SOURCE: The St. Petersburg Times
DATE: Issue #1378 (42), Tuesday, June 3, 2008
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TITLE: State Says It Backs Ethics In Business
AUTHOR: By Catrina Stewart and Nadia Popova
PUBLISHER: Staff Writers
TEXT: MOSCOW — Coming against the background of boardroom battles at TNK-BP and Norilsk Nickel, a conference Friday on the issue of corporate governance appeared to be either the lucky beneficiary of current events or the victim of bad timing. 
Senior government officials made the most of the situation, stressing Russia’s commitment to achieving higher standards of corporate governance, both at state-owned companies and private corporations. 
Newly appointed First Deputy Prime Minister Igor Shuvalov pushed the government’s message at the conference, emphasizing that better corporate governance would be vital as the country embarked on enormous new investment to develop infrastructure and diversify the economy. 
“If Russia is to become a major financial center, we need to embrace evolving corporate standards and be very clear about the niche we want to fill,” Shuvalov said. 
His comments were echoed by Deputy Prime Minister Alexander Zhukov, who said state-controlled corporations should lead by example when it comes to disclosure and transparency. 
“We want to be seen as a country with a good deal of responsibility in business ... and a country with which you can deal effectively and comfortably,” he told investors. 
The conference was organized by the World Bank Group and the National Council on Corporate Governance, which brings together representatives from Russian business and the government. 
Dmitry Medvedev has made improved transparency and a commitment to the rule of law central themes at the beginning of his presidency, calling them fundamental to the attraction of investment that the country badly needs. 
But the Kremlin’s message appeared at odds with the backroom battle at TNK-BP, as the Russian shareholders — Alfa Group, Access and Renova — called Friday for CEO Bob Dudley to step down, arguing that he represented the interests of co-owner BP. 
The stream of problems for TNK-BP — running from back taxes to visa problems for the company’s employees — has been widely interpreted by analysts as a state-led effort to bring Gazprom in as a controlling shareholder. 
“For everybody who invests here, [what’s going on at TNK-BP] gives you reason to pause,” said James Cook, a director at Aurora Russia, a private-equity company. 
Shuvalov said that the government did not wish to get involved in the conflict. 
But analysts said that the government was involved behind the scenes, as it seeks to regain control over one of the last of the so-called legacy issues. 
“The state is being very careful to try and distance itself” from the shareholders’ dispute in TNK-BP, said Chris Weafer, chief strategist at UralSib. “Hence, the assumption is that local shareholders are taking on the role of the state and applying the pressure.” 
With moves to consolidate its control over key sectors in recent years, and in energy as the most obvious example, the state is often doing the opposite of distancing itself. 
The practice of having state officials work as “independent” directors is widespread in certain industries, with First Deputy Prime Minister Igor Sechin’s position as chairman at state-run oil giant Rosneft only the most obvious example. 
“High-ranking officials are not efficient as independent directors,” Anna Belova, the director for strategic development at the Siberian Coal and Energy Company told the conference. 
“Very often, the time that they devote to the reading of documents on the situation in the company is equal to the same amount of time that they spend in a traffic jam on their way to a board meeting,” Belova said. 
Meanwhile, corporate battles are being waged at some of the country’s most public companies. 
Norilsk, the world’s largest nickel and palladium miner, is proving to be a key testing ground for transparency, as the management fights to defend minority shareholder rights amid Oleg Deripaska’s efforts to merge his company RusAl with the miner. 
Analysts have expressed concern that RusAl, a private company, has overvalued itself at a reported $45 billion, while undervaluing the worth of Norilsk. 
If the deal were to be pushed through, analysts have said that minority shareholders could eventually see the value of their stakes in the company eroded. 
On Wednesday, Denis Morozov, the general director at Norilsk, withdrew his candidacy for the June 30 vote to elect a new board at the company, saying there should be greater opportunities for independent directors. 
At the conference Friday, Morozov said that the possibility of a hostile takeover at Norilsk had demonstrated just how important making information public can be. 
“We had to show our stakeholders around the world in 2007 that their interests were not in danger, so we advertised harder, through channels like advertisements in newspapers presentations around the world.” 
There has also been conflict at Polyus Gold, where independent directors have opposed the miner’s plans to carve off strategic assets without full board approval. 
The spat spilled out into the open recently, when management said it would not endorse the reappointment of an independent director, whom they claim has a conflict of interests as a result of work that one of his companies has carried out for the two key shareholders, Vladimir Potanin’s Interros and Mikhail Prokhorov’s Onexim Group. 
Sources familiar with the row say that minority shareholders are “very disturbed” by the latest developments in the case. 
Each of these battles underpins the need for clearer corporate governance. 
“Russia’s key political priority is to change the investment image of Russia from a difficult, risky place to invest to one that’s more receptive,” Weafer said. “This is the rebranding theme that the Kremlin is very keen to pursue.” 
But the list of elements involved in such a branding that was enumerated by Zhukov at the conference gives a sense of just how daunting the task will be. 
“We have to work out legislation to toughen the obligation companies have to make information public, make managers materially responsible for the decisions they make, bolster the role of independent directors, work out mechanisms companies can use to resolve their corporate disputes outside the courts, and make ownership structures transparent,” Zhukov said. 
“Sometimes we only learn about the real owners of Russian companies from foreign exchanges,” he added, smiling. 
Norilsk’s Morozov said Friday that Russian law in some cases made open reporting impossible. 
“We launched an ADR program in 2001, which required us to provide a maximum in transparency and disclose information as to our reserves,” Morozov said. “But Russian law forbade this, as the platinum stocks were considered a state secret.” 
Investors said that many companies in Russia are keen to move toward more open and Western practices, but often lack the necessary knowledge to do so. 
“We’ve found in Russia that there’s a willingness to have good corporate governance, but a lot of companies just don’t know what’s required, or what investors are looking for,” said Cook, of Aurora Capital. 
Potanin, who chairs the National Council on Corporate Governance, illustrated the particular way that corporate governance works in Russia using the Norilsk example. 
“In a big company like Norilsk Nickel, a new investor, RusAl, appeared, which changed the company,” he said on the sideline of the conference. 
“And now it is entertaining to watch how the new shareholders fight for their positions, for the minority shareholders’ votes, through the media and analysts’ public comments.
“But the most constructive way is, of course, a proper dialog between the company’s shareholders,” Potanin said.

TITLE: Current Era of Economic Growth Threatened by Inflation
AUTHOR: By Catrina Stewart
PUBLISHER: Staff Writer
TEXT: Editor’s note: This is the first in a series of reports about the key challenges facing Russia today. 

It’s early evening at the upscale Scandinavia restaurant, and its courtyard a few meters off Tverskaya Ulitsa in Moscow is starting to fill up with customers. 
Bustling servers bring out plates piled high with beef burgers, while diners indoors tuck into the pricier steaks and fish. 
But behind the scenes, the Swedish restaurant is starting to feel the pinch. 
“We haven’t marked up the prices on some of the favorite dishes for six years,” said Marina Averchenkova, the restaurant’s public relations director. “But as long as we work a lot with imported products such as meat and wine, prices in Europe have put us in a situation where we have had to raise our prices.” 
With the state expecting inflation to top 15 percent in May, rising costs are forcing thousands of enterprises to hike prices even as they struggle to keep costs down. 
Prime Minister Vladimir Putin says Russians can live with double-digit inflation for years, but it is a claim that may be put to the test if the government does not act urgently to contain soaring costs. 
After eight years as president, Putin has passed on to Dmitry Medvedev stewardship of a booming economy. But it could prove to be a poisoned chalice. The country is facing sky-high inflation — driven by food prices — that threatens to undermine many of the Putin-era successes. 
It is not a Russian phenomenon, of course. Across the globe, food costs have escalated on the back of years of underinvestment in agriculture, poor harvests and higher demand for grain from emerging economies, such as China. Tens of thousands of people across the world marched on May 1 against the rising cost of food and falling wages and pensions. In Russia, too, there are signs of growing unrest as inflation starts to bite. 
Real inflation is believed to be higher than the official figures, and a recent poll indicated that about 67 percent of Russians identify inflation as the most urgent issue facing the country today. 
Inflation rose for the first time in years in 2007, hitting 11.9 percent. The Economic Development Ministry remains hopeful that inflation will be contained at 10.5 percent this year, while economists say it could reach 11.5 percent to 14 percent. Even the figure of 14 percent is arguably optimistic, given that consumer prices have risen by 7.5 percent so far this year. 
While prices have risen rapidly for some time now, particularly in higher-end segments of the economy, such as property, it was only last fall that the specter of inflation truly reared its head. With State Duma and presidential elections fast approaching, the authorities got down to work fast on growing food prices. 
But their efforts — which included price caps on food and hikes on several import and export tariffs — have been widely derided by economists as populist and cosmetic. With a new government installed this month, hopes have been kindled that the bureaucrats will now start to take substantive steps to tackle inflation. 
For sure, the government is taking inflation seriously. But officials have shown a deep-rooted disinclination to do anything that would alienate the population and threaten economic expansion. 
Over the past 18 months, the country has seen a significant increase in money supply; the ruble has depreciated against the euro and the yen, and the government has pursued an aggressive spending program as it seeks to uphold economic growth, which has averaged at more than 7 percent in the last eight years. 
It is no coincidence that inflation has struck in the middle of a debilitating international financial crisis that has rocked confidence in the global financial sector and brought the United States to the brink of recession. 
Faced by the prospect of tougher lending conditions for banks and, in turn, their consumers, the Central Bank responded by printing more rubles — a decision that released liquidity into the system to shore up the financial sector but further fueled inflation. 
But there is good news, too. Central Bank chief Sergei Ignatyev said Wednesday that the money supply has risen by a mere 0.7 percent in the year to April, compared with 11.2 percent over the same period last year, giving the Central Bank the confidence to predict slowing inflation over the rest of the year. 
Nevertheless, there is no easy solution, and policymakers remain divided on how to tackle the problem, which has real potential to undo the government’s popularity. 

Problem No. 1: Overheating Economy 
Liberal members of government have warned repeatedly that the state’s aggressive appetite for spending — on wages, infrastructure and other national projects — is fueling inflation. 
“Real budgetary expenditure rose by 26 percent last year. It’s too much and is greater than the total growth of our economy,” Deputy Finance Minister Dmitry Pankin said at a forum this week. “This is influencing inflation.” 
It is a point made by his boss, Finance Minister Alexei Kudrin, time and time again. The keeper of the country’s purse strings, Kudrin has navigated the country through eight years of prosperity and has fiercely opposed the government’s tendency to support big-spending programs, which would ensure continued high growth. The government has also poured money into pensions and state sector salaries, further measures that fuel inflation. 
With global growth under threat because of the financial crisis, Russia is selling itself to foreign investors as a place where the rewards are still rich. It is a silver lining that many believe the country can ill afford to ignore. 
Indeed, economists are already predicting that Russia’s growth will slow this year, although the effect will be much less than in the West, as banks see overseas funding dry up, resulting in fewer loans. 
A split in the government on the pace of growth spilled into the public in April when Kudrin and Economic Development Minister Elvira Nabiullina squared off over whether the economy was overheating, the state at which growth becomes unsustainable. Kudrin’s conclusion, that the economy is overheating, is shared by many economists. 
“Inflation has really been able to run away … because the economy is simply growing too fast,” said Rory MacFarquhar, chief economist and a managing director at Goldman Sachs. 
He said the economic growth could be slowed to a more sustainable rate by reining in government spending and curbing credit growth. 
But it appears that Kudrin is fighting a losing battle. Putin has outlined massive investment for transportation infrastructure this month, and more is to come. Oil, meanwhile, has soared to more than $135 per barrel, delivering windfall profits for the state. 
“As long as the price of oil is so high, this is an argument that Kudrin cannot win,” said Martin Gilman, former representative of the International Monetary Fund in Russia. 
If inflation cannot be contained, however, the economy faces a very real risk of slowdown. 
Problems will arise if inflation reaches 15 percent to 20 percent, the level at which it could start to dent investor confidence, said Oleg Vyugin, chairman of MDM Bank and the former head of the Federal Service for Financial Markets. 
“If inflation is kept under current limits and is manageable, then it is possible to avoid [damaging the economy],” Vyugin said. “But if businesses see that the government is not in a position to control inflation, then there will be serious damage.” 

Problem No. 2: Monopolies 
The many monopolies have also been a major contributor to inflation by introducing aggressive price hikes for services. 
The government regulates prices in a range of sectors, from electricity and gas to telecommunication services. The prices are usually set at the beginning of the year and in some sectors are subject to reforms and liberalization, which implies double-digit growth in prices in many cases. 
“I think the government has to come up with a reasonable plan on how to regulate these tariffs taking into account the [current level of] inflation,” Vyugin said. 
In addition, anti-monopoly rules should be enforced against companies that try to regulate prices, he said. 
Earlier this year, Putin sought to blame monopolies for high food prices, claiming that they effectively created a cartel to keep costs high. It is a theme he took up again in his candidacy speech for prime minister, calling for tougher implementation of the anti-monopoly policy. 
But he also ruled out curbing the power of the country’s natural monopolies, which include companies such as Gazprom and Transneft, arguing that the money for reform and upgrading of the country’s infrastructure had to come from somewhere. 

Solution No. 1: Appreciation 
One way to bring down costs would be to allow the ruble to strengthen against other currencies, namely the euro and the dollar. For example, a liter of German orange juice that sells for 2 euros at home costs 74 rubles to import at the current exchange rate of about 37 rubles to the euro. But the same liter would cost only 72 rubles if the ruble appreciated to 36 to the euro. 
This difference is potentially significant because food is a main driver of inflation in Russia and, Putin said recently, big Russian cities import up to 70 percent of their food. 
The Central Bank tightly controls the ruble’s exchange rate by buying and selling rubles to keep the ruble steady against major foreign currencies. 
Until the government relinquishes control of the ruble, it will not be able to target inflation in the long-term, some economists said. 
“They really do need to let go of the exchange rate,” MacFarquhar said. “But there is a very deep-seated reluctance to get into the position of overvaluation after 1998, [the year of the Russian financial crisis].”
Vyugin said the Central Bank should have let go of the ruble months ago, given the money pouring into the economy in the shape of investment flows, on the one hand, and services and trading boosted by high oil prices on the other. 
“When the economy experiences this kind of double inflow, the currency has to be appreciated,” Vyugin said. 
Many major investment houses are banking on exactly that. Goldman Sachs, Deutsche Bank and Merrill Lynch recently advised clients to buy rubles in anticipation of a policy change on the currency. They predicted that the currency could appreciate by as much as 4 percent in the next six months. 
But to rein in inflation for good, the ruble would need to be appreciated by about 20 percent, some economists said. Politically, such a measure would face stiff opposition. Domestic exporters, which make up a powerful lobby in the government, benefit from a weaker ruble, which adds to their competitiveness abroad. On the flipside, domestic exporters, particularly in the oil industry, are also seeing inflation eat into their competitive advantage by increasing their costs. 
The Central Bank is reluctant to appreciate the ruble. Fearing ruble speculation that would result in greater inflows of money, the bank said last year that it no longer considered the exchange rate policy to be an effective way to battle inflation. 
In a speech to the Duma before his confirmation as prime minister early this month, Putin dismayed many economists by saying the government’s anti-inflationary efforts would focus on boosting investment in agriculture, enterprise, and curbing the power of monopolies. He made no mention of ruble appreciation and suggested that the state’s goal was to return to single-digit inflation “within the next few years” — an indication that the prospect of ruble appreciation had been shelved. 
A few weeks later, the Central Bank muddied the picture further, saying it would conduct daily interventions in the local forex market to head off speculators and make the exchange rate more flexible. In doing so, the bank introduces greater volatility into the market, making it harder for dealers to predict the bank’s next move. It is also a first step toward an inflation-targeting regime. 
But perhaps the biggest turnabout came this week, when the Central Bank indicated that it would start to broaden the ruble’s traded range on a very gradual basis and might let the currency appreciate within months. Nevertheless, the bank has made clear its determination to pursue every other available avenue first. 
Gilman, who teaches at Moscow’s Higher School of Economics, argued that a drastic ruble appreciation was not the answer. “Firstly, it would be a signal to investors that the ruble is a safe one-way bet,” he said. “But the longer-term problem is that Russia is not going to be running a current account surplus for very much longer. Do you want the ruble appreciating by 20 percent if Russia is going to be running [a] deficit? Is that really an intelligent policy?” 

Solution No. 2: Monetary Tightening 
The Central Bank’s primary tool to fight inflation so far has been to tighten monetary policy by raising interest rates. 
Interest rates have been hiked twice this year, and more increases are expected. But economists call this measure ineffective in a climate where the exchange rate is tightly managed. Higher interest rates combined with a weaker ruble would encourage investors to pour more money into Russia, negating the effect of such a move in the first place. 
“Whenever you have interest rates hikes in a fixed exchange system, it generates capital inflows and monetary expansion rather than monetary contraction,” said Vladimir Osokovsky, chief economist at UniCredit Aton. “For example, in the U.S., you cut interest rates and the dollar depreciates, [which leads to] monetary expansion. … Here, the monetary expansion and contraction is driven by capital inflows and outflows rather than the efforts of the Central Bank.” 
Raising interest rates will work only when the ruble is allowed to float freely, he said. 
Of secondary importance is that consumer credit is a relatively nascent phenomenon in Russia, where only a minority of the population hold credit cards and mortgages account for a mere 2 percent of gross domestic product, compared with 40 to 50 percent in the West. While higher interest rates in the West would discourage spending, in Russia the effect of such a move is minimal. 
“The Russian authorities are between a rock and a hard place,” Gilman said. “There is very little that monetary policy can do to change this situation.” 
In the meantime, the Central Bank has announced that it will raise bank reserve requirements aggressively from July 1, forcing banks to set more money aside and thereby slow lending growth. Corporate lending has grown at a phenomenal rate, up by 70 percent in the first quarter alone, and banks have historically been able to capitalize on cheap interest rates abroad to lend at a higher cost at home. 

Solution No. 3: A Coordinated Policy 
The Central Bank is inching toward an inflation-targeting regime, but it has indicated that this will only start to happen toward the end of this year. Inflation targeting would effectively imply a relaxation of control over the exchange-rate mechanism and a tightening of control over capital inflows. “That’s what the Central Bank is doing, and that is what they have to be doing from a macroeconomic viewpoint,” said Osokovsky, of UniCredit. 
But it is a long-term solution, and there would be a significant time lag before it would begin to have an impact on inflation. 
The U.S. economy, meanwhile, is playing a significant role in fueling Russian inflation. With the ruble tied closely to the dollar, the key international reserve currency, Russia is effectively importing loose U.S. monetary policy. Since the beginning of the year, the U.S. Federal Exchange has desperately tried to inject dynamism into its flagging economy by dropping interest rates to just 2 percent. This has led to an avalanche of dollars into the economy, which feeds into countries such as Russia that tie their currencies to the dollar. It is unlikely that the Fed will tighten its monetary policy before the U.S. economy starts to pick up. 
“U.S. monetary policy is very soft today, and a lot of funds in the Middle East and Asian countries have accumulated dollars and are now trying to spend them,” Vyugin said. “It’s a source of inflation.” 
There is little Russia can do to influence U.S. monetary policy, but Gilman suggested that Russia could build an informal coalition of countries to put pressure on the United States.

TITLE: Unit Gets Damages In Army Sex Case
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The Kuibyshevsky Federal Court on Monday ruled that the Soldiers’ Mothers human rights group and Komsomolskaya Pravda newspaper must pay 22,000 rubles ($895) in damages to military unit No. 3727 of the Russian Interior Ministry’s signal corps for publicizing cases of St. Petersburg recruits allegedly being forced into prostitution.
Komsomolskaya Pravda was also ordered to publish an apology within a month.
The military unit had demanded 2 million rubles ($85,000) in compensation for damage to its professional reputation, but was content with the verdict.
“The apology is key to the case: the unit will be able to restore its image,” said Vyacheslav Tukayev, an aide to the commander of the Northwestern troops of the Russian Interior Ministry forces.
The trial was closed to the media.
Olga Nikolayeva, an aide to the commander of unit No. 3727 on legal issues, said the case sets an important legal precedent.
“This case has special importance because military units in Russia have not — until now — defended their professional reputation, although, as a legal entity, each of them has the right to do so,” Nikolayeva said.
Soldiers’ Mothers will appeal the verdict.
“The decision is clearly unjust and unfair,” said Ella Polyakova, the chairwoman of the organization and one of the members of the St. Petersburg Human Rights Council. “It is especially revealing that the judge ruled to close the trial — to avoid any leaks that would give people a true picture of the scale of violence and abuse.”
Lawyer Sergei Golubok had asked for the hearings to be open to the public but suggested that the names of the alleged victims would be withheld to protect their identities. 
“The evidence we have collected is exhaustive but the problem with trials like this is that no witness protection program exists in Russia and some of the people whose evidence would have been important are afraid to step forward and talk only off the record,” Polyakova said.
In other cases, alleged victims who had originally complained about being abused, enslaved or raped, have often withdrawn evidence. 
 “These situations are incredibly demanding; the victims are obviously intimidated,” Polyakova said. 
In 2005, Leningrad Military District conscript Maxim Gugayev spent months in forced labor at a farm owned by a retired army officer in Krasnoye Selo. 
He weighed less than 40 kilograms and had concussion, bruised internal organs, and feet burned with acid when he finally entered a hospital. 
Colonel Alexander Pogudin, who arranged Gugayev’s confinement in forced labor at the farm, was fined 50,000 rubles ($2,000) in a subsequent court case.
At the military hospital, Gugayev first told investigators he had been beaten by unknown assailants. But when he returned to his native Yaroslavl, he wrote an appeal to the St. Petersburg Military Prosecutor’s Office and described his forced confinement. Lawyers used Gugayev’s conflicting testimonies to help the colonel get off with only a fine. 
“Unfortunately, in Russia, victims’ testimonies are not treated seriously enough,” Polyakova said. “Even if we submit a whole pile of testimonies, the prosecutors can easily refuse to open a criminal case, claiming that the evidence does not suffice.”
Soldiers’ Mothers has provided investigators with lists of the people, including army officers, allegedly using the services of the recruits who said that they had been forced into prostitution, complete with names and addresses, but the case has so far gone nowhere.
“Basically, what happens is that the prosecutors weigh the testimonies of deserters against the words of the officers; needless to say the victims do not stand a chance,” Polyakova said. “Apparently, the people our victims had listed as clients were questioned, and after they said they were innocent the prosecutors felt they could close the case.”
Figures released last week showed that in 2007, the number of suicides in the Russian army was 341 people, accounting for more than half of deaths due to non-combat causes.
“We have lost a whole batallion of recruits; the proportion of suicides in the total numbers of human losses has been on the rise in recent years,” said Sergei Fridinsky, Russia’s chief military prosecutor. 
“Naturally we are extremely alarmed by the tendency,” he said.
Soldiers’ Mothers say the recruits are driven to suicide by hazing, violence and physical abuse. 
“Every month deserters flock to us telling absolutely chilling stories of torture, forced prostitution and slavery,” Polyakova said. 
“If these young men feel that death is the only escape it tells you something about their faith in military prosecution,” Polyakova said. 
“Had they seen the slightest chance of their abusers and rapists getting punished, of course, they would have chosen to live, ” she said.

TITLE: Pope Praises Closer Orthodox Ties
PUBLISHER: The Associated Press
TEXT: VATICAN CITY — Pope Benedict XVI believes that relations between the Catholic Church and the Russian Orthodox Church are increasingly close and has expressed his gratitude to the Russian Orthodox patriarch for pursuing dialogue. 
Benedict made the remarks in a letter to Patriarch Alexy II. The Vatican released the text Friday. 
The letter was delivered by Cardinal Walter Kasper, head of the Pontifical Council for the Promotion of Christian Unity. Kasper had been on a visit to Russia and met with the patriarch on Thursday. 
The pope said the visit by Kasper gave him the opportunity “to restate my appreciation for your commitment to fostering relations between Catholics and Orthodox.”
“It is with joy that I reflect on the experience of growing closeness between us, accompanied by the shared desire to promote authentic Christian values,” Benedict said in the letter. 
He expressed hope that the two churches could be even closer. 
Relations between the Catholic and Orthodox churches have improved in recent years. But tensions that began after the demise of the Soviet Union remain and have prevented a meeting between the patriarch and the pope. Benedict’s predecessor, John Paul II, never fulfilled his desire to make a pilgrimage to Moscow.

TITLE: U.S. Envoy Appointed To Cabinet
PUBLISHER: The Associated Press
TEXT: MOSCOW — Prime Minister Vladimir Putin appointed Russia’s longtime ambassador to the U.S. to his Cabinet on Monday, a move likely to deepen speculation that the former president will claim a strong foreign policy role.
Putin named Yuri Ushakov as a deputy Cabinet chief of staff, government spokesman Dmitry Peskov said. The appointment was revealed shortly after the Kremlin said President Dmitry Medvedev had relieved Ushakov of the Washington post because he was taking another job.
Putin became prime minister last month after ceding the presidency to Medvedev, his hand-picked successor. He has stressed that constitutional powers of the presidency, such as setting foreign policy, would not shift to the prime minister’s office.
Peskov told The Associated Press that Ushakov’s post, with responsibility for coordinating the foreign relations of the prime minister and Cabinet, is new. But he said the appointment did not mean that Putin was seeking unusual foreign policy muscle.
Under the Russian Constitution, the president is the undisputed head of state and is responsible for setting policy. The prime minister heads the Cabinet, which implements policy and focuses largely on the economy.
But Putin has often overshadowed Medvedev since his unprecedented move from the Kremlin to Russia’s No. 2 post. He was treated like a head of state during a high-profile visit late last week to France, where his reception underscored the clout he continues to hold.

TITLE: Putin Backs Abkhazian Autonomy Plan
AUTHOR: Reuters, AP
TEXT: MOSCOW — Prime Minister Vladimir Putin said he approved of a plan to give Georgia’s breakaway region of Abkhazia autonomy but not full independence.
But Georgia accused Moscow of trying to annex the region after the Defense Ministry sent unarmed troops on Saturday to rebuild a railroad in Abkhazia. The ministry called the deployment “humanitarian aid.” 
Georgia said Friday that it had stopped spy plane flights over Abkhazia to quell Western fears that tensions between Tbilisi and Moscow could degenerate into war.
Georgian President Mikheil Saakashvili has offered Abkhazia, which broke away in a war in the 1990s, a package that would return it to Georgian control but give it autonomy, the post of vice president, free trade zones, and seats in parliament.
“I very much hope that the plan that Saakashvili proposed will gradually be introduced, because overall it is the right plan,” Putin said Friday in an interview with France’s Le Monde newspaper, given on a visit to Paris and attended by a group of reporters.
“It just needs the other side to agree to it. You need to conduct a dialogue,” he said.
Putin’s apparent support was surprising because Moscow backs the separatists. However, his condition that Abkhazia must agree to the plan is unlikely to be fulfilled. The separatists rejected it when it was first presented.
Russian state television broadcast footage on Saturday of columns of military trucks arriving in Abkhazia, where most of the population have been issued Russian passports.
“We have organized for the restoration of [Abkhazia’s] roads and infrastructure and have sent unarmed railway troops to carry this out,” the Defense Ministry said on its web site.
Putin said he had personally agreed with Abkhaz authorities that Russia would help restore the railroad. “I was personally occupied with this,” Putin said in the Le Monde interview. “We worked out an entire plan of cooperative work: developing energy, building infrastructure. We decided to restore the railroad.” 
He did not say when the plan was agreed upon.
Georgia said the move was illegal. 
“This is one more aggressive step by Russia against the territorial integrity of Georgia. ... The annexation of Abkhazia is under way,” Deputy Foreign Minister Grigol Vashadze told reporters in Tbilisi.
President Dmitry Medvedev is scheduled to meet Saakashvili early this month, their first contact since Medvedev became president, Georgian and Russian officials said late last week. The officials did not say where the meeting would take place, but Saakashvili has said he would like it occur on the sidelines of the St. Petersburg International Economic Forum on June 6 to 8.
Speaking after addressing the United Nations Security Council on Friday, Georgian UN Ambassador Irakli Alasania said the spy plane flights had been stopped but might resume if Tbilisi saw a threat from Abkhazia. Russian UN Ambassador Vitaly Churkin said he was “quite encouraged” by the Georgian halt to overflights, although he regretted the warning of a possible resumption — something he said Alasania had not mentioned at the council meeting.
To try to calm tensions, European Union foreign policy chief Javier Solana is due to visit Tbilisi and Abkhazia this week, while U.S. Deputy Assistant Secretary of State Matthew Bryza, Washington’s point man for the area, will go to Moscow.

TITLE: Georgia Summons Envoy
PUBLISHER: Reuters
TEXT: TBILISI — Georgia summoned Russia’s ambassador to its foreign ministry on Monday to protest against the deployment of about 400 Russian soldiers into the breakaway region of Abkhazia to repair damaged railway lines.
The United States has already expressed its dismay at Russia’s decision to send the unarmed soldiers into the region on Saturday to rebuild rail routes damaged during a war between Abkhazia and Georgia in the 1990s.
But Russia’s ambassador to Georgia, Vyacheslav Kovalenko, defended the military deployment.
“Any humanitarian action for the restoration of bridges and railways is aimed at making the lives of people in the region better,” he said. 
“Any humanitarian action should be welcomed.”
Georgia’s foreign ministry has already complained to the Russian envoy dozens of times during the long-running dispute.
And Georgia’s deputy defence minister, Batu Kutelia, told Reuters that Tbilisi opposed Russian soldiers being deployed to Abkhazia because civil organisations usually carry out humanitarian missions. 
“The Russians are using military forces to restore a railway and this is an absolutely different from a humanitarian operation,” he said
Russian soldiers patrol between Abkhazian and Georgian forces under the terms of a 1994 UN ceasefire which allowed Moscow to station up to 3,000 soldiers in the region.

TITLE: Lawyer in Aslamazyan Case Attacked
PUBLISHER: Reuters
TEXT: MOSCOW — Two men attacked and robbed lawyer Viktor Parshutkin on Friday, a few days after he successfully defended media activist Manana Aslamazyan against currency-smuggling charges.
Parshutkin said the men attacked him with clubs at around 3 a.m. after a Moscow gypsy cab dropped him off on a dark street far from his central apartment.
“They beat me on the head several times, then one of them hit me especially hard in the face and blatantly shouted ‘We had an order to kill you,’“ Parshutkin said by telephone.
The men stole a bag containing his cell phone, identification and a small sum of money, Parshutkin said.
“I link this attack directly to my professional activity in the case of Manana Aslamazyan,” he said.
On Tuesday, Parshutkin successfully defended Aslamazyan, head of the Educated Media Foundation, which trained journalists, in the Constitutional Court against charges of smuggling currency worth about 348,000 rubles ($13,180) into Russia last year.
Parshutkin said he had been at a colleague’s apartment discussing business before the attack. He left and hailed a car to go home, but said the driver told him that he could only drive him halfway and dropped him off on an empty street.
“It’s clear after this week that my phone is being bugged and I am being followed,” he said.

TITLE: In Brief
TEXT: <b>Karabakh Talks in City</b>
MOSCOW (Reuters) — Armenia’s and Azerbaijan’s leaders will meet on the sidelines of the St. Petersburg International Economic Forum this week to discuss the disputed area of Nagorno-Karabakh for the first time since Armenia’s change of president, Interfax reported.
Armenia’s foreign minister, Edward Nalbandyan, announced the June 6 talks after a meeting with Foreign Minister Sergei Lavrov in Moscow on Friday. 

<b>8 Killed in Fire</b>
MOSCOW (Reuters) — Eight people were killed when fire swept through a wooden house in the city of Khabarovsk in the Far East, RIA-Novosti reported Sunday.
The fire gutted the single-story building on Saturday, a police official said. “The landlady, her daughter, son-in-law and five of their acquaintances died in the fire,” he said. 
All were believed to have been drinking, he said. 

<b>Tobacco Ban</b>
ASHGABAT, Turkmenistan (Reuters) — Turkmen President Gurbanguly Berdymukhammedov has banned a Central Asian variety of tobacco known as nas, state media said. 
Nas is usually placed under the tongue or between the lower lip and gum and has a stronger effect than cigarettes. It also causes the person consuming it to spit almost constantly.
Berdymukhammedov, a dentist by education, also ordered the government to carry out campaigns aimed at educating the population about the health damage caused by dipping tobacco. 
Turkmenistan previously banned smoking and consuming nas in public. 

<b>Poles Don’t Vote Putin</b>
WARSAW (AP) — A poll says Polish voters would swap their president, Lech Kaczynski, for former British Prime Minister Tony Blair or German Chancellor Angela Merkel if a foreigner could hold the job.
But the least acceptable candidate was Prime Minister Vladimir Putin.
The poll by the PBS DGA center published in Gazeta Wyborcza daily said some 25 percent of respondents named Blair their top choice. Some 48 percent of the 1,030 questioned rejected Putin. 

<b>For the Record</b>
Eighteen men went on trial in Azerbaijan on Friday for suspected links with Osama bin Laden’s al-Qaida network. Most were arrested in October and November in a sting operation. (Reuters)

TITLE: Experts See Drop in Number of Street Kids
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: St. Petersburg has from 3,000 to 10,000 street children but their number is gradually decreasing, experts have said.
“It’s hard to count these children and hard to give exact statistics. However, we have noticed that the number is decreasing,” Vera Klimova, coordinator of work with neglected children at Innovations Center, said at a press briefing dedicated to the problem last week.
Klimova said that in the Nevsky and Admiralteisky districts where help for street children is available the number of street children has decreased significantly.
“However, you can still see quite a number of them at Prospekt Prosveshcheniya or in the Kupchino district,” in the north and the south of the city respectively, Klimova said.
Wednesday’s press briefing was attended by a number of agencies dealing with street children, an often hidden problem that the authorities have struggled to tackle. 
Maria Chugunova, a social worker from the city’s Children’s Crisis Center, said the decreasing number of street children could be due to measures taken to prevent family neglect, the appearance of family support centers, and pro-active help from the city administration.
Chugunova said every year the Children’s Crisis Center receives about 7,000 calls on its hotline. 
Children complain about family conflict, violence, addictions and serious illnesses. The center offers help to children if they leave home, or are thrown out, via means such as the Social Rehabilitation Center for Street Children located in the Nevsky District.  
The Children’s Crisis Center also has a mobile school where children, regardless of their age and education, can attend classes.
A special “night hostel” offers beds to teenagers who can’t live at home or have run away from children’s homes. 
There are also day-care centers where children can receive subsidized food twice a month to help out their families.
“We don’t give the food packages more often than this in order to keep families active and doing something for themselves,” Chugunova said.
The Children’s Crisis Center caters for autistic children and children with other special needs by providing excursions to museums and day trips.
Klimova said the Innovations Center has worked with the Admiralteisky district to support the Ostrov (“Island”) day center that offers social, medical, psychological, and family rehabilitation to children in need.
The family rehabilitation program offers psychological and material help to parents as well.
“Sometimes those parents just need to believe in themselves, or to be sent to medical establishments to be cured of addictions,” Klimova said.
The center also takes children to summer camps.
Ostrov prepares youngsters for adult life by encouraging school attendance and has collaborated with companies such as the Grand Hotel Europe, IKEA, and Gillette to provide internships and work placements for former street children.
Innovations Center organizes street patrols two or three times a week to reach out to children living rough. 
“However, all our experience shows that to achieve real success, every child needs an individual adult to take care of them,” Klimova said.
“I think that in future the system of shelters and day centers should be changed to placing children with adoptive families,” she said.

TITLE: Alcoholism, Drug Abuse On the Rise Locally
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: Experts have raised concerns over the alarming rate of alcoholism and drug addiction in St. Petersburg, citing a lack ofboth  public awareness and official commitment as major hindrances in their fight against substance abuse. 
“We have treated thousands; some quit the habit entirely, others come back for extra treatment, and others disappear completely. But we get new cases on a daily basis,” said Valentina Novikova, head of the 10-year-old program to treat alcoholics and drug addicts at the St. Petersburg Drug Rehabilitation Center which treats an average of 1,000 patients annually.
“But out there on the streets are billboards featuring colorful ads for alcoholic drinks, and when I get home the television screen portrays the same message,” she told journalists on Tuesday, saying the government has yet to do enough in reversing the upward trend in alcoholism and drug addiction in Russia.
“There are not even reliable statistics as to the number of drug addicts or alcoholics that may provide an objective assessment of the situation and the extent of the challenge facing us,” she said, adding that it is up to the federal authorities to gather such statistics. 
The Interior Ministry acknowledged three years ago that drug abuse was increasing at an alarming rate across the country and said there were more than 300,000 registered drug users in Russia, though experts believed the real figure was up to eight times greater. 
But Dmitry Konstantinov, the St. Petersburg Drug Rehabilitation Center’s chief physician, believes that there are about 45,000 drug addicts in St. Petersburg, “a considerably higher number than previous years, and that the number of alcoholics could even be triple that of drug addicts.”
That would mean that about 3 percent of St. Petersburg’s population are alcoholics. 
Konstantinov said drug addicts are more aware of their problems than alcoholics and that they constitute the majority of those showing up at the center for treatment.
He said positive changes in the public’s attitude have helped drug addicts face their illness more readily than they had previously in Russia. 
“Unlike in the past, drug addicts are no longer scared of being put in jail as they are now considered to be patients rather than criminals, though like alcoholics they are still considered to be social outcasts,” Konstantinov said.
But he said 520 beds at the center and less than 100 in its 10 affiliates in the city is “too small a fraction to deal with the army of thousands of alcoholics and drug addicts who come to us.” 
He said the center received about 1,000 patients last year, and had received about a quarter of that number as of March this year.  
However, Konstantinov is expecting to solve the problem of space in the near future as construction work on new facilities is underway after the center received federal funds worth 17.5 million rubles ($745,000) this year.
“We used to get less than 5 million rubles, and sometimes as little as 1.5 million rubles in the past,” he said.
However, some say that throwing money at the problem is not enough.  
“Unless the problem is tackled from a spiritual point of view the situation will get worse,” said Father Alexander, a pastor who is also involved in Novikova’s rehabilitation program.

TITLE: Russian Word Laureates Announced
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: The third Russkoye Slovo (“Russian Word”) festival, the final stage of which took place in St. Petersburg late last month, named the winners of Russian language contests among children, students, teachers and families.
Among the children’s winners were first-placed Marina Serenok, from Klimovo village in the Bryansk Oblast, Darya Kudanova, from Salavat in Bashkortostan (second), and Ilsiya Shaikhutdinova (third). In the final the children wrote a commentary to a video. 
Among the student winners, Dina Bobrova from Rostov-on-Don was victorious, while Lyudmila Shesterova, a teacher from Vladikavkaz, won the teacher’s contest. The Cherdantsevs from Chelyabinsk won the family contest.
In the family contest, family members had to demonstrate debating skills  and take it in turn to read the lines of a family poem.
A roundtable on language policy in the media was held as part of the festival.
The festival was organized by the Society of Russian Language and Literature Teachers and St. Petersburg State University.
“The main goal of the festival was to attract the attention of society to the condition of the modern Russian language, to unite people interested in keeping and developing the language, to demonstrate the best examples of speech, and to promote Russian language and literature,” said Leonid Moskovkin, director of the headquarters of the Society of Russian Language and Literature teachers.

TITLE: Khodorkovsky’s Parents Worry, Remember
AUTHOR: By Mumin Shakirov
PUBLISHER: Special to The St. Petersburg Times
TEXT: KORALLOVO, Moscow Region - When the prison gate opened, Marina Khodorkovskaya rushed toward the gray building, she said. 
She was only allowed to see her son, Mikhail Khodorkovsky, for three hours, and she wanted to spend every possible minute with him. Despite the east Siberian chill, she said, she wore a light jacket instead of a heavy coat to allow her walk faster. 
Entering the bleak building, the 74-year-old woman headed down a long, dark corridor and ducked through a metal detector. Then she was searched by a female security officer. 
Finally, she found herself in a green-walled room with a grilled window, a narrow table, a couple of chairs and a silent prison official, she said. The room reeked of dampness. Everything looked the same as the last time she had visited in November. This visit, in late March, was her eighth in the five years since Khodorkovsky’s arrest in October 2003. 
When Khodorkovsky entered the room, she hugged him. She said she could feel that he had lost weight during a recent hunger strike but kept quiet, knowing it was useless to say anything. 
“He always makes his own decisions,” Khodorkovskaya said with a hint of sadness in her voice. “There is nothing I can do. I guess how healthy he is based on which medicine he asks us to bring.” 
She did not say which medicine her son had requested. 
Khodorkovskaya spoke about the meeting and her memories of Khodorkovsky’s childhood and his arrest during an interview at Korallovo, an old country estate located 60 kilometers outside Moscow. Khodorkovsky took over the formerly run-down children’s home 15 years ago and turned it into a modern boarding school offering free education to the children of slain troops and orphans from Chechnya, Beslan and other places. Once fully funded by Khodorkovsky’s Yukos oil company, the school is now supported by Western sponsors. 
Khodorkovskaya and her husband, Boris, 75, have served as school directors for 15 years, carrying out administrative duties and overseeing enrollment and the quality of the education. Boris Khodorkovsky keeps an office is in one building, where he and his wife receive guests and journalists. In addition to the office, the one-story building has a cramped hall, a tiny kitchen and a small room with a few paintings on the wall and a wall rug embroidered with Mikhail Khodorkovsky’s portrait. 
This is Khodorkovsky’s third year in the remote YaG 14/10 penal colony in the Zabaikalsky region, near the border with Mongolia and China. Khodorkovsky, once Russia’s richest man, has three years left to serve after being sentenced to eight years on fraud and tax-evasion charges that he calls politically motivated. On Saturday, the third anniversary of his sentencing, a small group of protesters carrying portraits of the jailed businessman rallied near Pushkin Square to call for his release. 
The flight from Moscow to Chita, the capital of Zabaikalsky region, takes six hours, no simple undertaking for a woman of Khodorkovskaya’s age. She spent five days in there and was able to see her son once. Khodorkovskaya said she had gotten used to the presence of the silent prison official at her meetings with Khodorkovsky. She said she knew which topics were taboo: politics and a new money-laundering investigation into Khodorkovsky. 
The most recent meeting was important to her. It was their first after Khodorkovsky went on a two-week hunger strike in support of Vasily Aleksanyan, a jailed former Yukos colleague who is dying of complications from AIDS and has accused the authorities of denying him proper medical treatment. 
Asked what they had talked about, she said her son was mainly interested in the Korallovo school and whether any new buildings and streets had been built in Moscow. 
“I told him about our horrendous traffic jams and how hard it is to commute to Moscow and back,” she said. 
He also asked about his children. 
“His 17-year-old daughter, Anastasia, is the only one who has seen him,” Khodorkovskaya said. “She’s a college student now. His wife, Inna, does not allow their 9-year-old twins, Ilya and Gleb, to visit the Siberian jail. She does not want them to see their dad wearing a prison uniform.” 
She said nothing had changed financially for her and her husband since the arrest. She said they have always lived modesty, starting when Khodorkovsky, an only child, was young and they lived in a communal apartment on Prospekt Mira. “We were an average Soviet family with average means,” she said. 
Both parents worked as engineers at Moscow’s Caliber Industrial Plant, which built tools. 
She said Mikhail Khodorkovsky was an independent-minded child, comfortable being left at home alone when he was only 7. At the age of 15, he refused to go to a Pioneer camp, saying he was tired of the childish games there. His mother tried to find him a job at the plant where she worked, but Soviet law did not allow young teenagers to work with potentially dangerous machinery. So Khodorkovsky found a job on his own at a local bakery that summer. 
Khodorkovskaya said her son did not work because of the money but because he was interested in how the bakery worked. He bought a pair of jeans with his first month’s salary and a record player with the second. 
She remembered how he took a stand at the bakery, almost getting into a fistfight with fellow workers. Some pigeons spoiled several loaves of bread, and Khodorkovsky refused to put the bread in the display case for sale. The other shop assistants argued fiercely with him but finally relented after he held his ground, she said. 
The only time Khodorkovsky was punished was when he and his friends crawled out a fourth-floor window and onto the roof of his school, his mother said. The frightened principal called the boy’s father, who spanked him. 
“We were not worried about him,” Khodorkovskaya said. “We were worried about our neighbor, a very unstable woman who also had syphilis. It was a nightmare! We lived in the communal apartment and had to share the bathroom. I was so relieved when we finally got our own apartment.” 
The young Khodorkovsky was more interested in books and chemistry than girls, and he got married against his mother’s wishes to a fellow student, Yelena Dobrovolskaya, when he was 19. In 1985, the couple had a son, Pavel, who now lives in the United States. The couple divorced soon after the birth, and Khodorkovsky met his current wife in the early 1990s at Bank Menatep, which he ran. 
Khodorkovskaya said she never could quite believe that her son was the wealthiest man in Russia, as Forbes magazine ranked him for several years. The last time he topped the list, in 2002, his fortune was estimated at $15 billion. 
“I told him, ‘Nothing good will come out of this!’” Khodorkovskaya said. “He said, ‘Mother, everything is different now.’” 
Khodorkovskaya heard the news of his arrest from her husband on Oct. 25, 2003 - a day she said she would never forget. “I was at home, and my sister told my husband that Misha had been taken by special forces. It was not at all unexpected, as his business partners Platon Lebedev and Alexei Pichugin had already been arrested,” she said. “I immediately went to see my daughter-in-law, Inna, to comfort her and my grandchildren. I stayed with them for some time. We are tough people, but she felt her world was collapsing.” 
Khodorkovsky’s arrest is widely seen as Kremlin retribution for his decision to get involved in politics by funding opposition parties, among other things. Former President Vladimir Putin had told business leaders repeatedly to focus on their companies and stay out of politics. 
Asked whether Khodorkovsky should have avoided politics, Boris Khodorkovsky exclaimed: “How can you be in big business in Russia and remain uninvolved in politics? How can this be achieved? Misha talked about it a lot.” 
He said that in the months before the arrest, Khodorkovsky also spoke about leaving business and dedicating his time to educational programs. “He wanted to see democracy in our country, like in the West,” he said. “To achieve that you have to be an educated person and build a democratic society from bottom to top. He never planned to get involved in politics.” 
His mother said Khodorkovsky has not had any contact with politicians or business leaders since his arrest, only with close friends from his school days.

TITLE: Tycoon’s Lawyer Meets German Foreign Minister
AUTHOR: Reuters, SPT, Bloomberg
TEXT: MOSCOW — Ahead of a trip by President Dmitry Medvedev to Berlin this week, Germany’s foreign minister has met with a lawyer representing Mikhail Khodorkovsky, a German diplomatic source said Saturday.
Foreign Minister Franz-Walter Steinmeier met an unidentified lawyer representing Khodorkovsky at a Moscow hotel during a visit to Russia in May, the German source said.
The source declined to give further details.
German magazine Der Spiegel reported that Steinmeier had discussed the possibility of getting Khodorkovsky transferred to Moscow on humanitarian grounds from his Chita prison, where he is serving an eight-year sentence.
Medvedev will visit Berlin on Wednesday for talks with German Chancellor Angela Merkel. A government spokesman said Merkel would discuss a range of issues with Medvedev but declined to say whether she would raise Khodorkovsky’s case.
Der Spiegel cited no sources for its story. Neither a spokesman for Khodorkovsky nor his U.S. lawyer Robert Amsterdam were immediately available to comment.
Prime Minister Vladimir Putin, however, said Friday that he would advise Medvedev against granting Khodorkovsky any “privileges.”
“He broke the law, repeatedly and flagrantly,” Putin said in an interview with French newspaper Le Monde transmitted live to journalists in Paris on Friday. 
“The group he belonged to was accused of crimes against people, not just in the economic sphere, and this was proven in a court of law. They committed murders, more than one person. This kind of ‘competition’ is not admissible. And we’ll do our best to stop it.”
Khodorkovsky was arrested in 2003 in what was widely regarded as a Kremlin campaign to punish him for his political and business ambitions. The arrest was criticized in the West, and a number of politicians have called for his release.
“Just as I was when I was president, Dmitry Medvedev should be guided by Russian legislation,” Putin said. “Mr. Medvedev, like myself, graduated from the law department of St. Petersburg University. 
“We had good teachers who taught us to respect the law. And I’ve known Mr. Medvedev for many years. 
“He will respect the law and, incidentally, he has said this in public several times,” Putin said.
Putin said in March that any question of pardoning Khodorkovsky would fall to Medvedev. By law, Khodorkovsky would have to admit his guilt in any appeal to the president for a pardon. Khodorkovsky maintains his innocence.
Khodorkovsky, speaking in an interview with The Sunday Times last month, declined to comment on whether he would seek a pardon from Medvedev.
But he did say he was cautiously optimistic about Medvedev’s desire to overhaul the country’s notoriously corrupt legal system.
“The outcome of my case depends on the speed with which reform to the judicial system, which Medvedev has said he wants, will take place,” Khodorkovsky said. 
“In an independent court, only a complete idiot would swallow the kind of case brought against me. Unfortunately, reforms don’t happen overnight, but some steps taken by Medvedev’s team are cause for cautious optimism.”
Medvedev has issued several calls to crack down on the country’s “legal nihilism.”

TITLE: Plagiarism?
AUTHOR: By Victor Sonkin
TEXT: Two years ago, a scandal raged about the prize-winning author Mikhail Shishkin’s alleged plagiarism of a diary written by a girl from Rostov-on-Don in the early 1900s. Shishkin responded to the criticism calmly, if somewhat arrogantly, by claiming that a writer is free to use whatever material he chooses.
Recently, the topic of plagiarism has resurfaced, this time in pulp fiction. One of the writers in the spotlight was Darya Dontsova, the crime fiction author who boasts the largest print runs in the country, churns out a book every month or so, and, unlike most authors, often adorns the pages of glamour magazines. Journalist Igor Chersky found a passage in one of Dontsova’s books that was closely modeled on a short story of his, published several years ago in a minor magazine. “Closely modeled” is an understatement: The story was practically taken wholesale, with small modifications, such as “dog” instead of “cat” and “Sorbonne” instead of “Oxford University.” As usual these days, the story splashed out into the blogosphere, and other examples came to light.
It turned out that Dontsova had already been caught red-handed (without any apparent consequences) when she took an obscure 1970s cookbook by East German authors and turned it, again with some changes, into “The Lazybone’s Cookbook.” The issue that interested Dontsova’s fans and haters alike was whether she leafed through old books and magazines herself or whether both cases resulted from the sloppiness of her ghostwriters.
In the online discussion that ensued, other examples were listed, such as the case of the fantasy writer Sergei Lukyanenko. In his novel “The Specter,” the hero cooks rice in a way identical to the one described in a book by the Soviet food historian William Pokhlyobkin. Admittedly, this is more innocuous: After all, where could he take the recipe from if not a famous cookbook? But the aftertaste is not very palatable.
Yet another example of dubious ethics was the publication by the controversial magazine “Russian Life” of memoirs by Yefim Zozulya about an influential circle of writers shortly before the Revolution. The magazine informed the readers that the memoirs had been previously printed by the academic journal “Russian Literature” in the 1990s, but not in full. In fact, the Russian Literature publication occurred in 2005, and the memoirs were not only printed in full, but equipped with comments and appendices, lacking in the new publication.
It’s not only these cases that should concern us: We can be sure that not all thieves get caught.

TITLE: ‘Comrade Cars’ From the U.S.S.R
AUTHOR: By Asif Siddiqi
TEXT: Few people would associate the automobile with Soviet communism. Reflexively we link the car to the United States: from its birth as an icon of mass production in the era of Henry Ford to its status in American popular culture as a metaphor for mobility, freedom and youth rebellion. 
Yet, undoubtedly, the car had a life in the Soviet Union. It had its functions, its admirers and its own metaphors. The many Russian web sites dedicated to Volgas, Moskviches and Pobedas only underscore the degree to which Soviet cars continue to resonate with new generations who romanticize the real and imagined pasts of these vehicles. 
Lewis H. Siegelbaum, a professor of history at Michigan State University, sets out to recover this seemingly lost story in his new book, “Cars for Comrades: The Life of the Soviet Automobile.” 
Wonderfully written and imaginative in scope, “Cars for Comrades” is, however, much more than simply a book about the history of Soviet cars. 
Siegelbaum, an eminent historian who has written widely on Soviet labor history, uses the biography of the Soviet automobile to construct a thoughtful meditation on how cars embodied, encouraged and exacerbated fundamental contradictions in the 70-year experiment of Soviet communism.
The life of the Soviet automobile began with a quandary. When Soviet industrial managers made plans to create a domestic auto industry in the 1920s, they found it difficult to balance the obvious need for American assistance and the necessity of giving their automobile industry a distinct Soviet identity. 
What emerged was the notion of a “Detroit but without Ford,” which in fact bore very little relation to the reality of the American automotive capital. In the Soviet imagination, Detroit was a mythical colossus of factories “whose seemingly limitless production of automobiles was Promethean.” 
This fantastic vision of Detroit, combined with the technological utopianism of the post-Revolutionary days, served as inspiration for the great automobile factory cities of the early Stalin years. 
Siegelbaum focuses his story on the fortunes of three such factory complexes, including the famous Avtostroi in modern-day Nizhny Novgorod, where the first mass-produced car of the post-World War II era, the Pobeda, was built. 
These massive factory complexes were not simply places where cars were built, but also the building sites of Soviet communism. 
Siegelbaum’s descriptions of these “socialist cities” echo the writing of historian Stephen Kotkin, who brought to life the construction of the gargantuan Magnitogorsk steel works in his seminal “Magnetic Mountain.” 
The creation of these giant modern citadels was fraught with contradictory impulses. On the one hand, there were the visions of the Communist Party elite who saw in these cities the perfect manifestation of future Soviet civilization. 
On the other hand, there was the harsh reality on the ground where workers toiled in unimaginably poor conditions and were forced to improvise solutions that bore little resemblance to the original plans.
American engineers and technology were indispensable to the birth of the Soviet auto industry; not only did Americans help design the original factories, but American cars (their frames and engines) also served as prototypes for many early Soviet models. 
Yet the history of the Soviet car is about much more than dependence on foreign expertise. 
From the very beginning, Soviet managers, engineers and technicians had to mold American technology to fit domestic requirements. Siegelbaum underscores that, unlike their American counterparts, Soviet factories overwhelmingly produced vehicles suitable for heavy industrial needs, favoring trucks and tractors over passenger automobiles. 
The earliest major automobile, the large ZIS-101 limousine, was produced in massive numbers in the late 1930s for influential Party and government leaders. 
It and its successor, the ZIS-110, “quite literally embodied the relationship between the Soviet national economy and state power.” 
Cars conveyed not only authority but also fear: During the time of the Great Terror, the secret police’s vehicles, the so-called Black Ravens and Black Marias, would throw even the most innocent bystander into a state of utter panic.
By far the most interesting chapters in the book are those in which Siegelbaum turns his attention from the car itself to two other indispensable elements of automotive culture — roads and consumers. 
As anyone who has traveled beyond Moscow or St. Petersburg knows, Russian roads compare poorly with those in Western Europe and the United States, with paved roads becoming a luxury toward the east. 
This endemic quality of “roadlessness” provides fodder for Siegelbaum’s often humorous exploration of the many ways in which the Soviet state struggled to modernize its road infrastructure. 
Such campaigns were intended as a response to an obvious rhetorical question: How could the Soviet Union be on the path to socialism when there were no roads? 
The fortunes of the Soviet automobile dramatically changed after World War II. Where prewar and wartime use of cars was limited to either military or official use, the shift to larger pools of personal ownership, especially after the Khrushchev years, heightened the contradictions inherent to Soviet society. 
Because Soviet cars were chronically unreliable, and gasoline and spare parts relatively hard to come by, Soviet citizens who owned cars inevitably found themselves immersed in a black market that the state was ill-equipped to stamp out. 
The state’s grudging acceptance of this parallel economy implied its readiness to compromise while raising a symbolic challenge to Soviet communism. 
As Siegelbaum notes, “the state under Leonid Brezhnev found itself engaged in a Faustian bargain over a notoriously individualistic mode of transportation.” 
Siegelbaum’s focus on popular “desire” rather than “demand” for cars puts a provocative spin on the role of the automobile in the late Soviet economy. 
If people publicly paid lip service to the notion that they did not want to wallow in the kind of shallow consumerism endemic in the United States, in private they were willing to ignore legal restrictions in the quest to own a car. 
The state’s clumsy attempts to manage this desire only fed it: Millions of Soviet car owners developed private business relationships that worked outside and often in direct contradiction to the formal levers of the state.
Siegelbaum’s narrative, based on a rich combination of archival, journalistic and anecdotal sources, is packed with dizzying amounts of information — demographic data, economic indicators and production figures. 
These frequently render the big picture opaque. A concluding chapter highlighting some of the primary threads of this biography of the Soviet car would have helped to consolidate many of the story’s rich analytical threads. 
Buffs will quibble that more could have been written about the mechanical evolution of the specific Zhigulis, Moskviches and Volgas that dot the Russian landscape. 
On the other side, social and cultural historians of technology will find that Siegelbaum’s approach is lacking in the theoretical grounding that has revolutionized the field in the past two decades. 
Most critically, the role of the gulag in Soviet cars and roads (and vice versa) is given no extended attention. 
These are, however, minor quibbles. Siegelbaum combines a refreshingly conversational tone with an eye for unusual anecdotes that make “Cars for Comrades” a delight to read. 
This is that unusual book: one rich with academic nuance and insight that can be enjoyed by anyone with an interest in Russian consumer culture in general. 

Asif Siddiqi is an assistant professor of history at Fordham University and specializes in modern Russian history.

TITLE: Forum Seeks Solutions to Problems of Architecture
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: Ideas were exchanged, projects presented and problems and solutions discussed by representatives from architectural bureaus from all over the world last week at the Architectural Dialog Forum which ran from May 23 through May 31.  
The main objective of the forum, according to Nikolai Fedotov, general director of the Artindex publishing and exhibition center, was “to facilitate the development of concrete recommendations, drawing on the experience of other countries in the form of dialog and discussions.”
During a presentation entitled “Respecting historic buildings,” Gunter Katherl and Sabine Aberle of the Austrian firm Caramel Architekten discussed possible options for the future development of St. Petersburg as a city-museum displaying “pearls” of European architecture. 
Architecture in Russia’s capital was also discussed in a presentation entitled “Moscow’s Contemporary Architecture” given by Ernst-Ulrich Tillmans of the German bureau 4a Architekten.
New architectural projects in the center of St. Petersburg are often hotly contested, such as the construction of the 396-meter-tall Okhta Center skyscraper to be built on the bank of the River Neva opposite the historic Smolny Cathedral, or the reconstruction of New Holland Island, a former military complex that is being redeveloped by British architect Norman Foster to include hotels and an entertainment center.
Fedotov said at the forum that “there are no criteria or mechanisms for the creation of truly brilliant projects.  Creating quality, contemporary architecture in the city center today is a question of prestige.  We need ambitious constructions that will become landmarks, with a European sheen and relevance to the present.”
“However,” he continued, “that doesn’t mean that we should forget about the historical context. The future, therefore, lies in the ability to integrate both an understanding of architecture with an understanding of investment requirements, development of infrastructure and corporate social responsibility.”
Dale Jones-Evans of the Australian architecture firm PTY LTD urged St. Petersburg to move forward and develop innovatively.  After presenting a range of projects that have been built in the center of large cities including Sydney, he said the guiding principle of construction in cities should be “a striving for harmony.”
In St. Petersburg, he said, this means combining the city’s classical architecture with contemporary buildings.  
“The old should be combined with the new, otherwise the city will stagnate.  I believe the city will have to develop.  If it’s happening all over the world, and in Moscow, then it will happen here too,” said Jones-Evans.
The forum was also used to discuss the issues faced by western architectural firms working in Russia, and the differences in methods and trends in the construction industry here and abroad.
According to Tillmans of 4a Architekten, projects that take six years to complete in Russia are finished in two or three years at most in Germany.
“It is not unusual in Russia for every architectural element to be built two or three times — to be destroyed and started again from scratch,” he said.  Tillmans said that as a result, far more time and building materials are expended, meaning that 4,500 square meters cost 22 million euros ($34 million) to build in Russia, and just 7-10 million euros ($11-16 million) in Germany.
A project to build an out-of-town residential home for elderly people — the first of its kind in Russia — was also presented at the conference.  The complex will include several accommodation blocks and a nurses’ block, as well as cottages with their own gardens.  Covered walkways will link the cottages, according to Paul Shroeder of fs-architekten in Germany. The residential home will be located on six square hectares in the town of Pavlovsk, 30 kilometers south of St. Petersburg, next to Pavlovsk’s historic main park, and will be a pilot project for a program of building other such complexes in Russia, said Shroeder. According to fs-architekten, the complex’s infrastructure will correspond to that of a spa resort and include a restaurant, cafe-bar, concert hall and theater.  A swimming pool, library, beauty salon, hairdresser’s and gym are also planned.  The center will be able to accommodate up to 120 residents.
The topic of copyright laws also attracted considerable interest from both Russian and foreign participants at the forum.  Viktor Naumov, a partner at the St. Petersburg office of Salans law firm and head of intellectual property rights, IT and telecom for the firm in Russia, gave a presentation on “Protecting and managing non-material assets in the sphere of architecture and design.”

TITLE: Palace Square Work Tender Awarded
PUBLISHER: Vedomosti
TEXT: A consortium of Intarsia and PO Vozrozhdenie has won a tender for the reconstruction and restoration of the eastern wing of the General Staff Headquarters building on Palace Square, the Triumphal Arch and the adjoining internal courtyards. They offered to complete the work for 4.4 billion rubles ($185 million), while a consortium comprising the Pyotr Veliky, Climate Prof and Vesk companies submitted a bid of 4.8 billion rubles ($202 million), said the general director of the St. Petersburg Investment Projects Fund, Alexei Vasiliev.
Eight percent of the reconstruction is to be financed from the state budget, while 20 percent will be provided in the form of a loan from the World Bank. The complex will be expanded from 40,600 square meters to 63,000 square meters. According to Vasiliev, the contract will be signed no earlier than June 20, with the time period for the work being 18 months.

TITLE: In Brief
TEXT: <b>LSR Plans Sale of Bonds</b>
MOSCOW (Bloomberg) — LSR Group, the Russian developer and maker of building materials, plans to sell 5 billion rubles ($210 million) of bonds.
The St. Petersburg-based company registered the new issue and will sell the bonds when it believes “the market conditions to be most favorable,” the company said in a Regulatory News Service statement on Monday.

<b>Dixy Sales Increase 49%</b>
MOSCOW (Bloomberg) — Dixy Group, Russia’s third-largest publicly traded supermarket chain, reported a first-quarter profit after debt-servicing costs fell and set a goal of expanding its store network by a quarter this year.
Net income was $6.8 million, compared with a year-earlier net loss of $770,000, the Moscow-based, St. Petersburg-founded company said Monday in a statement. Sales advanced 49 percent to $459 million after new stores opened and shoppers spent more money on food.

<b>Putin Talks to Saudi King</b>
MOSCOW (Bloomberg) — Russian Prime Minister Vladimir Putin held telephone talks on Monday with Saudi King Abdullah bin Abdel Aziz al-Saud on Russia’s entry into the World Trade Organization.
Putin, who visited Saudi Arabia in February 2007 when he was president, also discussed the implementation of joint projects with the Saudi king, a statement from his office said.

<b>Raven Gets New Loan </b>
MOSCOW (Bloomberg) — Raven Russia Ltd., the U.K. developer of warehouses in Russia and Ukraine, received a $53.2 million loan to finance a new project in Kiev.
International Finance Corporation, part of the World Bank Group, is providing a $28.5 million seven-year loan, with the remaining $24.7 million to come from other banks, Guernsey-based Raven Russia said in a statement distributed by the Regulatory News Service on Monday.

<b>Krasnodar Land Tender</b>
MOSCOW (Bloomberg) — Russia will auction land this month for the Azov-City, one of four gambling zones the country plans to create next year, Kommersant reported.
Krasnodar, southern Russia’s government, will offer 20 plots in the first auction for construction of casinos and hotels in the area, the newspaper said, citing Krasnodar’s deputy governor Alexander Remezkov. Russia plans to move all casinos and gaming halls in the country to four designed areas from July 2009.

<b>Gazprom Wants More </b>
MOSCOW (Bloomberg) — Russia’s Gazprom wants to increase its U.K. market share 10-fold from the present 1 to 1.5 percent in the next five years, though it has no present intention of trying to buy Centrica, the biggest British energy supplier, according to Vitaly Vasiliev, who heads Gazprom’s U.K. arm, the Independent reported.
In an interview with the newspaper, Vasiliev, the chief executive officer of Gazprom Marketing & Trading, said the company is looking at organic growth rather than a big acquisition.
Its customers are mainly small- and medium-sized companies at the moment and the next step is to target the retail market, though it will be several years before household customers can switch to Gazprom from their current suppliers, Vasiliev told the Independent.

TITLE: TNK-BP Battle Continues, CEO Refuses to Resign
AUTHOR: By Anatoly Medetsky, Tim Wall and Nadia Popova
PUBLISHER: Staff Writers
TEXT: MOSCOW — TNK-BP’s embattled chief executive, Bob Dudley, on Saturday defiantly dismissed a call by the company’s Russian shareholders for him to quit and warned that boardroom infighting could threaten its future. 
“The road ahead is risky,” Dudley said in a speech at a conference on corporate governance at the Ritz-Carlton hotel, a stone’s throw from the Kremlin. “TNK-BP’s direction is not irreversible. ... It has indeed arrived at a watershed.” 
“For five years my role has been to balance the interests of the shareholders,” Dudley told a throng of reporters after his speech. “I’ll try to continue to maintain this balance.” 
His comments came as Prime Minister Vladimir Putin revealed in an interview with French newspaper Le Monde that in 2003 he had warned BP against a 50-50 partnership, advising instead that one side should have a controlling stake. 
Concerns have been steadily mounting over the viability of the British oil major’s joint venture through a torrid week of public mudslinging with its Russian partners, billionaires Mikhail Fridman of Alfa, Len Blavatnik of Access Industries and Viktor Vekselberg of Renova. The Russians boycotted a board meeting in Cyprus on Thursday after BP rejected their demand for Dudley’s ouster. 
BP and the Alfa-Access-Renova, or AAR, shareholders met informally for talks on the island, however, and are set to continue their talks this week, Vladimir Buyanov, a spokesman for BP in Moscow, said Sunday. 
BP chief executive Tony Hayward will attend the St. Petersburg International Economic Forum this weekend, Buyanov said. Hayward has held a number of meetings with Russian officials in recent months, including with top officials at Gazprom and Rosneft. 
In a statement released late Thursday, the AAR shareholders accused Dudley of “deeply inappropriate” airing of differences in public and acting in the interests of BP alone. 
The boycott came three days after an interview by Dudley with Vedomosti, in which he confirmed that there were serious disagreements among shareholders on whether to expand abroad or develop current TNK-BP fields in Russia, as well as on investment strategy and whether to sell “some of the assets.” 
In the wake of Thursday’s failed meeting, an independent director on the TNK-BP board, Jean-Luc Vermeulen, resigned. 
“He tried to resolve the dispute between the shareholders, but failed, and decided to resign,” a source close to TNK-BP said Saturday. 
Dudley said Saturday that he could not comment on Vermeulen’s resignation, as he had not spoken to him since. 
The shareholders’ reaction to the Vedomosti interview was not surprising, Dudley told reporters. 
“I don’t consider it a strong response,” he said. “And it is appropriate for me to talk about it.” 
The shareholder infighting is just the latest in a string of troubles to hit the Russian-British firm from all sides this year, including raids by the Federal Security Service over spying allegations, and BP specialists first facing visa problems and then being denied access to TNK-BP’s offices. 
The mounting pressure has prompted speculation that BP could soon cede majority control of TNK-BP to a state energy firm, such as Gazprom. 
On the possibility of Gazprom buying a stake in TNK-BP, Dudley said, “As far as I know, none of the shareholders are selling.” The dispute would be “resolved soon,” he told reporters. 
Senior ministers said last week that the government would stay out of the shareholder dispute. 
Putin’s interview with Le Monde, published Saturday, further fueled the speculation about a change in ownership at the company. 
“They now have a problem with their Russian partners. I warned them several years ago that there will be problems,” Putin said in the interview, which was attended by news agencies. 
Putin said that, at the signing ceremony for the TNK-BP deal in 2003, he had told BP: “Don’t do it. Agree to one of you having a controlling stake.” 
“A whip master was needed there. ... [BP] told me they will manage, and here is the result. They will always have frictions over who is the boss,” Putin said, Reuters reported. 
Putin’s comments appeared to be in stark contrast to those he made in June 2003, however, when as president he blessed the TNK-BP deal at a joint news conference with then-British Prime Minister Tony Blair in London. 
“Russia and Britain have a mutual and well thought-out plan for cooperation,” Putin said, The St. Petersburg Times reported at the time. “As the English proverb goes, where there’s a will, there’s a way.” 
But the pioneering TNK-BP deal now seems an era away, as the tide has turned decisively in favor of strong state control over the strategic oil sector. 
A week after Putin and Blair met in London, the onslaught against Mikhail Khodorkovsky’s Yukos began, leading to his jailing on tax and fraud charges and the bankrupting of the country’s largest private oil company. 
Last year, Putin called on the country’s top business leaders to focus on expanding abroad and hinted that they should leave the strategic sectors of the economy to state-controlled companies. He has also called for more domestic companies to be led by Russian CEOs and top managers. 
Buyanov, the BP spokesman, said Sunday that it was known that Russian officials had harbored reservations about TNK-BP’s 50-50 partnership structure for years. 
Other press revelations appeared to show the pressure on TNK-BP coming to a head. 
The Wall Street Journal on Friday cited sources close to TNK-BP as saying that BP had sought the ouster of the company’s executive director, German Khan, a partner in Fridman’s Alfa Group, as well as TNK-BP’s security and legal chiefs, over the refusal by security personnel to allow BP specialists enter TNK-BP’s offices. 
Buyanov said he could not confirm or deny the report. 
Peter Henshaw, vice president for communications at TNK-BP, confirmed Sunday that a group of BP secondees to TNK-BP with valid work permits and visas had been “denied entry to TNK-BP’s offices by the company’s security group, which reports to Mr. Khan.” 
Khan had also been the executive behind TNK-BP applying for fewer work permits for foreign specialists than Dudley had ordered, the Journal said, citing an unnamed immigration official.

TITLE: Putin to Raise Wages Amid Soaring Prices
AUTHOR: By Gleb Bryanski
PUBLISHER: Reuters
TEXT: PARIS — Prime Minister Vladimir Putin said Friday that he would hike wages, pensions and social benefits to compensate for rising prices and smooth the effects of anti-inflation policy. 
“Through raising wages, pensions, social benefits and subsidies, we will try to minimize negative consequences of our anti-inflation policy for the people,” Putin said in an interview with the French daily Le Monde attended by Reuters and released on Saturday. 
Missing the annual inflation target by a wide margin has become the biggest policy failure of Putin’s last year as president and is likely to turn into a major headache for his cabinet this year. 
In his nomination speech before the parliament this month, Putin said he was prepared to tolerate double-digit inflation for a few years. His cabinet has yet to present a comprehensive anti-inflation policy. 
Putin said his cabinet was aware of inflation dangers and kept a close eye on the situation. Inflation is running at an annualized 15 percent, making the cabinet’s goal of 10.5 percent for this year unlikely to be attained. 
Russia’s inflation is a result of global food price rises, and also a consequence of capital inflow and lavish budget spending ahead of parliamentary and presidential elections last year. 
A more prudent budget policy would have helped the country curb price growth this year, but Putin signaled that he was not yet prepared to risk his high popularity ratings. 
“We understand that [rising wages] means an inflow of money into the economy, but we are simply obliged to do it and we will do it,” Putin said. 
Wages grew by 28 percent year on year in April, and some officials have warned that the country risks falling into an inflationary spiral as Latin American countries did in the 1990s and have said wage controls could be necessary. 
Food makes up more than 40 percent of the basket of goods and services used to calculate Russia’s consumer price index, a typical feature for poorer nations, where the population spends a large proportion of income on food. 
“We understand that food price growth hits those of our citizens who have low incomes. The share of their family budgets spent on food is big,” Putin said. 
Putin, who is still coming to grips with his new role as prime minister, mentioned a recent rise of the refinancing rate — a symbolic ceiling of official interest rates hardly used in practice — among anti-inflation measures. 
The Central Bank has little leverage over the economy, swelled with petrodollars, with its interest rate policy, but the market takes guidance from its deposit and repo rates rather than the refinancing rate. 
Echoing his foreign policy statements, Putin also blamed the West for Russia’s inflation problem: “Inflation has been exported to Russia from developed economies, including Europe,” he said.

TITLE: World Bank Urges  More Measures
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s government and central bank must tackle accelerating inflation to sustain economic growth, which probably slowed to an annual 8.7 percent in the first quarter, the World Bank said in a report Monday.
Inflation quickened to 14.3 percent in April, the fastest pace in five years, and the Economy Ministry expects consumer-price growth of between 9 percent and 10.5 percent this year, compared with 11.9 percent in 2007.
“Reducing inflation in Russia is a necessary condition for sustained high rates of growth,” the bank said in its report. “International evidence overwhelmingly suggests that the objective of high, sustained growth cannot be achieved with high inflation, which hurts both saving and investment.”
Central bank increases in interest rates and mandatory reserve requirements of banks since the start of the year were “moves in the right direction,” the World Bank said.
The central bank increased the minimum rate for taking out one-day loans in repurchase auctions by a quarter of a percentage point to 6.5 percent on April 29. Effective July 1, the reserve minimum will be raised to 7 percent from 5.5 percent for foreign currency deposits and to 5 percent from 4.5 percent for ruble deposits.
“More tightening will be required to tighten monetary policy and reduce inflation,” including allowing a more flexible exchange rate and slowing the expansion of government spending, the report said.

TITLE: Managing Risk Versus Profitability
AUTHOR: By Anna Shcherbakova
TEXT: Getting hold of money is becoming more and more expensive for companies. A few months ago, they could borrow from Russian banks at about 12 percent interest, but now the interest rate has increased up to 14-16 percent. Businesses are appalled. But do they have any choice? Borrowers have nowhere to go and no other sources of money, several bankers have admitted when asked. 
Just a year ago, companies could issue eurobonds or borrow money abroad. But those times ended with the international financial crisis, which has decreased the wealth of European and American banks. Russian banks also have no more access to foreign financing. At the same time, wealthy Russian companies have withdrawn their money from the national banks in order to finance their new investment projects. Last week the Central Bank increased the loan loss reserves for banks, which makes loans even more expensive and restricts lending. As a result, banks are fairly short of money while the demand for long-term loans is high.
This situation is good for banks, the CEO of one of Russia’s top-100 banks said. According to him, borrowers were being spoiled by the growing supply of money and not even bothering to persuade banks to issue them loans. Now that the buyer’s market is transforming into a seller’s market, it is more fair, he concluded triumphantly. 
From the other side of the fence, the situation looks less rosy. For some companies, loans are simply too expensive. And some companies, or even industries, are on bankers’ blacklists, and have very little chance of being able to borrow money. 
One of the first victims of banks’ increasing suspiciousness is the North-Western Timber Company, known by its Russian acronym SZLK. It borrowed 5 billion rubles (about $200 million) from seven Russian banks. Last month one of the creditors, worried by the late payment of 20 million rubles ($800,000) demanded the repayment of the entire loan ahead of schedule. Unable to pay back the entire amount, SZLK initiated bankruptcy proceedings for its enterprises.  
From the regulator’s point of view, the situation is not nearly so tragic. The banking system is growing fast, despite the problems of international financial markets, said Georgy Melikyan, first deputy chairman of the Central Banks, at the 17th International Banking Congress that took place in St. Petersburg last week. In the first four months of this year Russian banks borrowed $12.8 billion abroad, compared to $14 billion during January-April 2007. According to Sergei Ignatiev, chairman of the Central Bank, the macro-economic situation is promising to slow down the inflation rate, which was 14.3 percent from April 2007 to April 2008. Industrial production and GDP are growing, while capital inflow from abroad, which totaled $80 billion last year, has stopped. According to Central Bank statistics, in the first four months of 2008, $5 billion flowed out of Russia. 
So in order to stay ahead of the game, banks will have to stay on their toes. The competition is increasing, not only among borrowers, but also among creditors, who have to tread the fine line between risk and profitability. The preliminary topic for the next banking congress is “Finding the perfect balance between growth and stability in the banking system.” 

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

TITLE: Beware of the WTO
AUTHOR:  By Felix Goryunov
TEXT: Russia’s 15-year flirtation with the World Trade Organization intensified last week as multilateral consultations on accession resumed in Geneva. Although Russian WTO negotiators stumbled over still-unresolved issues - farm subsidies, export taxes on wood and Gazprom’s pricing policies — they were optimistic about its impending membership. Since Russia’s main trading partners, the European Union and the United States, now support Moscow’s accession, it seems that there are no serious roadblocks remaining for official entrance - that is, unless the Kremlin, after weighting all of the risks more thoroughly, decides that Russia is not quite ready to be part of the WTO. 
Up until now, Russia’s leaders have been blinded by a naive euphoria regarding their self-proclaimed economic miracle. At every opportunity, they claim that Russia has become an island of stability among the global financial turmoil. The Kremlin’s top decision-makers are reluctant to face reality. 
Although Russia has shown impressive growth based on natural-resources exports, the country is not yet fit for membership in this global trade club. To join it now would be to ignore the symptoms of the country’s dominant economic malady, known as the Dutch disease. All the classic symptoms are present - the windfall revenues from natural-resources exports, consumption-driven growth, huge foreign capital inflows, uncompetitive manufacturing sectors, an appreciating national currency and accelerating inflation. WTO accession would only aggravate these problems, as the overwhelming majority of domestic businesses are not yet able to compete with foreign companies. In addition, the country is crippled by mounting labor shortages, poorly developed infrastructure and inadequate social safety. 
Nonetheless, the diarchy of President Dmitry Medvedev and Prime Minister Vladimir Putin feeds public expectations that the economic miracle will continue forever. But WTO membership in the near future will only exacerbate Russia’s existing problems. Imports, which already account for about half of the country’s consumption spree, and the strong ruble are a huge blow to domestic manufacturers. WTO membership would mean an even higher influx of imported goods. 
At a recent foreign investors’ conference in Moscow, Marco Franco, head of the European Commission’s delegation to Russia, offered a sobering analysis of Russia’s economic vulnerability. “If something goes wrong, the Russian growth machine might well grind to a halt, or even reverse,” he said. 
Igor Yurgens, vice president of Renaissance Capital and head of the Institute of Modern Development, which is Medvedev’s think tank, believes that there are still disagreements between the Finance Ministry and the Economic Development Ministry on the road map for economic development. Finance Minister Alexei Kudrin believes that financial stability must not be jeopardized by inflationary growth, while Economic Development Minister Elvira Nabiullina insists on boosting government spending to improve infrastructure and social safety nets while there are still windfall oil revenues. The debate between these two ministries involves a fundamental question of the country’s basic economic strategy, and until this is resolved, the issue of WTO membership is premature. 
There is no doubt that Russia needs to be more deeply integrated into the global economy, which eventually means membership in the WTO. But this must be accomplished at a time and in a manner that best suits the country’s long-term strategic interests. 
There is still hope that Russia will take a sober and calculated approach to WTO membership. Before it runs hastily to the WTO, thinking that the organization will provide the magic potion for its economic ills, Moscow should look to Kiev as a test case. It should wait and see whether its neighbor’s marriage to the WTO will be a happy one and draw the necessary conclusions. 

Felix Goryunov is a Moscow-based business journalist.

TITLE: Secrecy Is Not Always The Best Approach
AUTHOR: By Konstantin Sonin
TEXT: Everybody loves to hear exclusive and classified information — including CEOs of major corporations, editors of the largest newspapers and presidents and prime ministers, as well as ordinary citizens. For them, academic research that is obtained from open sources seems to carry little weight compared with a report compiled with the help of backroom informants. So often, analytical reports carrying the stamp “top secret” are perceived as more substantive than information that is available for general public - especially in matters concerning national security. 
Sometimes we can infer the contents of such classified reports by examining the actions of our leaders, for whom these reports served as the basis for adopting certain policies. It is frightening to even consider what Kremlin officials might have read in the report on Ukraine’s Orange Revolution, considering that they sent thousands of riot police armed with water cannons, truncheons and shields to counter a few hundred demonstrators, most of them middle-aged and mild-mannered intellectuals, at the Dissenters’ March. 
One might plausibly argue that it is impossible to build a comprehensive model involving wide-scale political struggles, mass movements and the influence of foreign governments. This is at least partly true, and it explains why there can be no secret political science or economics research, at least when it comes to economy-wide issues. Any predictions or conclusions on these matters become authoritative and meaningful only as a result of open discussion. Any political economist’s thesis has practical value only if it stands up to thorough analysis and criticism by other professionals in the same or a related field. 
Still, modern social science can employ advanced statistical methods to make conclusions about much-discussed issues such as a country’s intervention in another nation’s affairs. Two political scientists from New York University, Shanker Satyanath and Daniel Berger, and one economist, William Easterly, used historical data from the Cold War-era to measure how a country’s development of democratic institutions is negatively affected by a superpower’s intervention into that nation’s domestic affairs. The most serious challenge was not in determining if some type of intervention occurred (declassified CIA and KGB documents provide this data), but in establishing a cause-and-effect relationship between such interventions and the level of democracy in these countries. And because diplomats and members of the intelligence services love to exaggerate the role they played in historical events, including those in which they did not take any active part, researchers had to make a very close study of the hard facts available to them. 
The results of the research are clear and straightforward. A superpower’s intervention significantly lowers the level of democracy in those countries that are targets of interference, and the negative effect endures over an extended period of time. This is not surprising. Either for the purposes of establishing a regime similar to that of the superpower, or simply for realpolitik reasons, the superpower would want to have a authoritarian ruler rather than a leader with a wide political legitimacy. Perhaps more surprisingly, the devastating effect of intervention on the development of democracy was practically identical when instigated by the democratic United States as it was when it was directed by the communist Soviet Union. 
But in political economy, even the most advanced statistical methods do not guarantee conclusive results. Do they strike you as improbable or unreasonable? Do they contradict something you read elsewhere? Political economists, as opposed to backroom informants and secret government advisers, have nothing to hide. That is why their analyses are more interesting and useful. 

Konstantin Sonin, a professor at the New Economic School/CEFIR, is a columnist for Vedomosti.

TITLE: A Local Success Story: Vadim Pak
TEXT: St. Petersburg-based Vadim Pak won a scholarship last year from MBS Worldwide. He started the MBA for Financial Managers and Finance Professionals in January 2008, and currently works as head of import and marketing at the St. Petersburg-based company Sotrans. 
“I trained as a medical doctor and then studied world economics at the St. Petersburg State Polytechnic University. I was looking for a U.K. or U.S. distance-learning MBA to help further my career. 
I was lucky enough to win the scholarship that MBS Worldwide offered last year for Russian students. I started the course in January and it has been a great experience so far, in terms of widening my knowledge through the course work and meeting new people. 
The Manchester-based workshops are a fantastic opportunity to network with peers from all over the world and have face-to-face contacts with world-renowned academics. 
Studying for a distance-learning MBA takes a lot of self-discipline. At work or at home we live in another rhythm, my timetable is pretty full on! But I can get on with my career and every day I can bring in to my work what I learn on the course.”

TITLE: MBS Presents the Latest MBA Programs
AUTHOR: By Nigel Banister
PUBLISHER: Special to The St. Petersburg Times
TEXT: Career enhancer, panacea for success — MBAs have much to offer, and they will continue to do so as MBAs continue to evolve to meet busy executives’ needs in the global market place, explains Nigel Banister, CEO of Manchester Business School Worldwide. 
For years now, getting an MBA has been seen as a rite of passage for many executives wanting to further their career and get the most coveted jobs in a competitive and global market. Despite fears that the popularity of the qualification would dilute its ‘gold standard’ reputation, the MBA remains the leading business qualification in the world. But it has become very multi-faceted as business schools continually innovate and diversify the courses to remain relevant to the markets and meet the demands and constraints of students. Several important trends are driving this evolution, including globalization, specialisation, technology and the current business environment. 
Globalization, which is being accelerated by the rise of emerging economies,  (in particular China and India) and the falling of entry barriers around numerous countries, is driving much of the changes that are happening in business schools today. Technology and the Internet, which have become endemic in every market place, are helping this drive. And today’s unstable business environment means that more schools than ever before have had to follow the changing needs of organisations and executives evolving in it. Now is not a time for fixed long-term strategies where one can continue to leverage the same knowledge and competences that one had five years or even a year ago. Soft skills are also becoming a much bigger issue and are now an essential part of a good MBA, alongside the hard financial skills, management and strategy. And this makes sense in a world where collaboration and partnership is core to businesses. 
A growing trend at present is specialisation. There are many opportunities open to financial professionals who wish to specialise in a niche area, from accounting to banking to financial markets. Whether they come in the form of an Executive MBA degree in a particular industry or a separate certificate earned in addition to the MBA, specialised MBA programs all have a common aim: to give students a foundation in general management, from basic marketing to business strategy, and an in-depth knowledge of a particular sector. 
Some experts argue that specialised MBAs are the wave of the future, helping those in a certain industry make better use of their time and get ahead more quickly in their careers. And companies see the value in hiring someone who is already a specialist.
Specialist MBAs now also cover industries such as construction, engineering, telecoms and sports management, and have been very popular. For instance, two years ago Manchester Business School Worldwide launched an MBA for Construction Executives that was developed with U.K. industry bodies of excellence such as ConstructionSkills, the Royal Institute of Chartered Surveyors (RICS) and Royal Institute of British Architects (RIBA). The school also runs an MBA for Engineering Business Managers.  
The MBA for Construction Executives has met with phenomenal success in Dubai, which is in the midst of a tremendous construction boom and where the school has a thriving branch. I could see a similar pattern occurring in Russia, given the huge construction spur currently underway in the country, the revenues it is generating (it is estimated that the construction industry is now comparable in turnover to the domestic oil industry), the launch of enormous infrastructure projects by private developers and federal agencies, and the tremendous need for more housing in the country. 
An MBA from a well-respected business school will set executives apart by giving them an integrated and holistic set of business skills to make strategic decisions at the very highest levels, and that is the choice that an aspiring CEO or CFO should make. A specialist MBA program can also be used as a mechanism for changing careers as well as giving a strong dose of management education for executives already a few years into their career.
But in a time of instability and turmoil in the financial markets, taking a year off to invest in one’s career is a risk that many won’t feel they can take. 
Hence a third trend, which has been leading the MBA market in the past few years — flexibility. MBAs with a flexible delivery — distance learning, e-learning, or part-time — have been increasingly popular with executives. Recent figures from the Association of MBAs (AMBA) show that take-up rates for distance learning MBAs have increased by 80% over the past decade. Fitting learning around other commitments makes sense for people who lead mobile lives and have flexible work patterns. This type of MBA enables students to stay in their job, whilst studying for the management program, therefore not incurring the cost of a traditional full time MBA. This form of MBA is sometimes fully or partly funded by employers.
Corporations also sometimes ask a leading business school to devise a customized MBA program for their employees. For instance at MBS Worldwide, we work with BT, KPMG and PwC who have supported our MBA for Financial Managers and Finance Professionals for the past few years. They request tailoring of some of the course content to suit business practice within their particular working environment. 
Technology has also made the delivery of course content more effective and has helped to create a ‘virtual student community’ for people studying remotely. There is a growing trend of moving away from a teacher-to-student method, using communities of practice, encouraging peer-to peer work and getting students to collaborate on discussion boards, such as Facebook. For instance we have weekly tutorials using a web based conferencing system and some academics offer drop in chat sessions with students. We also expect that the next 10 years will change the face of management education worldwide. It will be the first decade when “digital natives” — anyone under 25 today — will go to business school. The workspace, living space and learning space will all be linked together with personal virtual learning spaces and traditional teaching methods will eventually decline. 
MBS Worldwide has been offering part-time MBA programs to Russian students for over ten years. Those were years of tremendous change for the country and we have been very excited to witness its transformation into a major finance and now services hub. We are looking forward to the next ten years where it seems very likely that we will open an executive center in Moscow as the growth in our student base continues. We will continue to train the nation’s future business leaders but learn from them too: it is a two-way process and it is all about sharing one’s knowledge to get ahead. 

Nigel Banister is CEO of Manchester Business School Worldwide.   www.mbs-worldwide.ac.uk.

TITLE: Case Study: Elena Demidenko
TEXT: Elena Demidenko completed her MBA for Financial Managers and Finance Professionals last year at Manchester Business School Worldwide. She currently works for Deloitte & Touche in Sydney, Australia. 
“I was a Financial Controller at a shipping company when I enrolled on my MBA.  Starting the MBA enabled me to move to a Big Four consulting firm and to take my career to a more strategic and international level. 
Studying whilst having a full time job required quite a lot of self discipline, but the distance learning programme gave me the freedom of movement I needed - I moved from the Far East of Russia to Moscow and then to Australia while studying for my MBA. 
A reasonable schedule of written assignments and only one week of workshops in Manchester per semester allowed me to meet my professional commitments. The workshops were really valuable as they enabled me to build confidence through group work and to learn from my peers. The workshops provided a unique opportunity to meet outstanding people from all over the world, to share our professional experiences and knowledge. 
After completing the taught part of the MBA, I moved from Moscow to Australia. The MBA gave me a sustainable international competitive advantage - I have been offered some excellent senior positions in Sydney. 
MBS Worldwide has enabled me to become a more effective manager of international teams and to operate and communicate with confidence in an international business environment - regardless of the location.”

TITLE: Scholarship Event in St. Petersburg
TEXT: Manchester Business School Worldwide is launching its second MBA scholarship for Russian students to join the course in January 2009. The scholarship, which is worth $8,700 (403,089 rubles) and covers 50 percent of the MBA fees, can be won by answering the following question:
“Explain in 1500 words how an MBA from Manchester Business School could benefit your career and your organisation in the context of Russia’s evolving business climate.” 
The essay must be sent to admissions@mbs-worldwide.ac.uk no later than 17 October 2008, accompanied by a completed application form for one of the MBS Worldwide MBA programs. 
For more information about the scholarship, visit: http://www.mbs-worldwide.ac.uk/russian_scholarship.asp 
Nigel Banister will hold an information session “Empowering yourself for success in the global market place” in the Dostoevsky room of the Grand Hotel Europe in St Petersburg on June 19 from 6.30pm to 8.30pm. To attend the presentation and/or have a one-to-one consultation with Nigel Banister, please send your CV to admissions@mbs-worldwide.ac.uk.

TITLE: Hero or Henchman?
AUTHOR: By Ilya Ponomarev
TEXT: For the past week, Russian television has been stoking the public’s passions over Estonia’s charges of war crimes against Arnold Meri. Judging from the coverage, you would think that serious domestic problems, such as increasing neo-Nazism or the lack of housing for veterans, have been resolved. 
Of course, it is always easier for the Kremlin and its media outlets to criticize other countries than itself. It is more expedient to fight against imaginary foes than to take on the real threats to society. 
Russia’s leaders never tire of displaying hypocritical self-righteousness, crying out passionately about justice — particularly when these public stances bring in so many political dividends. 
The more Russia bickers with the Baltic states, the more it resembles a fixed contest in which the results are settled beforehand. The ruling elites of both sides compete with one other at tossing out nasty accusations before their electorates in an attempt to divert attention away from the real problems of everyday life. This happened not long ago with the dispute over moving the Bronze Soldier monument from central Tallinn, and it is happening again now. It seems that those in power are happy, even if a decorated war hero must now stand trial — and this is a man who, in 1941, didn’t quit the field of battle against the Nazis, even after sustaining four battle wounds, and who is now unafraid to stand up for his fellow war veterans, despite suffering from a serious illness. 
I do not want to address Meri’s specific actions in 1949 for which he now stands accused — the deportation of the Estonia civilians to Siberia. Let’s leave it to the lawyers to determine whether Meri organized the deportations or was just carrying out orders. There is a more important issue that has gotten lost in the Meri affair: Instead of focusing on one person for crimes against humanity, the authorities should initiate an international tribunal against the entire Communist regime for crimes against humanity. Although the wealthy and ruling elite in the former Soviet republics might find this initiative attractive, the overwhelming majority of the people, who live worse now than they did 20 years ago, would never support this idea. In the absence of a Nuremberg-like trial, however, any attempt to single out one person smacks of a politically motivated campaign to find a scapegoat. 
In reality, of course, politicians and the media don’t care that much about Meri or his alleged crime of “genocide,” despite the passionate debates on television talk shows. They relish the opportunity to generate good public relations with voters, especially since the government has nothing to say regarding the real problems facing society. How many rating points has United Russia racked up by renaming streets in Pskov and Altai in honor of Arnold Meri? As is often the case, one man’s meat is another man’s poison. 
And for their part, Estonian leaders are manipulating the issue to marginalize opposition groups. They also are trying to provoke Russia to take retaliatory actions, which would then prompt the European Union to come to Estonia’s defense. 
Both the Russian and Estonian sides should be ashamed of themselves for how they have cynically exploited the Meri affair for political gain. 
The spindoctors on both sides who stand behind their respective PR campaigns should think more about the millions of Russian and Estonian lives that were lost during World War II and its aftermath. They should also think about their children, who will grow up one day and look back on the Meri trial and cry, “Shame on you!” 

Ilya Ponomarev is a State Duma deputy from A Just Russia and is one of the founders of the Left Front movement.
By Marko Mihkelson
In recent days, the court proceedings in the small Estonian town of Kardla, where Arnold Meri stands trial for crimes against humanity, have gained much attention in the Russian press. 
Unfortunately, this case reveals dramatically how biased and truth-fearing the media landscape of Russia is today. 
Naturally, no word is spoken or written about the fact that Meri is accused of carrying out deportations under Estonian legislation and international law. 
The Russian media only proclaim that Meri was given the Hero of the Soviet Union award and that, in their view, the court case of the 88-year-old veteran is only a political trial orchestrated by the Estonian authorities. 
It is all supposed to serve the purpose of “rewriting” the outcomes of the World War II, we are told. 
Following this logic, it might be assumed that all heroes of the Soviet Union enjoy a life-long immunity and can kill, rape or deport with impunity. It is sad if this is the contemporary Russian view of the rule of law. 
There is no statute of limitations on crimes against humanity. It is not important who committed them and when. 
Eleven persons accused of crimes against humanity have been convicted in Estonia from 1995, eight of whom participated the deportation of civilians in the 1940s. 
Even the European Court of Human Rights in its decision of Jan. 17, 2006, supported the Estonian court practice of trying and prosecuting crimes against humanity. 
Meri is accused of carrying out deportations of 251 people — mostly women and children — from the Estonian island of Hiiumaa on March 25, 1949. On that day, the Soviet occupation forces deported altogether 20,000 people from Estonia. 
Unfortunately, that was not the only tragedy in the sufferings of the Estonian people in the 1940s. A similar episode occurred on June 14, 1941, when the People’s Commissariat for Interior Affairs of the Soviet Union organized the deportation of more than 10,000 residents of Estonia, among whom nearly 5,000 women and 2,500 children. 
More than 3,000 of them were sent directly to prison camps, where the majority were killed or died. 
For most Russians, the Soviet Union’s victory in World War II, which is officially called the Great Patriotic War in Russia, has been elevated to the single most important historical event. 
No one today questions the importance of the Allies’ defeat of Nazism. What raises concerns, however, is that the victory over Nazi Germany is told in rigorous black-and-white terms. We know that history is a growing collection of narratives with countless nuances. No historical event occurs in a vacuum. 
This is true for the Great Patriotic War, and it is important to analyze all of the events that preceded and followed the war. 
I am convinced that many Russians are more knowledgeable and balanced than the ruling elite in analyzing and interpreting World War II and its aftermath. 
Deep wounds in the memory of nations heal very slowly. 
The feelings of distrust and even hatred can be easily fomented and manipulated. It is very difficult to earn respect by trampling on the truth, and leaders who try to stifle the historical sense of entire nations with this peculiar weapon of history are doing a terrible disservice to their citizens, the consequences of which may be irreversible. 

Marko Mihkelson is the chairman of the European Union Affairs Committee in Estonia’s parliament.

TITLE: America Isn’t Much Better Than the U.S.S.R.
AUTHOR: By Alexei Bayer
TEXT: For a while in the mid-1970s, whenever I met an American, I would typically be the first person from the Soviet Union they had set their eyes on. I gladly practiced my English by relating to them the horrors of Communist oppression and lamenting the lack of freedom in the country that I left behind.
Their usual reaction to my stories was sympathy for my plight. This is why I was taken aback when an older African-American college classmate didn’t shake his head in chagrin after I rattled off my usual catalog of woes. On the contrary, he cut into me.
“Why do you people allow this to go on?” he asked sharply. “Why don’t you go down into the street and protest? We do.”
To my objections that Americans, either black or white, risk little by protesting, he told me about the civil rights struggle in the South and the kind of murders and police brutality that occurred during that period. 
“Sure, we don’t have the KGB,” he concluded. “But that’s because we keep our government in line. The KGB provides an excuse for you to stay apathetic. If you don’t stand up for your freedom, you don’t deserve to have it.”
I wonder what he thinks about the situation in the United States now. Unlike the war in Vietnam, which divided the country and led to violent student protests, the war in Iraq has Americans largely united. Although nearly two-thirds believe that it was the wrong thing to do and disapprove of how U.S. President George W. Bush has been handling it, anti-war protests have been, at best, lukewarm.
The nation expressed no objections at all to such a remarkably un-American establishment as Camp X-Ray in Guantanamo Bay. Reports of torture, detention of obviously innocent or mistakenly arrested persons and outright war crimes committed in violation of treaties signed by the U.S. government go uninvestigated by law enforcement authorities. U.S. citizens accused of terrorism have had their civil rights stripped before they have been found guilty.
These practices don’t reach the extent of Stalinist terror, but they are surely not much better than what went on in Leonid Brezhnev’s Soviet Union. Sure, there are brave lawyers defending detainees on their own time and commentators writing about the situation, albeit mostly on the Internet and not in the mainstream media. The general public remains apathetic and meek — much like the Soviet public was in the 1970s and 1980s.
In fact, the bravery of a handful of Soviet dissidents looks even more impressive in retrospect, in comparison with the current U.S. apathy. Establishment figures who cast aside government-provided privilege and spoke out against injustice in the Soviet Union included decorated General Pyotr Grigorenko and scientist Andrei Sakharov. In 1968, following the invasion of Czechoslovakia by the Soviet Union and the Warsaw Pact, Brezhnev’s version of the coalition of the willing, eight very brave souls came out to Red Square to protest. Despite severe oppression, the underground journal Chronicles of Current Events had plenty of dissident activities to report in each of its issues.
The United States’ origins are grounded in a violent protest against tyranny. When the people of Massachusetts objected to taxation without representation, they dumped English tea into the Boston harbor. The founding fathers created a superbly flexible, well-balanced political system, but I wonder whether they would have objected if modern Americans had rioted in the streets after they elected Al Gore by popular vote only to have Bush be declared president by the Supreme Court. 
We in the United States are now putting our faith in the political system, hoping it will give us back our freedom next January. Let’s hope this hope is not misplaced and that even those who don’t seem to care about freedom enough to demand it can still go on enjoying it.

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

TITLE: Next U.S. Leader Cannot Undo Bush’s Mess
AUTHOR: By Fyodor Lukyanov
TEXT: The U.S. presidential election campaign is entering its decisive phase. The candidates for the rival parties seem to have been determined, and now the real struggle begins.
U.S. President George W. Bush is suffering record-low approval ratings, and his exit is eagerly awaited both at home and abroad. 
Europeans are especially looking forward to a change in the White House. A rebirth of unity among Western countries, which the Bush administration has all but destroyed, is one of the most popular discussion topics on both sides of the Atlantic. 
The Bush administration was ruined by its arrogance. Washington’s certainty that it could take on the world single-handedly reached its height following the military invasion of Iraq. 
As a result, U.S. relations with its European allies have been seriously damaged. Although Washington has been trying since the end of 2004 to rectify matters by withdrawing from its blatantly unilateral approach to global affairs, it has been unable to restore even the appearance of mutual understanding with its European partners. The conflict at last month’s NATO summit in Bucharest over membership for Ukraine and Georgia served as vivid proof of European discontent with Washington.
As far as the crisis in Iraq is concerned, one thing is certain — the United States cannot afford to pull its troops out of the country. 
The experience of the last 18 months has clearly shown that the degree of even relative stability in Iraq is directly proportional to the number of U.S. divisions stationed there. 
If it does turn out to be possible to shift the responsibility for maintaining order over to Iraqi institutions, it will have to be a long, gradual process, and it will necessarily entail reliance on the occupation forces. 
A hasty withdrawal would spell catastrophe for Iraq itself, which would cease to exist as a unified state. Both U.S. presidential candidates probably understand this, even though Senator Barack Obama has promised to bring the troops home quickly. 
In practice, this will mean that the new U.S. president will distance himself from Bush’s failed policies and turn to allies for help in Iraq. By appealing to the ideal of trans-Atlantic solidarity, Washington will call on Europeans to share the burden of stabilizing Iraq. 
But the current situation in Afghanistan is a good indication of how much enthusiasm continental Europe is likely to have for sharing the burden in Iraq. For example, the United States and NATO have not been able to persuade Germany to relocate its forces to the southern part of the country where allied forces are battling the Taliban — even though the Afghanistan military campaign (in contrast to that in Iraq) is being carried out in accordance with United Nations resolutions and enjoys widespread support. 
Of course, we could assume that the United States will try to shift the balance of power within NATO, as the European member countries have been trying to do under France’s leadership. But Europe’s motive for gaining a greater role in NATO is to ensure that the alliance won’t be dragged into operations at odds with its understanding of the organization’s mission. Europe would like to see NATO as a crisis manager for regional problems of interest to the Old World — from Kosovo to Chad. For the United States, NATO is a tool with which it exercises global leadership. 
It is hard to imagine what could convince Europe to forego its own wishes and support the United States as the dominant player in global affairs. Only the appearance of a common enemy as powerful and threatening as the former Soviet Union might be able to accomplish this. But Russia, which has few allies that can be taken seriously, lacks the potential to play that role, despite its high opinion of itself as a reborn global superpower.
Senator John McCain has formulated a concrete idea for a trans-Atlantic coalition to counter new dangers. His favorite brainchild is a league of democracies. 
This alliance would unite democratic countries around the world, from the United States and Brazil to India and South Korea. They would stand in opposition to authoritarian states, primarily China and Russia. This is the logic behind McCain’s call to remove Russia from the Group of Eight and replace it with Brazil and India, but not China.
This model has all of the markings of neoconservative publicist Robert Kagan. In 2002, Kagan proclaimed that the United States and Europe had taken irreversibly divergent paths. Europe, he explained, had lost its will, having plunged into its own morass, leaving the United States as the only force in the world realistically capable of decisive action. 
That stance served as the grounds for the United States’ subsequent unilateral steps in Iraq in open defiance of Europe’s wishes. 
Now Kagan, instead of putting up walls between the Atlantic coasts, is trying to build bridges between them. And to add urgency to that process, he has identified a terrifying threat — authoritarian capitalism from China and Russia — against which all responsible democracies should unite. This constitutes a serious bid for a systemic confrontation, replete with ideological undertones. 
But if McCain were to occupy the Oval Office, his determination to create a league of democracies might weaken. 
Looking at it objectively, the majority of the world’s population would not be included in such a league, and those excluded hold most of the planet’s natural resources, along with a huge arsenal of nuclear weapons. 
A new Cold War in this configuration would be extremely dangerous — especially with the absence of international institutions capable of regulating those relations. And mobilizing all of Europe to join such a league would hardly be realistic. 
In any case, the United States will probably start a new “peace offensive” intended to win Europe’s allegiance and, at the same time, to bring its activities in line with Washington’s interests. 
Europe is unable to formulate a united political platform. It therefore thrashes about in the attempt, which in turn only increases its unease. 
Russia has not ruled out the prospects of building a new relationship with the European Union and the United States. Moscow has made it known that if the West refuses to negotiate with Russia as an equal, it will find other influential friends. 
It is no small matter that President Dmitry Medvedev began his foreign policy activity with Kazakhstan and China. And Moscow’s hint at rapprochement with Beijing only serves to fuel Western ideologists’ warnings of a “new threat” from Russia and China. 
Thus, it would seem that, instead of entering a new epoch in international relations, we are still trapped in the same old vicious circle. 

Fyodor Lukyanov is editor of Russia in Global Affairs

TITLE: Dementieva Takes Shot at 1st French Title
PUBLISHER: The Associated Press
TEXT: PARIS — Robby Ginepri leaves Paris with considerable consolation: He was the last American to lose at the French Open.
Ginepri’s surprising run ended Monday when he was beaten by No. 24-seeded Fernando Gonzalez 7-6 (4), 6-3, 6-1.
Conquering an aversion to clay common among Americans, Ginepri became the first U.S. man to reach the fourth round at Roland Garros since Andre Agassi in 2003. He hung with Gonzalez until losing serve twice in a row late in the second set.
The Chilean benefited from a wider variety of shotmaking than Ginepri, mixing drop shots and slices with a penetrating forehand, and looked more comfortable with his footwork on the dirt.
Gonzalez improved to 16-0 this year on clay, although he withdrew before the third round in Rome because of a hamstring injury. He faces a potential quarterfinal matchup against top-ranked Roger Federer.
At No. 88, Ginepri was the lowest-ranked player left in the men’s draw. He began the tournament with an 0-5 record at Roland Garros, and by winning three matches, he clinched a berth on the U.S. Olympic team.
Yelena Dementieva advanced to the women’s quarterfinals, winning five consecutive games to start the final set and beating fellow Russian Vera Zvonareva 6-4, 1-6, 6-2.
For the No. 7-seeded Dementieva, it’s the best showing at Roland Garros since she was runner-up to champion Anastasia Myskina in 2004. Dementieva closed out the victory by smacking a backhand winner, then celebrated with a whirling leap and a yelp.
The 11th-seeded Zvonareva committed 41 unforced errors and grew increasingly frustrated as the final set slipped away. After falling behind 3-0, she pounded the clay with her racket three times — forehand, backhand and forehand.Dementieva and Zvonareva were among five Russian women in the final 16.
On Sunday, three-time defending champion Rafael Nadal returned to the quarterfinals by beating fellow Spaniard Fernando Verdasco 6-1, 6-0, 6-2.
The win was Nadal’s most lopsided yet at Roland Garros, where he’s 25-0. He had lost at least six games in each previous match.
Seeded second behind Federer, Nadal is bidding to become the first man since Bjorn Borg in 1981 to win a fourth consecutive French Open title. On Tuesday — Nadal’s 22nd birthday — he’ll play yet another Spaniard, childhood chum Nicolas Almagro, who beat Jeremy Chardy 7-6 (0), 7-6 (7), 7-5.
“If I win, it’s going to be a beautiful birthday present,” Nadal said. “And if it’s not, well, too bad.”
Almagro, seeded 19th, is making his first appearance in a Grand Slam quarterfinal. When he had completed his fourth-round victory, he turned to his family and friends in the stands and moved his hand from front to back across his hair, as though holding clippers.
“That was a bet that I had with my team. So now I won,” he said. “I’m going to shave their heads. I’ll use the razor. … I don’t know how my father is going to react when I shave his head. I won’t do that to my mother.”
Also renewing a friendly rivalry Tuesday will be No. 3-seeded Novak Djokovic and 19-year-old Ernests Gulbis. They shared adventures on and off the court a few years ago at coach Niki Pilic’s tennis academy in Munich, Germany.
“He was destroying me in practices. I couldn’t win a match. Practice? No chance,” Djokovic said. Jokingly he added: “So all the pressure’s on him, OK? He’s the favorite.”
Actually, Gulbis will be an underdog playing in his first Grand Slam quarterfinal. He advanced by beating Michael Llodra 6-4, 7-6 (4), 6-3, while Djokovic swept No. 18 Paul Henri-Mathieu 6-4, 6-3, 6-4.
In the women’s quarterfinals, No. 2-seeded Ana Ivanovic will play No. 10 Patty Schnyder, and No. 3 Jelena Jankovic will face 19-year-old qualifier Carla Suarez Navarro.
Fourth-round matches scheduled Monday included Federer against Frenchman Julien Benneteau, and top-ranked Maria Sharapova against No. 13-seeded Dinara Safina.
Almagro lost his two previous tour matches against Nadal, but it has been more than two years since they last played. They competed against each other a lot growing up and shared a rooting interest in the Real Madrid soccer team. “He is a model for me,” Almagro said. “He is a great friend; that might change on Tuesday.”

TITLE: Denmark’s Embassy Bombed in Pakistan
AUTHOR: By Asif Shahzad
PUBLISHER: The Associated Press
TEXT: ISLAMABAD, Pakistan — An apparent car bomb exploded outside the Danish embassy in Pakistan’s capital on Monday, killing at least five people and wounding dozens more, officials and witnesses said.
The blast echoed through Islamabad and left a crater more than three feet deep in the road in front of the embassy. Shattered glass, fallen masonry and dozens of wrecked vehicles littered the area. A plume of smoke rose above the scene as people, some bloodied, ran back and forth in a state of panic.
The explosion appeared to be a car bomb, police officer Muhammad Ashraf said. Someone parked a car in front of the embassy and it exploded at around 1 p.m, he said.
Officials at two hospitals reported at least five people — including two policemen — were killed and 35 wounded in the blast.
Danish Foreign Minister Per Stig Moeller said the explosion killed a male Pakistani custodian at the embassy and seriously injured a handyman. Two office workers were also injured, Moeller said.
He condemned the attack as “totally unacceptable.”
“It is terrible that terrorists do this. The embassy is there to have a cooperation between the Pakistani population and Denmark, and that means they are destroying that,” Moeller told Denmark’s TV2 News channel.
There was no immediate claim of responsibility. Al-Qaida No. 2 Ayman al-Zawahri recently called for attacks on Danish targets in response to the publication of caricatures in Danish newspapers depicting the Prophet Muhammad.
Denmark has faced threats at its embassies following the reprinting in Danish newspapers of the caricatures depicting the Prophet Muhammad. Muslims generally consider depicting the prophet to be sacrilegious and Islamic militants had warned of reprisals.
In April, Danish intelligence officials warned of an “aggravated” terror threat against Denmark because of the cartoon. The warning specifically singled Pakistan, along with North Africa, the Middle East and Afghanistan.
Ben Venzke, CEO of IntelCenter, a U.S. group that monitors al-Qaida messages, said the bombing was likely the work of the terror group or one of its affiliates.
He said al-Qaida laid out an extensive justification for attacks against Danish diplomatic facilities and personnel in a video last August, and repeated its threat earlier this year.
“I urge and incite every Muslim who can harm Denmark to do so in support of the Prophet, God’s peace and prayers be upon him, and in defense of his honorable stature,” IntelCenter quoted al-Zawahri as saying in an April 21 video.
Foreign Secretary Salman Bashir pledged Pakistan would do all it could to safeguard foreign diplomatic missions.
“I think the Pakistani nation feels very ashamed today on incidents such as these,” he said.
It was the second targeting of foreigners in less than three months in the usually tranquil Pakistani capital. A bombing in March at a restaurant in Islamabad that killed a Turkish aid worker and wounded at least 12 others including four FBI personnel.
“I was with a friend passing through a nearby street then we heard a big bang,” said witness Muhammad Akhtar. “Then we saw smoke and people running in a frenzy. We shifted at least eight or nine injured to hospitals. They all have got serious injuries. They were soaked in blood.”
Footage from the scene showed rescue workers dragging away a bloodied person, covering his torso with a blanket.
Sirens wailed as ambulances took the wounded from the scene. One group of rescuers carried away what appeared to be the upper half of a man’s body. Pieces of metal and glass were scattered at least 200 yards from the blast site.

TITLE: Zenit Spirit Lifts Russia Ahead Of Euro 2008
AUTHOR: By Sonia Oxley
PUBLISHER: Reuters
TEXT: VIENNA — Russia have been riding a wave of confidence in their Euro 2008 preparations after FC Zenit St. Petersburg’s UEFA Cup final success.
With six members of Guus Hiddink’s squad at the club that outclassed Rangers in last month’s final—and a further five from 2005 UEFA Cup winners CSKA—there are plenty of players who have experienced top level battles. 
“Above all we gained experience of playing matches at the very highest level,” Zenit goalkeeper and Russia’s second-choice Vyacheslav Malafeyev told the daily Sport Express last week.
“Plus we now have a much bigger conviction in our strengths.”
Russia have not got past the group stage since 1988 when, as part of the Soviet Union, they reached the European Championship final in Germany before losing 2-0 to the Netherlands.
It would be tempting to write them off again this time but their qualification at the expense of regulars England, coupled with domestic club success, means they are dark horses.
“I am almost sure that people will look at us differently now,” striker Pavel Pogrebnyak told the sportsdaily.ru website.
“I don’t even know whether this suits our team or not. But, all the same, they won’t put us among the favorites,” said the Zenit forward, who was the UEFA Cup’s joint top scorer with 10 goals but missed the final through suspension.
Pogrebnyak is a doubt for the tournament after hurting his knee in last week’s 2-1 win over Serbia in a warm up, while his Zenit team mate and arguably Russia’s best player Andrei Arshavin will miss the first two group games through suspension.
Their club manager Dick Advocaat played down Arshavin’s absence, saying Zenit had managed without him, notably in a 4-0 win over Bayern Munich in the UEFA Cup semi-final second leg.
“Andrei is one of the most talented players playing for Russia, therefore it is of course a loss for the team,” Advocaat told Sport Express.
“But Zenit also played without Arshavin against Bayern Munich and achieved the necessary result, so there is no need to make a drama out of the loss of any footballer.”
Russia are in Group D for the June 7-29 tournament in Austria and Switzerland, along with holders Greece, Spain and Sweden.
Despite Russia’s buoyant mood, goalkeeper Malafeyev sounded a warning against revelling in past successes.
“You mustn’t rest on your laurels… In football, yesterday’s wins are forgotten very quickly.”
Dynamo Moscow striker Alexander Kerzhakov said Friday he was ready to replace injured forward Pogrebnyak in the Russian national side if necessary.
“I’m ready to accept an invitation to the national side anytime. I’m still in top form,” Kerzhakov told the media, Agence France Presse reported on Friday.

TITLE: Shuttle Docks With ISS
AUTHOR: By Juan A. Lozano
PUBLISHER: The Associated Press
TEXT: HOUSTON — Shuttle Discovery closed in on the international space station early Monday with a super-size delivery: a scientific lab that’s as big as a school bus — and a toilet pump.
The space shuttle and its seven astronauts are delivering the $1 billion lab on behalf of Japan. They’ll install the lab, with help from the space station’s three residents, on Tuesday.
It’s named Kibo, Japanese for hope, and is 37 feet long and weighs more than 32,000 pounds.
Shuttle commander Mark Kelly and his crew also have a new pump for the space station’s malfunctioning toilet. The Russian-built toilet broke 1 1/2 weeks ago, and space officials are hopeful that this pump — from a different manufacturing batch than the spares on board — will get it working normally.
Before parking at the space station, Kelly was going to guide Discovery through a slow backflip so the station residents could photograph the shuttle’s underside.
It’s one of the safety measures put in place by NASA after the 2003 Columbia accident to check for launch damage.
On Sunday, the astronauts performed a cursory wing inspection using their ship’s 50-foot robot arm. They surveyed the upper edges of the wings, beaming down the camera images to ground controllers, but could not check the lower edges of the wings and the nose cap because they lacked the proper laser tools.
Their laser-tipped inspection boom is at the space station, left there by the previous shuttle crew in March. They’ll retrieve it and, after they depart, perform a full survey.
Discovery did not have enough room for the 50-foot boom — standard equipment on all of the previous post-Columbia missions — because of the enormous lab filling its payload bay.
About five pieces of insulating foam broke off Discovery’s external fuel tank during Saturday’s liftoff, and one or two of them may have hit the shuttle. NASA officials said they were not too worried because the foam losses occurred after the crucial first two minutes of the flight and therefore lacked the acceleration to do much, if any, damage.
What’s more, the foam fragments looked to be thin and flimsy.
Astronaut Karen Nyberg said neither she nor her crewmates saw anything wrong as they were surveying the wings.
“To me, it looked really good,” flight director Matt Abbott said from Johnson Space Center. But he cautioned: “We’ve got a lot of work to do to go through the data.”
Discovery’s fuel tank was the first one built from scratch with all of the post-Columbia safety changes. The tank, at least from the early data, looks to have performed well, said LeRoy Cain, chairman of the mission management team.

TITLE: Mixed Results For Teams In Euro 2008 Warm-Ups
PUBLISHER: Reuters
TEXT: Sweden was upset, the Netherlands cruised, Greece settled for a scoreless tie and Poland rallied to get a tie Sunday in European Championship warm-up matches.
A virtually full-strength Sweden lost to Ukraine 1-0 in Stockholm, while the Dutch team beat Wales 2-0 and Poland managed a 1-1 tie with Denmark less than a week before the start of Euro 2008. Defending champion Greece was held to a scoreless tie by Armenia.
Ukraine’s win won’t help Swedish morale ahead of its Euro 2008 group games against defending champion Greece, Spain and Russia. Sweden faces Greece in Salzburg on June 10 in its first game. Greece was to play Armenia in a warm-up game later Sunday.
The Dutch team is in the toughest group, facing World Cup champion Italy in Bern, Switzerland, on June 9. With games against France and Romania to follow, they will be boosted by a comfortable victory over the Welsh in Rotterdam.
Real Madrid teammates Arjen Robben and Wesley Sneijder put the Dutch in control with goals in the 35th and 53rd minutes. The result and performance provided the buoyant Dutch fans with the chance to wave farewell to coach Marco van Basten, who will move to Ajax next season, and veteran goalkeeper Edwin van der Sar, who ends his international career after the tournament.
“At times, we played very good soccer,” said Van Basten, who made six changes in the second half.
Poland, facing games against three-time European champion Germany, co-host Austria and Croatia, fell behind in Chorzow when midfielder Martin Vingaard scored for Denmark in the 28th minute. Jacek Krzynowek equalized just before halftime.
The Greeks dominated for large spells of the game in Offenbach, Germany, but rarely posed a threat to Armenian goalie Gevorg Kasparov. Angelos Charisteas had a good chance in the 37th minute when Kasparov dropped the ball.

TITLE: USA '08 THE CHOICE
PUBLISHER: Reuters
TEXT: WASHINGTON — Hillary Clinton won the Democratic nominating contest in Puerto Rico on Sunday, but still badly trails front-runner Barack Obama as he draws closer to clinching the party’s presidential race.
Clinton’s win in Puerto Rico, a territory where residents are not allowed to vote in the November election, gave her more fuel for her argument that she has won more popular votes in the five-month nominating fight and is the best Democrat to face Republican John McCain.
But the results pushed Obama closer to the magic number of 2,118 delegates needed to become the nominee, and the Illinois senator already has turned his attention to a general election fight with McCain.
Contests on Tuesday in Montana and South Dakota, with 31 pledged delegates to the August nominating convention at stake, conclude the voting in the Democratic presidential race.
Obama is about 45 delegates shy of securing the nomination and could reach the number quickly with help from some of the approximately 180 uncommitted superdelegates — party officials who can back any candidate.
Clinton made a direct appeal to those delegates on Sunday, saying they should consider her argument that she would have the best chance to beat McCain and had won more votes than Obama.
“More people across the country have voted for our campaign. We are winning the popular vote,” Clinton said during a loud victory celebration in San Juan, Puerto Rico.
“I do not envy the decision you must make,” she said.
Clinton’s claims about the popular vote are disputed by the Obama campaign and do not include states won by Obama that used a caucus system where individual votes are not tallied.
But popular votes do not determine the party’s nominee, who is selected by delegates at the convention. Obama’s lead in delegates is unassailable unless Clinton wins nearly all the remaining uncommitted superdelegates.
Obama, who called Clinton to congratulate her on her Puerto Rico win, looked past the New York senator while campaigning in South Dakota to focus on her role in his general-election race against McCain.
“Senator Clinton is an outstanding public servant. She is going to be a great asset when we go into November to make sure that we can defeat the Republicans,” he said at a rally in Mitchell, South Dakota.
Obama picked up endorsements from at least two more superdelegates on Sunday.
Clinton had campaigned heavily in Puerto Rico, a Caribbean island with 55 delegates at stake, and defeated Obama by more than 2-to-1. Obama visited the territory for one day last week.
Obama cleared a significant hurdle on Saturday when a party committee decided to seat the disputed Michigan and Florida convention delegations at half-strength.
The decision prevented Clinton from significantly cutting his delegate lead. Clinton had won both disputed contests — which were not sanctioned by the national party because of a dispute over their timing — and demanded the delegations be seated at full voting strength.
“Now that Michigan and Florida have been added, we are getting close to the number that will give us the nomination,” Obama said on Saturday.

TITLE: Wasps Sting Rival Tigers To Win English Premiership Rugby Title
PUBLISHER: Reuters
TEXT: LONDON — Lawrence Dallaglio signed off in style when the Wasps team he has served for 18 years outmuscled, outkicked and outlasted great rivals Leicester to win the English Premiership final 26-16 at Twickenham on Saturday.
Wasps scored two first-half tries to lead 23-6 at halftime but two for Leicester closed things up and the difference was in the goalkicking of Wasps fullback Mark van Gisbergen, who landed six of his seven attempts, and Leicester flyhalf Andy Goode, who missed four from six.
A crowd of 81,600, a world record for a club game, rose as one to salute former England captain Dallaglio when he left the field after 68 minutes, with half of them similarly vocal when he lifted the cup that marked Wasps as champions for the sixth time and made it six successive seasons that the London club have finished with a major trophy.
“I’d say this was one of our greatest achievements,” Dallaglio, 35, said. “We were 10th in the table at Christmas; it’s a monumental effort.”
The number eight was keen to play down his own involvement though. “Today was about Wasps and the game of rugby and I didn’t want to detract from that,” he said.
The clash between the clubs who have now won the title in 10 of the last 12 seasons was a typically physical one but Wasps, who beat Leicester in the Heineken Cup final last season and in the Premiership final in 2005, deserved their hat-trick.
They were much quicker out of the blocks and maintained their dominance throughout the first half as forwards James Haskell and Simon Shaw led by example by smashing into their rivals.
Their first try came from flanker Tom Rees on 12 minutes after an Eoin Reddan break and, with Van Gisbergen landing three penalties, it was one-way traffic.
Leicester replied with two Goode three pointers but Wasps remained the more physical side, dominating the breakdown and forcing key turnovers, one of them leading to their second try.
Josh Lewsey, inexplicably overlooked by England throughout the season, produced a scything run to touch down, with Van Gisbergen converting.

TITLE: Fulbright Scholars May Get Palestine Exit Visas
AUTHOR: By Mark Lavie
PUBLISHER: The Associated Press
TEXT: JERUSALEM — The U.S. has reinstated the Fulbright scholarships of seven Gaza Strip students blocked by Israel from leaving the Hamas-ruled territory, according to a letter obtained by The Associated Press.
The students were informed Thursday that their scholarships for the upcoming academic year would be deferred because they couldn’t get out of Gaza, which Israel blockaded after Islamic Hamas militants seized power a year ago.
A letter dated Sunday from the U.S. consulate in Jerusalem said officials were working to secure exit permits so the students could continue the visa and university placement process.
“We are working very closely with the Government of Israel in order to secure its cooperation in this matter,” the letter said. Consulate officials would not comment Monday beyond confirming the letter’s authenticity.
On Monday, Israeli government spokesman Mark Regev indicated the problem would be solved.
Israel, he added, “sincerely hopes that it will be possible to get the students out by the beginning of the coming academic year.”
All Gazans who exit the territory need to undergo tight Israeli security checks.
Israel allows pressing humanitarian cases to leave Gaza, but officials say students are not included in that definition. Some 500 students and their dependents have been allowed to leave over the past year. But exit permits have dried up in recent months in the wake of militant attacks on Israel, according to an Israeli human rights group, Gisha, which has been helping Gaza students leave for studies abroad.
Gisha director Sari Bashi welcomed the U.S. consulate’s pledge to help the students. Gisha “calls on Israel to allow all students with scholarships trapped in Gaza to leave and study abroad,” she told the AP.
The U.S. started appealing to Israel on Friday. The lobbying included a call from the No. 3 State Department official to Israel’s ambassador in Washington on Friday morning.
State Department spokesman Tom Casey told reporters on Friday that the U.S. objected to the Israeli decision and “they heard our concerns.”
Regev said the U.S. didn’t immediately approach Israel to expedite the exit of the scholarship winners.

TITLE: England Win in Friendly
PUBLISHER: Agence France Presse
TEXT: PORT OF SPAIN, Trinidad — Jermain Defoe's double strike helped England cruise to a 3-0 friendly victory against Trinidad and Tobago on Sunday.
Fabio Capello must wish every match could be as easy as this stroll in the Caribbean sunshine at Port of Spain's Hasely Crawford Stadium.
England flexed their muscles through Gareth Barry's first international goal and a neat finish from Defoe within the opening 16 minutes.
But, while Defoe staked his first-team claim with another goal in the second half, Capello can have learnt little else because Trinidad were the most obliging of hosts. They allowed England the time and space to dominate without ever needing to raise the tempo much beyond walking pace.
Yet the prospect of flying thousands of miles for a meaningless game at the end of a gruelling season could have produced a less than committed display from Capello's team. So it is to the Italian's credit that England gave the match their full attention for as long as it took to ensure a comfortable victory.
They could have scored more but Capello will be happy enough that his team go into the more serious business of qualifying for the 2010 World Cup with two successive wins.
The absence of seven Manchester United and Chelsea players rested by Capello gave England's understudies a rare chance to shine.
Dean Ashton finally made his debut two years after a broken ankle denied the West Ham forward his first international appearance.
There was also a first start in 15 months for Tottenham defender Jonathan Woodgate, while Capello used his fourth captain in four matches as David Beckham took the armband for the 59th time.
In stifling heat approaching 90 degrees, Trinidad's hopes of a famous victory suffered an early blow. Kenwyne Jones chased a long ball over Rio Ferdinand and David James rushed out to tackle the Sunderland striker.
James won the ball but Jones crumpled into a heap and had to be stretchered off.
It took England 83 minutes to score against Trinidad when they last met in the 2006 World Cup.

TITLE: Yves Saint Laurent Dies at 71
AUTHOR: By Elaine Ganley
PUBLISHER: The Associated Press
TEXT: PARIS — Yves Saint Laurent, one of the most influential and enduring designers of the 20th century, will be remembered for empowering women through his fashion, a longtime friend and associate said.
Saint Laurent died Sunday at his Paris home after a yearlong battle with brain cancer, said Pierre Berge, Saint Laurent’s business partner for four decades. He was 71.
“Chanel gave women freedom” and Saint Laurent “gave them power,” Berge said on France-Info radio. Saint Laurent was a “true creator,” going beyond the aesthetic to make a social statement, Berge said.
“In this sense he was a libertarian, an anarchist and he threw bombs at the legs of society. That’s how he transformed society and that’s how he transformed women.”
In his own words, Saint Laurent once said he felt “fashion was not only supposed to make women beautiful, but to reassure them, to give them confidence, to allow them to come to terms with themselves.”
Saint Laurent was widely considered the last of a generation that included Christian Dior and Coco Chanel and made Paris the fashion capital of the world, with the Rive Gauche, or Left Bank, as its elegant headquarters.
From the first YSL tuxedo and his trim pantsuits to see-through blouses, safari jackets and glamorous gowns, Saint Laurent created instant classics that remain stylish decades later.
Designer Tomy Hilfiger said he was saddened by the loss of such a legendary talent.
“He was a creative genius who changed the world of fashion forever,” Hilfiger said in an e-mail to The Associated Press.
France’s Prime Minister Francois Fillon said Saint Laurent was a pioneer and a visionary who “contributed to France’s influence” in the world.
“Mr. Saint Laurent revolutionized modern fashion with his understanding of youth, sophistication and relevance. His legacy will always be remembered,” said Calvin Klein designer Francisco Costa.
Saint Laurent was born Aug. 1, 1936, in Oran, Algeria, where his father worked as a shipping executive. He first emerged as a promising designer at the age of 17, winning first prize in a contest sponsored by the International Wool Secretariat for a cocktail dress design.
A year later in 1954, he enrolled at the Chambre Syndicale school of haute couture, but student life lasted only three months. He was introduced to Christian Dior, then regarded as the greatest creator of his day, and Dior was so impressed with Saint Laurent’s talent that he hired him on the spot.
When Dior died suddenly in 1957, Saint Laurent was named head of the House of Dior at the age of 21.
He opened his own haute couture fashion house with Berge in 1962. The pair later started a chain of Rive Gauche ready-to-wear boutiques.
Saint Laurent’s simple navy blue pea coat over white pants, which the designer first showed in 1962, was one of his hallmarks. 
His “smoking,” or tuxedo jacket, of 1966 remade the tux as a high fashion statement for both sexes. It remained the designer’s trademark item and was updated yearly until he retired.
Also from the 60s came Beatnik chic — a black leather jacket and knit turtleneck with high boots — and sleek pantsuits that underlined Saint Laurent’s statement on equality of the sexes. 
He showed that women could wear “men’s clothes,” which when tailored to the female form became an emblem of elegant femininity.
Some of his revolutionary style was met with resistance. There are famous stories of women wearing Saint Laurent pantsuits who were turned away from hotels and restaurants in London and New York.
Saint Laurent’s rising star was eternalized in 1983, when the Metropolitan Museum of Art devoted a show to his work, the first ever to a living designer.

TITLE: Hollywood Studio Blaze
AUTHOR: By Greg Risling
PUBLISHER: The Associated Press
TEXT: UNIVERSAL CITY, California — Firefighters patrolled fire-scarred Universal Studios early Monday guarding against flare-ups while authorities wondered if the blaze that gutted some of Hollywood’s most famous backdrops was made worse because of low water pressure.
The massive fire broke out Sunday on a sound stage featuring New York brownstone facades around 4:30 a.m. at the 400-acre property, County Fire Chief Michael Freeman said.
It then destroyed the courthouse square featured in the film “Back to the Future” and an exhibit housing a mechanically animated King Kong that bellows at visitors on a tram.
At one point, the fire was two city blocks wide, and low water pressure forced firefighters to get reserves from lakes and ponds on the property. The blaze was contained to the lot, but burned for more than 12 hours before the final flames were extinguished.
“The water pressure situation was a challenge,” Los Angeles County Fire Chief Michael Freeman said. “This fire moved extremely fast.”
County Supervisor Zev Yaroslavsky said authorities would investigate the water problems to see if they reflect a larger shortfall in the area, which is part of his district.
“There’s no question that there was a lack of adequate water pressure at least in the perception of a lot of firefighters,” he said. “We’re going to find out what the problem was.”
The cause of the fire is under investigation. Damage estimates were not available, but costs are expected to move into the millions. 
A thick column of smoke rose thousands of feet into the air and could be seen for miles. “It looked like a disaster film,” said Los Angeles City Councilman Tom LaBonge.

TITLE: Russia’s Frolov Runs Away With Men’s Pentathlon Championship
PUBLISHER: Reuters
TEXT: BUDAPEST — Russia’s Ilya Frolov won the men’s modern pentathlon world championship on Sunday, easily beating the Czech Republic’s David Svoboda and Yahor Lapo of Belarus.
Defending champion and world ranking’s leader Viktor Horvath, who started the last event in second place, was forced to pull out of the 3 kilometer cross country race with a leg injury.
“After the riding event, I knew I have won,” Frolov said. “I’m the best runner (among pentathletes) in the world.”
Frolov, last year’s world championship runner-up, took an early lead with solid shooting and fencing scores and never looked back.
The day’s biggest surprise came before competition even started. 
The portable pool used in the swimming event cracked overnight, leaking all of its water and forcing a reshuffle of the schedule.
Repair crews fixed and filled the pool, but not in time for the swimming event, forcing organizers to bring riding ahead of swimming to gain time. 
The unusual schedule put two endurance events, swimming and running, back to back.
Saturday’s event was the last Olympic qualifying opportunity for pentathletes with the top three gaining automatic berths to compete in Beijing.
However, as the top two men had already qualified, only Lapo gained an Olympic spot from the medalists.
The vacant Olympic spots will be filled by the International Modern Pentathlon Association based on the world rankings list. In the team competition, Russia took gold ahead of Ukraine and Belarus.

TITLE: Ted Kennedy Has Brain Operation
PUBLISHER: The Associated Press
TEXT: DURHAM, North Carolina — U.S. Senator Edward Kennedy was set to undergo surgery Monday at Duke University Medical Center for his cancerous brain tumor and then faces chemotherapy and radiation treatment, his office said.
The 76-year-old senator was diagnosed last month with a malignant glioma, an especially lethal type of brain tumor. A statement from the Massachusetts Democrat’s office said the surgery would take place on Monday morning in North Carolina, by one of the nation’s top neurosurgeons, Dr. Allan Friedman, followed by chemotherapy and radiation.
Anthony Coley, a Kennedy spokesman, said the surgery was scheduled to begin around 9 a.m. and expected to last about six hours. He expects to remain at the North Carolina facility for one week to recuperate and then will begin further treatments at Massachusetts General Hospital and start chemotherapy.
“I am deeply grateful to the people of Massachusetts and to my friends, colleagues and so many others across the country and around the world who have expressed their support and good wishes as I tackle this new and unexpected health challenge,” Kennedy said in the statement. “I am humbled by the outpouring and am strengthened by your prayers and kindness.”
Kennedy said that over the past few days he and his wife, Vicki, “along with my outstanding team of doctors at Massachusetts General Hospital, have consulted with experts from around the country and have decided that the best course of action for my brain tumor is targeted surgery followed by chemotherapy and radiation.”
Kennedy said he selected a team of neuro-oncologists from Boston’s Massachusetts General Hospital and Duke University Medical Center.
After his treatment, Kennedy said, “I look forward to returning to the United States Senate and to doing everything I can to help elect Barack Obama as our next president.” Kennedy has endorsed Obama, the front-runner for the Democratic presidential nomination.

TITLE: Bolt Breaks 100-Meter Record
PUBLISHER: Reuters
TEXT: NEW YORK — Jamaican sprinters electrified the Reebok grand prix in New York on Saturday with Usain Bolt setting a new 100 meters world record and Veronica Campbell-Brown posting the fastest time of the year in the women’s event.
However, there was disappointment for China’s world record holder and Olympic champion Liu Xiang, who had to withdraw from the 110m hurdles due to a tight hamstring.
The 21-year-old Bolt announced he is a genuine force in track and field’s blue ribband event by streaking home in a time of 9.72 seconds, breaking the previous record of 9.74 posted by compatriot Asafa Powell last September.
Bolt, world championship silver medalist in the 200, exploded off the starting line to get an early jump on world champion Tyson Gay and left the American second in 9.85.
“I had the idea that I could run the world record,” Bolt told reporters after his stunning win. “I was pretty confident coming in here.
“I wasn’t looking for a world record but it came to me today and I’ll take it.”
Bolt’s brilliant performance crowned a great night for Jamaica as world champion Campbell-Brown ran the fastest women’s 100 of the year, winning her event in 10.91 seconds, two-hundredths of a second faster than American Allyson Felix’s 2008 best.
American Jenn Stuczynski had three tries at setting a women’s pole vault record but could not get over the bar set at 5.02 meters, winning the event at 4.80.
But the night belonged to Bolt, who waited out an hour’s delay to the start of the meet due to the threat of a thunderstorm, and a 45-minute suspension during the meet forced by thunder and lightning in the area.
Once the air cleared, Bolt struck.
At 1.96m tall Bolt has struggled with his start, but he timed this one beautifully after another runner’s false start, breaking out ahead of Gay and was never threatened.
“I was glad for the first false start,” Bolt said. “My first start wasn’t that good. I knew if I got Tyson on the start I’d get him.
“My coach said concentrate on the drive phase and that’s what I did.”
Earlier this month, Bolt had stunned the athletics world by running 9.76 in Jamaica, the second fastest time registered and only his third competitive race over the distance.
Gay was gracious in defeat.
“This is definitely great for the sport,” he said. “Obviously I have some work to do.
“Right now, it’s hats off to Bolt. Today was his day.”
Other top performances included world championship bronze medalist Wallace Spearmon winning the men’s 200 in 20.07 seconds, and Paul Koech of Kenya recording the fastest 3,000 steeplechase on U.S. soil with a time of 8:01.85