SOURCE: The St. Petersburg Times
DATE: Issue #1389 (53), Friday, July 11, 2008
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TITLE: Kvas Fights Onslaught Of Cola Imperialism
AUTHOR: By Paul Sonne
PUBLISHER: The Associated Press
TEXT: ZVENIGOROD, Russia — Poet Alexander Pushkin wrote that Russians need the drink like they need the air. No, it’s not vodka. It’s called kvas. And despite its humble folk origins, the fermented-bread drink brewed by Russians for more than a thousand years has become a booming multimillion-dollar industry.
Western imports like Coca-Cola and Pepsi once stifled the commercial kvas market. But today, a kvas revival has taken hold as Russia’s companies pitch it as a patriotic cola alternative, and Russians are repatriating their tastebuds with gusto.
The mildly alcoholic drink, which tastes a bit like a weak beer or wheaty cider, is riding a nationalist resurgence under leader Vladimir Putin, who has boasted of a new era of Russian pride and power.
Bottled kvas sales have tripled in the past three years, according to Moscow-based Business Analytica, and Russians will drink more than three liters (0.79 gallons) per person this year. In Moscow, cola’s share of the soft drink market dropped to 32 percent in 2007 from 37 percent in 2005, while kvas’ market share more than doubled over the same period to 16 percent in 2007.
But cola makers have a strategy: If you can’t beat kvas, brew it. Coca-Cola Co. introduced its own brand this May, the first time a non-Russian company entered the market as a key producer, and PepsiCo Inc. recently entered a distribution deal with a Russian kvas company.
“Kvas is getting more and more popular,” said Alexei Frolov, the marketing director for Ochakovo, Russia’s most popular brand of mass-produced kvas. “Something has changed in people’s minds.”
It’s not only Russians’ patriotic palate that has sparked kvas’ revival. New distribution and storage technologies — as well as a heavy dose of Madison Avenue-style marketing — have breathed life into the market, which has seen the entrance of three new major brands since 2004.
Once sold only during the summer out of wheeled yellow tanks the size of beer barrels, the drink is now bottled, canned and shipped across the country. Unlike its predecessor, the new kvas does not spoil quickly, and Russians can now buy it year round.
While Russians are drinking more kvas, some are enjoying it less. The new mass-produced brands have left many longing for the bread brew of the old days.
To find authentic kvas, connoisseurs come to this town about an hour west of Moscow, where in a basement beneath the onion domes of the town’s fifteenth-century Orthodox monastery, a huge refrigerator chills vats of the muddy brown brew.
For more than 600 years, monks at the Savvino-Storozhevsky Monastery have been brewing kvas for themselves, and seven years ago they started selling it. Unlike mass-produced varieties, the monastery’s kvas has no preservatives and spoils within five days.
As the monks say, it’s “live.” They sneer at competitors with their artificial preservatives.
“It is not profitable for them to make live kvas,” Father Ignaty said of Russia’s commercial kvas producers. “So they’re forced to poison people.”
Commercial brewers, meanwhile, pitch their product as the healthy patriotic alternative to unhealthy Western soft drinks.
That’s how kvas company Nikola — literally — made a name for itself. Nikola, which means “not cola” in Russian, launched an “anti cola-nization” campaign in Moscow last year that billed its kvas as the Russian alternative to “cola-nist” soft drinks.
The company ran ads featuring look-alikes of Michael Jackson and Kiss singer Gene Simmons scaring Russian children and bathers while holding up cola. Then the look-alikes reveal themselves to be “real Russians” and begin drinking kvas.
“No to cola-nization. Kvas. To the health of the nation,” the voiceover says.
The pitch appears to have worked. Launched in 2005, Nikola soon became Russia’s second-largest kvas seller and retooled the traditional image of the drink.
“In our family we have a full ban on Coca-Cola, for both the kids and the adults,” Olga Beglyarova said, after purchasing a bottle of fresh kvas from the monastery.
Coke and other soft-drinks, she claimed, “spoil and harm your health.”
Even Coca-Cola brews its kvas only with Russian ingredients, using a recipe that, according to spokesman Vladimir Kravtsov, tastes “as much as possible like the kvas sold during Soviet times.”
Yet despite their best efforts, the mass producers can’t beat certain selling points of the Zvenigorod kvas. As Father Antony said, his brew is “blessed by God.”
TITLE: Russia Flexes Muscles, U.S. Urges Calm
AUTHOR: By Guy Falconbridge and Arshad Mohammed
PUBLISHER: Reuters
TEXT: MOSCOW/TBILISI — Russia said on Thursday its air force fighters had flown over the breakaway Georgian region of South Ossetia to prevent an attack by Georgian forces.
The overflight was ordered less than 24 hours before Secretary of State Condoleezza Rice arrived in Georgia in a show of support for the ex-Soviet state, which wants to join NATO.
Georgia denounced the flights as an unprecedented aggression and Rice also admonished Russia, saying “it needs to be a part of resolving the problem and solving the problem and not contributing to it.”
“The violence needs to stop and whoever is perpetrating it, and I have mentioned this to the president, there should not be violence,” she told a joint news conference with Georgian President Mikheil Saakashvili. Russia supports separatists in two Georgian breakaway regions and the Russian foreign ministry said its jets had overflown South Ossetia because it believed Georgia was preparing to attack the rebel region.
“The need arose to take urgent and active measures to prevent bloodshed and keep the situation within peaceful bounds,” it said in a statement.
“In order to clarify the situation, aircraft of the Russian air force carried out a brief flight over the territory of South Ossetia,” it added.
“As subsequent events showed, this step allowed (us) to cool hot heads in Tbilisi and prevent events developing along military lines, the likelihood of which was more than real.”
It was Russia’s first admission for at least a decade that its air force has flown over Georgian territory. Georgia has alleged in the past that Russia trespassed in its airspace but Moscow has always denied it.
Georgian Deputy Foreign Minister Giga Bokeria told Reuters: “This is an unprecedented acknowledgement of aggression and violation of a sovereign state’s airspace.”
Tension has been rising in Georgia’s breakaway regions of South Ossetia and Abkhazia. They are the focus of friction between the pro-Western government in Tbilisi and neighboring Russia, which supports the separatists.
Russia accuses Georgia of fuelling tension in the region and says its role — which has included sending in extra troops this year — is intended to defend locals from Georgian aggression.
In the worst violence in months, a bomb in a cafe in Abkhazia killed four people on Sunday and separatists in South Ossetia said two people were killed last week in a heavy exchange of fire with Georgian forces.
Russia said there was strong evidence Georgia’s government was behind the violence, though Tbilisi denied that.
The conflicts over the breakaway regions could hinder Georgia’s progress towards NATO membership, and they sow instability in a country the West views as a vital transit route for oil and gas exports from the Caspian Sea.
Saakashvili said Russian fighter jets had come close to the Georgian capital late on Tuesday.
“Maybe they wanted to salute Secretary Rice,” he said. “I don’t know ... This is a very worrisome development.”
He said Russia’s behavior was a reaction to NATO expansion and an increasing U.S. presence in the region.
“Looks like some people did not notice that the Cold War is over,” he said. “The main point is that Russia ...no longer acknowledges the jurisdiction of Georgia towards an essential part of its territory.”
South Ossetia and Abkhazia broke away from Tbilisi’s rule after wars in the 1990s. Russia says Tbilisi wants to use force to re-establish its control.
Rice also reaffirmed Washington’s support for Georgia’ bid to join NATO, an ambition that has angered Russia. Alliance members will decide in December whether to give Georgia a formal timetable for accession.
TITLE: Peter the Great’s Ship Discovered in Baltic Sea
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: Archaeologists have discovered the wreck of a Russian battleship designed by Peter the Great in Amsterdam and which played a key role in a 1719 victory over Sweden in a war on the Baltic Sea.
A team including professional archeologists, divers, a film-producer and a cameraman located the 54-gun “Portsmouth” battleship at a 12-meter depth in the waters off Kotlin Island near Kronshtadt last week during final stages of a three-month mission as part of the “Secrets of the Sunken Ships” project.
The team was back on dry land on Tuesday.
“We are currently lobbying for an immediate raising of the wrecks to serve both as a museum and as objects for research,” said Andrei Lukoshkov, head of the research team, adding that the discovery is unique because the ship, which was designed by Peter the Great, disappeared with another ship, the “London,” on the way back to the port of Kronshtadt.
However, pending further studies of the wrecks, the archaeologists are yet to establish if wreckage found near the “Portsmouth” also belongs to the “London.”
“We have so many collections that we need to establish a museum of marine archaeology and shipbuilding,” said Lukoshkov.
He said the Kronshtadt district administration has signaled support for the scheme but has yet to reveal the action plan.
Lukoshov said a total of 11 shipwrecks, including the remains of the “Oleg,” a cruiser built in St. Petersburg in 1901-1903 but sunk by an English torpedo on July 8, 1919, and those of an aircraft resembling Li-2 model belonging to the First Long Range Aviation Division Guard downed in 1944, have been found during the three-month mission.
Others include unidentified wreckage of a European mast ship, a German boat “Frida Horn” registered at Schlezwig, both tracked to the second half of the 19th century, and a well-preserved earlier version of a mainly iron battleship equipped with rifles.
Among the tasks carried out by the expedition team was the continuation of a study of the badly damaged 16th century 40-meter-long mast-ship discovered last year, belonging to the same class as the famous Swedish “Vasa” battleship also discovered last year. “Vasa” is believed to have sunk between 1580 and 1610 during Boris Gudunov’s reign when the Swedes had conquered the Northwestern part of Rus, the ancient state that predates Russia.
The recent breakthrough brings to a total of about 30 wrecks of warships discovered in the “Secrets of the Sunken Ships” project. Others include the “Hanhoot,” built in 1892, the “Jigit” and the “Haezdnik,” both built in 1856, making a total of about 50 wrecks including the merchant and passenger ships in the Gulf of Finland, River Volkhov and Lake Ladoga.
Meanwhile, at the behest of the museum of the Siege of Leningrad (Blockade Museum), the archaeologists also carried out a special expedition in the Neva River in search of a boat that went down during the Nazi blockade of the city. They have reportedly located an unspecified number of tanks and arms on the Neva riverbed.
www.baltic-sunken-ships.ru
TITLE: British PM Calls Litvinenko Case ‘Unacceptable’
PUBLISHER: Agence France Presse
TEXT: LONDON — Prime Minister Gordon Brown said Thursday he told Russian President Dmitry Medvedev at the G8 summit that the issue of ex-spy Alexander Litvinenko’s death in London “would not be closed.”
Giving his account of their first face-to-face meeting, which came amid cool relations between Britain and Russia, Brown said he had told Medvedev that the current stalemate over the case was unacceptable.
Russian officials said after the meeting in Japan this week that Medvedev told Brown in frank talks that he wanted to normalise relations between the two countries.
Brown told lawmakers at the House of Commons: “I made it clear to him that the Litvinenko issue would not be closed.
“We have justice to do on the part of someone who was murdered on British soil and it is not an acceptable position to be where we are.”
Litvinenko died in a London hospital in 2006 from radiation poisoning which it is thought he ingested through a cup of tea.
Britain wants Russia to extradite lawmaker and ex-KGB agent Andrei Lugovoi to face charges, but Russia has refused.
TITLE: Investigations Chief Denies Running an Illegal Business
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Investigative Committee head Alexander Bastrykin has denied accusations that he is running an illegal business in the Czech Republic.
In an interview published Wednesday in the Argumenty i Fakty weekly, Bastrykin called a report, published last week in Moskovsky Komsomolets about a Prague-based real estate business he purportedly owns, a “crude lie that deceives readers.”
Neither he nor any members of his family has ever run businesses in Russia or abroad, Bastrykin told the newspaper.
In the June 2 report, muckraking journalist and State Duma Deputy Alexander Khinshtein claimed that Bastrykin is registered as co-owner of a Czech company called LAW Bohemia, thus putting him in violation of Russian law.
Published along with the article was a scanned copy of a trade registry entry from the Prague City Court, which listed Alexander Bastrykin and Olga Alexandrova as the company’s co-owners and with the same St. Petersburg address. Alexandrova is Bastrykin’s wife and the mother of his two children, Khinshtein wrote.
Khinshtein on Wednesday defended his report and suggested that Bastrykin either sue him or tender his resignation.
“Alexander Ivanovich [Bastrykin] is a lawyer who knows the two real mechanisms of defending your honor and facts,” Khinshtein said, Interfax reported.
Khinshtein said it was “unclear” to him why Bastrykin “stayed quiet for a week” after the report was published.
A semiautonomous body created last year, the Investigative Committee has repeatedly clashed with the Prosecutor General’s Office, under whose auspices the committee formally operates.
Bastrykin has publicly sparred with Prosecutor General Yury Chaika over a number of high-profile cases in a standoff that many believe is closely connected with a battle for influence between powerful, competing clans close to Prime Minister Vladimir Putin.
TITLE: In Brief
TEXT: Avrora Collision
ST.PETERSBURG (SPT) — A leisure boat collided with the Cruiser Avrora in the early hours of Thursday morning when the helmsman lost control of the vessel, Interfax reported.
The boat was carrying two people, a man and a woman who both sustained serious injuries. The female passenger was treated by the ambulance crew on the spot, while the male driver was delivered to a hospital in condition.
The damage to Avrora, the historic war ship that fired the shot that started the Russian Revolution moored in the Bolshaya Nevka river, was limited to several scratches on its side and the ancor chain.
A preliminary investigation has shown that the helmsman of the leisure craft exceeded the speed limit and was sailing in a restricted area.
Airport Bomb
ST.PETERSBURG (SPT) — Bomb disposal experts destroyed an explosive device discovered during construction works on a landing strip at Pulkovo airport, Interfax news agency reported.
The bomb, which dated from World War II, was discovered on Wednesday morning and destroyed at 4.40 pm.
Litter Bugs Beware
ST.PETERSBURG (SPT) — Several litter-busting guards will be posted along the fence surrounding the Pavlovsk Palace estate and its park to protect the area from environmental pollution.
“So far we only had one patrol crew in our disposal but clearly this is not enough,” Marina Flit, the museum’s chief curator, told reporters on Wednesday.
During the past 15 years the amount of garbage left my visitors in the park has grown by several time, she said.
The guards will patrol the estate on regular basis round the clock.
TITLE: President Voices Distress Over Plans for U.S. Shield
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: RUSUTSU, Japan — President Dmitry Medvedev said Wednesday that Russia was “distressed” by a U.S. deal to place parts of a missile-defense shield in the Czech Republic and promised to respond with “concrete steps.”
Medvedev also balked at a G8 proposal to impose sanctions on Zimbabwe, reflecting Russia’s reluctance to punish governments for votes that the West describes as not free and unfair — a description that it has repeatedly heard about its own elections.
As a three-day Group of Eight summit wrapped up, it appeared that the mild-mannered Medvedev was adhering closely to the course laid out by his tough-talking predecessor, Vladimir Putin. He refused to give an inch in one-on-one talks with other G8 leaders, and his public remarks echoed those made by Putin in the past — even if that left Russia at odds with the other G8 countries. Medvedev’s three top aides at the summit — foreign aide Sergei Prikhodko, economic aide Arkady Dvorkovich and deputy chief of staff Alexei Gromov — were formerly aides to Putin.
The U.S. missile-defense deal, signed Tuesday, soured the mood for Russia at the summit’s final day, with Medvedev saying Russia was “greatly distressed” with Prague’s approval of Washington placing elements of a shield on its territory.
“This does not suit us. And while we, of course, won’t whip up any kind of hysteria, we will consider concrete steps,” Medvedev said, without elaborating.
Putin had warned that Russia would point nuclear missiles at the Czech Republic and Poland, which is also considering hosting components of the missile-defense shield, if they reached an agreement with the United States.
A senior Polish official said Wednesday that Medvedev’s reaction underlined the need for Europe to seek closer security ties with the United States. “It is absolutely unacceptable for one country to threaten another for acts that are not aggressive in character,” presidential aide Michal Kaminski told reporters in Warsaw, Reuters reported. “The eventual construction of the shield is not directed against Russia.”
On Zimbabwe, Medvedev’s stance sharply diverged from the position of the United States and Britain, which back sanctions against what British Prime Minister Gordon Brown called “an illegitimate regime with blood on its hands.”
But after much deliberation Medvedev joined a summit declaration calling for “financial and other measures” against President Robert Mugabe’s officials responsible for violence. He said the measures would not necessarily be sanctions.
The stance of Russia, which does not have any considerable economic interests in Zimbabwe, reflects its apparent unwillingness to go after governments for elections criticized by the West. The March election that brought Medvedev to power has been described in the West as tightly controlled and stage-managed.
On Tuesday, Russia was of two minds about the Zimbabwe declaration, with the country’s G8 envoy, Alexander Pankin, warning that meddling in Zimbabwe’s internal affairs might trigger an unpredictable outcome.
It remained unclear Wednesday night why Russia chose to support the strongly worded statement, but Brown’s spokesman James Roscoe said graphic images of a Zimbabwean driver tortured to death had been shown to the G8 leaders. Britain’s Daily Mail reported on its web site that Medvedev “dramatically caved in” after Brown showed him the horrific pictures of a mutilated and burned corpse of a driver for Zimbabwe’s opposition Movement for Democratic Change. Roscoe, however, said Brown did not specifically show the pictures to Medvedev.
Brown called Zimbabwe “a developing tragedy” at the center of the summit’s agenda and said Britain and the U.S. had circulated a draft resolution calling for sanctions.
The declaration that was reached “shows that the whole of the international community is now not prepared to accept an illegitimate government,” Brown told reporters Wednesday.
Jasuo Fukuda, Japan’s prime minister and the summit’s host, used more cautious language, saying, “Sanctions would be possible. They would be conceivable as well.”
Medvedev, speaking hours later, said, however, that the declaration was meant to express concern but that there was no agreement on concrete measures. Medvedev only addressed the issue when asked by a reporter to comment.
In contrast, Brown started and finished his news conference with his statements on Zimbabwe. It is now up to the United Nations to “make the pressure of the world clear,” Brown said.
The UN Security Council is expected to vote in the upcoming days on a draft resolution calling for sanctions over election violence in Zimbabwe.
The G8 gathering, Medvedev’s first international outing as president, has become the summit of many firsts.
A summit of BRIC nations took place within the framework of the G8 talks, with Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh, Brazilian President Luiz Inacio Lula da Silva and Medvedev agreeing to coordinate economic activities and take steps to tackle a global food crisis.
The 34th summit also was the biggest ever, with leaders of 16 non-G8 states participating in the talks. Seven African heads of state were invited for so-called outreach sessions.
Among the other guests were United Nations Secretary-General Ban Ki-moon, World Bank President Robert Zoellick and European Commission President Jose Manuel Barroso.
For the first time, the G8 pledged as a group to halve emissions worldwide by 2050, although it has yet to agree on a midterm timeframe. The G8 nations agreed that major developing economies would need to act as well for the climate change talks to bear fruit, but countries like China refused to endorse that vision.
On energy security, the leaders agreed on the need for “increased production and refining capacities,” a better balance between supply and demand and increased transparency of the energy markets.
Medvedev said, however, there would not be any easy solutions in the energy sphere. “New sources of energy are not appearing very quickly, and there are not enough old sources of energy,” he said.
TITLE: Police Seize Reputed Mobsters
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — Police used a dramatic helicopter raid to detain dozens of reputed crime bosses gathered on a yacht to settle a rift between rival dons, an Interior Ministry spokeswoman said Wednesday.
Most of the more than three dozen suspected gang leaders detained in the Monday raid at a reservoir outside Moscow were subsequently released because of a lack of evidence, the ministry spokeswoman said.
Among those detained, according to media reports, was Tariel Oniani, an ethnic Georgian with a reputation as one of the most powerful crime bosses in the Soviet Union.
The ministry spokeswoman confirmed that 39 suspected crime bosses, known as “thieves-in-law,” were detained in the raid but declined to give any other details, including whether Oniani was among those who had been freed.
The thieves-in-law make up an infamous fraternity which maintains its own code of behavior, laws, courts, leaders and initiation rites, and which disdains any institution other than its own. The suspects were about to have dinner when police commandos rappelled from the helicopter Monday onto the yacht, which was floating on the Pirogovskoye Reservoir, several kilometers northeast of Moscow, Interfax reported.
Several of the suspects leapt off the deck in order to make a swimming escape, but the cold water forced them to climb back aboard, Kommersant said.
Police seized the vessel and ordered the captain to bring it to shore, where police agents detained them.
The reputed crime bosses had gathered on the yacht to discuss the rift between Oniani and fellow purported mafia don Aslan Usoyan, also known as “Grandpa Khasan,” Kommersant said.
The report cited a police officer as saying the dispute could develop into a bloody conflict reminiscent of the gang wars of the 1990s. Usoyan gathered his supporters — including Vyacheslav Ivankov, known as Yaponchik — for a May 2 meeting in Krasnodar, where they discussed how to seize control of government money allocated for the 2012 Winter Olympics in Sochi, Kommersant reported.
TITLE: Wife Kills Husband With Bed
PUBLISHER: Reuters
TEXT: A St. Petersburg woman killed her drunk husband with a folding couch, Channel Five television reported Wednesday. The St. Petersburg channel said the man’s wife, upset with her husband for being drunk and refusing to get up, kicked a handle after an argument, activating a mechanism that folds the couch up against a wall.
The couch, which doubles as a bed, folds up in order to save space. The man fell between the mattress and the back of the couch, Channel Five quoted emergency workers as saying. The woman then walked out of the room and returned three hours later to check on what she thought was an unusually quiet sleeping husband. Police refused to comment.
St. Petersburg’s emergency service said a private rescue service removed the man’s body.
Video on the television channel’s web site showed emergency workers sawing away the side panels of a couch to remove a man in his underwear lying headfirst between the cushions.
Emergency workers said the man died instantly.
TITLE: IES Seeks $1Bln for Its Non-core Assets
AUTHOR: By Nadia Popova
PUBLISHER: Staff Writer
TEXT: PERM — Viktor Vekselberg’s Integrated Energy Systems will seek to raise $1 billion from the sale of non-core electricity assets in the next six months to a year, general director Mikhail Slobodin said.
“We already have several serious offers for our non-core assets,” Slobodin told reporters as he opened a new turbine at a power station in the Perm region on Tuesday.
“The speed of the sales will depend on the situation in the market,” he said.
IES, also known by its Russian acronym KES, is the biggest private player on the country’s electricity sector, and is now the country’s biggest electricity generator after Gazprom.
IES’s non-core assets include distribution grids, construction and consulting units, while the core assets include generating, as well as electricity, heat and gas marketing units.
IES also holds 75 percent in Russian Communal System, the country’s biggest private housing utility, which it considers a core asset.
IES’s grid assets in the Urals, Volga, Central and Northwest federal districts, as well as in St. Petersburg-based Lenenergo, where IES holds a 25 percent stake, are worth some $650 million, said Matvei Taits, a utilities analyst at UralSib.
“Now that the grid sector is formed, it will be interesting for foreign investment funds,” Taits said.
Irina Filatova, a utilities analyst at Broker Credit Service, put the grid assets’ value at $1.2 billion.
Electricity infrastructure firm EnergoStroiEngineering, which has offices in Germany, Morocco and Uzbekistan, will be sold off too, and may go for more than $100 million, Slobodin said Tuesday.
Filatova said the firm was worth about $60 million. Power engineering firms such as E4 and state-run Tekhpromexport might be interested in it, Filatova said.
Power sector investor Halcyon Advisers said Wednesday “it was currently not holding any negotiations with IES.”
Prosperity Capital Management, another portfolio investor in the sector, declined to comment Wednesday.
E4 did not respond to a request for comment, while no one at Tekhpromexport was available to answer questions.
IES bought its generation assets in TGK-5, TGK-6, TGK-7 and TGK-9 from Unified Energy System, which was wound up July 1 after a three-year privatization program.
The investment obligations that companies took over from UES were too tough, Slobodin said.
“The economy needs new capacity and we are obliged to build it, which is not a way to earn money, and this is a systematic problem,” Slobodin said.
“The level of profit today is absolutely incomparable to the money we paid for the TGKs,” Slobodin said.
Giving an example, he said that if he paid $600 per kilowatt, buying a generating company, he gets a profit of $5 per kilowatt.
Another problem is that 60 percent of the country’s consumers have no meters for heat consumption, Slobodin said, adding that IES was talking to the government about the issue.
The main problem, though, was outdated equipment, Slobodin said.
“Russia needed the [equivalent of a] Superjet in Russian electricity machine-building,” referring to Sukhoi’s new midsized jet, the first new aircraft produced in the country since the Soviet collapse.
High-capacity turbines for the country’s power stations are currently bought abroad.
“We do need the new turbines, as the last of the current equipment is a few decades old and needs replacing,” Slobodin said.
TITLE: Listings Abroad Face New Curbs on Energy
AUTHOR: By Max Delany
PUBLISHER: Staff Writer
TEXT: MOSCOW — New rules will slash the percentage of shares Russian energy and mining companies can sell on stock exchanges abroad and impose less severe restrictions on other companies, the Federal Service for Financial Markets announced Wednesday.
The regulations will bolster the government’s twin aims of securing domestic control over the country’s strategic sectors and transforming Moscow into a major financial center over the next decade.
Russian firms involved in the large-scale extraction of oil, gas and metals will from now on face a stringent 5 percent limit, a radical cut from the current blanket level of 35 percent for all companies for listing abroad. The new cap for companies working in other strategic sectors will be 25 percent.
All other companies looking to list shares abroad will now have to cope with a 30 percent limit, once the new regulations come into effect in 10 days.
“This is a significant move,” said Yelena Krasnitskaya, a corporate governance analyst at Troika Dialog. “The rules follow the party line — the state wants to play the main role in the strategic companies.”
The news is positive for domestic bourses but could potentially be bad news for Russian companies looking to float new depositary receipts abroad, Krasnitskaya said.
Firms that have already made placements or received approval to float will not be affected by the new rules.
But coming hot on the heels of the approval in May of strategic sectors legislation, outlining which parts of the economy are off-limits for foreigner investors, the markets are unlikely to panic at the news. “Investors swallowed that bullet, and I don’t expect a massive reaction on the markets,” Krasnitskaya said. “I wouldn’t overestimate the dramatic consequences of these rules.”
President Dmitry Medvedev and his predecessor, now-Prime Minister Vladimir Putin, have pledged to turn the country into a leading financial hub over the next few years and these rules will help boost the liquidity of Russia’s domestic markets.
At a televised meeting with Putin on Wednesday, Federal Service for Financial Markets chief Vladimir Milovidov insisted that shares in Russian companies can and should be traded on domestic markets. “We have all the conditions in place to ensure that these shares are traded in rubles, in Russia,” he said.
Given the growth of Russian markets in recent years, some investors agreed with Putin’s assessment that Moscow could soon become a financial hub. “A few years ago, it’d be a good day if $50 million were traded in a day. Now that amount is traded in one second,” Ryan Dodd, partner at DBM Capital Partners, a fund that focuses on precious metals.
After a slow start to the year for Russian initial public offerings, some argued that these rules could put dampeners on IPOs being considered. “In the short term it will have no effect, but in the medium term it could slow down the pace of the IPO pipeline,” said Chris Weafer, chief analyst at UralSib.
A secondary placement of preferred shares planned by Mechel will go ahead unaffected, Reuters reported, citing sources close to the offering.
Despite fears that, given the current global liquidity squeeze, further caps on Russian companies could damage their prospects of attracting investment, Russian markets are able to take up the slack, Krasnitskaya said. “There is enough liquidity in Russia — the domestic market is deep enough,” she said.
Staff Writer Miriam Elder contributed to this report.
TITLE: Central Bank Allows Ruble to Edge Upward
AUTHOR: By Yelena Fabrichnaya
PUBLISHER: Reuters
TEXT: MOSCOW — The Central Bank allowed the ruble to strengthen Wednesday for the second time in a month, and dealers said they thought it was not the last time the regulator would use its heavy weaponry to combat inflation.
The ruble was trading at 29.42 versus the dollar/euro basket, 0.3 percent stronger than 29.51 seen previously as the Central Bank’s support level, before slightly easing later to 29.48.
“There is no Central Bank support, so the ruble has strengthened,” said Alexander Karpov, from bank Zenit. “So far, nobody knows where the Central Bank’s new support level is. Usually the Central Bank moves it by 10 kopeks.”
The bank had supported the ruble within a corridor of 29.6 to 29.9 since August 2007 but widened it last month.
In June, it allowed the ruble to strengthen to 29.51, saying it had widened the corridor symmetrically in both directions, but market players said they expected the ruble to trade only near the stronger end of the corridor.
Ruble appreciation makes prices of imported goods cheaper, thus helping reduce inflation, but Russian export industries warn against excessive appreciation, which would make them less competitive on international markets.
The country’s inflation, running at an annualized rate of 15 percent, has become the government’s key headache.
On Wednesday, the State Statistics Service said consumer prices grew 0.2 percent in the first week of July, compared with 0.3 percent a year ago. Prices have already risen 9 percent this year through Monday.
It was, however, a rare week in 2008, when the consumer price index grew slower than in 2007. Some dealers said it might be linked to the ruble appreciation in June.
Government officials blame inflation on soaring global food prices, while other economists also point to large state spending ahead of national elections and high net private capital inflows.
Yevgeny Nadorshin, from investment bank Trust, said he believed the Central Bank had chosen the right time to allow the ruble to appreciate.
“It is a relatively quiet period. It is not an optimistic mood dominating the markets, and thereby foreign speculators, which the bank is fearing most, take a cautious approach toward the national currency,” he said.
“The Central Bank’s goal to have inflation below last year’s level is still feasible. My calculations show that to bring inflation to below 11.9 percent, it will need to let the ruble appreciate further by no more than 1 percent,” he said.
Last year, the bank let the ruble appreciate twice in July and at the beginning of August.
TITLE: Deputy Prime Minister Says State Is Backing BP in Russia
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — Deputy Prime Minister Igor Sechin said Wednesday that the state supported BP’s presence in the country and that the Cabinet would gradually seek to remove some government officials from Rosneft’s board.
Government office-holders on the boards of state-controlled companies came into focus last week when President Dmitry Medvedev said most of them should relinquish their seats to independent directors.
Four government officials sit on Rosneft’s nine-member board, including company chairman Sechin.
Rosneft will not make any urgent replacements, Sechin said at a news conference. He declined to say whether any changes would take place before next year’s annual shareholders meeting.
“Such work will be done carefully, so as not to damage [the company’s] capitalization,” he said.
Rosneft has three independent directors and two other government representatives, Rosneft chief executive Sergei Bogdanchikov and Andrei Reus, chief executive of state-owned Oboronprom.
Medvedev said that even fully state-controlled companies should have at most two government representatives on their boards, although he added that one of them must be chairman. Sechin also reiterated the government’s stated intention to keep out of the ongoing dispute between BP and its Russian partners in TNK-BP. He said officials had no prejudice against the British oil major.
“Overall, we support the work of BP in Russia,” he said. “It has introduced new corporate government principles, technology, personnel training and transparency, which makes us happy.”
He said Rosneft was looking at expanding its cooperation with BP, which bought $1 billion worth of shares during Rosneft’s initial public offering in 2006.
Sechin also said the government was studying additional measures to encourage oil companies to increase output. Prime Minister Vladimir Putin and Cabinet ministers will discuss the proposals in the northern port of Arkhangelsk on Friday, he said.
In addition to proposed tax breaks for the industry that are currently being considered by the State Duma, the Cabinet could approve more incentives by the end of this year, including construction of roads and energy facilities near new fields, Sechin said.
With the country’s oil output falling since the start of the year, Putin made a tax relief package for the industry one of his first priorities after becoming prime minister in May. Producers complained of rising costs at aging fields and the need to increase investment to develop distant, new fields.
TITLE: Nazarbayev’s Astana Looks Back, 10 Years On
AUTHOR: By Maria Golovnina
PUBLISHER: Reuters
TEXT: ASTANA, Kazakhstan — If there is one thing Kazakh President Nursultan Nazarbayev cherishes as part of his legacy, it is the gold-plated extravagance of his new capital, Astana.
Tucked away in the empty heartland of Eurasia, Astana was little more than a windswept provincial town a decade ago, when Nazarbayev declared it the capital of his vast, oil-rich state.
Now, with its grandiose, if somewhat surreal, skyline dominating a barren landscape, Astana stands as a monument to Nazarbayev’s two-decade rule.
With gold-tinted tower blocks, oddly shaped skyscrapers and a giant pyramid with an opera house, Astana also offers a peek into what a country can do with billions of dollars of oil wealth.
In power since 1989, Nazarbayev dreamed up Astana’s creation — Kazakhstan’s answer to Dubai and Brasilia — in 1994 as a symbol of independence and a way to give a sense of national identity to his people.
Like other post-Soviet countries, Kazakhstan endured years of chaos in the 1990s, but its economy is now booming thanks to billions of dollars of foreign investment. Five times the size of France but populated by only 16 million people, it wants to copy the experience of Gulf states that have grown rich on the back of oil since the 1970s.
It is also at the center of global oil diplomacy, as Europe courts it as an alternative to Russian energy supplies.
Nazarbayev, however, has been criticized by rights groups for tolerating little dissent and backsliding on democracy.
Over the weekend, he was at the center of lavish festivities where he was unlikely to hear any critical voices: the city was holding its 10th anniversary celebrations, culminating conveniently on Sunday, Nazarbayev’s 68th birthday. Regional leaders including President Dmitry Medvedev came for the events.
More than $12 billion has been invested in Astana, which is growing fast in line with a plan laid out by Japanese architect Kisho Kurokawa.
And some of Astana’s once skeptical 600,000 residents have finally come to terms with their city’s flashy image.
A walk around Astana, once a tiny outpost founded by Russian troops, reveals a city of magnificent proportions, with some of its austere buildings and abstract statues harking back to the brutal grandeur of Stalinist architecture.
“Behind his back we call [Nazarbayev] the chief architect of Astana,” said Bair Dosmambetov, a senior official who oversees Astana’s construction. “We always seek his advice.”
The official hero worship is also explicit.
“Goal: position the first president of the Republic of Kazakhstan as a leader of global proportions,” said the city’s web site, explaining the gist of weeklong celebrations that include massive theatrical shows and concerts.
Somewhat mystifyingly, it also lists the “sacralization of the capital” as another key goal. The official cost of celebrations has not been made public.
Kazakhstan’s military march-style anthem, its lyrics co-authored by Nazarbayev, blared across Astana and scores of people waving blue-and-yellow national flags strolled through its streets as the festivities started.
At one event, a flag raising ceremony attended by Nazarbayev, a crowd cheered and chanted “Kazakhstan! Kazakhstan!” as the president spoke.
“We’ve lived through many challenges,” he said. “One of the challenges was to build a new country. … Our country has become respectable. Astana has become the center of Eurasia.”
But away from the rallies and speeches, there was little cause for celebration in Astana’s poorer districts, where people have yet to see the benefits of wealth, like millions of others outside Astana and the old capital, Almaty.
Spiraling food inflation is threatening to undo the gains built up through economic expansion of around 10 percent per year since 2000 in a country where around one-quarter of the population still lives in poverty, according to United Nations figures.
In one district, dotted by crumbling huts and bisected by a rough dirt track, people said their only source of water was a rusty metal pipe sticking out of the ground. “This celebration isn’t for us but for the elite,” said Gulzhamal, who refused to give her surname.
“We have to solve our own problems, figure out how to buy bread, how to buy clothes for our children, how to support them. We simply have no time for celebration.”
Over past years, Nazarbayev has refused offers from his officials to rename the city Nursultan, saying it was inappropriate while he was alive.
But he has continued to bask in lavish praise.
“Without any doubt,” Almaty Mayor Akhmetzhan Yesimov said, “The driving force behind this success is one epic figure — the head of state, Nursultan Nazarbayev, and his political will.”
TITLE: Pipeline Seeks Approval
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — Gazprom-led Nord Stream, a controversial pipeline that will ship Russian gas directly to Europe, can only seek financing once it gains environmental approval from neighboring countries, the consortium’s financial director said Wednesday.
The consortium will approach up to 30 banks about financing 70 percent of the 7.4 billion euro ($11.6 billion) pipeline, Paul Corcoran said, one day after the European Parliament demanded the project undergo stricter environmental scrutiny before construction starts.
Gazprom says Nord Stream, which will ship Russian gas 1,200 kilometers under the Baltic Sea to Germany, is key to ensuring Europe’s energy security, by filling rising demand and bypassing troublesome former Soviet transit countries.
Yet countries bordering the Baltic, including Poland, Estonia and Lithuania, as well as Denmark and Finland, have raised objections to the route on political or environmental grounds. About a dozen countries must approve an environmental impact assessment to be drawn up by the firm before it moves ahead with financing and construction.
“We can’t start discussions [with commercial banks] until the EIA is in its final form, which we expect in the fourth quarter of this year,” Corcoran said at the consortium’s Moscow office.
Corcoran said the consortium, based in Zug, Switzerland, has begun preliminary discussions with export credit agencies in Italy and Germany. They would also approach Russia’s state-run Development Bank, he said.
Dresdner Kleinwort, ABN Amro and Societe Generale are advising the consortium — which is owned 51 percent by Gazprom, 20 percent each by Germany’s E.On Ruhrgas and BASF Wintershall, and 9 percent by Dutch Gasunie — on project financing, he said. The consortium’s shareholders would provide pro rata financing for the additional 30 percent, and had already put forward 1.3 billion euros, he added.
Nord Stream is hoping to pump 27.5 billion cubic meters of gas per year from 2011 and 55 bcm from 2012, when a second branch is to come on line. Gazprom has long-term contracts for 21 bcm.
The consortium has faced delays and increased cost estimates on rising metals prices and environmental concerns. It has again pushed back its estimate of first gas delivery, from the second to the fourth quarter of 2011.
A tender for steel on the second pipeline branch has yet to be awarded, but Corcoran said rapidly rising prices for steel, iron ore and nickel had been figured into the budget.
He said the group already spent 100 million euros on environmental and scientific surveys of the Baltic and that the total bill could reach 150 million euros.
“We’ll be in constant contact with the national governments [along the Baltic] — ultimately they have to take the lead in dealing with such questions, for example munitions,” Corcoran said.
He dismissed the European Parliament’s approval Wednesday of a nonbinding report calling on the European Commission to open a new investigation into the pipeline’s environmental impact.
“We don’t believe it will have an impact on the approval process,” Corcoran said.
TITLE: Russian Auto Market is Europe’s Biggest in H1
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia passed Germany as Europe’s biggest auto market in the first half as sales rose 41 percent to 1.65 million cars, PricewaterhouseCoopers said Wednesday.
Spending on autos increased 64 percent to a record $33.8 billion, buoyed by $27 billion in sales of foreign makes led by GM’s Chevrolet unit and Hyundai, the firm said in a report.
Russia is becoming Europe’s top car market faster than forecast as sales fall farther west. Renault CEO Carlos Ghosn said in January that Russia would pass Germany within two years, while Ford’s European chief, John Fleming, said in June that it might do so in 2009.
“Sales will carry on growing at this pace for two or three years as rising incomes fuel demand,” said Mikhail Pak, an automotive analyst at Metropol. “Government spending on improving transport infrastructure will also be an important factor.”
Russian auto sales are likely to reach 3.8 million this year if the present level of growth is sustained, PwC said.
German deliveries may total 3.2 million, according to estimates from the country’s VDA trade association published July 2.
“Russia may become Europe’s biggest market in 2008 after surpassing Germany in the six months,” PwC partner Stanley Root said in the report, citing VDA figures showing sales in Europe’s biggest economy rose 4 percent to 1.63 million in the half.
Russian car imports jumped 54 percent to 785,000 in the period, almost half of total sales, and purchases of locally made foreign cars rose 41 percent to 290,000. Chevrolet was most popular, with sales reaching 103,735.
TITLE: A Beacon in Crisis
AUTHOR: By George Robertson
TEXT: Cast your mind back five years, when then-President Vladimir Putin made his state visit to London. The high-light was a ceremony hosted by Prime Minister Tony Blair, celebrating the creation of a new oil company called TNK-BP. It brought together BP’s technology and expertise with some of Russia’s world-class energy assets. This joint venture, we all hoped, would act as a beacon for what modern Russia can achieve.
Shortly after, when TNK-BP began operations, Mikhail Fridman, chairman of AAR, the consortium of investors in the Russian half of the business, proclaimed, “Today is a special day, not only for the Russian oil industry, but for the Russian economy as a whole.” I could not have put it better myself.
Five years on, however, the high hopes of 2003 are being put at risk by some of the very people who originally claimed to champion them — Fridman and his allies in AAR. In so doing, they are threatening the viability of the historic joint-venture agreement that they signed. Through their tactics, they are also tarnishing the country’s reputation among international investors. Anyone who cares, as I do, about the future of Russia, its economy and the rule of law should be concerned.
On Monday, AAR tried, and failed, to remove Robert Dudley as chief executive of TNK-BP’s management arm with a shareholder vote. The alleged grounds for this were that Dudley is not “independent” because he is a BP nominee. But under the terms of the joint venture, the chief executive is supposed to be nominated by BP. Dudley’s appointment was also approved by AAR. He has been an outstanding chief executive and, as a consequence of his leadership, BP and AAR have seen the value of their original investments multiplied many times.
The move against Dudley was, in reality, the latest episode in a campaign by AAR intended to destabilize TNK-BP, to overturn the joint-venture agreement and to wrest control of the company for its own purposes.
Another tactic AAR favors is to make self-serving assertions. Take, for example, some of the claims Fridman made in a comment published in the Financial Times on Monday. First, he said TNK-BP was underperforming. That is not true. The evidence he gave for this claim was the low price of the tiny proportion of TNK-BP shares — about 5 percent — that are quoted in Moscow. But this free float is highly illiquid and scarcely traded. It is a wholly inadequate measure of performance.
The truth is that TNK-BP has the best performance record in the Russian oil industry on almost all measures on which serious investors focus. Since 2003, TNK-BP has had the highest organic growth rate of any major Russian oil company, the highest reserve replacement ratio, the lowest finding and development costs and the highest return on capital employed. It has also paid more dividends — $18 billion — than any Russian company I know of. And it has been a good corporate citizen, improving safety and environmental standards and paying more than $70 billion in taxes and duties to the government. That is an outstanding record.
Nor is it the case, as Fridman claims, that TNK-BP has been stifled from investing overseas. On the contrary, the very purpose of the joint venture, enshrined in the shareholder agreement, was to create a company to do business in Russia and Ukraine. Despite this, the board has considered nine international opportunities. Five projects are being developed, and TNK-BP has opened offices in Turkmenistan, Venezuela and Kazakhstan. But we have rejected, on economic grounds, proposals in such places as Burma and the Kurdish region of northern Iraq. Rather than divert essential investment away from the Russian oil industry, members of AAR should invest abroad some of the billions of dollars of dividends they have received, if that is what they want.
At this stage, we cannot be sure how the TNK-BP saga will unfold. But, whatever happens, three things will remain certain. First, Russia is a big player in the oil industry, second only to Saudi Arabia. The world needs Russia to be — as Fridman himself said — integrated with the world economy. In that regard, TNK-BP is an important test case for investors. Second, as one of the world’s largest oil companies, BP is committed to Russia for the long term. It has to be.
And finally, when Fridman accuses BP of bullying, it is hard not to suppress a wry smile at the thought that anyone could browbeat a group of hardheaded businessmen who have accumulated fortunes of more than $50 billion since the early 1990s.
George Robertson is deputy chairman of TNK-BP and chairs its audit committee. This comment appeared in the Financial Times.
TITLE: Painting All Muslims With a Broad Brush
AUTHOR: By Yulia Latynina
TEXT: On behalf of all Muslims living in Russia, Geidar Dzhemal, head of the Islamic Committee of Russia, has called for an end to the persecution of Muslims in the country. Otherwise, he warned, Russia will lose the Caucasus.
It is untrue, however, that Muslims are persecuted in Russia, much less in the Caucasus. Visit a Friday service in any of the hundreds of mosques in Makhachkala, for example, and you will see thousands of people praying freely. The persecution is directed at those who profess Wahhabism.
It is also untrue that you can’t distinguish Wahhabis from Sufi Muslims, the traditional branch of Islam in the Caucasus. It is just as easy to find the difference between these branches of Islam as you can between Catholics and Protestants. Ask a Muslim how many raka’ah — a set of 11 ritual procedures when reciting prayers — he reads on Friday services.
If he answers “two,” he’s a Wahhabi; “six” and he’s a Sufi. It’s a basic question, like the difference between Communion in Catholic and Protestant churches.
It is true that those who give up drinking and smoking and who are engrossed in their thoughts of God are not rebels plotting against the state. It is ridiculous to interpret their prayers as a subversive act aimed at Prime Minister Vladimir Putin’s overthrow. After all, look at where Putin is compared to Allah.
But it is also untrue that Wahhabism is a peaceful religion for those who merely “pray differently.” First, too many of its Russian adherents — beginning with the founder of the Russian movement, Bagaudin Kebedov — have openly declared that their mission is to kill “infidels.”
Second, while there is generally a surprising tolerance between Islam’s various branches, this is not so with Wahhabism. In the North Caucasus, nobody ever heard that members of the Hanafi school of Sunni Islam claimed that adherents of the Shafi’i movement were not true Muslims, or that the various orders of the Sufi faith did not recognize each other’s legitimacy. Followers of the great Chechen ulema Kunt-Kadzhi whirl while reading prayers, but the Avartsi believers do not. And what of it? They don’t call each other munafiq, or religious hypocrites, over it.
This is not the case with the Wahhabi. Take even the most peaceful of them, and they will inevitably say that the traditional ribbon tied onto the tombs of the sheiks is a heathen practice, that reading six raka’ah during the ritual prayer instead of two is unacceptable and that everybody who prays differently is an apostate and a hypocrite.
Nonetheless, the followers of traditional Islam wield far greater administrative power. They also enjoy the support of the authorities. The Kremlin-installed Chechen president, son of a mufti and fanatical Muslim, Ramzan Kadyrov, persecutes the Wahhabis in the same way that Saint Ignatius of Loyola persecuted the Protestants.
Unfortunately, the Kremlin has chosen to side with the traditional Muslims in this theological dispute. But this is indefensible. A secular government should not take a position on how many raka’ah Muslims should read during their ritual prayers.
People who read two raka’ah should not be blacklisted and convicted unless it can be proven in court that they have engaged in illegal activity, such as taken up arms against authorities.
But this is not a case of persecuting Muslims. This is a case of one group of Muslims — for example, the fanatical supporters of Kadyrov — persecuting a different group of Muslims, the Wahhabi. Similarly, you can’t say that Henry I, Duke of Guise, persecuted all Christians during the St. Bartholomew’s Day massacre in 1572, because he targeted only one branch — the Huguenots.
Yulia Latynina hosts a political talk show on Ekho Moskvy radio.
TITLE: Expat Business Community Gets AmCham Aid
AUTHOR: By Yevgeny Rozhkov
PUBLISHER: Special to The St. Petersburg Times
TEXT: A business association dedicated to promoting the interests of its member companies, the American Chamber of Commerce (AmCham) in Russia originates from the American Business Club (ABC) that was created informally by a group of businessmen to unite the underrepresented American business community and aid each other in working towards common goals as Russia became independent after the collapse of the U.S.S.R. in 1991.
In the summer of 1993 the ABC applied to the U.S. Chamber of Commerce in Washington, D.C., to formally open a chamber in Russia. On Jan. 13, 1994, then U.S. Treasury Secretary Lloyd Bentsen and then U.S. Secretary of State Warren Christopher were present at the official launch in Moscow of the American Chamber of Commerce in Russia which had at that time about 130 member companies.
One of AmCham Russia’s new members, Moscow-headquartered TransLink Translation Company, opened in 2003 and now has spread to St. Petersburg and Ukraine. CEO Alexei Gerin considered joining the association as a new step forward for his company.
“Being a part of AmCham is a prestigious contribution to TransLink’s corporate image,” he said in 2004.
Now in its 14th year, AmCham Russia has continued to develop its reputation as a reliable business advocacy organization and evolved into the largest and most influential foreign business organization in Russia, an impact player in the policymaking arenas of both the U.S. and Russian governments, endorsing solutions to trade and investment issues that protect and benefit the interests of over 800 U.S., international and Russian member companies — 180 of which belong to the St. Petersburg AmCham Chapter.
In January this year, during an intensive three-day visit to Moscow, U.S. Senator Chuck Hagel, a distinguished member of the Senate Foreign Relations and Banking Committees and a successful businessman before being elected to the Senate in 1996, met with several Russian leaders, including Foreign Minister Sergei Lavrov. Hagel also found time for a breakfast meeting with the American Chamber of Commerce in Russia which — in his opinion — is one of the most effective AmChams in the world.
“I have long admired their initiatives and their aggressiveness. I think they do a tremendous job and are a very good model for our AmChams in other countries,” Hagel said.
Andrew Somers, who has served as president of the American Chamber of Commerce in Russia since November 2000, emphasized that from a strategic standpoint American companies see Russia as a growing market.
“U.S.-Russian political ties are changing dynamically. It’s not good for businesspeople. But it does not hurt them much,” he said in an interview with The St. Petersburg Times in April last year.
Somers, a former executive vice president, general counsel, special advisor on the Russian market and member of the board of American Express TRS Company, has brought with him more than 25 years of corporate, entrepreneurial, legal and political experience to make the Chamber one of the leading and most influential foreign business organizations in Russia.
In recent years the Russian economy has grown faster than that of Europe or the U.S., Somers said, noting that the main challenge is to bring Russian legislation and corporate working culture up to western standards.
“The labor pool is shrinking in Russia, because the market is expanding so fast. A few years ago the leaders of American companies would come to me saying that there is so much talent here. People are educated, smart. Now they say ‘I can’t achieve my goals, because people leave for more money after I train them.’ Salaries are very high, because Russians now have high demands,” Somers said.
He has seen Russian businesspeople become “smarter and richer” over the last 15 years. He indicated a lot of similarities in the way Russian and American businesspeople look at business. Instead of focusing primarily on the Russian market, Russian businesspeople have started to think globally.
Unlike Americans, Russian businesspeople are more concerned with issues involving the state — “what the government will think about a particular deal,” Somers said.
“And foreign companies here are starting to think about it too. It’s just a part of the business landscape,” Somers said.
Established in 1997 to represent the interests of the international business community in Northwest Russia, by 2007 the St. Petersburg Chapter of AmCham, the first regional chapter, had grown from 11 founding members to more than 170 companies, encompassing practically all industry sectors. According to its website (www.amcham.spb.ru), by 2005 the total amount of members’ investment into the economy of the Northwest Region of Russia had exceeded $4.5 billion.
Congratulating the Chapter on its 10th anniversary, Governor Valentina Matviyenko said “AmCham is coordinating government relations and patronizing the companies that represent almost every country of the world in St. Petersburg. It is much owing to AmCham’s proactive and constructive approach that the international business community and the city government have succeeded in establishing efficient communication. It would be true to say we speak the same language — business.”
Maria Chernobrovkina, executive director of AmCham in St. Petersburg for the past three years, holds a master’s degree in Asian studies, a law degree from St. Petersburg State University, and an MBA from the Stockholm School of Economics. Before joining AmCham, Chernobrovkina was an analyst for the U.S. Commercial Service (USCS) of the U.S. Department of Commerce, which provides support for American firms in the Russian market, conducts research and encourages more American companies to work in Russia.
One of the Russian companies then looking for U.S. partners was St. Petersburg-based Inform Services, formerly Inform Business Computer. The firm traveled as part of a Russian IT delegation led by Chernobrovkina to the Comdex technology fair in Las Vegas in 1998.
“Maria had a great combination of womanly qualities, an excellent mind and a honed business ability,” said Gleb Shelomentsev, head of Inform Services. “She adapted to things quickly. It was obvious that it felt natural for her to look for new areas, new boundaries all the time.”
For Chernobrovkina, her position at AmCham was a logical progression.
“When I worked at the commercial service, I helped companies enter the Russian market and then handed them over to AmCham,” Chernobrovkina said in 2005.
“Now I’m on the other side of the same coin, working with AmCham to assist companies in adapting to this market.”
Commerce is about dialogue and understanding. Chernobrovkina said that a dialogue with the authorities, especially with the customs and intellectual property rights committees, is key to resolving the anxieties American firms have about the Russian market.
Companies sometimes do not even realize such a dialogue with officials is possible, she said. Making businesses aware of AmCham’s ability to help establish contact is one goal Chernobrovkina has set for herself.
“Despite any worries foreign business has, Russia is just too big a market to miss out on,” she said. “Foreign companies know that they must come here.”
And they do come and join. In early July, AmCham Russia welcomed aboard on several member companies such as industrial real estate developer Immorosindustry, Western-managed recruitment company Russian Connection Group and one of the world’s leading automobile manufacturers Suzuki Auto MGF RUS.
TITLE: AmCham Member Backs Return to City’s Traditions
AUTHOR: By Gail Joiner
PUBLISHER: Special to The St. Petersburg Times
TEXT: One of the most prominent members of the American Chamber of Commerce in St. Petersburg, the Grand Hotel Europe, is in part responsible for rolling back the centuries and reviving the imperial tradition of sumptuous balls in the city.
The Grand Hotel’s endeavors are part of trend that has seen the rise of such events sponsored by high-profile businesses and other prestigious organisations in recent years.
The ball culture that flourished before the Bolshevik Revolution is booming again, with Valery Gergiev’s White Nights Ball, the Ball of the Palaces of St. Petersburg Festival, Yury Temirkanov’s New Year’s Ball and dozens of other events.
Corporate events are moving into palaces for their aristocratic atmosphere.
The Russian Museum, the country’s largest collection of Russian art, happily leases its premises to large companies for their annual receptions.
German Gref, head of Sberbank and formerly Russia’s Economy Minister, had his wedding party at the Petergof Palace on the Gulf of Finland, outside St. Petersburg.
Not many countries indeed can boast such beautiful palaces, which in most cases are either museums or private residences.
One event that stands out from the list is the Pushkin Golden Autumn Ball that while offering aristocratic ambience has a distinct charitable twist.
In October, the Catherine Palace in Tsarskoe Selo will welcome the guests of this opulent and sophisticated event, which was launched by a descendent of Russia’s national poet, Alexander Pushkin, and aimed at raising funds for Russian charities.
A joint project of the Pushkin Fund and the Grand Hotel Europe, the ball enjoys the patronage of H.S.H. Prince George Yourievsky. The event has been designed to evoke the style and atmosphere of the Pushkin era.
The venue’s location at Tsarskoe Selo is key to the event. Young Pushkin studied in Tsarskoselsky lyceum and it was during an exam there when the literary genius, then a teenager, made a profound impression on Gavriil Derzhavin, a famous poet close to the court.
“The Catherine Palace, with its splendid gardens and array of fantastic rooms, is regarded as the premier venue for hosting Russia’s most opulent events,” said Yekaterina Vasilieva, a PR manager with the Grand Hotel Europe. “Guests will also have the extraordinary opportunity to tour the splendors of the Palace including the world renowned Amber Room.”
Limited to 300 formally seated guests, the ball will feature an extraordinary Pushkin epoch scenario with top entertainment, exquisite dining and dancing into the evening. The ticket is a bargain at 25,000 rubles ($1000).
The event will assemble Russian and international guests, including the descendents of some of country’s finest aristocratic families, renowned artists, musicians, prominent businessmen and politicians, and other celebrities.
The Russian elite is still in the process of formation and does not automatically include anyone who can afford the ticket, although owners of expensive cars and luxurious mansions may regard themselves as the new high society. The Pushkin Ball is not for the “New New Russians” but for intelligent people who can appreciate its purpose.
The audiences will dance to the sounds of the Petersburg Orchestra under the baton of Peter Gribanov. The ball will be crowned by a fantastic fireworks show.
This year the Pushkin Golden Autumn Ball, which has received extensive press and TV coverage in the past, will be featured in a special television program.
According to Kenneth Pushkin, the founder of the ball and a distant descendant of Alexander Pushkin, performances will feature a selection of operatic scenes and arias with a Pushkin connection. Some of the finest young talent from the world-renowned Mariinsky Theater, including tenor Daniil Shtoda, bass-baritone Yevgeny Nikitin, soprano Oksana Shilova and ballerina Sophia Gumerova will entertain the guests.
In 1997, Kenneth Pushkin established the Pushkin Fund in the USA, and registered his charity in Russia four years later. The Fund issues financial grants for Russia’s cultural and social institutions, which until now have included, among others, The Boarding School for Musical Education at Mytischi in Moscow Oblast, Children’s Hospital No.15 in St. Petersburg, Bykovo Orphanage in Moscow Oblast, Mikhailovskoye State Preserve Museum in Pskov Oblast, Pushkin National Museum in St. Petersburg and State Pushkin Museum in Moscow.
Thomas Noll, General Manager of the Grand Hotel Europe will become a co-host of the event, along with Kenneth Pushkin. Noll promised the visitors a world-class gourmet dinner and highly tempting luxurious auction lots of the likes of an exquisite 1 carat diamond ring which was sponsored by Cristal for one of the previous balls.
The Golden Autumn Ball offers a true palatial experience yet serves a noble purpose. The preparation of the charitable auction is a top priority for the organizers. In past years, lots were sponsored by the Lomonosov Porcelain Factory, the Smolensky Diamonds Company, the Alfa Jewelry Plant, the Pushkin Fund and Pushkinsky Dom.
True to its name, in 2007, the charitable gala activities helped raise more than $ 70,000 for several recipient organizations including, in particular, St. Petersburg’s children’s hospital No. 15, the Pushkin National Museum and Pushkinsky Dom institute of literature.
The charities that will benefit from this year’s donations include Children’s Hospital No.15, Pushkinsky Dom, Pushkin National Museum, the Pushkin Literature Museum in Moscow and “Pushkin in the Caucasus,” a project for the children of Beslan.
The Grand Hotel Europe is offering a Golden Autumn package, valid from Oct 9-12, costs 65,100 rubles ($2,770) per person in a double room for three nights and featuring buffet breakfast, tickets to the Pushkin Ball, BMW airport transfer to and from the hotel as well as to and from the Catherine Palace, a glass of French champagne in the lobby bar and dinner in the hotel’s L’Europe restaurant (excluding beverages).
TITLE: AmCham Member Ford Speeds Past Milestone
AUTHOR: By Tobin Auber and Yekaterina Dranitsyna
PUBLISHER: Staff Writers
TEXT: One member of the St. Petersburg chapter of the American Chamber of Commerce had particular reason to celebrate this week, as the Ford Motor Company announced that it had produced its 250,000th Focus model at its Russian plant in Vsevolozhsk, to the north of the city.
The quarter-of-a-million milestone was passed on Wednesday, the company reported in a statement released to the press.
This achievement comes as the company plans further expansion and increases in production. Ford is to start production of its Mondeo model at its Leningrad Oblast plant as part of a $100 million upgrade, the company announced last year. The new model will be launched by the end of 2008 with a production line of 25,000 units a year.
“The Russian car market has been expanding dramatically over the last few years. We see that demand for stylish cars with good technical specifications, the cars that Ford offers, keeps growing,” John Fleming, president and CEO of Ford Europe, said last year.
At the moment Ford’s Russian plant, which employs over 2,200 people, produces four types of Ford Focus. Ford opened the plant in 2002 with an initial investment of $150 million.
By 2009 production capacity will increase to 125,000 units a year while Ford’s total investment into Russia will amount to over $330 million. Focus production will increase by 28,000 units a year. The growth in production is based on record growth in sales.
Since 2003, the Ford Focus has remained the most popular foreign car in Russia — 73,468 such models were sold in 2006. The Ford Fusion was also popular, selling 16,532 cars, a 143 percent increase on the previous year, while Mondeo sales in Russia totaled 10,120 cars.
“We are proud of our results in 2006 and especially the sales of the Focus and Fusion models. By increasing production by 89 percent and importing more Focus models from Europe, we have shortened the waiting list for our clients in Russia. Orders for 2007 already amount to 29,300 cars,” Henrik Nenzen, president of Ford in Russia, commented when announcing plans to begin Mondeo production.
In the first half of 2007, Ford sales in Russia increased by 122 percent over the same period for the previous year to 81,782 cars. The company sold 46,173 Ford Focus models, 20,313 Fusions, 5,464 Fiestas and 3,091 Mondeos.
Analysts see increasing production as a natural step for the company.
“For a while we saw high demand for economy class sedans. Now we see an increase in demand for business class cars in the lower price bracket,” said Sevastian Kozitsyn, analyst of Brokercreditservice.
“I don’t think there is at the moment an equivalent car that could challenge the Ford Focus. Though we should wait to see what models Volkswagen will produce and how they will be priced. If Toyota starts producing cheap cars, of course, they would beat off most competition,” Kozitsyn said.
Ford managers saw the dramatic growth in sales as a result of the “attractive model range, the low price and beneficial credit programs.”
Ford introduced loans with an interest rate of 4.9 percent. In the first quarter of 2007, out of 15,950 sold cars 6,075 cars were sold through credit scheme — a 94 percent increase on 2006 figures.
In July, Ford announced a new credit program for its Fiesta, C-Max and Explorer models and prolonged the credit program for the Fusion, Focus and Mondeo.
Sales and production growth in Russia in 2006 were considered a brand record.
Sales also increased across all of the company’s key markets including Great Britain, Italy and Benilux. Total sales of Ford Europe increased by 81,000 cars in 2006.
The total voume of production at seven plants increased by 125,000 units because of “the record volumes of production in Cologne, Kosaely (Turkey) and St. Petersburg.”
According to a report by PricewaterhouseCoopers, Russia will grow to become Europe’s largest car market by 2011 with sales amounting to $96 billion.
TITLE: Sarkozy Defends Olympic Decision
AUTHOR: By Mark John and Paul Taylor
PUBLISHER: Reuters
TEXT: STRASBOURG, France — French President Nicolas Sarkozy insisted on Thursday he had the backing of all European capitals for his controversial decision to attend the opening of the Beijing Olympics.
The Elysee Palace announcement on Wednesday that Sarkozy would attend the ceremony next month on behalf of the 27-member European Union triggered accusations he was undermining EU efforts to pressure China on its human rights record.
Defending the move in the European Parliament, Sarkozy said that as the current holder of the EU presidency, he had sought approval from all member states for the trip.
“All the member states gave their agreement for me to participate in the opening ceremony of the Olympic Games,” he told the assembly, whose president on Wednesday vowed to snub the Games’ August 8 opening.
Sarkozy argued it would be counter-productive to boycott a country with a permanent seat on the U.N. Security Council and which was key to efforts to resolve violence in Sudan’s Darfur region and the dispute over Iran’s nuclear goals.
“I happen to think that humiliating China is not the best way. The best way is frank dialogue. I don’t think you can boycott a quarter of humanity,” he said, noting that leaders of 13 EU states had also said they would be at the Games’ opening.
After months of suspense over whether he would attend, Sarkozy told Chinese President Hu Jintao at a G8 summit in northern Japan this week that he would come to the inaugural ceremony next month.
Rights activists have urged world leaders to boycott the ceremony in protest at China’s human rights record, especially in Tibet where its crackdown after deadly riots in March sparked worldwide criticism.
European Parliament President Hans-Gert Poettering said on Wednesday he would not go to the event, citing the lack of progress in talks between China and representatives of Tibetan spiritual leader Dalai Lama.
Green floor leader Daniel Cohn-Bendit said it was a “total disgrace” for Sarkozy to attend and represent the EU.
“When you come to write your memoirs you will very much regret what you are about to do, because you will see that those who are in prison will be crying,” he told Sarkozy of European concerns over political imprisonments in China.
Separately, a Chinese government spokesman said on Thursday that Beijing hoped ties with France, strained when pro-Tibet demonstrators disrupted the passage of the Olympic torch through Paris in April, would now be able to improve.
However Sarkozy also rejected a warning from China’s ambassador to Paris against meeting the exiled Dalai Lama when he visits France next month.
“It’s not for China to set my agenda and my appointments, just as it’s not up to me to set the Chinese president’s agenda,” Sarkozy said.
TITLE: Southern comfort
AUTHOR: By John Wendle
PUBLISHER: Special to The St. Petersburg Times
TEXT: The beaches and mountains of Crimea were once the epitome of a Soviet Black Sea holiday. Today the peninsula, which is only connected to southern Ukraine by a short, thin neck of land, seems to draw more middle-class tourists along with large numbers of hikers, campers and cyclists. The construction of new hotels and resorts has not been slowed by the fact that the area is also prone to ethnic tensions among Tatars, Russian and Ukrainians.
The Crimean Tatars began returning to their historic homeland more than a decade ago from Uzbekistan, where they were exiled by Stalin en masse in May 1944. By the early 1990s, their ancestral homes had been the homes of Ukrainian and Russian families for a little more than half a century. To resolve the problem, the government began allotting the group plots of land on which families have built small houses. But problems with electricity, water and location remain. Additionally, unemployment remains high and civil rights are routinely violated.
Simferopol, today’s capital, is near the historic capital of the Crimean Khanate, Bakhchisaray, a beautiful town full of Turkish and Islamic architecture, including the Khan’s palace and its fountain, which inspired a poem by Pushkin.
In Simferopol, blue and yellow trains from Kiev pull into the station after a 17-hour trip full of hikers clad in the idiosyncratic style of the East European outdoor type.
Large groups mosey past with their tall walking sticks cutting the sky. Other groups lounge in the sun, leaning against improbably large backpacks, their camouflage pants rolled up, exposing the pale legs of an office worker on vacation.
The port of Sevastopol, two hours south of Simferopol by minibus, opened to foreigners less than a decade ago and has fewer backpackers than the capital, but hundreds more Russian flags and sailors. Under the terms of a contentious lease, the city is the home of Russia’s Black Sea Fleet until 2017.
Gray Russian and Ukrainian frigates and cruisers dot the many natural harbors that have made Sevastopol worth fighting for over the centuries. During the Siege of Sevastopol (1854-1855) British, French and Turkish troops bombed the city to smithereens while the Russian defenders sank ships across the mouth of the port in a last ditch effort at defense.
Alfred Lord Tennyson’s poem “The Charge of the Light Brigade” was inspired by a battle at nearby Balaklava. One resident claimed that the city has more monuments than any other in the former Soviet Union.
Twenty minutes away from the city center by bus are the ruins of the Greek port of Khersones. Visitors are free to climb all over the exposed walls and foundations of the town. The gold dome of the restored St. Vladimir’s Cathedral looms over the site. The church marks the reputed spot where Vladimir the Great was baptized — bringing Kievan Rus into Christianity and launching the Russian Orthodox Church.
While Simferopol is a base for hikes over the Crimean mountains to the more remote coast on the southeastern shore, Sevastopol provides an interesting jumping-off point for southwest Crimea.
After exploring the pretty architecture, cafes and clean streets of Sevastopol for a couple of days, buses head from the main bus station to Yalta — a town that was once the apex of Russian imperial holiday luxury and the final home of playwright Anton Chekhov.
Making the trip is worth it if just to experience the drive. Visitors should try to get window seats on the right side of the bus. As the machines chug slowly up the switchbacks, grand views of the deep blue sea open up and amphitheaters of granite cliffs and pine forests rise on all sides. The views are exciting and majestic.
What goes up must come down, however, and the buses scream downhill, passing frighteningly close to cyclists loaded down with heavy bags. At one point in the trip, a police car sat on the road beside a long puddle of blood and a mangled bike.
Regardless of the dangers, the beautiful roads are thronged with cyclists, motorcycles and mopeds on what must be an incredibly exhilarating ride.
Yalta has small stone beaches chopped up by the concrete walls and tanning towers erected by hotels to milk beachgoers of money. If a visitor to Crimea is looking for a tan, a disco and a drink, the shop-lined boardwalk of Yalta is the place to go.
There are more intriguing spots, though. Many of the “towns” along the coast are little more than glorified resort communities. Few — if any — actual fishing villages dot the coast anymore.
Gurzuf offers attractive winding streets down to the sea and is a possible day trip from Yalta. Massandra is home to a winery, one of many that dot the peninsula making the traditionally sweet Crimean wine.
Travel between Sevastopol through Yalta to Alushta is easy. Buses leave regularly, taking the route over the mountains to Alushta from Simferopol. Traveling east, however, past Alushta and toward the town, public transportation becomes sporadic at best. But apparently the switchback coastal road between Alushta and Sudak is even more stunning than the one between Sevastopol and Yalta.
Sudak is overlooked by a massive hilltop Genovese fortress built more than five centuries ago. Crusader crosses still top the arrow slits.
Past Sudak, the number of tourists thins out dramatically. The beaches are covered in golf ball-sized gray, green and red stones and are home to three or four campers when there is anyone at all.
The beaches are hidden in small coves accessed by dirt roads that pass through remote vineyards and a starkly beautiful empty grassland of rolling hills and sharp cliffs.
Fox Bay is a naturist community, mentioned briefly in Lonely Planet. People live on the beach here when it’s warm enough.
Past Fox Bay, the minarets and domes of an elaborate set, built for a movie meant to take place in Uzbekistan but is still incomplete rise eccentrically beyond a bluff.
A 45-minute hike ends in the town of Kurortnoye, a strange place trying to make it as a disco hotspot, but too far off the beaten path — like a dance club in a French farming village.
A little walk past the town is the entrance to the Karadagh (Black Mountain) Nature Preserve. The spires, cliffs and rock formations are matched by the amount of wildlife on this tract of land formed by an ancient volcano. The four-hour guided hike has tremendous views.
Eastern Crimea past Alushta still feels like unexplored, wild country and is definitely worth visiting if you can get there and need some time away from the things of man.
Getting There
Sevastopol is a 17-hour train trip from Kiev. There are regular trains.
Simferopol is a 1 1/2-hour direct flight from Moscow.
Where to Stay
There are tons of places to stay in Crimea, from home stays and room rentals, to sanatoriums, hotels and resorts.
Two places in Yalta are Hotel Bristol (upscale, catering to foreigners) and Hotel Otdykh. The later has incredible views but some rooms lack bathrooms and all have tacky, Soviet-era decorations.
Things to Do
Karadagh Nature Preserve
Phone: 8 065 626 6287
TITLE: Chernov’s
choice
TEXT: In recent conversations with The St. Petersburg Times, accomplished western musicians either criticized or raved about the current situation in music and the music industry.
“I like working with computers and computer programs making music — at the same time it is difficult because people don’t have to work so hard to do an album anymore,” said Blondie guitarist Chris Stein speaking by mobile from a New York zoo. His re-formed band made its Russian debut in St. Petersburg on Tuesday.
“I think there was something good about having to work really hard. You know, get into that position.”
Songwriting has also declined due to advanced technologies, Stein reckons.
“Now people can make a record — two guys with a computer — for just a few thousand dollars, you know,” he said.
“And in a way that’s changed what’s happening in the music business a lot. Just make a song… People don’t work as hard on songwriting, it’s just very easy to buy some loops and stuff you haven’t even made yourself and paste it together and make a record out of that.
“It’s so easy to make a record without even being able to play an instrument now people can make a record. Everyone calls himself a DJ: it’s a strange phenomenon. All these people who are making music without even playing an instrument or without even making any of the tracks themselves.”
According to Stein, many current musicians have the wrong motivation.
“There’s a problem now because everything is so commercial now,” he said.
“There are so many young people who only want to be in a band to make money. Or at least that’s their first goal — to make money rather than to make music. Or it’s to be famous... To me that’s a problem.”
While Blondie has not released a new album since 2003 due to the collapse of the music industry, guitarist Andy Dunlop of the U.K. band Travis, whose band will perform in Moscow (no local gig) on Wednesday, said the problems facing the music industry are paradoxically good for music.
“I think music is an interesting place at the moment because the music industry has fallen apart,” he said.
“Bands are taking back the power and it’s kind of nice. I think over the last three years the power has almost been given back to musicians, with the whole MySpace thing and the growth of that. Bands can go out on their own right now.
“The era of independent music is rising again, rather than corporate music, you know. So it’s a good time for music, we live in good times.
“It’s not a good time if you work for a record label, but it’s a good time for being in a band.”
— By Sergey Chernov
TITLE: Iran Tests Missiles Able to Reach Tel Aviv
AUTHOR: By Edmund Blair
PUBLISHER: Reuters
TEXT: TEHRAN — Iran tested more missiles in the Gulf on Thursday, state media said, and the United States pledged to defend its allies against any Iranian aggression.
Washington, which fears Tehran wants to master technology to build nuclear weapons, said after Iran test-fired nine missiles on Wednesday that Tehran should halt further tests if it wanted to gain the world’s trust.
Speculation that Israel could bomb Iran has mounted since a big Israeli air drill last month. U.S. leaders have not ruled out military options if diplomacy fails to end the nuclear row.
Iran has responded by saying it will strike back at Tel Aviv, as well as U.S. interests and shipping, if it is hit. Tehran insists its nuclear program has only civilian goals.
Iran has said missiles fired during wargames under way in the Gulf included ones that could hit Israel and U.S. bases.
U.S. Secretary of State Condoleezza Rice said on a visit to the former Soviet republic of Georgia that Washington would defend American interests and those of its allies.
“We take very, very strongly our obligation to help our allies defend themselves and no one should be confused about that,” Rice said after meeting Georgian President Mikheil Saakashvili.
After Iran’s missile tests on Wednesday, Rice suggested its actions justified U.S. plans for an anti-missile shield with bases in eastern Europe, a project Russia strongly opposes.
Iranian state TV and radio said the Revolutionary Guards — the ideologically driven wing of Iran’s armed forces — fired ground-to-sea, surface-to-surface and sea-to-air missiles overnight. Long-range missiles were also launched.
“The ... maneuver brings power to the Islamic Republic of Iran and is a lesson for enemies,” Guards Commander-in-Chief Mohammad Ali Jafari was quoted as saying.
Iran has threatened to shut the Strait of Hormuz, a vital route for Gulf oil exports, if it is attacked. Thursday’s exercises involved divers and speedboats, as well as the launch of a high-speed torpedo called Hout, state media said.
Wednesday’s tests rattled global oil markets, pushing up the price of oil. Crude prices have dipped in recent days but have hit a series of record highs this year partly on Iran tensions.
China urged restraint in the row over Iran’s nuclear program but avoided direct condemnation of Tehran for test- firing the missiles. Wednesday’s missile maneuvers had drawn criticism from the United States and European countries.
“We express our concern about these developments,” Chinese Foreign Ministry spokesman Liu Jianchao told a news conference when asked about Iran’s missile tests.
Liu welcomed the prospect of fresh talks on the nuclear program being pursued by Iran, the world’s fourth largest oil producer and China’s third biggest crude supplier.
The United States, Britain, France, Germany, Russia and China have offered Iran incentives to curb its nuclear work. Tehran rejects their demand that it suspend uranium enrichment.
The European Union’s foreign policy chief, Javier Solana, representing the six powers, is expected to meet Iranian officials to discuss Iran’s response to the package. Solana’s spokeswoman said on Wednesday no place or date had been set.
Russia, which is building Iran’s first and so far only nuclear power plant, and China have been resisting U.S.-led calls for expanding U.N. sanctions on the Islamic Republic.
Sanctions have made Western firms increasingly wary about investing. France’s Total said on Thursday it would not invest for now in a big gas deal due to political tensions.
Iran has brushed off the impact of Western caution saying it has a big enough cash pile from windfall oil earnings to carry out the project itself or find other interested parties.
TITLE: Giselle and Spartacus on tour
AUTHOR: By Larisa Doktorow
PUBLISHER: Special to The St. Petersburg Times
TEXT: This autumn the Mikhailovsky Theater celebrates its 175th anniversary and to mark the occasion the recently revamped opera and ballet theater is taking its ballet troupe on its first London tour. From July 22-27, the theater will show Londoners two of its new productions: the epic “Spartacus” and the Romantic ballet “Giselle.”
A favorite with audiences from the moment of its world premiere in Paris in 1841 and in St. Petersburg a year later, “Giselle” still holds a secure place in the repertoire of major theaters everywhere including the Mariinsky and the Paris Opera. Local balletomanes saw a fresh version of this classic ballet last November following its reworking by ballet restorer Nikita Dolgushin, himself a renowned choreographer and former dance star who first danced the leading role in 1959. In previous ballet restorations as director of the St. Petersburg Ballet Theater, Dolgushin revived fin-de-siecle repertoire including Mikhail Fokin ballets and Anna Pavlova’s miniatures.
Giselle is considered the embodiment of the Romantic ballet movement. It is a challenging display piece for ballerinas, who in their interpretation of the heroine need to have extraordinary dramatic as well as technical qualities in the specially demanding first act, while demonstrating spiritual and mystic artistry in the second act.
“This is the oldest ballet for which the original choreographic text is preserved,” Dolgushin said. “The Paris version was created by Jean Coralli and Jules Perrot. We cannot guarantee 100 percent that we have managed to repeat this version. The ballet has been modified a number of times, including by Maurice Petipa. However, we have managed to preserve the romantic structure of the original, the essence of which is the collision between reality and fantasy.”
“The design for the role and the dance patterns have been preserved,” Dolgusin added. “We can say the same about the sceneries and the costumes. The most difficult part was to get to the spirit of the epoch. For that we needed to study old drawings and while executing the poses to pay attention to the minute details.”
Designer Vyacheslav Okunev recreated the classic sets and costumes, returning freshness to old traditions.
Questions always remain about the validity and authenticity of ballet restorations. A majority of specialists will tell you that only 50 percent of the original steps have survived or can be restored. The rest depends upon the modern choreographer.
The Mikhailovsky Theater’s new “Giselle” was prepared under the aegis of its music director and conductor Andrei Anichanov, who parted company with the theater a few weeks ago. At a July 1 performance his place was taken by conductor Stanislav Kochanovsky.
The first act ends with a very powerful and touching scene of Giselle becoming mentally unhinged after her noble suitor’s betrayal of his vows. Before she collapses and dies on stage, she dances out the happy moments of her love, going through different moods and tempi. Here instead of the traditional four minutes or so of dance steps, Giselle is given only pantomime.
In the past, St. Petersburg’s best-loved ballerinas turned this scene into a showcase for their acting talents. Natalia Makarova was unforgettable in this role during her time at the Kirov Ballet before her defection from the Soviet Union to the U.S. in 1970, with a captivating mad scene after she symbolically undid her hair. Makarova was at that time partnered by Dolgushin.
Perhaps in striving for authenticity, Dolgushin the ballet-restorer decided the mad scene was a later addition that should go. However, the replacement of magnificent ballet steps by mime is a mistake.
The second act in the Mikhailovsky’s new “Giselle” is stylish and beautifully performed. Sabina Yapparova gives a gracious and affective Giselle, and her unhappy lover, the very capable Semyon Chudin, partners her splendidly.
Following its tour abroad and summer break, the theater reopens for the fall season on Sept. 18.
The Mikhailovsky Theater London Tour 2008 takes place at the London Coliseum (July 22-27).
www.mikhailovsky.ru/london2008/
TITLE: North Korea Must Verify
AUTHOR: By Jack Kim
PUBLISHER: Reuters
TEXT: BEIJING — A new round of talks aimed at disarming North Korea will focus on verifying the North’s own account of its nuclear programs, the chief U.S. envoy said on Thursday.
The negotiations are the first in nine months, after North Korea last month produced a long-delayed declaration of its nuclear activities, one of the initial steps pledged under a disarmament deal.
“Obviously we’re going to focus very much on a verification regime to wrap up this phase,” U.S. envoy Christopher Hill told reporters.
“We’ve been discussing that with all the partners in the process, so I don’t think there will be any surprises,” he said.
China’s North Korea nuclear pointman, Wu Dawei, told the opening session of the talks that he was encouraged by the fact the process was getting under way again.
“It is encouraging to see in the past three years, despite twists and turns, all of us are sharing the same boat and walking the same path,” Wu said.
“We overcame various difficulties on the way forward. No matter what the difficulties were, these difficulties made us smarter and stronger.”
The talks, which group North and South Korea, the United States, Japan, Russia and host China, are scheduled to run for three days.
TITLE: Jesse Jackson Says Sorry To Obama For Remark
PUBLISHER: Reuters
TEXT: WASHINGTON — U.S. civil rights leader Jesse Jackson complained on Tuesday that Democratic presidential candidate Barack Obama can seem to be “talking down to black people” at times and should broaden his message.
But Jackson apologized for a crude and disparaging remark about Obama at the weekend while he was speaking into an open microphone that he thought had been turned off.
Jackson, talking to CNN on Wednesday, said Obama has given what amounts to “lectures” at African-American churches.
“I said it can come off as speaking down to black people. The moral message must be a much broader message. What we need really is racial justice and urban policy and jobs and health care. There is a range of issues on the menu,” said Jackson, who was an acolyte of the slain civil rights leader, Martin Luther King Jr.
Obama would be America’s first black president if elected on November 4 over Republican John McCain. Jackson ran for the Democratic presidential nomination in 1984 and lost.
In an aside to another guest after a Fox News Channel interview on Sunday, Jackson had said Obama had been talking down to black people and added: “I want to cut his nuts out.”
He said on CNN: “I was in a conversation with a fellow guest at Fox on Sunday. He asked about Barack’s speeches lately at the black churches. I said it can come off as speaking down to black people.”
“And then I said something I felt regret for — it was crude. It was very private, and very much a sound bite — and a live mike. I find no comfort in it, I find no joy in it.
“So I immediately called the senator’s campaign to send my statement of apology to repair the harm or hurt that this may have caused his campaign, because I support it unequivocally.”
Obama campaign spokesman Bill Burton said the candidate accepted Jackson’s apology. “(Obama) will continue to speak out about our responsibilities to ourselves and each other, and he of course accepts Reverend Jackson’s apology,” Burton said.
Jackson’s son, Jesse L. Jackson Jr, an Illinois congressman and active Obama supporter, condemned his father’s remarks.
“Revered Jackson is my dad and I’ll always love him. He should know how hard that I’ve worked for the last year and a half as a national co-chair of Barack Obama’s presidential campaign. So, I thoroughly reject and repudiate his ugly rhetoric,” he said in a statement.
“The remarks like those uttered on Fox by Revered Jackson do not advance the campaign’s cause of building a more perfect Union.”
TITLE: Joining forces
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: With his band Televizor on summer vacation, opposition rocker Mikhail Borzykin will perform at a concert that brings together three like-minded rock musicians at Orlandina on Wednesday. Alexei Nikonov of Posledniye Tanki v Parizhe (Last Tanks in Paris), also known as PTVP and Gleb Samoilov of Agata Kristi join Borzykin on the bill.
The concert’s Russian title is “Tri Byut,” which is a pun on the word “tribute” but which is roughly translated at “Three Beat” in the sense of “the three who beat.” Each of the three musicians will perform a set each.
“We have wanted to get together on stage for a long time,” said Borzykin, speaking by phone on Thursday. “We communicate with each other from time to time, and this idea originated perhaps more than a year ago, but we haven’t managed to get together until now.”
Despite performing in different music styles, Borzykin said all the three musicians share the same critical views of Russia’s political and social situation and want to counter pro-Kremlin propaganda.
“All three of us share a realistic attitude to what happens in this country now, which makes us closer to each other. Amid the common apathy we stand out as three men on our own,” Borzykin.
“The concert will be in three parts, where each one will show what he is capable of performing unplugged. Nikonov, as far as I know, will recite his poems, while Gleb Samoilov will perform his songs, some of which he doesn’t perform with Agata Kristi for ideological reasons. I’ll perform some old and new ones from my material.
“We don’t have any big idea about this event. It’s just [a concert by] like-minded people, not musically, but rather open-minded people who haven’t been brainwashed by propaganda.”
Samoilov’s participation would surprise many since his older brother, Vadim Samoilov, who formed and leads Agata Kristi is known as a Kremlin supporter and a friend of Kremlin ideologist Vladislav Surkov. The band made news when it recorded a limited-edition album with lyrics written by Surkov himself to be distributed among Surkov’s family and friends in 2003.
“As far as I understand, Gleb doesn’t share the political views of his older brother Vadim,” said Borzykin.
“In my view, Gleb has a more realistic and sober outlook on things, on what happens in the country and that’s why Gleb can’t fully express himself within Agata Kristi. Vadim Samoilov is a member of the [Kremlin-appointed] Public Chamber. Gleb doesn’t share his brother’s Putinism.”
Performing at a rally that concluded an opposition May Day march, Televizor performed one of Borzykin’s most recent songs, called “Gazprombeiter” (Gazprom worker). In the song, he used the authorities’ plan to erect the 396-meter tall Okhta Center tower (also known as the Gazprom Tower) which is criticized as violating local laws, and being a threat to St. Petersburg’s protected historic skyline, as a metaphor for today’s Russia and its oppressed and brainwashed society.
However, Borzykin said he isn’t promoting the concert at Orlandina as a political event.
“It’s simply three totally different musicians expressing their views on the world and what is happening,” he said.
“All three have a distinctive attitude toward the reality around us. It’s all in the lyrics. We didn’t plan to turn this concert into a political rally or gathering.”
Borzykin, who was a candidate representing the pro-democracy coalition The Other Russia and its symbolic campaign to hold an alternative State Duma election (the opposition had little or no chance to participate in the actual State Duma election in December) was picked as a member of the National Assembly, created by the opposition as an alternative parliament, in May.
“I failed to go [to the National Assembly’s opening session in Moscow] for personal reasons, but was included in it afterwards,” Borzykin said.
“The ideas of the round table, which the National Assembly is, appeal to me. I like [oppositional politician] Andrei Illarionov’s idea that first one should be able to be a democrat in practice, not in words, which means to be able to sit down at the negotiating table with anybody – except, of course, the oppressors – and find common points. It’s the only way to build civil society.
“I agree with most of the platform of the Assembly. It uses democratic slogans, and the left-wing part of it supports these slogans, which is very good. It’s a place for discussing and expressing one’s opinions. It’s very good that now we have it.”
Mikhail Borzykin of Televizor, Alexei Nikonov of PTVP and Gleb Samoilov of Agata Kristi will perform in a concert called Tri Byut (“Three Beat”) at Orlandina on Wednesday.
TITLE: A robot with a heart
AUTHOR: By A. O. Scott
PUBLISHER: The New York Times
TEXT: The first 40 minutes or so of “Wall-E” — in which barely any dialogue is spoken, and almost no human figures appear on screen — is a cinematic poem of such wit and beauty that its darker implications may take a while to sink in. The scene is an intricately rendered city, bristling with skyscrapers but bereft of any inhabitants apart from a battered, industrious robot and his loyal cockroach sidekick. Hazy, dust-filtered sunlight illuminates a landscape of eerie, post-apocalyptic silence. This is a world without people, you might say without animation, though it teems with evidence of past life.
We’ve grown accustomed to expecting surprises from Pixar, but “Wall-E” surely breaks new ground. It gives us a G-rated, computer-generated cartoon vision of our own potential extinction. It’s not the only film lately to engage this somber theme. As the earth heats up, the vanishing of humanity has become something of a hot topic, a preoccupation shared by directors like Steven Spielberg (“A.I.”), Francis Lawrence (“I Am Legend”), M. Night Shyamalan (“The Happening”) and Werner Herzog. In his recent documentary “Encounters at the End of the World” Herzog muses that “the human presence on this planet is not really sustainable,” a sentiment that is voiced, almost verbatim, in the second half of “Wall-E.” When the whimsical techies at Pixar and a moody German auteur are sending out the same message, it may be time to pay attention.
Not that “Wall-E” is all gloom and doom. It is, undoubtedly, an earnest (though far from simplistic) ecological parable, but it is also a disarmingly sweet and simple love story, Chaplinesque in its emotional purity. On another level entirely it’s a bit of a sci-fi geek-fest, alluding to everything from “2001” and the “Alien” pictures (via a Sigourney Weaver voice cameo) to “Wallace and Gromit: A Grand Day Out.” But the movie it refers to most insistently and overtly is, of all things, “Hello, Dolly!,” a worn videotape that serves as the title character’s instruction manual in matters of choreography and romance.
That old, half-forgotten musical, with its Jerry Herman lyrics crooned by, among others, Louis Armstrong, is also among Wall-E’s mementos of, well, us. He is a dented little workhorse who, having outlasted his planned obsolescence, spends his days in the Sisyphean, mechanical labor of gathering and compacting garbage. His name is an acronym for Waste Allocation Load Lifter- Earth Class. But not everything he finds is trash to Wall-E. In the rusty metal hulk where he and the cockroach take shelter from dust storms, he keeps a carefully sorted collection of treasures, including Zippo lighters, nuts and bolts, and a Rubik’s Cube.
Wall-E’s tender regard for the material artifacts of a lost civilization is understandable. After all, he too is a product of human ingenuity. And the genius of “Wall-E,” which was directed by the Pixar mainstay Andrew Stanton, who wrote the screenplay with Jim Reardon, lies in its notion that creativity and self-destruction are sides of the same coin. The human species was driven off its home planet — Wall-E eventually learns that we did not die out — by an economy consecrated to the manufacture and consumption of ever more stuff. But some of that stuff turned out to be useful, interesting, and precious. And some of it may even possess something like a soul.
Observing Wall-E’s surroundings, the audience gleans that, in some bygone time, a conglomerate called BnL (for “Buy N Large”) filled the earth with megastores and tons of garbage. Eventually the corporation loaded its valued customers onto a space station (captained by Jeff Garlin), where they have evolved into fat, lazy leisure addicts serviced by a new generation of specialized machines. One of these, a research probe named Eve (all of the robot names are acronyms as well as indicators of theoretical gender) drops to Earth and wins Wall-E’s heart.
Their courtship follows some familiar patterns. If “Wall-E” were a romantic comedy, it would be about a humble garbageman who falls for a supermodel who also happens to be a top scientist with a knack for marksmanship. (I’m pretty sure I reviewed that a while back, but the title escapes me.) Wall-E is a boxy machine of the old school, with creaks and clanks and visible rivets, his surface pocked with dents and patches of rust. He is steadfast, but not always clever or cool. Eve, shaped like an elongated egg, is as cool as the next iPhone and whisper quiet, unless she’s excited, in which case she has a tendency to blow things up. She and Wall-E communicate in chirps and beeps that occasionally coalesce into words. Somehow their expressions — of desire, irritation, indifference, devotion and anxiety, all arranged in delicate counterpoint — achieve an otherworldly eloquence.
That they are endowed with such rich humanity is as much a Pixar trademark as the painstakingly modeled surfaces or the classical virtual camerawork and editing. The technical resourcefulness that allows “Wall-E” to leap effortlessly from the derelict Earth to the pristine atmosphere of the space station is matched by the rigorous integrity the filmmakers bring to the characters and the themes.
The paradox at the heart of “Wall-E” is that the drive to invent new things and improve the old ones — to buy and sell and make and collect — creates the potential for disaster and also the possible path away from it. Or, put another way, some of the same impulses that fill the world of “Wall-E” — our world — with junk can also fill it with art.
TITLE: Rushdie Wins ‘Best of Booker’
PUBLISHER: Reuters
TEXT: LONDON — British author Salman Rushdie won the “Best of the Booker” prize on Thursday to mark the 40th anniversary of one of the world’s most prestigious literary awards.
“Midnight’s Children” won the Booker Prize in 1981, and the Indian-born writer was hot favorite to take the award decided by the public from a shortlist of six in an online poll.
The 61-year-old, whose 1988 novel “The Satanic Verses” outraged many Muslims and prompted death threats against him, also won the 25th anniversary Booker prize in 1993.
“I think it was an extraordinary shortlist and it was an honor to be on it,” Rushdie said in a recorded message from the United States, where he is on a book tour.
His sons, Zafar and Milan, accepted a trophy in London on his behalf, and the author said it was apt that “my real children (are) accepting a prize for my imaginary children.” Milan added: “I’m really looking forward to reading it when I’m older. Well done Dad.”
Victoria Glendinning, chair of the panel who drew up a shortlist, said the entries were dominated by themes of the end of empire and two world wars.
“These are the nettles we have been compelled to try and grasp,” she said.
TITLE: Briton Wins Longest Tour de France Stage
PUBLISHER: The Associated Press
TEXT: CHATEAUROUX, France — Mark Cavendish of Britain won a sprint to take the fifth — and longest — stage of the Tour de France on Wednesday, and German rider Stefan Schumacher held on to the overall leader’s yellow jersey.
Cavendish beat Oscar Freire of Spain and veteran German sprinter Erik Zabel on the line at the end of the 232-kilometre flat stage from Cholet to Chateauroux. He completed the stage — the longest of the Tour — in five hours 27 minutes 52 seconds.
Three Frenchmen — Lilian Jegou, Nicolas Vogondy and Florent Brard — hit the front after 11 kilometers and at one point had a lead of more than eight minutes. However, the field never seemed concerned, and the riders worked together to catch the breakaway almost on the finish line.
“It’s the biggest thing that’s happened to me,” the 23-year-old Cavendish said. “To win a stage of the Tour is a massive thing. I came here with the intention of winning one. It just means so, so much to me.”
Cavendish said he had been forced to begin his sprint earlier than he wanted but had managed to hold on because “when you have a team like I have, it’s impossible not to be the best.”
Cavendish had been disappointed that Monday’s third stage was won by a breakaway, giving no opportunity for the sprinters to fight out the victory.
Cavendish, who comes from the Isle of Man, was selected by British Cycling on Tuesday to ride the madison on the track at the Beijing Olympics along with Bradley Wiggins. The pair won the world championships in the event in March. He is not slated to compete in the road races, however.
Schumacher held on to his 12-second overall lead from Kim Kirchen of Luxembourg and David Millar of Britain.
“It was great to enjoy this stage in the yellow jersey,” Schumacher said. “Yesterday, it was a great mix of feelings given that the start of the season was not good for me. Yesterday, I could have cried but I didn’t want to cry in front of everyone. Today, I was much more relaxed.”
All the riders who are expected to contest the overall victory finished safely in the pack, although Spanish rider Alejandro Valverde hit debris in the road about 80 kilometers into the stage and went over his handlebars. He injured his right arm, right knee and calf, but got back on his bike and continued riding.
The injuries are not expected to threaten Valverde’s continued participation, said Eusebio Unzue, director of his Caisse d’Epargne team. French cyclist Aurelien Passeron hit a female spectator about five kilometers from the end of the race.
Passeron got back on his bike and continued, but finished almost five minutes behind the field.
Race organizers said the spectator, Marie-Antoinette Bidault, a local resident, was helped to her feet quickly by those next to her. Medical staff were soon on the scene and gave her an X-ray, which revealed an injury to her right wrist but no break.
Colombian rider Juan Mauricio Soler, who has ridden with injured wrists since crashing in Saturday’s first stage, pulled out of the race early into the stage. He was the King of the Mountains champion as the Tour’s best climber last year.
His Barloworld team said a scan had confirmed a fracture in the right hand of Soler, who felt so much pain when he held his handlebars that he was in danger of crashing.
“In agreement with Mauricio, we decided to wait two days after the crash to see if things improved, but we’ve had to accept that it is impossible for Soler to carry on in the Tour de France,” team manager Claudio Corti said.
TITLE: Putin Heads Preparations For Sochi
PUBLISHER: The Associated Press
TEXT: LONDON — Prime Minister Vladimir Putin will be directing preparations for the 2014 Winter Olympics in Sochi, the head of the local organizing committee said Tuesday.
“He is still the captain of our team,” Dmitry Chernyshenko told The Associated Press. “He is aware of all the details and is controlling the project at all levels. It is his personal commitment and personal challenge. We will not let him down.”
Putin’s direct involvement became fully evident Thursday when he called for the bobsled and luge venue and the Olympic village in the mountain region to be moved to new locations because of environmental concerns.
“He didn’t suddenly appear.” Chernyshenko said in a telephone interview. “He is personally involved in the project on a daily basis.”
Putin, then Russian president, was instrumental in Sochi securing the games when he traveled to Guatemala City a year ago to lobby International Olympic Committee members before the host city vote.
As prime minister, Putin is head of the government council overseeing the Sochi Olympics, the first Winter Games to be held in Russia. Sochi, a Black Sea resort near the Caucasus mountains, has served as Putin’s summer residence.
Chernyshenko said Putin’s role in the change of venues was a “perfect example” of cooperation between the organizing committee and the Russian government.
“We can show the world that we can deliver concrete action, not just words, as President Putin personally promised in Guatemala,” he said.
Sochi, which must build all its venues from scratch, has been under pressure from environmental groups concerned about the impact on the ecology in the mountain region.
Chernyshenko said organizers remain on course to complete the facilities two years ahead of the Olympics.
“This relocation will not impact the final deadlines,” he said. “We are firmly on track.”
Both the bobsled track and the Olympic village were planned for the undeveloped Grushevaya area adjacent to a nature reserve. Along with the possible damage to the pristine area, environmentalists warned the track would obstruct animal foraging tracks.
“In determining priorities — money or ecology — we choose ecology,” Putin said last week. “If the balance of nature is upset, this could lead to a situation that would be impossible to restore for any money.”
Chernyshenko said organizers have already located a new venue for the bobsled and luge track at Alpika Service, in the main ski resort of Krasnaya Polyana, and the site had been approved by the international bob and luge federations.
Organizers will save on the original $3 million budget for the sliding facility because they will no longer need to build about 10 miles of mountain roads, he said.
“The new site is convenient for the athletes and spectators and is compact and fully compliant with environmental standards,” Chernyshenko said.
TITLE: ‘Wizard’ Coach Hiddink Denies There’s Magic in Winning Ways
PUBLISHER: Agence France Presse
TEXT: SEOUL, South Korea — Guus Hiddink, christened the “wizard” by grateful Russian media, said Tuesday there was no magic to his giant-killing exploits as a coach in big international tournaments.
“There’s no recipe, there’s no secret, there’s no magic,” he told journalists during a visit to South Korea, the team he took to the 2002 World Cup semi-finals against all the odds.
“What we emphasized was to expose [ourselves], as a team, as players, to play fully committed and fully hard,” the 62-year-old said of his latest team Russia, which he led to the Euro 2008 semi-finals last month.
The country had not advanced to the knockout stage of a major competition in 20 years.
The Dutchman — a hero in South Korea — also took Australia to the second round of the World Cup two years ago.
Hiddink arrived Monday to attend this week’s opening of a football pitch named after him for disabled children in the southeastern port city of Pohang.
“You cannot guarantee 100 percent winning, but what we guaranteed to the public is that we would play in a very attractive style,” he said of Russia’s Euro 2008 performance.
“You must be very realistic,” he said, sitting at a lunch next to current South Korean national coach Huh Jung-Moo. “Let’s not forget realistically where Russia is, where Korea is.”
South Korea, seeking their seventh ticket to the World Cup, have made it to the final regional qualifying round starting in September. But their performance has been flawed in recent qualifiers.
“You must put the aims and targets, so everyone knows what to do within a team,” said Hiddink, quoted by Yonhap news agency. “[A team] cannot always be top, top, top. But when players play with their heart, there’s no big problem.”
n Zenit St. Petersburg have rejected a 15 million euro ($23.51 million) offer from Barcelona for playmaker Andrei Arshavin, the Russian champions said on Monday.
“Barcelona had failed to improve their original offer of 15 million euros, thus we decided to end our negotiations with the Spanish club,” Zenit said on their Web site www.fc-zenit.ru.
“We have not received any offers for Arshavin from any other clubs, therefore there are no discussions going on about his transfer.”
Last week, Zenit offered to extend Arshavin’s current deal by two more years until 2012. Zenit have given the 27-year-old two weeks to decide his future.
(Reuters)