Vladimir Kolesnikov said last week that if his firm is not sold by July 1, two-thirds of its shares will be transferred to the grid company and one-third to Hydro-OGK. 
“They will then sell these assets as they see fit,” Kolesnikov said at a news briefing this month. 
He added that this could take place as late as 2010, but most likely it would happen sooner. 
Chubais said UES still had the option of buying up a new share issue of OGK-1 to fund the firm’s investment program in the near term, until it can be sold at an appropriate price. 
Germany’s RWE is late in paying for power firm TGK-2, which it acquired in March, UES said Friday, threatening to void the deal if delays continue. 
“The board of directors of UES decided to unilaterally cancel the sales contract of TGK-2 ... if it is not paid for by May 31, 2008,” UES said in a statement. RWE had no comment. 
The utility paid $800 million for effective control of TGK-2, a Yaroslavl-based regional producer of electricity and heat. This is the first time UES has threatened to void a sales deal in response to late payment. 
UES sold a 21.3 percent stake in regional utility Bashkirenergo to investment firm Unitrade for 11 billion rubles ($466 million) on Friday. 
A source close to the deal said Unitrade was linked to Vekselberg’s IES. Bashkirenergo, which generates, distributes and retails energy in the republic of Bashkortostan, is one of the few vertically integrated companies UES is selling.

TITLE: Airbus Viewed as ‘Liability’ As Share Prices Fall
AUTHOR: By Andrea Rothman
PUBLISHER: Bloomberg
TEXT: PARIS — Airbus SAS, the world’s largest commercial aircraft maker, is valued at “less than zero” after this year’s 32 percent drop in the shares of parent European Aeronautic, Defence & Space Co., according to Lehman Brothers Holdings Inc. analyst Joe Campbell.
“The market is viewing Airbus as a liability, rather than an asset,” said Campbell, 62, who is based in New York and has ranked among the top five aerospace analysts for six consecutive years in an Institutional Investor magazine poll. 
EADS, based in Paris and Munich, on May 13 reported an additional three-month delay in deliveries of the A380 superjumbo jetliner, which was already two years behind schedule. Before the latest setback, the company had cut its profit forecast by $6 billion through 2010. 
Airbus, based in Toulouse, France, is also six months to a year late on the A400M military transport. It has a $31.4 billion contract with six European governments and Turkey for 180 of the planes. Additional cost overruns and penalty payments may drain cash needed for the $16 billion expense of developing the Airbus A350, a long-range jet competing with Boeing’s 787 and 777. 
A February 2007 recovery plan meant to help Airbus cope with a weakening dollar as it competes with Chicago-based Boeing for dominance of the $60 billion-a-year airliner market has stumbled. The planemaker sought in part to shift investment for new planes to subcontractors who would buy Airbus plants. It chose local companies in France and Germany that lacked the capital to shoulder the risk and the plan fell apart. 
The U.S. currency has lost 16 percent of its value against the euro since Airbus unveiled its reorganization. 
Investors’ low valuation of Airbus is “a bizarre outcome for a large company,” Campbell, whose firm is an investment bank for EADS, said in an interview. “It reflects both the industrial challenges of engineering and making big airplane programs, and particularly and primarily, the euro trading at $1.50 or $1.60.” He rates the shares “equal weight.” 
EADS’s non-Airbus assets, including helicopters, satellites, rockets, fighters and defense electronics, are worth 15 or 16 euros a share, or about where the stock is trading, estimates Campbell. Non-Airbus businesses contribute a third of the company’s sales, which totaled 39.1 billion euros in 2007. 
Scott Babka and Rupinder Vig at Morgan Stanley in London say EADS without Airbus is worth 13.5 euros a share. Getting an aircraft maker for free might provide a floor for the stock, according to Vig. 
When EADS was founded in 2000, management promised 10 percent margins on earnings before interest and taxes by 2003. The best so far was 7.3 percent in 2005. Last year, EADS lost 446 million euros. Chief Executive Officer Louis Gallois in March 2008 forecast margins on earnings before interest and tax at Airbus “in mid-single digits” through about 2011. 
Gallois, 64, became sole chief of EADS last July. Tom Enders, 49, who previously shared the top job, is now Airbus CEO, making him the fifth person to run the planemaker in three years. 
“As long as Gallois and Enders and people at the top of the company can’t give any guidance that Ebit margins will go above 5 percent, there’s not a lot of incentive to buy the shares,” said Klaus Breil of Cominvest Asset Management in Frankfurt, which oversees 6 billion euros including EADS shares. 
Airbus will probably experience further A380 delays, Breil said. It may need to seek 2 billion euros more in savings to counter the dollar’s decline. Meanwhile, an almost doubling of jet-fuel prices in the past year is squeezing carriers and jeopardizing aircraft production, he said. 
Colin Crook, a UBS Investment analyst in London, cut EADS to “sell” last Tuesday, citing those concerns and posting a 12-month target price of 14.50 euros. 
Airbus has already said it may cut research costs. That on top of the A380 delays may compromise the planemaker’s future, says Richard Aboulafia, vice president at Teal Group, a Fairfax, Virginia-based consultant. 
“Everyone needs to focus on what’s at stake here,” Aboulafia said. “The 350 is Airbus’s future; the A380 is just an interesting sideshow.” 
Since the A380 was launched in 2000, Airbus and Boeing have taken combined orders of about $80 billion for about 400 planes in the very large category. Orders for the A350 and 787, which are long-range aircraft with two aisles, have totaled around $400 billion in the period. 
Gallois, at a May 20 briefing, promised unspecified new cost-cutting announcements before September. In an interview, he agreed with Lehman’s Campbell about EADS’s valuation.

TITLE: Japan Urged by U.S., EU To Welcome Foreign Investment
PUBLISHER: Agence France Presse
TEXT: TOKYO — A senior U.S. Treasury official on Monday urged Japan to open up to foreign investment, underscoring growing concern overseas that Asia’s largest economy is becoming more insular. 
The plea, which echoed a similar call made recently by the European Union, follows a series of setbacks for foreign investors trying to push further into the world’s second-biggest economy. 
“There are concerns among investors that Japan may not be fully committed to attracting FDI (foreign direct investment),” said U.S. Assistant Treasury Secretary Clay Lowery. 
“It is therefore important Japan sends a clear signal that it is open for investments,” he said. 
The comments reflect growing worry overseas about the difficulty of investing in Japan, whose own companies have expanded around the globe. 
Visiting European Union Trade Commissioner Peter Mandelson last month urged Japan to open up more to foreign investment, saying it was the most closed of the developed economies. 
Earlier this month the government invoked a national security law for the first time to block a foreign investment, ordering a British hedge fund to desist from doubling its stake in the country’s top power wholesaler, J-Power. 
Hedge funds are still viewed with suspicion in the world’s second largest economy. One fund, Steel Partners of the U.S., has suffered a series of setbacks in the country, including legal defeat in the country’s top court. 
In February, Tokyo put off a proposal to restrict foreign ownership of airports following warnings that the move would undermine wider efforts to attract investment.

TITLE: Siemens Corruption Trial Opens
AUTHOR: By Maria Marquart
PUBLISHER: The Associated Press
TEXT: MUNICH, Germany — A former Siemens AG manager on trial over alleged corruption and bribery testified Monday that “commissions” were paid to secure orders. 
Reinhard Siekaczek, a former manager at the ICN fixed-line telephone network division, is the first to go on trial over the company’s corruption scandal that came to light last year. 
Siekaczek, 57, is charged with 58 counts of breach of trust. Prosecutors allege that he set up a complex network of shell corporations that he used to siphon off company money over several years. The money allegedly was used as bribes to help secure contracts abroad by paying off would-be suppliers, government officials, potential customers. 
Testifying as the trial opened, Siekaczek acknowledged having set up slush funds. 
“The whole sectoral management was naturally informed that this function was carried out by me,” he told the Munich state court. 
“Naturally it was known to me and everyone that we pay commissions to secure orders,” he said, adding that they had been handled “very discreetly” with only a very small circle of people in the know. 
He said he used a system of phony consultant contracts in order to generate money for commissions. “I saw no other possibility,” he said. 
The defendant said he did not receive bonus payments for his actions. “I myself derived no benefit,” he said. 
Breach of trust carries a maximum possible sentence of five years in prison. The trial is scheduled to last through July. 
Siemens has acknowledged dubious payments of up to $2 billion in the wider corruption case uncovered last year. 
The company, which makes everything from wind turbines to trams, agreed in October to pay a $317 million fine to end some legal proceedings in Germany related to the scandal. 
Siemens’ own investigation has found evidence of violations across the company and in several countries. 
In a summary of a Siemens-commissioned report released April 29, Debevoise & Plimpton LLP said it examined business transactions that took place between 1999 and 2006 and found that “domestic as well as foreign compliance regulations have been violated.”

TITLE: Microsoft Has Cash to Spare
PUBLISHER: Reuters
TEXT: MOSCOW — Microsoft Chief Executive Steve Ballmer said on Friday that buying Yahoo was not a strategy in itself, and dropping the bid meant it now had $50 billion to spend on other acquisitions. 
“Yahoo was never the strategy we were pursuing, it was a way to accelerate our online advertising business,” he told a packed hall at a technology conference in Moscow. 
“We will spend money on some acquisitions. You can do a whole lot of things with 50 billion dollars,” he said. 
Ballmer was responding to questions about what he planned to do with Microsoft’s huge cash pile after it walked away from a proposal to buy Internet media company Yahoo for $47.5 billion, or $33 a share earlier this month. Yahoo had rebuffed the offer, saying it would only settle for $37 per share. 
Microsoft’s top executive was echoing a refrain heard from him in recent weeks: At a May 1 employee meeting, he said Yahoo was valuable as part of a strategy to beat Microsoft arch-rival Google, but there were limits on the price it would pay. 
“Yahoo’s not a strategy, it’s a part of a strategy,” Ballmer had said three weeks ago in Redmond, Washington.

TITLE: Deutsche Telekom Admits Calls Were Monitored
PUBLISHER: Reuters
TEXT: FRANKFURT — Deutsche Telekom said that it has uncovered the illegal monitoring of phone calls while investigating claims that management had spied on rebel directors. 
The German phone firm said it had informed state prosecutors about its discovery that the monitoring of phone call details took place in 2005. 
Information about calls such as time, length and parties involved had been gathered, the company said, but it added that no conversations had been tapped, as had been alleged in a German magazine. 
The Der Spiegel report said calls were monitored to spy on non-executive directors suspected of leaking information to journalists. 
“I am completely shocked by the allegations,” Chief Executive Rene Obermann said after the report said Telekom had hired a Berlin-based specialist to spy on managers. 
“We have involved the state prosecutors and will support them in their efforts to conduct a thorough investigation,” he said. 
The monitoring of phone calls took place when Telekom was being managed by former Chief Executive Kai Uwe Ricke. Its then Chairman, Klaus Zumwinkel, recently quit after he became embroiled in a tax-dodging affair. 
Der Spiegel reported both men as saying that they knew nothing of the monitoring of phone calls, which the magazine said took place in projects codenamed Clipper and Rheingold. 
It said the consulting firm had mined through the records of “hundreds of thousands” of fixed line and mobile phone calls to identify contact between company management and journalists. 
A spokesman for Zumwinkel told the magazine that any such analysis of phone records, if true, was not made with his approval. 
Ricke said: “I never issued any illegal contracts and certainly not did I at any time give any orders to spy on telephone records.” 
He confirmed, however, that top management — which included Obermann, then head of Telekom’s mobile business — had often spoken about leaks to the press and decided to “actively do something against it.” 
“Telekom had as many holes as Swiss cheese,” Ricke was quoted as telling the magazine.

TITLE: Seizing the Moment in China
AUTHOR: By Jing-dong Yuan
TEXT: President Dmitry Medvedev’s two-day state visit to China has important symbolic significance. The visit, which began last Friday, is the highlight of Medvedev’s first foreign trip since taking office in early May. Medvedev visited Kazakhstan last Thursday. 
By accepting Chinese President Hu Jintao’s invitation to go east to Beijing, Medvedev has signaled the continuity of former President Vladimir Putin’s policy of maintaining close ties with China and further strengthening a strategic partnership. But the visit also provides Medvedev with an opportunity to chart a new course in relations, as well as to develop personal rapport with Chinese leaders. 
Medvedev, who previously visited China as the co-chair of festivities celebrating the Year of Russia in China and the Year of China in Russia, returned to a country eager to expand cooperation in defense, trade and energy. Medvedev would do well to seize the moment. 
Boris Yeltsin began paving the way for warmer relations with a visit in December 1992, a year after the collapse of the Soviet Union. Beijing and Moscow have grown increasingly close in subsequent years, resolving boundary disputes, forming a strategic and cooperative partnership, and cooperating on key international issues, such as mutual support for multipolarity and a leading role for the United Nations, the promotion of a new world order, and opposition to unilateralism and power politics. In 2001, the two countries signed a Treaty of Good Neighborliness and Friendly Cooperation. They also have spearheaded the establishment and development of the Shanghai Cooperation Organization, or SCO. 
Beijing and Moscow maintain close consultations and cooperate on issues driven by their shared interests of safeguarding and promoting national interests in an era of U.S. dominance. For instance, China and Russia for years have called for the negotiation of a new international treaty banning weapons in outer space. Both are opposed to missile defenses, whether they are deployed in Europe, Northeast Asia or continental United States. The two countries have coordinated their Central Asia policies and actively support the SCO as a regional organization against ethnic separatism, religious extremism and international terrorism. They also promote economic cooperation among member states. 
Perhaps the most salient and tangible aspect of the partnership is the defense relationship that was initiated in the final days of the Soviet Union, nurtured and blossomed during the Yeltsin and Putin years, and is expected to continue under Medvedev. This unique relationship encompasses not only Russian military sales but also joint military exercises, high-level consultations and other exchange programs. 
China has become an important customer of Russian weaponry since the early 1990s, with major imports of fighter aircraft, destroyers, submarines, missiles and aerial early-warning systems. 
In addition, Beijing has been able to secure military technology transfers from Russia as part of arms trade arrangements. China has benefited from this relationship because Russian weapon systems fill important gaps in the People’s Liberation Army’s existing inventories of equipment and thereby improve aerial and naval capabilities for offshore military operations, especially in the context of a possible military conflict over Taiwan. 
For the strategic partnership to prosper, however, it is imperative that the two neighbors increase and strengthen their economic ties. This is an area that has yet to see major progress. While China and its other partners are seeing trade soar, trade with Russia has rarely if ever met its relative modest goals. Last year, trade reached $48 billion, making China Russia’s second-largest trading partner after the European Union, while Russia ranks a distant eighth for China. There is obviously much room to expand economic ties. 
An area that could potentially expand trade is the energy sector. For years, China and Russia have negotiated, signed agreements on, but in the end have had to cancel or suspend major pipeline deals that could provide China with much-needed oil and natural gas. Granted, Russia needs to make the best of its natural resources given rising energy prices in the global market. But the experiences and setbacks in energy cooperation have sent mixed signals to Beijing and are not congruent with a strategic partnership. 
The pursuit of national interests at times trumps the rhetoric and substance of the partnership. The substance of relations is still largely defined by anxiety about aspects of international relations that they both dislike rather than something they value and share. The apparent gap between rhetoric and substance can be further explained by concerns in some Russian circles over China’s rise as a major global power and issues affecting the Russian Far East, such as migration. Despite efforts by Beijing and Moscow, the affinity between the Russian and Chinese people remains lukewarm if not distant. 
Medvedev’s visit should reaffirm common interests and identify new areas to expand cooperation. China and Russia have benefited from a stable relationship for over two decades. It is now time to move that relationship to a higher plateau. 

Jing-dong Yuan is associate professor of international policy studies at the Monterey Institute of International Studies.

TITLE: Moscow 2041
AUTHOR: By Richard Lourie
TEXT: Dec. 25, 2041. Moscow. Today, President Dmitry Medvedev presided over the 50th anniversary of the collapse of the Soviet Union, now a national holiday marked by parades, speeches and a spike in drunk-driving fatalities. 
Operating on the principle that if you must have a president, then the fewer the better, Russia has re-elected Dmitry Medvedev for the seventh time. The constitutional prohibition on serving more than two consecutive terms has been scrupulously observed throughout. Elected in 2008 and again in 2012, Medvedev was replaced by Vladimir Putin in 2016. After Putin’s second term ended in 2024, Medvedev was re-elected by an overwhelming majority of the vote with the Kasparov-Yavlinsky-Limonov-Zyuganov bloc receiving only 960 votes nationwide. Medvedev served from 2024 to 2032 before stepping down. Aided by 21st-century medical breakthroughs, Putin was able to serve again from 2032 to 2040, completing his second term at 87 years old and looking like he was no older than 60.
Running on a platform of “continuity and experience,” Medvedev won re-election in 2040 by a landslide, and the Kasparov-Yavlinsky-Limonov-Zyuganov bloc splintered into five separate parties.
As Russia’s democracy evolved along its own specific, sovereign path, there were many calls to change the title of the country’s ruler. Some thought president sounded too American, while others thought it sounded too much like rezident, the word for an espionage station chief (of course, a certain contingent favored it for precisely that reason). Among the new titles proposed was “tsarident,” briefly popular because of its historical inclusiveness, but in the end Medvedev ruled that “president” was best. 
But just what sort of society will Medvedev be ruling 50 years after the fall of the Soviet Union? There are three basic possibilities — ruin, muddling through or triumphant success.
Russia comes to ruin by failing to diversify its economy, relying even more on oil (after Gazprom moves its headquarters to St. Petersburg, it is nicknamed Petrolgrad.) But the invention of a cheap oil substitute, which made yet another American geek fabulously wealthy, puts the country out of business. Russia becomes simply one of Europe’s utilities, supplying natural gas. The souther Muslim republics secede without fanfare or bloodshed. China gobbles up chunks of the Russian Far East, and Siberia debates becoming a country of its own as it had been briefly after the 1917 Revolution. The birth rate continues to fall, and some sardonic commentators suggest importing the United States’ illegal immigrants from Mexico on the theory that Latin lovers might spike up the birth rate.
In his comic novel “Moscow 2042,” Vladimir Voinovich depicted Moscow as a city that finally achieved communism. In the past, people had used the Pravda newspaper as toilet paper, whereas now, under communism, Pravda is actually printed in toilet-paper form. Something similar occurs in the muddle-through version. Russia is becoming weaker and poorer, but Moscow continues its boom fueled by natural gas revenues and a real estate bubble. The streets are paralyzed by Bentley gridlock. Rail transportation has become extremely iffy. The city is supplied by plane, the first Gucci airlift taking place in October 2037.
The third scenario is one of grand success. In Medvedev’s first term, Russia for once takes the long-term view. It is able to look beyond the mirage of oil wealth and diversify both economically and politically, producing a stable, just and progressive society. Not only that, early and wise investments in areas like nanotechnology pay off big. The country’s main resource proves not to be oil but its human capital — in other words, the geeks changing history are now Russian. Money, the greatest aphrodisiac, pours in and the birth rate spikes up. Against all odds, Russia becomes a normal, civilized and even slightly dull country. Let’s just hope that this scenario is not the most far-fetched of the three. 

Richard Lourie is the author of “A Hatred For Tulips” and “Sakharov: A Biography.”

TITLE: Unlike Putin, Medvedev Took Charge Quickly
AUTHOR: By Anders Aslund
TEXT: Most journalists have unquestioningly embraced the notion that Prime Minister Vladimir Putin formed the new government. A typical headline after the Cabinet shakeup read: “Putin Reinforces Power Base by Giving Top Jobs to Kremlin Aides” (Financial Times). 
But is that true? Many Russian insiders disagree, as has been reflected in this newspaper. They fall into two categories. One group says Putin is the real ruler and will remain so until 2020. The other group, which includes many leading Russian businessmen, suggests that Putin might fade away within a year because presidential powers are so great, Putin is tired and too Soviet and many economic and social problems are piling up. 
When Putin assumed the presidency in 2000, he initially did little to change the government left by Yeltsin, even keeping Yeltsin’s chief of staff, Alexander Voloshin, for four years. In later years, the Putin regime became increasingly dominated by a close circle of St. Petersburg KGB cronies, known for being as repressive as corrupt. Their only merit was their close links with Putin. For eight years, he did not demote a single crony.
Amazingly, when forming his new government and presidential administration, Dmitry Medvedev demoted no less than six of Putin’s chief KGB cronies: Kremlin officials Igor Sechin and Viktor Ivanov, FSB director Nikolai Patrushev, Federal Drug Control Agency chief Viktor Cherkesov, First Deputy Prime Minister Sergei Ivanov, and IT and Communications Minister Leonid Reiman. Since Putin had never done anything like that, Medvedev looks remarkably strong.
The scourge of the Putin administration was the Sechin group, which spearheaded the confiscation of Yukos and reinforced repression. It seemed invincible, but now its four top members have been demoted: Sechin, Viktor Ivanov, Patrushev, and Justice Minister Vladimir Ustinov. Apparently, their only support was Putin’s presidency.
The worry was that the competing St. Petersburg KGB clan headed by Cherkesov would come to the fore, but Cherkesov has also lost standing. Medvedev has delivered a remarkable double blow. 
Although Russia’s economy is continuing to boom, problems are increasing. Inflation has surged to 14 percent, and oil and gas production are stagnating. Economic overheating is overwhelming, with a shortage of qualified labor and desperate underinvestment in public infrastructure. Worst of all is the corruption that Putin promoted.
At long last, the blatant conflicts of interest have been somewhat reduced. Reiman, who has been mired in one corruption scandal after the next, has been demoted to presidential adviser. Sechin, the chairman of Rosneft, has been weakened, as has Viktor Ivanov, the chairman of Almaz-Antei and Aeroflot. Viktor Khristenko, the chairman of Transneft, no longer has energy in his portfolio as minister. The head of the newly created Energy Ministry, Sergei Shmatko, is independent of oil and gas interests.
All bona fide reformers remain in the government, and they have been reinforced by new appointments. Among the deputy prime ministers, a majority — Igor Shuvalov, Alexei Kudrin, Alexander Zhukov and Sergei Sobyanin —can be considered market economic reformers. 
Admittedly, they are balanced by Putin’s neanderthals, Viktor Zubkov, Sechin and Sergei Ivanov, but as economic reality imposes itself on Russia, renewed reforms will be badly needed. Sechin has hardly ever appeared in public and is considered unsuitable as a public politician, so he might be up for a fall. How many news conferences can he survive?
In Russia, no ruler is safe unless he controls the security services. It took Putin more than a year until he was allowed to undertake any change. With stunning speed, Medvedev sacked Patrushev, Putin’s long-serving and odious friend, as head of the FSB and appointed Alexander Bortnikov, who is probably closer to Medvedev. 
Medvedev has emphasized the need to fight Russia’s “legal nihilism” and corruption with legal reforms, and he has appointed his own justice minister, his old friend Alexander Konovalov. On Monday, he announced the creation of a new state body to fight corruption.
In recent speeches, Medvedev has complained about re-nationalization and increased state domination in the economy. 
Among Putin’s presidential staff, Medvedev needed two people, Vladislav Surkov, who commands the United Russia faction in the State Duma, and Alexei Gromov, who has masterminded Putin’s media manipulation. Both are staying with the presidential administration, which probably means that they will transfer their loyalty to Medvedev.
One of Putin’s most spectacular failures has been to win membership for Russia in the World Trade Organization. Sensibly, Medvedev has raised this issue to a first deputy prime minister — Shuvalov — with a strong operative track record. The same is true of Khristenko, who has been given the WTO mandate at the ministerial level. Apparently, Medvedev is more serious about Russia joining the WTO than Putin ever was.
Putin has also alienated other former Soviet republics through arrogance, verbal aggression, cyberwar and military provocations. Medvedev has at least established a government agency to promote Russia’s cooperation with these countries.
One of the most repugnant features of Putin’s regime was his support of the hooligan movement Nashi. He even organized a state agency to nurture them and let their head, Vasily Yakimenko, become the agency’s chairman. Medvedev lost no time in sacking Yakimenko and abolishing his agency.
Is this a Medvedev rout? It is too early to say. One dissonance stands out. Sergei Naryshkin, a Putin loyalist from the St. Petersburg KGB, has become Medvedev’s chief of staff. But Medvedev has already advanced his cause more than Putin did during his first three years as president. Rather than talking about Putin’s reinforced hold on power, we could speculate that Putin is actually preparing to leave. 
None of these changes proves that Medvedev is good, but they arouse hope. Interestingly, both former Prime Minister Mikhail Kasyanov and Novaya Gazeta editor Dmitry Muratov have argued that we should give Medvedev half a year to prove himself. There are many litmus tests. Will Medvedev give amnesty to Russia’s political prisoners, including Mikhail Khodorkovsky? Will he reintroduce freedom of expression, media and assembly? All these laws already exist, so he can just start implementing them again.
Medvedev’s successful start suggests that we should expect many and substantial reforms soon, and they are badly needed. Corruption cannot continue like this if the Russian state is to stay manageable. Long-prepared reforms for education, health care and pensions are urgent. The country’s infrastructure must be extended and renewed. The government can no longer afford not to reform as it did for the past five years. There is new hope for Russia.

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

TITLE: A Westerner’s Take on a Soviet Crime
AUTHOR: By Pauls Toutonghi
PUBLISHER: Special to The St. Petersburg Times
TEXT: In this age of grisly televised violence and graphic reporting from the front lines of war, literary models are struggling to keep their hold on the popular imagination. A murder imagined from the page somehow lacks the immediacy of a murder witnessed on the screen. The thriller genre seems to be responding to this fact by escalating its brutality — often early on in the story. In the novels of crime writers such as James Patterson and Patricia Cornwell, the first few chapters have the feel of a ceremonial bloodletting. Tom Rob Smith’s debut novel is no exception to this pattern. 
For a time in “Child 44,” the body count competes with the page count. To make matters worse, the victims are children — wholly blameless, wholly innocent. Smith’s premise is simple: Someone, over the past 20 years, has been killing kids. The setting is the former Soviet Union, near the end of Stalin’s rule. And the central dramatic question is quite basic: Will Leo Stepanovich Demidov, a conflicted, amphetamine-addicted police inspector, manage to overcome his personal problems and bring this serial child-murderer to justice? Can he circumvent a system that has lost all sanity, that has branded him as a maverick and an outlaw? The Soviet state refuses to acknowledge that murder occurs in its new proletarian paradise. If Leo even admits that a serial killer is on the loose, he will have committed a treasonous act, one which pits him against the power structure of the government and the rest of the police force.
If this seems familiar, there’s good reason for that. It is, at its core, the plot of nearly every gritty police procedural — one man against the system. The difference is that Smith has chosen to use the Soviet state as the book’s chief antagonistic force. And in the world of “Child 44,” the Soviet Union is a villain so big that it saturates everything. Every character is terrified of the system. Every character has internalized its brutality and seems to suffer from post-traumatic stress disorder. This version of the Soviet Union is the very epitome of George Orwell’s bleakest totalitarian nightmares. 
Indeed, Smith misses no opportunity to make the country seem sinister, setting the action in places with names like “Collective Farm 12,” “Orphanage 80” and ”Hospital 379.” Never are these numbered bureaucratic outposts even close to hospitable or inviting: “Orphanage 80 was a five-story brick building with faded white lettering painted on the side: WORK HARD LIVE LONG. On the roof there was a long line of chimneystacks. The orphanage had once been a small factory. Dirty rags hung across the barred windows, making it impossible to see inside.” The grimness — and griminess — would put Oliver Twist’s London to shame.
Smith’s prodigious talents are obvious. “Child 44” is impeccably wrought and tense. The central question — Will the murderer be brought to justice? — gives the story a compelling and significant conflict. And Smith’s characters are torn in many directions and forced to make difficult choices. Leo, the protagonist, believes in the system that he serves, but this very belief proves to be his downfall. The things he suffers are the stuff of classical tragedy. He is the Aristotelian tragic figure writ large. It is easy to empathize with his plight. Because of this, the book is exciting. It’s hard to put down.
Yet precisely because of how entertaining it is, “Child 44” raises the more sobering question of how to write about Soviet history without misusing it or casting the state as an easy villain. Nearly 20 years after the collapse of communism the Soviet Union’s legacy has yet to be unraveled. There’s a danger that this important historical epoch will become a cliche — fodder for sensationalism — and that it will lose its complexity in the popular imagination. If this does in fact happen, then the myriad values for which the Soviet state stood will simply fall by the wayside, as so much historical detritus. Was there state-induced paranoia in the Soviet period? Undoubtedly. But to reduce an entire society to a caricature of itself, as does Smith — that is a different matter. 
While avoiding the trap of sensationalism might not be the first thing on the minds of writers who are out to entertain, in Smith’s case there may also have been another force at work. Nearly every mainstream novelist daydreams: “What if I sell the movie rights? What would it be like to see this book in the movie theater? Who will play my protagonist? Is there a chance that he ... could he possibly be played by Brad Pitt?” 
As it happens, Smith is already an accomplished screenwriter, having written for both film and television. His experience in that world must have influenced his work on “Child 44.” Like Patterson or Cornwell’s popular novels, his text seems calculated for film. One can practically imagine the cinematographer’s notes in the margins: low f-stop, dissolve this shot, fade to black. Indeed, the film rights have already been sold to Fox 2000 Pictures, to be directed by Ridley Scott.
This does raise a worry about the formulaic nature of some of the novel’s major plot points. Many of the scenes seem built for a screenplay. They’re short. They’re marked by an obvious turning point and often lead to reversals in the fortunes of the central characters. Yet while this sort of scene infrastructure can be helpful for a writer during the creation of a work, the key is making sure that the scaffolding doesn’t come through in the finished product. 
Furthermore, Smith makes certain stylistic choices that are completely baffling. All the dialogue, for example, is in italics. This seems almost unbelievable and is difficult to rationalize, since italics are hard on the eyes. Nor does the history of literature appear to offer any precedent for an entire novel with italicized dialogue. 
A biographical note: Tom Rob Smith is only 29 years old. He is clearly a writer in process; he’s still learning how to tell a story on the printed page. What he does well, he does extremely well, and these things are, ultimately, the core of storytelling. If “Child 44” is any indication, Smith may soon be a prodigious — and prolific — talent. It will be interesting to see this young writer develop as he makes his way through the literary marketplace and, undoubtedly, onto the big screen. 

Pauls Toutonghi is the author of the novel “Red Weather” and a professor of English and creative writing at Lewis and Clark College.

TITLE: Salon
AUTHOR: By Victor Sonkin
TEXT: Almost three years after the death of Mikhail Gasparov, one of Russia’s greatest literary scholars and intellectual icons of the last few decades, his new book has hit bookstores. Published by Fortuna-L, the book is titled “The Capitoline Wolf: Rome Before The Caesars.”
It is a book aimed primarily at young readers, which isn’t surprising: “Amazing Greece,” first published in the mid-1990s, introduced children and young adults to the classical world. The book has since been republished many times and remains in steady demand. Amid the stream of poorly translated and usually rather primitive Western children’s educational books and the work of home-grown authors, either fantastically ignorant or written in an inaccessible style, Gasparov’s “Greece” was a breath of fresh air. Written by one of the most knowledgeable philologists of all time, the book was funny, compelling and easy to read. It is my firm opinion that nothing in Russian nonfiction of the last thirty years or so even comes close to it.
“The Capitoline Wolf” is a humbler enterprise for several reasons. First, the Romans did not have the kind of mythical history the Greeks were so fond of. Second, Gasparov apparently did not prepare the book for publication, otherwise it might have been enlarged or at least furnished with a foreword. It is a great pity that there is virtually nothing in the book telling how it came about.
It is, however, another brilliant example of the genre. The stories of valor, love for the country, magical omens and bloody battles are told in Gasparov’s characteristic wry style, with gentle humor and vivid detail. This book should really be made part of every school’s curriculum, as no one remembers anything from the school course on ancient history. It’s hard to forget the stories told by Gasparov, though.
The book, though lavishly illustrated, does not represent the pinnacle of publishing art: Its layout is messy and general artistic concept nonexistent. This is symptomatic of the low general level of book culture in Russia. Just comparing the covers of Russian and Western nonfiction books is enough to bring tears to one’s eyes. In spite of this, and of the rather extravagant price of 450 rubles ($20), “The Wolf” is currently on the top-10 list of Moskva, the city’s largest downtown bookstore, which illustrates how necessary such books are.
“Fortuna-L” has announced that “Amazing Mythology,” another book by Gasparov, will be published soon. In his last years, Gasparov was working on a large academic study of classical myths, and the book must be a by-product of this. I’ll await it eagerly.

TITLE: Precocious Lawmaker Sees a Move to Youth
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: As he soaked up the feeble May sunshine at an outdoor cafe on Moscow’s Red Square, State Duma Deputy Robert Shlegel, Russia’s youngest lawmaker, held forth on how the Kremlin should breed a new generation of patriotic public administrators. 
“Fifteen people under 30 elected to the Duma isn’t a bad start,” Shlegel, 23, said as he sipped a $10 juice, which he insisted, somewhat defensively, that he could afford. 
Elected in December on the ticket of the all-powerful United Russia party, Shlegel rose to prominence as a spokesman for Nashi, the pro-Kremlin youth movement that mobilized tens of thousands of young people in street rallies to show their support for then-President Vladimir Putin and counter the opposition. 
Since becoming a lawmaker, Shlegel has made headlines by attacking readers of erotic magazines and sponsoring a controversial bill that would have toughened the penalties for libel. Earlier this week, United Russia dumped Shlegel’s bill after receiving numerous complaints from media freedom groups and Public Chamber officials. 
“The concern of my colleague, Robert Shlegel, is understandable, but we consider the amendments superfluous,” Duma Speaker and party leader Boris Gryzlov told reporters. 
The episode raised questions about whether Moscow’s political elite view young politicians like Shlegel as the future of Russia — or as expendable foot soldiers. 
Nashi and other pro-Kremlin groups like Young Russia position themselves as stepping stones to high-powered careers. At last summer’s Nashi training camp at Lake Seliger, activists could apply for internships at Gazprom and receive leaflets outlining how to become lawyers, deputies and PR specialists. 
Of course, groups like Nashi pale in comparison to the Soviet-era Komsomol, which once boasted tens of millions of members and was a mandatory step for anyone seeking a Communist Party career. 
Shlegel described Nashi as a pool of “nationally minded” potential officials and said President Dmitry Medvedev understood the need to train young managers to replace the existing political elite. 
At the current speed, however, it looks like the process will take quite a long time. 
In 2006, United Russia declared that at least 20 percent of its tickets for regional legislative elections had to go to political activists aged 21 to 28. But the young people were usually put by older party bosses at the bottom of the ticket, and very few actually made it in, said Alexei Titkov, an analyst with the Institute of Regional Studies. 
In the last Duma elections, United Russia’s career boost for young pro-Kremlin activists was also quite modest. 
Contradicting Shlegel’s claim, only 11 Duma members are younger than 30, according to the Central Elections Commission. Moreover, not all of them are members of United Russia’s fraction in the Duma, which has a total of 314 lawmakers. Only two Nashi members, Shlegel and Sergei Belokonev, were picked by United Russia and placed high enough on its ticket to get into the lower chamber. 
Shlegel’s role in the Duma is to submit controversial bills that United Russia and the Kremlin want, but that no other deputy is willing stake his reputation on, said Alexei Mukhin, head of the Center for Political Information. 
“He can be very easily sacrificed in the event of a big scandal,” Mukhin said. 
In the interview, Shlegel insisted that he authored his bills himself, without any guidance from his United Russia elders. He also defended his media bill, which would have allowed courts to close media outlets for libel, instead of just penalizing them with fines as stipulated by existing law. 
“Today’s media organizations are not trustworthy; they cannot effectively perform their social role,” Shlegel said, arguing that the threat of closure would make media outlets more responsible and ultimately serve freedom of the press. 
Oleg Panfilov, head of the Center for Journalism in Extreme Situations, said the bill contradicted the constitution and international treaties signed by Russia. He also offered his own explanation about why the bill might have been introduced by Shlegel. 
“He belongs to a new, poorly educated generation that understands little about liberal values, disrespects the law and enjoys permissiveness based on his love of the president,” Panfilov said. 
Shlegel agreed that his bill was too controversial to be introduced by any of his older colleagues. “Yes, no one wanted to get into a vulnerable position,” he said. 
United Russia may end up clamping down on the media anyway. Even as it rejected Shlegel’s bill, the party agreed to form a working group that could completely overhaul Russia’s media law, Kommersant reported Tuesday. Shlegel called the decision a “victory” in comments posted on United Russia’s web site. 
Shlegel’s other main Duma initiative was a bill to fine people for publicly carrying erotic magazines and even for gawking at explicit images in the presence of others. He ended up withdrawing the bill. 
Curiously enough, Shlegel, a graduate of the Moscow Television and Radio Institute, used to work for MolotOK, a teen-oriented magazine that prosecutors tried to shut down because of its sexual content. 
Shlegel has clearly enjoyed a striking change in fortune since the early 1990s, when his fatherless family left Turkmenistan and settled in the Moscow region. 
He now seems to have developed habits typical of young investment bankers. Or at least that’s the impression he tried to make. 
Shlegel said he lunches at Bosco Cafe in the GUM shopping center because the Duma cafeteria is too noisy and cramped and drives an Alfa Romeo because a Camry, which costs about the same amount, is too common. 
He has not always professed pro-Kremlin ideology. Before joining the establishment, he used to call the Russian political elite “defeatist” in interviews and on his LiveJournal blog, where his user picture consists of the right side of his own face combined with the left half of the Terminator’s shining skull. 
One the main things that drew Shlegel to Nashi, he said, was his desire to defend Russia against the so-called “orange” ideology — named after Ukraine’s Orange Revolution of late 2004, in which street protests brought pro-Western candidate Viktor Yushchenko to power after a disputed presidential election. 
“Now, there is no more of the ‘orange’ threat left, and mainly due to Nashi,” he said proudly. “We accumulated most of the politically active youth in Russia.” 
Shlegel said the disintegration of the Soviet Union and the separatist aspirations of some Russian regions in the 1990s were orchestrated by the West. “It is a well-tested technology of territorial disintegration used against our country,” he said. “The process is still going on, and we need to resist it.” 
When asked why many members of the Russian elite, including top officials, buy property in the West and send their children to study there, Shlegel responded that it was their private business how to spend their money. 
Much of Nashi’s activity consisted of “ritual spurning of the weak enemies of the regime,” said Sergei Shargunov, a writer who briefly headed the youth wing of A Just Russia, another pro-Kremlin party. 
“Shlegel and others were not bad guys when I knew them before, but when they began to consider it a big honor to call opposition leader Garry Kasparov a foreign agent and Eduard Limonov a fascist, I felt that their pursuit of loyalty to the regime came at the expense of their personalities,” Shargunov said. 
Some also believe that the days of lavishly funded pro-Kremlin youth groups are over. 
After the Duma election, reports surfaced in the media saying the government would soon stop backing Nashi. Citing unidentified Kremlin officials, the reports said enthusiasm for Nashi had waned after the opposition failed to stage massive, Orange Revolution-style street protests. Nashi heatedly denied the reports. 
Alexander Tarasov, who studies youth movements at the Feniks think tank, and Dmitry Badovsky, a political analyst with the Institute of Social Systems, both said the Kremlin had lost many of its reasons for supporting the youth movement since the election. 
Pundits said the movements would not be disbanded, but they also expressed doubt that they would be used as a pool of potential government recruits. 
“Today’s ruling elite consists of men in their 40s and 50s, and they have no inclination and see no strategic necessity to give way to younger administrators,” Mukhin said. 
The Kremlin might keep the movements as channels of communication with youth, said Badovsky. “As well as for pro-Kremlin street cheerleading and flag-waving at United Russia congresses,” added Tarasov. 
One sign of the times may be the fate of Nashi founder Vasily Yakemenko, who left the movement late last year and was appointed to head the government’s Committee for Youth Affairs. 
The committee was disbanded in a government reshuffle earlier this month, and Yakemenko became one of the few top Putin-era officials who have not yet been offered a government job by Medvedev. 
Still, Shlegel was sure that Yakemenko would be offered an important post. 
“When Medvedev was at the Nashi camp at Lake Seliger last year, he was extremely happy with what he saw there, and he was very pleased with Yakemenko,” Shlegel said.

TITLE: Lewis Hamilton Wins Monaco Grand Prix
PUBLISHER: Reuters
TEXT: MONACO — McLaren’s Lewis Hamilton battled to a masterful Monaco Grand Prix victory on Sunday despite hitting the barriers on an afternoon of mayhem on the principality’s slippery streets.
“This has got to be the highlight of my career, and it will be the highlight for the rest of my life,” declared the ecstatic Briton, the first English winner of the showcase race since Graham Hill in 1969.
“Even if I win here again, which I plan on doing, this is the best one...It was the most fun I’ve ever had in a race,” he added.
The Briton’s sixth win in 23 starts, and second of the season, catapulted the 23-year-old to the top of the standings — three points clear of Ferrari’s world champion Kimi Raikkonen who took ninth place after a wet and crash-strewn race.
Poland’s Robert Kubica was second for BMW Sauber, 3.0 seconds behind, with Ferrari’s Brazilian Felipe Massa in third after starting on pole position.
The race, glamour highlight of the Formula One season, was ended after the two hour mark was reached with 76 of the 78 scheduled laps completed.
“Great guys, fantastic job as always,” the jubilant Hamilton told his pit crew over the radio as he took the chequered flag.
“I apologise for hitting the barriers but we made up for it. Now let’s go and party tonight.”
Hamilton made a great start, taking Raikkonen for second place into the first corner, but had to pit on lap seven with a deflated right rear tyre after a brush with the barriers at the harbour-side Tabac corner.
Hamilton rejoined in fifth but still with everything to play for on a circuit where the slightest mistake carries a heavy penalty.
Ironically, the early pit stop played into Hamilton’s hands as others literally slipped up, with Massa sliding off at the Ste Devote corner and handing the lead to Kubica for a long stretch before the pitstops. Hamilton’s victory made up for the disappointment of finishing runner-up in a McLaren one-two last year and allowed him to emulate his late boyhood hero and champion Ayrton Senna as a Monaco winner.
“Incredible, an incredible feeling,” said Hamilton. “The last 20 laps were very emotional.”
In a race turned into a lottery by rain and crashes, with accompanying safety car interventions, Australian Mark Webber finished fourth for Red Bull with Germany’s Sebastian Vettel fifth for Toro Rosso.
Brazilian Rubens Barrichello was sixth for Honda, his first points since 2006, with Japan’s Kazuki Nakajima seventh for Williams and Finland’s Heikki Kovalainen eighth for McLaren after starting last from the pit lane.
Hamilton’s friend Adrian Sutil provided the heartbreak and tears, the German starting 18th for Force India but enjoying the race of his life in fourth place until Raikkonen misjudged his braking and shunted him out at the tunnel exit with the chequered flag less than 10 minutes away.
“It was a great race with an incredibly sad ending,” said the distraught German.
“We could have had fourth place. It’s incredible bad luck that Kimi crashed into me. He obviously didn’t do it on purpose.”

TITLE: NASA’s Phoenix Searches For Life on Mars
AUTHOR: By Alicia Chang
PUBLISHER: The Associated Press
TEXT: PASADENA, California — NASA’s newest outpost in the solar system is a polygon-cracked terrain in Mars’ northern polar region believed to hold a reservoir of ice beneath.
Hours after the Phoenix Mars Lander softly landed Sunday in the Martian arctic plains, it dazzled scientists with the first-ever glimpse of the Red Planet’s high northern latitudes.
A flood of images sent back by Phoenix revealed a landscape similar to what can be found in Earth’s permafrost regions — geometric patterns in the soil likely related to the freezing and thawing of ground ice.
“This is a scientist’s dream, right here on this landing site,” principal investigator Peter Smith of the University of Arizona, Tucson said in a post-landing news conference.
Phoenix landed on Mars after a 10-month, 422 million-mile journey. After a week checking out its science instruments, the lander will begin a 90-day digging mission to study whether the northern polar region possesses the raw ingredients needed for life to emerge.
Phoenix joins the twin rovers on the Martian surface, which have been exploring the equatorial plains since 2004. Unlike the mobile rovers, Phoenix was designed to stay in one spot and dig trenches in the soil.
Early indications show the lander is healthy, said Barry Goldstein, project manager at NASA’s Jet Propulsion Laboratory (JPL). The images confirm the lander unfurled its solar panels, hoisted its weather mast and unwrapped the protective covering of its 8-foot-long robotic arm. It’ll be several days before the arm will be unstowed.
“Everything just worked like a charm,” said Goldstein, who kept up a JPL tradition by passing out bags of lucky peanuts on landing day.
Mission control erupted in cheers when a radio signal from Phoenix was detected after a hair-raising plunge through the atmosphere that required the lander to slow itself down from over 12,000 miles-per-hour to a 5 mph touchdown using a combination of friction, parachute and thrusters.
Mission managers pumped their fists and hugged one another after the confirmation signal was received.
“They will be remembered forever that they are the first people to explore the polar region of Mars. There’s no telling what discoveries would be seen over the next 90 days,” said JPL director Charles Elachi.
It’s the first successful soft landing on Mars since the twin Viking landers touched down in 1976. Rovers Spirit and Opportunity used a combination of parachutes and cushioned air bags to bounce to the surface four years ago.
Phoenix avoided the fate of another polar explorer, the Mars Polar Lander, which crashed into the Martian south pole after prematurely shutting off its engines in 1999. Phoenix inherited the hardware of a lander that was canceled after the Polar Lander disaster and carried similar instruments flown on the ill-fated 1999 mission.
Phoenix’s descent was nearly flawless. The only unexpected turn occurred when it opened its parachute seven seconds later than planned, causing the spacecraft to settle slightly downrange from the bull’s-eye target, said Ed Sedivy, program manager at Lockheed Martin Corporation, which built the spacecraft.
Phoenix planted its three legs in a broad, shallow valley littered with pebble-size rocks that should not pose any hazard to the spacecraft, project managers said.
“I know it looks a little like a parking lot, but that’s a safe place to land. There’s not any big rocks,” Smith said.
During its prime mission, Phoenix will dig through layers of soil to reach the ice, believed to be buried inches to a foot deep. 
It will study whether the ice melted during a time in Mars’ recent past and will analyze soil samples for traces of organic compounds, which would be a possible indicator of conditions favorable for primitive life. Phoenix is not equipped to detect past or present alien life.
The $420 million Phoenix mission is led by University of Arizona and managed by JPL.

TITLE: Hiddink: Russia Must Be United
PUBLISHER: Reuters
TEXT: MOSCOW — Russia must avoid the internal problems that have plagued them at major tournaments in the past if they are to do well at Euro 2008, coach Guus Hiddink said on Saturday.
Starting with the 1994 World Cup, Russia’s first international competition as an independent nation after the break-up of the Soviet Union, bitter squabbles and infighting have proved the team’s downfall.
“I know very well what happened in 1994,” Dutchman Hiddink told Reuters in an interview on the eve of Russia’s departure for their Euro 2008 training camp in Germany.
Hiddink’s assistant coaches, Alexander Borodyuk and Igor Korneyev, were on the 1994 World Cup team that was rocked by a seven-player boycott, led by captain Igor Shalimov, after a public row with coach Pavel Sadyrin.
“Alex and Igor have told me what went wrong in 1994 so obviously we don’t want these things to happen now,” Hiddink said.
Similar problems developed at Euro ‘96 when Russia coach Oleg Romantsev sent Sergei Kiryakov home after accusing his leading striker of undermining the team’s morale.
After their dismal showing in England, Romantsev blamed two other senior members of the squad, goalkeeper Dmitry Kharin and winger Andrei Kanchelskis, for stirring up trouble.
The players in turn accused Romantsev of heavy drinking and poor tactics, saying the team lacked adequate preparations.
There was more of the same during the 2002 World Cup when Romantsev once again failed to guide his team past the first round.
Two years later at Euro 2004, Romantsev’s former long-time assistant Georgy Yartsev caused shockwaves back home by sacking his most experienced and influential player Alexander Mostovoi from the squad after one game.
Russia became the first team to be eliminated from the tournament in Portugal.
Since taking over the Russia job in July 2006, Hiddink has been able to avoid the problems his predecessors have had.
Having coached the Netherlands, South Korea and Australia at major championships, the Dutchman said he knew the importance of having a positive atmosphere in the team.
“I had a similar problem at Euro ‘96 with Edgar Davids when I coached the Netherlands. Having won the European Cup with Ajax the year before, he was about to join AC Milan that summer so playing at Euro ‘96 was very important for him,” Hiddink said.
“But I sent him home after he made a big fuss for sitting out our second game. He was a key member on our team, not a young player, nevertheless I didn’t hesitate to drop him, otherwise the team’s morale would have been destroyed.”
Hiddink recalled Davids for the 1998 World Cup, however, and the midfielder paid back his coach by scoring a last-minute goal to give the Dutch a 2-1 win over Yugoslavia in the second round.
“He scored the winning goal and we embraced afterwards. It was a very dramatic moment for both of us.”

TITLE: Last-Gasp
Clinton In Puerto Rico
AUTHOR: By Thomas Ferraro
PUBLISHER: Reuters
TEXT: CAROLINA, Puerto Rico — Struggling presidential contender Hillary Clinton campaigned in Puerto Rico on Sunday as she prepared for a pivotal ruling and sought to end a firestorm ignited by her reference to the 1968 assassination of Robert Kennedy.
Clinton’s husband, former President Bill Clinton, was to join her on Monday for a third straight day of campaigning on the Caribbean island, where she has been favored to win.
But before the U.S. territory’s Democratic presidential primary Sunday, Clinton faces a major showdown — possibly the final one — when Democratic Party officials meet to decide what to do with delegates from Florida and Michigan.
A decision on Saturday in her favor by the Democratic rules committee is key to her uphill fight with Barack Obama to win the Democratic nomination at the party convention this summer and face Republican John McCain in the November election.
The two states, which were stripped of their convention delegates for violating party primary rules, are believed to be making plans to allow at least some delegates to be counted.
Obama, the Illinois senator, has a nearly insurmountable lead in the popular vote and pledged delegates.
Campaign chairman Terry McAuliffe was asked if Clinton would accept a decision she did not particularly like.
“I am not saying that today,” he said on “Fox News Sunday.” “I’m saying let them make their decision and then we will determine.”
At a series of campaign events across Puerto Rico, Clinton was greeted by crowds of several hundred people, chanting, “Hillary, Hillary.” One man held a sign reading, “Quit.”
“We admire you as a woman of determination and intelligence,” Perza Rodriguez, mayor of the town of Caborojo, told the former first lady at a beachfront rally.
Puerto Ricans can help pick the Democratic nominee but do not have the right to vote in November’s general election.
Even as she tried to get the political discussion back to topics like the economy, her comments citing Robert Kennedy’s assassination after winning the June 1968 California presidential primary were still the focus of political talk.
Writing in the New York Daily News, Clinton again explained she had mentioned the assassination in the historical context of a campaign that continued well into June. The New York senator said her remarks were taken out of context.

TITLE: Last WWI Hero Hailed
AUTHOR: By Brian Charlton
PUBLISHER: The Associated Press
TEXT: KANSAS CITY, Missouri — Frank Woodruff Buckles, the last known living American-born veteran of World War I, was honored Sunday at the Liberty Memorial during Memorial Day weekend celebrations.
“I had a feeling of longevity and that I might be among those who survived, but I didn’t know I’d be the No. 1,” the 107-year-old veteran said at a ceremony to unveil his portrait.
His photograph was hung in the main hallway of the National World War I Museum, which he toured for the first time, and the Veterans of Foreign Wars of the United States presented him with a gold medal of merit.
Buckles has been an invited guest at the Pentagon, met with President Bush in Washington, D.C., and rode in the annual Armed Forces Day Parade in his home state since his status as one of the last living from the “Great War” was discovered nearly two years ago.
Federal officials have also arranged for his burial at Arlington National Cemetery.
Born in Missouri in 1901 and raised in Oklahoma, Buckles visited a string of military recruiters after the United States entered the “war to end all wars” in April 1917.
He was rejected by the Marines and the Navy, but eventually persuaded an Army captain he was 18 and enlisted, convincing him Missouri didn’t keep public records of birth.
Buckles sailed for England in 1917 on the Carpathia, which is known for its rescue of Titanic survivors, and spent his tour of duty working mainly as a driver and a warehouse clerk in Germany and France. He rose to the rank of corporal and after Armistice Day he helped return prisoners of war to Germany.
Buckles later traveled the world working for the shipping company White Star Line and was in the Philippines in 1940 when the Japanese invaded. He became a prisoner of war for nearly three years.
Buckles gained notoriety when he attended a Veteran’s Day ceremony at the Arlington grave of General John “Black Jack” Pershing, who led U.S. forces in World War I, said his daughter, Susannah Flanagan.
He ended up on the podium and became a featured guest at the event, and the VIP invites and media interview requests came rolling in shortly afterward.
“This has been such a great surprise,” Flanagan said. “You wouldn’t think there would be this much interest in World War I. But the timing in history has been such and it’s been unreal.”
Buckles spent much of his museum tour Sunday looking at mementos of Pershing, whom he admired. He posed for pictures in front of a flag that used to be in Pershing’s office and retold stories about meeting the famous general.

TITLE: Despite European Success, Chelsea Fires Avram Grant
PUBLISHER: Reuters
TEXT: LONDON — Chelsea sacked manager Avram Grant on Saturday, three days after his team were beaten on penalties in the Champions League final by Manchester United.
“Chelsea Football Club can confirm that Avram Grant has had his contract as manager terminated today. This follows meetings over the last two days,” the Premier League club said in an official statement on its Web site (www.chelseafc.com).
“Everybody at Chelsea FC would like to thank Avram for his contribution since taking over as manager last September.
It added: “We will now be concentrating all our efforts on identifying a new manager for Chelsea and there will be no further comment until that appointment is made.”
Among those linked with the job have been Frank Rijkaard, who has left Barcelona, and Roberto Mancini, who has just coached Inter Milan to the Serie A title in Italy.
Former England manager Sven-Goran Eriksson, whose future at Manchester City is uncertain, has also been mentioned in the past with a possible move to Stamford Bridge as has Dutchman Guus Hiddink, who is in charge of the Russia team.
British bookmakers William Hill make Hiddink 11/4 favourite to succeed Grant at Stamford Bridge while Dutch compatriot Rijkaard leads the betting odds at 2/1 with Ladbrokes.
Hiddink, however, ruled himself out of the running on Monday, saying he is committed to coaching Russia.
The 53-year-old Grant, a close personal friend of Chelsea’s Russian billionaire owner Roman Abramovich, took charge of team affairs in September after Jose Mourinho left the club.
The Israeli has now followed Mourinho out of the Stamford Bridge exit door after his side finished as runners-up to Manchester United in the Premier League and also lost in the League Cup final to Tottenham Hotspur in February.
It also comes as no surprise with his future in doubt almost from the time he took over as coach from Mourinho in September.
But Chelsea lost only five matches under Grant and reached the Champions League final for the first time, an achievement that was beyond Mourinho during his three seasons in charge.
They also went into the final league match of the season level on points with Manchester United and could have won the title if they had bettered United’s result on the final day.

TITLE: Cannes Honors French Film With Plaudits, Palme d’Or
AUTHOR: By Mike Collett-White and James Mackenzie
PUBLISHER: Reuters
TEXT: CANNES — Critics hailed the first French victory at the Cannes film festival for 21 years, after the acclaimed classroom drama “Entre Les Murs” (The Class) won the Palme d’Or for best picture late on Sunday.
The triumph marked another high point for French cinema, which has already celebrated a rare best actress Oscar for Marion Cotillard and a home-made box office hit “Bienvenue Chez Les Chetis,” seen by about 20 million people.
Screen legend Catherine Deneuve won a special prize along with Clint Eastwood before the festival wound up and hundreds of journalists and industry executives left for home on Monday.
This year’s festival had the usual blend of Hollywood glamour and hard-hitting independent cinema and, while studios were less willing to splash out in the expensive Riviera resort, there was plenty of late-night revelry despite unseasonal rain.
Big names such as Angelina Jolie, Brad Pitt, Robert De Niro, Eastwood, Penelope Cruz, Woody Allen, Steven Spielberg and Harrison Ford, as well as sports stars Mike Tyson and Diego Maradona trod the famous red carpet this year.
“The Class” is a naturalistic portrayal of a tough Parisian high school where a teacher battles to maintain discipline, and touches on hot issues in France such as overcrowded classes and immigrant youth.
The jury’s choices on the final night were mostly popular.
Benicio del Toro won best actor for his portrayal of Argentine revolutionary Ernesto “Che” Guevara in Steven Soderbergh’s film and the best actress award went to Sandra Corveloni in the Brazilian drama “Linha de Passe.”
The Grand Prix runner-up prize went to Italy’s “Gomorra” (Gomorrah), Matteo Garrone’s hard-hitting film about the camorra Naples crime network, and Turkey’s Nuri Bilge Ceylan won best director for “Three Monkeys,” a tale of family secrets.
There were some surprises at the red carpet ceremony, which brought the curtain down on the 12-day movie marathon.
Israeli animated documentary “Waltz With Bashir” went unrecognized, despite being praised for its haunting retelling of a conscript’s efforts to dig up  memories of the 1982 massacre of Palestinians in Beirut.

TITLE: Davydenko Wins On Clay
PUBLISHER: The Associated Press
TEXT: POERTSCHACH, Austria — Top-seeded Nikolay Davydenko won the Hypo Group International for a third time, beating defending champion Juan Monaco 6-2, 2-6, 6-2 Saturday.
Davydenko won his 13th ATP Tour title overall and second of the season after winning the Masters Series event in Miami last month. The fourth-ranked Russian also won this tournament, a clay-court tuneup for the French Open, in 2005 and 2006.
“I was tired but played tactically very well,” Davydenko said. “I made him run from one side to the other and that worked out great in the first and third set.”
The second-seeded Argentine, who beat Davydenko in the quarterfinals here last year, said he gained a lot of confidence despite losing the final.
“Nikolay is a world-class player, so it was always going to be hard to beat him,” said Monaco, who saved three match points in Friday’s semifinal match against Ivan Ljubicic. “It was the best preparation for the French Open. I am ready to do well there.”
Davydenko was in command of the first set after breaking Monaco in the opening game. Monaco looked vulnerable from the baseline, hitting 14 unforced errors. The 15th-ranked Argentine got treatment for a blister on the middle finger of his right hand.
“I got injured during warm-up. It hampered me in the first set, but it is no excuse for losing the match and it is no problem for Paris either,” Monaco said.
Davydenko added another break to close out the set, and then was treated for a left thigh injury.
In the second set, Davydenko appeared hampered by his injury and Monaco found his rhythm, using three breaks to level the match.
“I lost concentration because I was thinking about my leg,” said Davydenko, who added that he did not consider quitting the match.
“No, I wouldn’t do that in a final. Maybe in a first or a second round, but not when I am playing for the title. Then it doesn’t matter which tournament is up next week.”
Davydenko said he will get further treatment on his thigh before he plays Thomas Johansson of Sweden in the first round of the French Open.
Davydenko raised his game again in the decider and dominated the match from the baseline. He wrapped up the victory with a backhand winner on his second match point.

TITLE: Munster Claim Title In European Finale
PUBLISHER: Reuters
TEXT: CARDIFF — Munster won the Heineken Cup for the second time when they edged triple champions Toulouse 16-13 in a fearsomely competitive Heineken Cup final that more than lived up to its billing at the Millennium Stadium on Saturday.
The Irish province, champions in 2006 when they beat Biarritz in the same stadium after twice losing in the final, recovered from a slow start against the European competition’s most successful team.
The game was perfectly poised at 13-13 with 25 minutes to go but Ronan O’Gara, as so often before, proved the decisive player when he landed a 65th-minute penalty.
His team, helped enormously by their remarkable supporters, then forced themselves to the finish against the mighty French side seeking an unprecedented fourth European title.
The first half was split in almost perfect symmetry as Toulouse dominated the opening 20 minutes only for Munster to flip the game on its head by controlling the next 20.
From kick-off, Toulouse starved Munster of possession and constantly were probing, but they managed only three points from a Jean-Baptiste Elissalde drop goal after the flyhalf had missed with another drop attempt and an early penalty.
Munster eventually began to get some ball, with former All Black wing Doug Howlett a constant darting presence.
Some slick handling then set up a ruck five metres out from which Denis Leamy reached over the line only for the video referee to rule he had lost the ball before touching down.
However, the determined number eight was not to be denied and five minutes later, after some heroic Toulouse defence on the line had repelled half a dozen assaults, he was bundled over for the opening try, converted by O’Gara.
Elissalde reduced the deficit to 10-6 with a penalty to end the first half but it was Munster trotting off with a spring in their step.
Things were tighter after the break, and though Howlett had a lovely try ruled out for a forward pass, the game appeared to edge Munster’s way after 50 minutes.
Toulouse captain Fabien Pelous was sin-binned for a petulant kick at Leamy and O’Gara landed the penalty to make it 13-6.
Toulouse though, had an ace in the pack in the shape of fullback Cedric Heymans. Taking a quick throw-in in his own half he chipped ahead, collected the ball and chipped again. Centre Yannick Jauzion outpaced the Munster defence to hack it over the line and Yves Donguy gleefully fell on it.
Elissalde converted and the 14 men were level.
Elissalde kept Munster on the back foot with a series of spiralling kicks into the closed roof of the Millennium Stadium but Toulouse got a little over-confident on a couple of occasions and failed to make it tell.

TITLE: China Faces Threat From ‘Quake Lake’
AUTHOR: By Chris Buckley
PUBLISHER: Reuters
TEXT: MIANZHU, China — China was preparing to dynamite rock, mud and rubble forming a dangerously large “quake lake” on Monday, hoping to avert a new disaster two weeks after a catastrophic tremor struck Sichuan province.
The government put the death toll from the May 12 earthquake at 65,080, an increase of more than 2,400 from a day earlier. The figure is certain to rise as searchers account for the 23,150 missing. A total of 360,058 people were injured.
The Communist Party’s decision-making Politburo warned that the situation remained “grim” and relief work arduous for the country’s “most destructive” tremor since 1949, the official Xinhua news agency said.
The frenzied initial rescue response is cooling into a long battle with nature, deprivation and latent discontent sure to last long after thousands of aftershocks.
Chinese soldiers carrying 10 kg (22 lb) of dynamite each arrived on Monday at the Tangjiashan lake, one of dozens formed by the earthquake, to try to blast away rubble, Xinhua news agency said, as heavy rain and high winds were forecast.
The lake’s barrier was in danger of bursting after the water rose by nearly two meters on Saturday to 723 meters (2,372 feet), only 29 meters below the lowest part of the barrier.
“The lake is now holding more than 128 million cubic meters of water and may cause a devastating flood if the barrier bursts,” Xinhua said.
Mianyang, a city near the worst-hit areas, had returned to a kind of normality, with shops open and traders and pedestrians filling streets. But much remained to remind China that absorbing the damage of the quake will take many years.
The city sports stadium was thronged by thousands of the estimated 5 million people displaced by the quake. City roads were busy with troops and supply trucks that will have to support towns and villages for a long time yet.
And the hundreds of “missing” posters plastered on boards at the stadium and on lampposts echo the grief — and anger over many children killed when their schools crumpled, often even as other buildings nearby stood.
“We don’t know how long we’ll be here. It already seems like years and years,” said Zhu Huajun, a displaced farmer whose 14-year-old daughter lost both legs when her school collapsed.
“As well as all the dead, so many people have also been disabled. If it’s a kid how can you be sure that she’ll be taken care of properly in a few years, when people forget the quake?”
In a small town outside the city of Mianzhu, families were sheltering beside the remains of a Buddhist temple.
“Our homes were all flattened,” said Nan Guizhi, 76. “We needed somewhere to stay and it might as well be this temple so we can guard it.”
Other residents said their biggest worry was how they would endure the rainy months in tents.
On the outskirts of Mianzhu, thousands of displaced people remained in a huge encampment sweltering in government-issued tents. Doctors working under a massive awning said heatstroke and other heat-related illnesses would be a growing worry as the humid summer gets into full swing.
In Mianzhu which has been transformed into a tent city for displaced people, there were tense scenes and angry exchanges as relief goods were in short supply.
Some refugees accused village officials of favoritism when handing out bedsheets, clothes and other relief material.
“People with good connections get all they want. Ordinary people aren’t getting enough,” said Su Shide, 51, a farmer.
Aftershocks continue to rattle nervous residents, with many sleeping outdoors even when their homes are unscathed. A strong aftershock on Sunday killed at least eight people, injured nearly 1,000 and toppled more than 70,000 houses.
As the rainy season arrives, officials also worry about build-ups of water forming dozens of lakes. Thousands living below the lake Tangjiashan have been evacuated as a precaution.
The government has asked the international community to provide more relief aid, saying more than 3 million tents are needed and just 400,000 have so far reached the disaster zone.
“Living like this is much more tiring than you’d think,” said tent-dwelling farmer Jiang Shuncheng, whose wife, father, a son and daughter-in-law all died in the quake.
“But I’d still be too scared to live under a roof.”

TITLE: New President Tackles Lebanon Woes
AUTHOR: By Tom Perry
PUBLISHER: Reuters
TEXT: BEIRUT — President Michel Suleiman, the army chief elected Lebanon’s head of state on Sunday, kept the military unified through three years of turmoil that pushed the country to the brink of a new civil war.
As president, his main challenge will be trying to reconcile feuding politicians who agreed that he should lead a nation paralyzed by their power struggle.
“It is essential... to work on fortifying our country and our coexistence through dialogue and to avoid transforming our country into an open arena for conflicts,” Suleiman said in a speech after being elected by parliament.
Commander of the military for a decade, Suleiman kept the army out of fighting this month when the political conflict triggered Lebanon’s worst civil strife since the 1975-90 war.
Instead of taking on the gunmen, his troops were deployed only to keep the peace after the battles ended in victory for Hezbollah — Lebanon’s most powerful group and an organization with which Suleiman has enjoyed good ties in the past.
Suleiman’s handling of the latest crisis was praised by Hezbollah but frowned upon by the ruling coalition for the army’s perceived acquiescence in the Shi’ite group’s offensive.
Despite their criticism of the army, factions in the anti-Syrian governing alliance did not withdraw their support for Suleiman as a consensus candidate for a post they had once hoped to fill with a leader from among themselves.
Suleiman, 59, fills a chair vacated in November by Emile Lahoud — an ally of Damascus seen by his opponents as a Syrian puppet.
Suleiman was appointed army chief in 1998, when Damascus controlled Lebanon. He coordinated closely with Syrian troops before they withdrew from Lebanon in 2005 under international pressure triggered by the assassination of former Prime Minister Rafik al-Hariri.
As president, Suleiman will have to grapple with a slew of divisive issues including a UN Security Council resolution that calls for all militias in Lebanon to be disarmed — a demand supported by Hezbollah’s Lebanese opponents.
Suleiman has been unwilling or unable to stop the Iranian- and Syrian-backed group from building up its arsenal and replenishing it after the 2006 war with Israel.
If Lebanon’s sectarian tensions have tested the army’s unity, its resources have also been stretched by the deployment of 15,000 soldiers in the south after the 2006 war and by prolonged battles with Islamist militants in the north in 2007.
Suleiman, a Maronite Christian from the village of Amchit, oversaw the deployment in the south under a UN resolution that halted the Hezbollah-Israel war.
The presidency is reserved for a Maronite under Lebanon’s sectarian power-sharing system.
Suleiman’s profile as a national figure soared during 15 weeks of fighting between the army and al Qaeda-inspired Islamist militants who launched an insurrection in the north a year ago.
Lebanese rallied around the troops during their campaign against the militants in a Palestinian refugee camp. More than 420 people, including 169 soldiers, were killed in the fighting before the revolt was put down.
Fluent in English and French, Suleiman is married with three children. He graduated from the Military Academy in 1970 and holds a Lebanese University degree in politics and administration.

TITLE: ‘Suspension’ Handed to Iraq
PUBLISHER: The Associated Press
TEXT: SYDNEY, Australia — Iraq’s soccer team was provisionally suspended from competition for one year by the sport’s ruling body Monday due to the Iraqi government’s decision to disband all national sports federations.
The FIFA executive committee imposed the ban on the Iraqi Football Association (IFA) following a governmental decree last week that also dissolved the Iraqi National Olympic Committee.
On the first day of its meetings in Sydney, FIFA said it would revoke the suspension if it received by Thursday “written confirmation from the Iraqi government that the decree has been annulled.”
Iraq was due to play Australia in a World Cup qualifier at Brisbane on Sunday and was scheduled to arrive in the Queensland state capital late Tuesday from Thailand, where the team was training.

TITLE: Ooh La La, Tennis Player Posed Nude
PUBLISHER: The Associated Press
TEXT: PARIS — Ashley Harkleroad, the 61st-ranked American who lost to Serena Williams 6-2, 6-1 on Sunday in the first round of the French Open, said she posed for the August edition of Playboy magazine.
“I thought about it, and it was something that I did,” Harkleroad said after the match. “I’m proud of my body. I was representing a female athlete’s body.”
The 23-year-old noted other athletes who have appeared in the magazine, including Olympic swimmer Amanda Beard and former volleyball player Gabrielle Reese.
“I’ll be the first tennis player ever. That’s kind of cool,” Harkleroad said.
“There’s a few reasons why I did it, but I can’t really go into it right now,” she added. “But like I said, I really didn’t think it was that big of a deal. I’m proud of my body. I stay in shape and try to stay fit.”
Williams, an eight-time Grand Slam champion, said she respected Harkleroad’s decision to pose for the men’s magazine, but ruled out her own pictorial.
“I can’t say right now it’s in any thought of my mind to be in that mag,” Williams said. “But I’m happy for her if that’s what she wanted to do. It takes a lot of courage.”
Eduardo Schwank has been through quite a bit the last few weeks, including a hotel fire that destroyed his laptop, passport, equipment and his winner’s check of $6,780 from a Challenger event in Rome.
On Sunday, the 75th-ranked Argentine overcame cramps in his Grand Slam debut to beat a former French Open champion-and guarantee himself at least $37,463 in prize money.
Schwank, playing in only his sixth tour-level event, beat 1998 champion Carlos Moya 7-6 (4), 6-2, 6-7 (1), 4-6, 6-3 in the first round. But before he could finish off his Spanish opponent, Schwank had to recover from cramps that left him lying in the red clay at Roland Garros.
“I did suffer cramps, and I was a bit nervous,” said Schwank, who was playing in a five-set match for the first time.
About two weeks ago, Schwank’s room at a hotel in Bordeaux, France, caught fire and the building had to be evacuated.
“We were having breakfast and we heard the sirens and the firemen. We were not paying much attention,” he said. “But all of a sudden, the hotel manager came to us, and said, ‘Hey, it’s in your room.’
“So, of course, I turned blank. We tried to fix things, and everything’s not over yet. We have a lawyer managing all this.”
After arriving in Paris, Schwank had to win three qualifying matches to get his spot in the men’s field.
“We had to fight quite a lot, but I made it and I’m very happy,” Schwank said. “With this fire, maybe I could have left the tournament, but I went to the end and it turned out right.”
Andy Murray survived a five-set marathon in the first round of the French Open, winning his first match at the clay court major in his second attempt.
The 10th-seeded Briton beat wild card Jonathan Eysseric of France 6-2, 1-6, 4-6, 6-0, 6-2. Eysseric turns 18 on Tuesday and is the youngest player in the men’s field.
“Obviously playing a young guy you’ve not seen takes a little bit of time to get used to,” Murray said. “I didn’t know how comfortable he was up at the net. I didn’t know how well he moved. He obviously moved very well and was not bad up at the net.”
Murray, who lost in the first round in 2006 in his only other appearance at Roland Garros, said he was playing despite a throat infection.
“I’ve been on antibiotics since Tuesday and I’ve not been too well,” Murray said. “I haven’t had much practice in the last five days. I had to make sure I wasn’t tiring myself out too much.”

TITLE: Burma General Offers Glimmer of Hope
AUTHOR: By Aung Hla Tun
PUBLISHER: Reuters
TEXT: YANGON — Foreign aid workers saddled up for the cyclone-ravaged Irrawaddy delta on Monday to see whether army-ruled Myanmar will honor a promise made by its top general to give them freedom of movement.
“We’re going to head out today and test the boundaries,” one official from a major Western relief agency told Reuters in Yangon shortly before his departure for a region that has been off-limits to nearly all foreigners since the May 2 cyclone.
Thousands of beggars have been lined up along the roads of the delta, where the storm left 134,000 people dead or missing and another 2.4 million clinging to survival.
Droves of children shouted “Just throw something” at passing vehicles. But police told drivers and volunteer donors not to give them anything as they were “just begging.”
“Go directly to where you want to go. Don’t throw anything from the car. Know your own people,” they shouted at the cars at one checkpoint on the way to the devastated town of Bogalay.
Three weeks after the disaster, there are still many villages that have received no outside help and waterways of the former Burma’s “rice bowl” remain littered with animal carcasses and corpses, either grotesquely bloated or rotting to the bone.
The stench of death is widespread, as are the swarms of flies.
Donors pledged nearly $50 million in aid at a landmark conference on Sunday but Western countries said much of the cash would be contingent on access to the delta.
Many of the donations are destined for the UN’s $201 million emergency appeal, which was nearly a third full before the meeting. It is meant to provide help for three months only.
Besides denying and delaying visas to aid officials, army and police checkpoints on roads leading out of Yangon have prevented all but a handful leaving the former capital.
However, junta supremo Than Shwe promised visiting UN Secretary-General Ban Ki-moon last week that all aid officials and disaster assessment teams would be allowed in “regardless of nationalities.”
Given the army’s reputation for breaking its word during the 46 years it has held power, the reaction was cautious from aid agencies and countries such as the United States, which regards Myanmar as an “outpost of tyranny.”
Washington told the Yangon conference it was ready to raise its offer of $20.5 million in aid if the junta opened up, but added it was “dismayed” the generals went ahead with a constitutional referendum in the middle of the disaster.
The re-imposition, expected in the next couple of days, of a rolling, year-long house arrest order for opposition leader and Nobel laureate Aung San Suu Kyi is only likely to rile the Bush administration further.
Increasing the frustrations of aid agencies and governments, the Myanmar embassy in Bangkok was closed on Monday after a fire caused extensive damage to one building in the compound. Thai police said the blaze did not appear to be suspicious.

TITLE: Anti-Foreigner Violence Plagues South Africa, Army Called Out
PUBLISHER: The Associated Press
TEXT: JOHANNESBURG, South Africa — The death toll in two weeks of anti-foreigner violence in South Africa has reached 50, police said Sunday, as thousands displaced by the violence coped with rain and cool temperatures.
The revised death toll was eight more than the previous figure. A police spokesman also said Sunday that the army will continue supporting police trying to quell the violence.
On Saturday, the army said one of its soldier shot and killed a man who was attacking a woman in a slum that has seen attacks on foreigners.
“There’s no change at this stage until such time as we are satisfied peace is being restored,” said Gauteng provincial police spokesman Govindsamy Mariemuthoo. He said few incidents and no deaths or injuries were reported overnight.
Thousands of foreigners remain in makeshift camps after being chased from their homes by stick- and knife-wielding mobs of South Africans who accuse immigrants of taking jobs and blame them for crime. A church service was held Sunday at one of the camps.
The violence has centered on squatter camps and notoriously bleak dormitories built during the apartheid era for single men who were allowed to work in the cities, but not to bring their families.
President Thabo Mbeki, who on Wednesday called in the army for the first time since the end of apartheid in 1994 to aid police, was to address the nation on the violence later Sunday, according to the state broadcaster.
Mbeki condemned the violence Saturday, saying during an appearance in Cape Town that “there can never, ever be justification for criminal, violent activity against anyone.”
Other leaders of his African National Congress Party, including its president, Jacob Zuma, were visiting hot spots Sunday, hoping their presence and words could help restore calm.
Protesters marched for peace Saturday in Johannesburg, the commercial capital where the violence began and where it has been most intense.

TITLE: Exhibition Puts a New Face on HIV Epidemic
AUTHOR: By Svetlana Osadchuk
PUBLISHER: Staff Writer
TEXT: MOSCOW — When Moscow photographer Serge Golovach decided to present portraits of beautiful women for an HIV/AIDS awareness project, he was revealing a startling truth about AIDS in Russia today — it is quickly becoming a problem with a woman’s face. 
At the beginning of the AIDS epidemic in Russia, those infected were predominantly male. Unlike in much of the rest of the world, the vast majority of AIDS cases in Russia and the CIS were the result of intravenous drug use — a behavior usually associated with men. But of the 415,000 people infected with AIDS in Russia today, 135,000 of them — 32 percent — are women, according to the latest figures from the Federal Consumer Protection Service. A higher percentage of cases among women can be found only in Moldova or in African countries. In Moscow, the situation is even worse. Out of the 28,000 cases of HIV registered in Moscow as of January 2008, more than a half were women — up 14 percent from last year, according to the Moscow branch of the consumer protection service. More disturbing, most of the newly infected women are young and in their best reproductive years, from ages 20 to 29. Around 5,000 of these women found out that they were infected while undergoing blood tests as part of prenatal care. 
The ongoing feminization of the AIDS epidemic in Russia will no doubt affect the health and future of the nation. An increasing number of HIV-positive children born to these women are the predictable result. But there remains the disturbing question of why more Russian women are becoming part of this epidemic. Experts say it is a result of both the changing nature of HIV transmission in Russia and changes in gender-based social norms and sexual customs. While officials say intravenous drug use remains the main way of transmitting the virus, contracting HIV as a result of heterosexual intercourse is rising. The Moscow AIDS Center’s web site says 86 percent of new cases of HIV are the result of intercourse. This change suggests that HIV is now affecting the general population rather than the marginalized elements of society, such as prostitutes or drug addicts, who have long been considered at high risk for acquiring HIV. 
Of course, it remains true that mass unemployment and economic insecurity in the depressed regions of Russia sometimes force women into commercial sex work, which contributes to the rising numbers of HIV-positive women. Surveys of regional Russian cities show that most sex workers are between the ages of 17 and 23 and that condom use among these prostitutes is erratic at best. 
But what makes the changing situation alarming is that ordinary women are increasingly at risk in a country where sexual coercion and gender inequities are tolerated, and double standards make it acceptable for men to have multiple sexual partners. While using condoms could be a solution in many cases, condoms have traditionally been extremely unpopular among Russian men. This is especially the case among the segments of the population with lower income and educational levels, where HIV is spreading most rapidly. The economic dependency of some women on their husbands and sexual partners leaves them with little bargaining power when it comes to negotiating condom use. 
“Some women suspect their husbands have many sexual partners but fear being abandoned or beaten if they resist their husbands’ sexual demands,” says Maria Ivannikova, the head of the informational department of the nongovernmental association AIDS Information Service. 
Since women are biologically more vulnerable to acquiring HIV, it is two to four times more likely that a woman will contract HIV from a man than a man from a woman. The explanation is that women have a large surface area of reproductive tissue that is exposed to their partner’s secretions during intercourse, and semen infected with HIV typically contains a higher concentration of the virus than a woman’s sexual secretions. Specialists say young women are especially at greater risk, because their reproductive organs are immature and more likely to tear during intercourse, specialists say. Women also face a high risk of acquiring other sexually transmitted diseases, which increases the risk of contracting HIV 10-fold when left untreated. 
The female condom could be a solution, since it is the only safe and effective HIV prevention option available that is completely controlled by women, but at the moment the method is mostly unknown in Russia. And even when women are familiar with female condoms, they have a hard time finding them. Pharmacies do not stock them because of their relatively high cost and a lack of demand, according to Igor Peskarev, the director of Humanitarian Action, a UNAIDS partner NGO in St. Petersburg. 
“You may find women’s condoms only in sex shops in our city, and the price will be around 3 or 4 euros, more than 100 rubles. It’s relatively expensive for a one-time use item,” he said. 
Microbicides, which can be applied in the vagina for the prevention of HIV and other STDs, are still in the developmental stage, although Russian scientists are working along with others around the world to develop an effective one. 
Every day, more than 100 new cases of HIV appear in Russia, and if current trends continue, women will soon make up a majority of the victims. And the fact that Russia is currently in the midst of a serious demographic crisis compounds the problem. According to data from the Center for Strategic and International Studies, the combination of falling birth rates and rising death rates from chronic and infectious disease means that by 2025, Russia’s population will fall from about 144 million to about 125 million. Add to that 5 million to 15 million excess deaths from AIDS, and the country may lose 20 percent of its citizens over the next 20 years. 
In an attempt to raise awareness of this problem and help lift the stigma of people with AIDS, UNAIDS recruited 25 famous women from Russia and Ukraine who agreed to be photographed. By displaying the photographs of women who are well-known and in the news, the organization hopes to encourage both public and private discussions about HIV/AIDS, particularly among women. The exhibit, which ran for two weeks in Moscow in May, is now touring the country, and a selection of the photographs will be published as a 2009 calendar to be launched on Dec. 1, World AIDS Day.