SOURCE: The St. Petersburg Times
DATE: Issue #1404 (68), Tuesday, September 2, 2008
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TITLE: Second Coming For Local Magazine
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: A popular local weekly magazine that has been critical of local government policies, Gorod, was relaunched this week under the title Gorod 812.
Now published by the Agency for Journalistic Investigations, one of St. Petersburg’s most influential media holdings, the magazine was shut down in May — officially owing to poor financial performance, but amid rumors that the real reason behind the closure was Gorod’s razor-edge criticism of City Hall.
Founded in 2002, the magazine was owned by the Moscow businessman Leonid Davydov, currently chairman of the board of the VTsIOM polling agency and a member of the Russian Public Chamber. Davydov never publicly commented on the closure of the magazine but Marina Polosatkina, who had been the magazine’s general director, told reporters at a news conference in May that the shutdown took place on purely financial grounds.
Her version was questioned by some experts.
“Although by no means an opposition outlet of the caliber of Novaya Gazeta or Radio Liberty, the magazine was more outspoken than most local publications,” said Boris Vishnevsky, a political analyst and award-winning columnist with Novaya Gazeta.
Andrei Konstantinov, head of the Agency for Journalistic Investigations, stressed at a news conference on Monday that Gorod was closed solely because it was making losses. When confronted with the question of why the Agency for Journalistic Investigations decided to absorb a business that looks set to saddle it with losses, Konstantinov said the holding’s management is confident they will be able to develop a successful sales and advertising plan. 
“We have absorbed a team of journalists, and it wasn’t the editorial department that failed Gorod,” Konstantinov explained. “As a product, Gorod was — and will be — high quality. It needed a more efficient sales team, and this is something to which we can contribute.”
Konstantinov said the Agency for Journalistic Investigations had repeatedly — and fruitlessly — tried to buy the Gorod brand from its previous owners but after the negotiations failed, the editorial team settled on the name Gorod 812 which combines the old name with the number of St. Petersburg’s telephone area code.
“This is not a charitable project, neither is it a public relations tool — we do not need either of those,” Konstantinov said. “This is an exciting challenge for the holding which until now has not had a weekly magazine among its publications.”
Sergei Baluyev, the magazine’s editor-in-chief, said the publication has retained its structure and key staff, and will continue to have a circulation of 10,000 copies an issue. He also said that he had taken the initiative of contacting the Agency for Journalistic Investigations with the offer to collaborate.
“As for the themes, they will be, as before, dictated by events and the city life, and nothing else,” Baluyev. “We are looking to expand the team of experts whom we quote on various topics. It is an open secret that there is a handful of experts who never leave the pages of the local media as if no other competent people existed. We are out to change that.”
After the news broke that Gorod was closing down, the editorial team was hit with an avalanche of phone calls. Rescue scenarios varied from sponsorship offers from private sponsors to investment packages from banks to plans suggesting that each of the magazine’s 10,000 readers send  1,000 rubles to help the publication’s financial survival.
Vishnevsky said the publication looks set to preserve its philosophy and core values despite changing ownership.
“I believe in personalities in journalism, in individual reputations, rather than in brands as such. The editors of Gorod 812 have kept all the key staff, and I have known most of these people personally for many years — it is impossible to force them into writing anything against their principles,” Vishnevsky said.

TITLE: Russia Says U.S. May Be Arming Georgia
AUTHOR: By Robert Wielaard
PUBLISHER: The Associated Press
TEXT: BRUSSELS, Belgium — Russia warned the West on Monday against supporting Georgia’s leadership, suggesting that the United States carried weapons as well as aid to the ex-Soviet republic and calling for an arms embargo until the Georgian government falls.
The remarks by Foreign Minister Sergey Lavrov and his spokesman came as European Union leaders delicately approached their relations with Russia, weighing how to punish Moscow for its invasion of Georgia without isolating the continent’s major energy supplier.
The latest Russian rhetoric was likely to anger the United States and Europe and enrage Georgian President Mikhail Saakashvili, who has said Russia’s goal all along has been to remove him from power.
“If instead of choosing their national interests and the interests of the Georgian people, the United States and its allies choose the Saakashvili regime, this will be a mistake of truly historic proportions,” Lavrov said.
At the EU emergency summit talks, leaders debated a draft statement condemning Russia for putting relations with the EU “at a crossroads” and urging it “not to isolate” itself from Europe.
It called Russia’s invasion of Georgia unacceptable and said the EU is ready to bolster ties with Georgia. There was, however, no mention of sanctions against Russia or of sending EU soldiers to Georgia.
A copy of the draft statement was obtained by The Associated Press.
Hours after Lavrov’s comments, the spokesman for the Foreign Ministry suggested U.S. ships that carried humanitarian aid to Georgia’s Black Sea coast following last month’s war may also have delivered weapons.
Without naming a specific country, Foreign Ministry spokesman Andrei Nesterenko said there were “suppositions” that the cargo of military ships bringing aid to Georgia may also have included “military components that will be used for the rearmament” of Georgia’s military. He provided no evidence, but said such suspicions were a reason for Russia’s call for an arms embargo.
Lavrov reserved particular criticism for the United States, which has trained Georgian troops, saying such aid had failed to give Washington sufficient leverage to restrain the Georgian government. Instead, he said, “It encouraged the irresponsible and unpredictable regime in its gambles.”
Neither the State Department nor the Pentagon had immediate comment.
Human Rights Watch said Monday that Georgia — as well as Russia — dropped cluster bombs during the conflict. The rights group said Georgia’s government has admitted it, while Russia continues with denials.
“These indiscriminate attacks violate international humanitarian law,” said Bonnie Docherty, arms division researcher at the New York-based body, who said the casualty toll in only four Georgia villages from cluster bombs and their leftover duds was 14 dead and dozens wounded.
The revelation could provide fuel for Russia, which has traded allegations with Georgia over controversial weapon usage, human rights violations and disinformation.
In the Georgian capital, Tbilisi, as many as 100,000 protesters jammed the main avenue, chanting their country’s name. The Tbilisi demonstration started with people holding hands to form “human chains” in an echo of the so-called Baltic Chain of 1989 in which residents of then-Soviet Lithuania, Latvia and Estonia stretched the length of their homelands to protest Soviet occupation.
On arrival at the EU summit, German Chancellor Angela Merkel said the EU must stress the importance of “the territorial integrity of Georgia” but that the lines of communication with Moscow “should not be cut off.”
British Foreign Secretary Gordon Brown said the “27 members of the European Union are totally united in condemning the aggression of the Russian Government.”
“While we do want good relations with Russia, I think it is pretty clear from what has happened over these last few weeks it cannot be business as usual. Indeed it will not be business as usual until things improve.”
Russia supplies the EU with a third of its oil and 40 percent of its natural gas — a dependence the European Commission says will rise significantly in the future.
Germany relies on Russia for 34 percent of its oil imports and 36 percent of its natural gas consumption. Slovakia, Finland and Bulgaria depend on Russia for more than 90 percent of the gas that heats homes, cooks meals and powers factories.
The Europeans appeared to focus more on bolstering Georgia. The draft statement called for a free trade pact with Georgia, visa-free travel and reconstruction aid.
It said a “peaceful and lasting” solution to the conflict in Georgia must be based on respect for the country’s sovereignty and borders.
“Each state in Europe has a right to determine freely its foreign policy and its alliances” — an apparent reference to Moscow’s fierce opposition to Georgia’s bid to join NATO.
In Brussels, Vladimir Chizov, Russia’s ambassador to the EU, said the Europeans exaggerate the Russian-Georgian war’s significance with references to another Cold War.
‘“The Cold War was clearly about ideologies,” Chizov told a pre-summit conference of the German Marshall Fund of the United States.

TITLE: In Lieu of Public Debate, Opposition Disagrees Over War
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Although divided over the war in Georgia but a group of parties in opposition to the Kremlin represented by the recently established National Assembly not only worked together on Sunday, but extended their reach to Russia’s regions — starting in St. Petersburg — as shown by the inaugural session of the National Assembly’s Regional Council in the city.
The National Assembly is an alternative parliament aimed at the “restoration of democracy” in Russia launched by the Other Russia pro-democracy coalition that features Garry Kasparov’s United Civil Front and Eduard Limonov’s banned National-Bolshevik Party (NBP) as well as other parties and movements, in Moscow in May.
Held at Park Inn Pribaltiiskaya, the first session of the National Assembly’s Regional Council in St. Petersburg on Sunday featured 106 “deputies” belonging to 13 political parties, movements and public organizations.
Members of the United Civil Front and the NBP were joined by representatives of the democratic party Yabloko, Mikhail Kasyanov’s People’s Democratic Union, Vladimir Ryzhkov’s Republican Party, as well as activists from rights and pressure groups such as Soldiers’ Mothers, Living City and Protect Vasilevsky Island.
“It was extremely important for us to create a national platform on which different positions presented in society by different political forces and organizations could collide, in a situation, when, as we know, the State Duma, the so-called official parliament, has stopped being a place for discussions,” said Kasparov, addressing the deputies.
“Now we see how decisions crucial for the country get accepted unanimously. I think even if these decisions seem right to somebody, it still doesn’t make us happy, because such things [as the recognition of Southern Ossetia and Abkhazia] demand to be seriously discussed in society and the organizations that represent the whole spectrum of public opinion.”
Kasparov stressed the importance of establishing branches of the National Assembly in the regions outside Moscow. 
“It is in the regions, where we can start to rebuild the totally destroyed structure of Russian parliamentarianism, because it’s here where we can work with people specifically, to create a base of voters...not those who have put up with their voices getting stolen, but those who want their voice to affect the situation in the country.”
He added that around 70 “deputies” of the National Assembly — more than 10 percent — are from St. Petersburg.
“There are different viewpoints on such important issues as those of war and peace existing in the Assembly — exactly because they exist in this country, and there is nothing surprising about that... 
“Some people may like the decision to recognize South Ossetia and Abkhazia, others may not, but such decisions can’t be accepted in a normal country unanimously,” Kasparov said. 
“It’s obvious that there are different positions and these positions should be discussed,” he added.
Kasparov responded to critics of the National Assembly who say that it split and became unworkable when it was faced with the ongoing crisis in Georgia. 
“Quite the opposite! It became the only platform where such issues are discussed,” he said.
In debates on Georgia that followed, Andrei Dmitriyev, the local leader of the mildly nationalist NBP, delivered his party’s view that it supported the Russian authorities’ decision to invade Georgia.
“Once in blue moon, Russia’s leadership acts in the right way,” said Dmitriyev, who said he spent several days in Tskhinvali and the Georgian town of Gori soon after the military action took place. 
He criticized views expressed by liberals in the opposition — including those of Kasparov who wrote in an article that all sides have lost out in the August hostilities. 
“Why did nobody win? The peoples of South Ossetia, Abkhazia and Russia: they all have won,” he said, 
Dmitriyev added that he supports the Kremlin and President Dmitry Medvedev in their actions during the conflict.
Dmitriyev described the liberals’ anti-war position as a “big political mistake” because it allows the authorities to present the opposition as “internal exiles.”
“We, natsbols [NBP members], don’t want to be in a ghetto, we are struggling against the despotism of those in power, we are not struggling against the Russian people and against our country,” he said.
Finally, Dmitriyev asked that his words be taken not as an attempt to destroy the coalition but as criticism toward comrades-in-arms, and called for renewed focus on the country’s internal problems such as the absence of free elections and various social problems.
While many in the audience seemed to disagree with Dmitriyev, Kasparov drew attention to the fact that the NBP has defended its position for many years — unlike pro-Kremlin youth groups such as Nashi or the Young Guard.
“Limonov’s position on this issue hasn’t changed for 16 years, I think it’s important to note this,” Kasparov said.
“When we were making certain coalition agreements regarding restoration of democracy in Russia, everyone did it with their eyes open.
“We knew the positions of our allies in the coalition on a number of issues, including Abkhazia and South Ossetia, that’s why I wouldn’t equate official patriotic hysteria warmed up by the Kremlin… with those who have defended this position — in my view, a wrong position — for many years.”
According to Kasparov, more representative debates on the war in Georgia are due in Moscow later in September.
In the first session, the National Assembly’s local council accepted its manifesto and several other documents. 
Deputies agreed to the principles of the National Assembly’s Charter, which states that the National Assembly has been established to “defend civil freedoms, political rights, the health and life of Russian citizens, political democracy and people’s representation.”
“We are united in our disagreement with the course of the current political regime leading the country to a national catastrophe,” it says.
According to the local branch of the United Civil Front, the second session will be held in St. Petersburg in a month’s time.
The official local parliament, the St. Petersburg Legislative Assembly, had no comment about the establishment of the National Assembly’s local council on Monday. 
Liza Agamalyan, the press officer to the Legislative Assembly’s Chairman Vadim Tyulpanov, declined to comment when contacted on Monday.

TITLE: Hundreds Ride Sex Toys in Local River Rapids Race
AUTHOR: By Christopher Hamilton
PUBLISHER: Special to The St. Petersburg Times
TEXT: LOSEVO, Leningrad Oblast — Athletes and thrill seekers converged at the Losevo Rapids on the Vuoksa River on Saturday, about 82 kilometers northwest of St. Petersburg, for the sixth annual Bubble Baba Challenge — a wet and wild ride on inflatable women. 
“This is one of my favorite events of the summer. I’ve been rafting most of my life, but the people and the atmosphere make this competition special. It’s more of a crazy celebration and party [than a sporting event],” said Kirill, a participant from St. Petersburg who admitted he had no serious ambitions of winning. 
“I’m just hoping to finish this year. Last year I got swept away by the rapids and got washed into the lake so I didn’t make it over the finish line. But this year I’m ready.” 
Spectators were full of giggles as they photographed the competitors walking around in wet suits, life vests, and helmets, with their “women” — inflatable sex toys — in tow. 
“It’s a very amusing event,” said this year’s champion Vladimir Zaitsev. “I was an organizer during the inaugural event in 2003, but was invited to participate in 2004. I had never rafted or anything before, so that first year was a total rush for me. I’ve raced every year since.”
Zaitsev also won the event in 2006. 
This year, Zaitsev and his doll, “Hedgehog in the Fog,” again took first place with a time of 2 minutes 45 seconds. Sergei Ushkov and “Submariner” finished next nine seconds later, followed by third-place winners Nikolai Novosyolov and “Snow White” clocking in at 2:59. 
This year’s competition saw the debut of a separate heat just for women. Yelizaveta Smirnova took first place in the women’s event with “Surprised Little Squirrel” with a time of 3:38. Maria Nalimova and “P-Love-Chikhe” finished second at 4:42, followed by third-place winner Alexandra Kiselyova on “Rubber Lady” 14 seconds later. 
“It’s been great to watch this event grow during the years. Every year the organization gets better and better. This year the waiting time between heats was greatly reduced and there were more event staff than in past years. It was really well organized.” Zaitsev added. 
Despite the enthusiasm, turnout for this year’s event was lower than expected. 
“We had over 600 people register online to participate this year. But a lot of people were scared away by the chilly weather and forecast for rain,” explained the event’s founder and director Dmitry Bulavinov. 
“If everyone that registered came we would have maintained our usual growth rate — a rise of about of about 150 percent in the number of participants,” Bulavinov added. “Next year we hope to take pre-payments with the online registrations using Yandex.money.” 
“We introduced a number of improvements this year, including an electronic timing system. This not only improved the accuracy of the timing, but also allowed us to reduce the waiting time between heats.”
Officially, 234 men and 24 women participated this year. 
Baba in Russian generally means “country woman,” but is sometimes used in a sexually derogatory way. Other interesting “baba names” for the sex dolls included “Swimming Milkmaid,” “Love Torpedo,” and the “Elastic Lady.”
“The most important thing is quickly finding your way to the fast rapids and working your legs hard. If you’re slow to get into the rapids you won’t have a chance,” said Zaitsev, an amateur swimmer who competes at city level. “And you also have to save a bit of energy for the end because you need to swim against the rapids to the finish line.”
“I don’t think my background in swimming gives me much of advantage. It’s hard to swim while holding on your inflatable doll... It’s more like synchronized swimming!” he said. “But, seriously, I do want to thank my coach Igor Cherdakov and my girlfriend Diana for all their support.”
Winner of the women’s race Smirnova wasn’t available for comment on Monday. 
Heats of about 50 swimmers took place throughout the afternoon at 15-20 minute intervals. The best five competitors from each heat qualified for the final championship race. 
“Most of the heats are limited to the number of blow-up dolls we have available to rent,” Bulavinov explained. 
“We bought them in bulk online so we only paid about half-price for them, but the course isn’t kind to them and they usually only last about two seasons. But the rental and entrance fees pretty much cover the costs.”

TITLE: Opposition Journalist Mourned in Ingushetia
PUBLISHER: Reuters
TEXT: NAZRAN, Russia — More than 1,000 people gathered in Russia’s troubled Ingushetia region on Monday to protest the death of Magomed Yevloyev, a leading journalist and local opposition leader shot while in police custody.
Yevloyev, owner of opposition Internet site www.ingushetiya.ru, is the most high-profile Russian journalist to be killed since investigative reporter Anna Politkovskaya was shot outside her Moscow apartment in October 2006.
Local police said he was shot by accident when he tried to grab a police officer’s gun, but his supporters and human rights groups said they did not believe that version of events.
Yevloyev had frequently clashed with Ingushetia’s Kremlin-backed leader Murat Zyazikov, and his Internet site was the subject of official attempts to close it down.
A Reuters reporter in Ingushetia’s biggest city Nazran said protesters gathered in a central square around a truck which was carrying Yevloyev’s coffin.
“They killed our colleague in a dastardly and open way. If the federal authorities do not intervene in what is happening, we have the right to demand Ingushetia’s secession from Russia,” Magomed Khazbiyev, a protest organiser, told the crowd.
The protesters responded with loud shouts of “Allahu Akbar” or “God is Great.” About half the demonstrators left when Yevloyev’s body was taken for burial. Some 500 people remained and said they would not leave until Zyazikov left his post.

The local administration, contacted by Reuters on Monday, declined to comment on Yevloyev’s killing. Zyazikov has in the past accused his opponents of spreading misinformation and staging “provocations” to foment instability.
Yevloyev’s killing is likely to add to tension in a region which is already a tinderbox because of poverty, a violent Islamist insurgency and accusations that Zyazikov brutally crushes dissent, an allegation he has denied.
Reporters Without Borders, a Paris-based group which campaigns for media freedom, said the explanations given by the Ingush authorities for Yevloyev’s death made no sense.
“We are outraged by the death of Yevloyev, who demonstrated his courage and determination by reporting independent news in Ingushetia, although he and his family were harassed and threatened,” it said. “His death must not go unpunished.”
Russian prosecutors said they had started a criminal investigation under article 109 of the Russian criminal code: causing death through carelessness.
“On August 31 at 14:00 (6:00 a.m. EDT) officials from the Ingush Interior Ministry were conveying Magomed Yevloyev from Magas airport to Nazran in an official vehicle,” a ministry spokeswoman said, reading from a statement.
“Yevloyev attempted to grab the weapon of one of the officers accompanying him. As a result the unidentified officer inflicted a penetrating gunshot wound to Yevloyev’s head.”

TITLE: AgroRus Examines Problems of Modern Agriculture
AUTHOR: By Yevgeny Rozhkov
PUBLISHER: Special to The St. Petersburg Times
TEXT: Fifty-one regions including St. Petersburg and the Leningrad Oblast and other major exhibitors such as Moscow and the Moscow Oblast, and Russia’s agricultural centers of the northwest, south, the Urals and Siberia were represented at the 17th international AgroRus exhibition which took place in St. Petersburg last week.  
Although cutting the traditional red ribbon was a routine ceremony at AgroRus 2008, next year participants are likely to see an innovation emphasizing the nature of the exhibition. Yevgeny Utkin, the development director of the Karelia dairy plant, suggested that next year’s VIP guest should use the knife to slice a plait made of cheese like the 17.5-meter masterpiece the company displayed at this year’s exhibition. 
“Russia’s Book of Records features a similar 16.5-meter cheese plait made in the Altai Region, but it took us 179  liters of milk and two days to beat the previous achievement,” said Utkin. 
Originally the dairy-makers planned to impress with a more perishable kind of soft cheese product which requires considerable refrigerating capacities, but finally decided on another malleable, edible substitute, which won them the AgroRus 2008 Gold Medal.
While substituting products may be relatively easy, it is far more difficult to substitute employees in the agricultural sector, complained participants at the exhibition.
“A lack of skilled personnel is one of the basic problems in rural areas at present. Therefore authorities are not only concerned with how to keep individuals on the land, but also with how to provide new residents with good-quality, comfortable living conditions,” said professor Alexander Grimitlin, President of Russia’s Northwest Association of Engineers, which specializes in heating, air conditioning and constructional thermal physics. 
Projects to construct new infrastructure for rural populations were already underway at the end of the 1970s in then-Soviet Lithuania, and in Grimitlin’s opinion, the experience is worth reviving. 
“Unfortunately, such experience is not widespread among specialists — designers, builders and engineers are in desperate need of new approaches to low level construction,” said the professor.
Experts say that agriculture has seen increased financing from the federal budget, which has made it possible to construct more cattle farms and purchase new equipment. The Vologda Oblast in Russia’s northwest is the country’s leader in dairy production, while the Pskov Oblast’s agriculture is enjoying doubled investments from the local authorities. In addition, for the first time in the last ten years, the Russian government is offering legal and financial support to one of the country’s most crucial industries.
“In a draft version of the budget for the Leningrad Oblast, we have increased the sum intended for the development of agriculture from the initial 645 million rubles ($26.1 million) to one billion rubles ($40.5 million),” said Sergei Yakhnyuk, deputy governor of the Leningrad Oblast. He said that the estimate would increase further. 
“We are in for a serious task and have a five-year time period in which to restore everything that was neglected and destroyed in the 1990s. In addition, production growth in Russian agriculture has to be ensured,” said Yelena Khazova, Vice President of the Severo-Zapad (North West) Association of Agricultural Producers. 
Although agriculture is still a problem sector in the economy of Russia’s northwest, with a 1.5 percent decline in gross product production and falling revenues, it is gradually progressing from a struggle to survive to constant development, as described by Dmitry Toropov, director of a department at Russia’s Ministry of Agriculture. 
“The development of the market’s infrastructure, legal and financial support of the agricultural industry and self-government in rural areas are the basic issues that will improve the wellbeing of citizens and ensure national consumer goods security,” said Toropov. 
The Leningrad Oblast annually harvests around one billion tons of potatoes and other vegetables and more than two billion eggs, thus fulfilling its dairy product requirements by 128 percent, and meat requirements by 132 percent, according to Alexander Varyonov, deputy head of the agricultural industry department at City Hall. Given such figures, in the opinion of Alexander Khodachek, Rector of St. Petersburg Higher School of Economics, the abundance of imported goods and ingredients on the market is a sign of reluctance among consumers and producers to support local industry.

TITLE: Turkey Retaliates to Russian Measures
AUTHOR: By Mark Bentley and Ali Berat Meric
PUBLISHER: Bloomberg
TEXT: ANKARA, Turkey — Turkey imposed curbs on Russian imports Monday as a dispute over the movement of goods between the two countries showed no sign of abating. 
Russian goods entering Turkey will be subject to the same kind of detailed inspections that Moscow applies to Turkish products at its borders, Foreign Trade Minister Kursad Tuzmen told reporters at a trade fair in China on Monday, according to the state-run Anatolia news agency.
Turkey, a U.S. ally that trades more goods with Russia than any other country, complained last week as Turkish trucks sat waiting at Russian customs. The government suspects that Moscow may be punishing it for allowing U.S. warships to pass through the Bosporus to deliver humanitarian aid to Georgia.
“I hope we can now resolve the problem without it getting worse,” Tuzmen said. “We don’t want to conclude that Russia is obstructing Turkish exports because of permission we gave for NATO ships to pass through the Bosporus.”
U.S. warships are spearheading the aid mission to Georgia, a U.S. ally that wants to join NATO. The Bosporus provides sole access for ships to Georgia’s ports in the Black Sea. Russia began an incursion into its Caucasus neighbor on Aug. 8, a day after Georgian troops attempted to regain Russian-backed South Ossetia.
The curbs on Turkish exports may cost the country as much as $3 billion in lost revenue, Tuzmen said. Russia was the largest market outside the European Union for Turkish goods last year, with $4.9 billion of exports. Turkey also relies on Russian natural gas imports for heating and electricity.
The Turkish government is responsible for policing the 32-kilometer Bosporus, the only route for ships traveling to the Black Sea, under the 1936 Montreux agreement. Countries that do not border the Black Sea may only sail their warships there for a maximum 21 days and must give 15 days’ notice before passing the straits.
Turkey is responsible for applying the accord’s three-week rule on foreign ships, Anatoly Nogovitsyn, deputy chief of the General Staff, said in Moscow on Wednesday.
Ankara has sought to boost trade with Moscow as it tackles a current account deficit that’s widening as energy costs increase. 
Textile and clothing exports, which make up the bulk of exports to Russia, were Turkey’s biggest foreign currency earner last year, bringing in $22.6 billion.
Meanwhile, Turkish builders, including Enka, have invested billions in Russian construction projects. Enka on Friday slumped 2.8 percent to 10.60 liras ($9) on the Istanbul Stock Exchange, extending this week’s losses to 12 percent on concern that the trade dispute will hurt its business in Russia.
The dispute means that Turkey may withdraw its support for Russia’s membership of the WTO, Tuzmen said. Russia, with the largest economy outside the 153-member trade organization, applied to join more than 15 years ago. 
Russian Foreign Minister Sergei Lavrov was due to hold talks with his Turkish counterpart Ali Babacan in Ankara on Tuesday.

TITLE: Local Office for Lidings Law Firm
PUBLISHER: The St. Petersburg Times
TEXT: Lidings, a Moscow-based law firm and Russia’s first to specialize in advising foreign companies doing business in the country, opened an office in St. Petersburg on Monday. The opening was the result of increased business for the firm in the city, Russia’s second-largest center for international investment. 
“Many of our clients are already working in St. Petersburg. Besides, we have significant plans to increase our work with clients from Scandinavian and the Baltic states, because their presence is particularly noticeable in the northwest region,” Lidings partner Andrei Zelenin said in a press release issued by the company.
Current clients include the Taiwanese IT firm Foxconn and British geophysical company ARKeX. 
Lidings plans to attract recruits for its St. Petersburg office by cooperating with local universities and law firms, and is considering merging with one of the city’s established law firms.

TITLE: Finnish Developer Positive on Local Market
PUBLISHER: Bloomberg
TEXT: HELSINKI — The Finnish developer SRV Group has increased its Russian investments and said its plans to expand there aren’t hindered by the country’s political standoff with Europe and the U.S.
“What we’ve learned is that you always have to have a partner in Russia to anchor your business to the society,” CEO Eero Helioevaara said in an interview Thursday in Helsinki.
SRV raised about $173 million in an IPO last year to expand in Finland and Russia. The company acquires land and manages projects to commercialize it and sell it, hiring mainly outside contractors for the actual construction.
SRV’s Russian projects include an office and retail park adjacent to the International Banking Institute in St. Petersburg, as well as a logistics center in the city’s suburbs.
The Russian partners supply the land and contacts with authorities, while SRV plans and supervises the project and secures outside financing.
Western companies that have struggled in Russia may not have done their homework, Helioevaara said. SRV invested “hundreds of thousands of euros” in a St. Petersburg site several years ago, only to learn that it could not build there because there was a public facility there that couldn’t be demolished, he said.

TITLE: In Brief
TEXT: <b>Oil Exports Guaranteed</b>
MOSCOW (Bloomberg) — Russian Deputy Prime Minister Igor Sechin said a report that the country may cut oil exports should the European Union impose sanctions over South Ossetia was a “gross provocation,” according to RIA Novosti.
Russia fulfilled its contractual obligations during the Cold War, and is a responsible and reliable energy partner, the state-run news service cited Sechin as saying Friday in Moscow.
Russian oil groups are international companies with shares traded in Europe and the U.S., which means they could incur “negative consequences” should they fail to honor their commitments, he said, according to RIA.

<b>UkrTatNafta Punished</b>
KIEV (Bloomberg) — Ukraine’s Anti-Monopoly Committee fined the country’s second-biggest refinery UkrTatNafta after finding it guilty of overcharging for fuel.
Kremenchug-based UkrTatNafta will have to pay 300,000 hryvnias ($64,170), the committee said Friday in a statement on its web site.
“UkrTatNafta benefited from a lack of competition in the fuel market to get additional revenue,” said First Deputy Head of the Kiev-based committee Yuriy Kravchenko. “Hopefully, the future price policy of UkrTatNafta and other market operators will be balanced.”

<b>Brazilian Beef Resumed</b>
MOSCOW (Bloomberg) — Russia will resume purchases of beef from Brazil’s Goias state, two months after imports of the meat were suspended because of a disease outbreak.
Goias, which accounts for 25 percent of Brazil’s beef sales to Russia, was due to resume shipments on Monday from all cities except Cavalcante, where a case of vesicular stomatitis was found in June, the Brazilian Agriculture Ministry said in an e-mailed statement. Russia is the biggest importer of Brazil beef.
Brazil, the world’s biggest beef exporter, suspended shipments from Goias to Russia on June 27.

<b>FAS Proposes Changes</b>
MOSCOW (Bloomberg) — Russia should set its crude export duty at least once a month so that the government can react faster to changes in global oil prices, Vedomosti reported, citing the head of the Federal Anti-Monopoly Service.
Exports of oil products should be taxed at 80 percent of the crude export duty, compared with the current rate of 35 percent for heavy oil products and 70 percent for light oil products, the Moscow-based newspaper also cited Igor Artemyev as saying.
Russia revises its export taxes on crude and oil products every two months based on the previous two-month average price for Urals, the country’s benchmark export blend.

<b>RR Starts Work in Libya</b>
MOSCOW (Bloomberg) — Russian Railways, the operator of the world’s largest rail network, began construction of a rail line in Libya on Saturday.
State-run Russian Railways plans to build 554 kilometers (344 miles) of track to link Libya’s major cities along the country’s Mediterranean coast, the company said in an e-mailed statement on Monday. Construction will cost 2.2 billion euros ($3.2 billion) and take four years, it said.
“A new, bright chapter of economic cooperation between Libya and Russia opens today,” Vladimir Yakunin, chief executive officer of Russian Railways, said in the statement.

TITLE: Evraz Q1 Profits Soar On Price Hikes, Assets
AUTHOR: By Nadia Popova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Evraz Group, Russia’s biggest steelmaker by market value, announced an 82 percent jump in first-quarter net income to $2 billion because of strong pricing, acquisitions and an improved sales mix, the company said in a statement Friday. 
“This is the result of soaring steel prices, which were partly caused by the shortage of raw materials for steelmaking, and our acquisition of new assets,” Evraz chief executive Alexander Frolov said during a conference call. 
Evraz, which is part-owned by billionaire Roman Abramovich, is almost fully supplied with its own coking coal and iron ore, used for making steel.
The results were higher than expected, analysts said. 
“We believe the steel prices will be at the same high level in the next one to two years,” Evraz chief financial officer Pavel Tatyanin told reporters in the conference call. “We don’t feel the affect of the financial crisis on our company.”
Prices for steel have grown 45 percent to 50 percent over the last year, and semifinished and construction steel products have become 60 percent to 70 percent more expensive over the same period.
Russian prices for galvanized steel sheet currently go up to an average of about 38,000 rubles ($1,570) per ton, while girder is priced at about 40,000 rubles per ton and reinforcing bar, or rebar, goes for around 37,000 rubles.
Evraz has redirected almost all of its exports to the domestic and CIS markets to meet growing local demand, the company said in an e-mailed statement. The revenue from Russian and CIS construction products sales grew 51.5 percent to $2.1 billion, up from $1.4 billion in the first quarter of 2007. Overall sales revenues in Russia increased by 53.6 percent to $4.2 billion, the company said. 
High global steel prices helped Evraz’s non-Russian sales to double to $6.4 billion from $3.2 billion in the first half of the year. The main factor driving revenue growth outside Russia was a strong pricing environment and additional sales volumes from new acquisitions, Evraz said in the statement.
Since December, Evraz has paid more than $5 billion for assets in the United States, Canada and Ukraine. 
Tatyanin said Friday that Evraz hoped to secure the approval of Chinese regulators this month for a deal to increase its stake in China’s Delong Holdings to 75 percent. Evraz is to pay $860 million for the stake.
“Evraz is benefiting strongly from its strategy of mergers and acquisitions growth in high value-added steel products and its vertical integration into iron ore, coking coal and scrap,” UniCredit Aton said in a note to investors Friday, giving a “buy” recommendation for Evraz shares and a 12-month target price of $115.
Evraz Global Depositary Receipts rose in London $3.10, or 4.3 percent, to close at $75.50, after earlier jumping 6.4 percent.
Magnitogorsk Iron & Steel Works, Russia’s third-largest steelmaker, boosted its net profit 19 percent to $1.03 billion and Novolipetsk Steel, the country’s fourth-largest steelmaker, boosted net profit 44 percent to $1.53 billion in the first half. Severstal is due to release its first-half results Thursday.

TITLE: Banned U.S. Suppliers Named
PUBLISHER: Combined Reports
TEXT: MOSCOW — Russia, the biggest market for U.S. poultry exporters, will ban imports from 19 producers in the United States and warned on Friday that another 29 suppliers faced a possible ban on health and safety grounds.
The ban is to take effect Monday and includes three plants belonging to meat giant Tyson Foods, the Federal Service for Sanitary Supervision said, a day after Prime Minister Vladimir Putin first spoke of the measures.
“Joint Russian-U.S. inspections of U.S. poultry processing plants at the end of July and the beginning of August showed a number of inspected plants do not fully observe the agreed standards,” the service said in a statement.
“The inspection showed that many plants have not taken steps to eliminate faults discovered by previous inspections.”
The United States last year exported nearly $1 billion worth of poultry, mainly frozen chicken leg quarters, and other meat products to Russia. The ban comes as Moscow prepares separate cuts to existing meat import quotas to help domestic suppliers.
The watchdog said its inspectors had not been allowed to visit some poultry farms and had not received results of an investigation into a possible excess of arsenic in some U.S. poultry.
It said it wanted to receive these results within one month.
“A timely reception of this information … will prevent the imposition of restrictions on poultry imports to Russia for 22 plants belonging to Tyson Foods, four plants of Peco Foods and three plants of the Equity Group,” the statement said.
Agriculture Minister Alexei Gordeyev, in a separate statement, said inspectors had more than once found an excess of arsenic, as well as salmonella, E.coli and other dangerous bacteria. He said the bans on the 19 producers would not damage the Russian poultry market, as domestic output had risen.
“In the last seven years, poultry meat output has been rising annually by 15 percent,” Gordeyev said. He said the country planned to raise poultry meat output by more than 300,000 tons this year from the 1.9 million tons produced in 2007.
Gordeyev said poultry, meat and pork import quotas should also be cut by hundreds of thousands of tons.
Russia regulates imports of poultry and red meat by tariff quotas, which have been fixed for 2005 to 2009. The United States has the largest share of the poultry quotas.
Plants affected include at least two owned by Tyson, two from Sanderson Farms, the fourth-largest U.S. chicken producer, and a Jennie-O Turkey plant owned by Hormel Foods.
The U.S. Agriculture Department called the objections “not consistent” with U.S. and international standards and food safety policies. It said the facilities complied with U.S. regulations.
In March 2002, Russia banned all U.S. poultry for about one month, citing safety concerns. The lifting of the ban involved top-level politicians, including President George W. Bush and then-President Putin.
Putin has said the move has nothing to do with tension over the recent fighting in Georgia.
But Mike Cockrell, chief financial officer of Mississippi-based Sanderson Farms, said Russia has banned U.S. poultry before, and sometimes it came during times of political tensions. 
“It appears chicken is still being used as a political tool,” he said.
Reuters, AP

TITLE: Zubkov: Fertilizer Export Taxes Could Triple
AUTHOR: By Simon Shuster
PUBLISHER: Reuters
TEXT: MOSCOW — Russia could double or triple export duties on mineral fertilizers if producers do not sell to domestic farmers at an “acceptable” price, First Deputy Prime Minister Viktor Zubkov said Friday, Interfax reported.
“There is only one way out: raising export duties. If we feel that fertilizer producers are not meeting agricultural producers halfway, we will go ahead and double or triple them,” Zubkov said, the news agency reported.
Zubkov’s comments could signal that the fertilizer industry could be the next victim of the state’s battle against inflation. Sharply raising export duties would further squeeze global supplies, threatening to push record prices even higher.
Prices for potash, a nutrient that farmers apply to the soil to boost plant yields, shot to a record $1,000 per ton last month. Miners are essentially sold out of the mineral at a time when world food shortages have pushed grain prices to new highs.
This has made it more attractive for Russian fertilizer producers such as Silvinit, which supplies 10 percent of the world’s potash, and Uralkali to export the mineral instead of selling it at home.
Russia, meanwhile, is fighting an uphill battle against inflation, which is running at close to 15 percent on an annualized basis, pushed up especially by climbing food prices.
In the last two months, the government has aggressively pushed companies to lower prices for basic goods.
Prime Minister Vladimir Putin attacked coal miner Mechel in July for charging more at home than abroad, a criticism that chopped $8 billion from the firm’s market value. The Federal Anti-Monopoly Service later ordered it to cut prices by 15 percent.
By lifting a five percent import tariff on cement this year, the government helped push prices down over 20 percent as foreign producers flooded the market, taking market share from local firms.
Russia said in March that it would set export tariffs of 8.5 percent on nitrogen fertilizers and 5 percent on potassium fertilizers, to remain in force until Apr. 30, 2009.
The tariff on fertilizers containing nitrogen, phosphorus and potassium in any combination of the three in packages not exceeding 10 kilograms was upped to 8.5 percent from 5 percent.
Since the beginning of the year, prices on compound fertilizer had risen 70 percent, Zubkov said, Interfax reported.
“That is not due to rising domestic demand for fertilizer, but other factors, mainly price gouging,” he said.
Interfax also reported that an agreement between fertilizer producers and the Agriculture Ministry is to be prepared by Oct. 1, to include a formula for price settlements to 2012.

TITLE: Carmakers Get Discount
PUBLISHER: Reuters
TEXT: MOSCOW — Russian steel companies have agreed to cut prices for car manufacturers by a minimum five percent and could make further reductions in the near future, Deputy Prime Minister Igor Sechin said. 
The cuts, which Sechin said could extend to 15 percent, suggest that a state-sponsored drive to push down raw material prices and aid economic and infrastructure development is spreading quickly to other industries.
New York-listed Mechel, the largest supplier of coal to the Russian steel industry, was previously ordered by anti-monopoly authorities to cut prices by 15 percent from Monday after being found guilty of abusing its dominant market position. 
“I spoke today with some car manufacturers. They have already received the first reaction from steelmakers: a promise to lower auto sheet prices by a minimum five percent in their contracts with car manufacturers,” Sechin told reporters at the Moscow auto show Thursday. “I don’t want to say that it’s enough, but it’s a positive trend,” said Sechin, an influential deputy of Prime Minister Vladimir Putin.
Russia is the world’s fourth-largest steel producer, with output led by companies such as Evraz and Severstal.
Russia, battling inflation running at an annualized rate of nearly 15 percent, has moved to rein in raw material suppliers who were making record profits selling their products to domestic buyers.
“The market is setting itself up properly and there is movement along the chain,” Sechin said.
One of the beneficiaries of the latest price move will be carmaker AvtoVAZ, which is majority owned by state corporation Russian Technologies. French carmaker Renault owns a one-quarter stake in AvtoVAZ.

TITLE: Markets on Road to Recovery
AUTHOR: By Courtney Weaver
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — After tumbling to its lowest point in almost two years on Tuesday, Russia’s MICEX Index began to slowly claw its way back over the rest of the week, suggesting a possible end to the volatility that has plagued the country’s markets since tensions erupted between Russia and Georgia on Aug. 8.
While daily drops and jumps of up to 4 percent can still be expected in the weeks to come, the market will slowly start to recover, investors and analysts said.
“Barring some other military issue between Georgia and Russia, we’ve probably seen at least the near-term low on this issue,” said James Fenkner, managing partner at Red Star Asset Management. “If commodity prices stay up and inflation rates remain moderate in Russia, then I think the market could do relatively well in the fourth quarter.”
Over the week, the ruble-denominated MICEX fell 1.9 percent to 1,348.92 points, while the dollar-denominated RTS Index dropped 3.3 percent to 1,646.14 points. 
Both indexes fell after President Dmitry Medvedev on Tuesday officially recognized the Georgian separatist territories of South Ossetia and Abkhazia. MICEX dropped to its lowest level since Sept. 2006, falling as low as 5.8 percent since Monday’s close in the minutes following Medvedev’s announcement.
But almost immediately, markets began to bounce back. The MICEX ended the week 8.4 percent higher than at its low point on Tuesday, while the RTS was 6.4 percent up from its Tuesday low at Friday’s close.
“The market rocketed up with the realization that there was nothing the West could do about it,” Fenkner said, referring to Medvedev’s declaration.
Analysts predicted that Russian markets would gradually stabilize over the course of the next couple of months, and said rising oil prices were already making foreign investors more optimistic.
State-controlled Rosneft reported a strong second quarter on Thursday, with a bigger than reported net profit and crude oil export value up 80 percent year on year. Company revenue increased by 96 percent year on year, and Rosneft reported both upstream and downstream growth. 
Rosneft’s stock rose 1.8 percent on the MICEX on Friday, and was 5.1 percent higher on the week. International oil prices rose across the board on Friday as then-tropical storm Gustav made its way toward the United States.
“There are two key factors that determine the level of the index: risk factor and oil prices,” said Kingsmill Bond, chief strategist at Troika Dialog. “This week the oil prices finally stopped falling, giving people grounds for optimism.”
In contrast to Rosneft, the company’s domestic competitor, LUKoil, reported a lower-than-predicted net income increase Friday. UBS cut its price estimate on LUKoil’s shares by 2.5 percent, and its stock fell by 2.7 percent Friday on the MICEX. 
On global currency markets, the dollar fell against both the euro and the yen Friday, as the market prepared itself for Gustav, which strengthened to a hurricane over the weakened, prompting the evacuation of New Orleans and threatening U.S. refineries on the Gulf of Mexico.
Tensions with the West resurfaced Friday when British newspaper The Daily Telegraph reported Russian oil companies were under orders to prepare for an oil and gas reduction to Europe on Monday, in case European Union countries at a summit voted for sanctions against Russia over Georgia.
Both analysts and investors dismissed the report.
“Given the history of Russia as a dependable supplier, this is not that big an issue,” Fenkner said. “They were selling gas into Germany during the Cold War.”
He added that the West was still in better standing with Russia than with other oil exporters, such as Iran and Saudi Arabia. “It’s the lesser of global evils,” he said.
Political tensions will continue to influence the Russian market’s recovery, analysts said.
Bond, of Troika Dialog, said the Russian markets’ volatility might only end after the U.S. presidential election in November.
“At the moment, the U.S. election has the potential to become a catalyst in one way or another for this market,” he said, adding that the policy stance of a U.S. administration led by John McCain or the less hawkish Barack Obama toward Russia would guide the actions of foreign investors.

TITLE: Russian Bombs Fell Just Short of Supsa Pipeline
AUTHOR: By Mark Trevelyan
PUBLISHER: Reuters
TEXT: AKHALI-SAMGORI, Georgia — During the conflict with Georgia, Russian planes dropped bombs within 15 meters of a pipeline to the Black Sea that BP was in the process of reopening through the country, witnesses said. 
Residents on Friday showed reporters deep craters alongside the pipeline, which runs between Azerbaijan’s capital, Baku, on the Caspian Sea, and Georgia’s Black Sea port of Supsa. 
Reuters reported on Aug. 12 that Georgia had accused Russia of bombing the pipeline, although without causing serious damage. Russia denied any such attacks.
“They started dropping the bombs at 7 o’clock in the evening of the 11th,” said Adam Zaridze, 26, a herdsman. 
“In one day they dropped 42 bombs,” he said. “They were black planes. ... The cattle ran all over the place. Some of the cattle were killed.” 
A woman suffered a fatal heart attack from fear, he said. 
Next to a marker post above the underground pipeline, 25 kilometers from the border with Azerbaijan, three craters were visible within 15 meters of it. The largest was about 3 meters deep and 8 in diameter. 
A line of craters could be seen running perpendicular to the pipeline for a distance of more than one kilometer. In one place, cattle were grazing beside a churned-up area larger than a football field, with two craters in the middle. 
Pipelines through Georgia, bringing oil and gas westward from the Caspian Sea, are strategically important because they help reduce Western energy dependence on Moscow. 
The European Union relies on Russia for about one-quarter of its gas and much of its oil. 
Last month’s short Russian-Georgian conflict rattled energy markets and Western governments, which saw it as an attempt by Russia to reassert control over a former Soviet republic seeking to escape Moscow’s orbit and move closer to the West. 
BP spokesman Matt Taylor said the company was aware of the bombing but did not want to comment. 
When fighting began, BP was in the process of reopening the pipeline, which was pumping 150,000 barrels per day until it was closed for maintenance in 2006. 
He said the idea was to reopen it at 90,000 bpd to “provide some flexibility” and backup for the main oil pipeline across Georgia, which runs from Baku via Tbilisi to Ceyhan in Turkey. 
That pipeline normally carries 700,000 to 800,000 bpd but was closed for two weeks this month because of an explosion in its Turkish stretch. 
It runs close to the Baku-Supsa pipeline, as does an important gas pipeline from the Caspian to Turkey, but neither were damaged in the conflict. 
Taylor said it was hard to say when the smaller Baku-Supsa pipeline could reopen. 
“We just want to get it up and running as soon as we can but it’s very hard to put a timeline on it right now,” he said. 
“The operation’s been put on hold until we can assess the impact of this conflict on the integrity of this pipeline.”

TITLE: Georgia Sales of Dollars Surge
AUTHOR: By Emma O’Brien
PUBLISHER: Bloomberg
TEXT: MOSCOW — Georgia’s central bank sold more dollars in August than in any other month in at least nine years as the former Soviet republic sought to support the lari amid its five-day war with neighboring Russia.
The $187.2 million that was sold amounted to almost 13 percent of Georgia’s $1.5 billion reserves, according to central bank figures. The sales were the highest since the National Bank of Georgia started to compile data on foreign-exchange interventions on its web site in January 1999.
Allegations that Georgia attacked Russian peacekeepers and citizens in the breakaway region of South Ossetia spurred Russia to send in forces on Aug. 8. The conflict, condemned by the U.S. and Europe, prompted the National Bank to cut its benchmark interest rate to 11 percent from 12 percent and Standard & Poor’s and Fitch Ratings to lower Georgia’s credit ratings.
“The ruble tanked during all this, so imagine what would have happened to the lari” without the dollar sales, said Vladimir Osakovsky, an analyst in Moscow at Milan-based UniCredit SpA, the bank with the largest assets in eastern Europe. “The stable currency provided an anchor of financial stability amid the crisis.”
The central bank’s actions, which included the sale of $12.9 million on the day of Russia’s incursion, helped limit the lari’s loss against the dollar to 0.1 percent last month, Osakovsky said in an interview.
Georgia’s stocks and bonds slumped during the conflict. The 7.5 percent 13-year government security slid, pushing the yield 147 basis points higher to 9.94 percent. The yield jumped to a record 10.75 percent on Aug. 11. Bank of Georgia, the only stock listed outside the country, tumbled 32 percent, the biggest monthly drop since it started trading in November 2006.
The dollar sales by the National Bank, led by Governor David Amaglobeli, 32, amounted to about 15 percent of all the currency in circulation in Georgia, according to Osakovsky.
“In Georgia, people look at the exchange rate as an indicator of the whole economy, so it was important to keep it stable,” said Archil Mestvirishvili, head of the central bank’s macroeconomics and statistics department in the capital Tbilisi. “If the demand for currency was larger than supply we intervened.”
The lari, which is managed by the central bank to limit the impact of its fluctuations on the competitiveness of exports, was little changed at 1.4099 per dollar on Aug. 29.
Russia’s ruble, which in August had its worst monthly decline against the dollar since March 1999, fell 0.1 percent to 24.6762 on Monday. The nation’s central bank lets the ruble trade freely within a band against a basket made up of dollars and euros. It lost 1.7 percent versus the basket last month.
Georgian economic growth will probably be nine percent this year, down from 12.4 percent in 2007, Amaglobeli said Aug. 21, nine days after President Dmitry Medvedev called off Russia’s military operation. Russian peacekeepers remain in the Georgian port city of Poti and in the separatist regions of South Ossetia and Abkhazia, whose independence Russia has recognized.

TITLE: Oil Firms See Record Results
AUTHOR: By Tanya Mosolova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia’s top two oil companies reported their biggest-ever quarterly profits on near-record oil prices, with state-controlled Rosneft’s outpacing those of LUKoil, which posted a hedging loss. 
Both companies said Friday that they would go on to post record profits for this year, even though oil prices have come under pressure and the ruble has risen against the dollar this year. 
“We are now paying higher export duties because of the lag effect and selling at lower prices because global oil prices are falling, but we still expect a record year,” Rosneft vice president for finance Peter O’Brien said by telephone. 
Rosneft, the country’s top oil producer, reported a better-than-expected net profit, which jumped 153.2 percent versus the same period of the previous year, and a 96 percent increase in revenues. 
Results of Rosneft’s closest peer, LUKoil, showed a 63.9 percent rise in net income and 58 percent increase in sales, although LUKoil undershot analyst expectations by half a billion dollars because of the hedging loss. 
LUKoil vice-president Leonid Fedun told a briefing that he expected better financial results in the third quarter because of more efficient hedging operations, and he also said 2008 would be a record year for the company. 
Rosneft posted net profit of $4.31 billion, revenues of $21.13 billion and earnings before interest, taxation, depreciation and amortization of $7.05 billion. 
LUKoil, in which U.S. oil major ConocoPhillips owns 20 percent, said second-quarter net profit was $4.13 billion, sales $31.94 billion and EBITDA $6.24 billion. 
Soaring oil prices had meant strong results were well flagged in the market, and analysts said investors would focus on costs to judge whether the oil companies were winning in the national battle against rampant inflation. 
“On the costs side, which is increasingly important for everybody, particularly with the inflation we are having and until recently currency appreciation, we have done well. Production cost per barrel [is] barely up in nominal terms despite more than 20 percent ruble appreciation,” he said. 
LUKoil continued to fare worse in that fight, analysts said. In terms of EBITDA, Rosneft outstripped its rival for the first time this quarter. 
“LUKoil’s second-quarter selling, general and administrative expenses and transportation costs increased more than we expected,” said Igor Kurinny from ING in a research note, adding that he believed LUKoil could have saved about $300 million in the second quarter by exercising better cost controls. 
Pavel Sorokin from UniCredit Aton said the fact that Rosneft’s operational cash flow rose 13 percent and stood higher than capital expenditure was a good sign, as it showed that the company had free cash for future needs. 
The heavily indebted company, which borrowed to buy Yuganskneftegaz, the former production subsidiary of now-bankrupted Yukos, also refinanced a large portion of its debt and reduced its interest expenditure by 2.5 percent, Sorokin said. 
ING said Rosneft’s operating cash flow, which amounted to $4.87 billion, was 37 percent above its forecast, while capital expenditure of $2.5 billion was largely in line.

TITLE: Russia, Tajikistan Strengthen Ties
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia agreed to expand energy projects with Tajikistan, while seeking support from Asian allies in a standoff with the West over its recognition of two separatist Georgian regions.
Gazprom, Russia’s state-controlled natural-gas producer, will start developing four blocks in the mountainous former Soviet republic in October, President Dmitry Medvedev said after meeting his Tajik counterpart Emomali Rakhmon in Dushanbe on Friday. Russia’s Rosatom is also interested in uranium mining projects, Medvedev said.
Russia will also help to build three new hydroelectric power plants in Tajikistan, Medvedev said. Tajikistan suffered cuts in power supplies nationwide early this year during its coldest winter in three decades.
“Russia will actively participate in building new generation capacity,” Medvedev said. Tajikistan hosted this year’s summit of the Shanghai Cooperation Organization, an alliance between Russia, China and the four former Soviet republics in Central Asia.

TITLE: Russia and the West Are a World Apart
AUTHOR: By Gyorgy Schopflin
TEXT: The events of the last few weeks have made it clearer than ever that Russia has no place in Europe. The invasion of Georgia, the disproportionate use of force, the presence of irregular forces, the looting and deliberate destruction of infrastructure and then the recognition of Abkhazia and South Ossetia as “independent” are all evidence of a Russia that is not European and does not want to be European.
Of course, what it means to be European has varied over time, but Russia has expressly flouted European values as they are understood by most Europeans. Russian spokesmen may insist that they are part of the common European home, but the way in which they want to furnish it is unacceptable to its other inhabitants.
The Russian answer to too many problems has traditionally been force. In the past 100 years, it has invaded practically all of its neighbors. What is puzzling about this is that Russia (while part of the Soviet Union) suffered dreadfully from violence in the 20th century, losing at least 20 million people. Yet despite this, it drew conclusions about the use of violence contrary to those drawn by Europe.
For Europe, force, if it must be used, is the very last resort and the other resources — negotiation, discussion, debate, international organizations — must be completely exhausted first. This commitment to nonviolent methods has become deeply embedded in the European mind-set, which is not the case with Russia. The Yugoslav wars were a vivid example, as most of Europe was opposed to the use of force to settle this conflict. 
The recognition of Abkhazia and South Ossetia flies in the face of the position that Russia has adopted in international law with respect to Kosovo. It is a complete turnaround and marks a radical inconsistency, which may prove to be an encouragement for some regions of Russia that are less than delighted with Russian overlordship. Chechnya obviously comes to mind. Again, consistency and predictability are regarded as essential components of the present European order.
President Dmitry Medvedev has argued that the Russian intervention in Georgia was undertaken for humanitarian reasons, but that does not explain the ethnic cleansing of Georgians who remained in South Ossetia during the conflict. Besides, if Russia had been looking to bolster its European credentials in the southern Caucasus, it would not have used force at all, but would have sought to negotiate with the government of Georgian President Mikheil Saakashvili. Negotiations, of course, were never taken seriously as an option for the Kremlin, which only goes to show how far Russia has moved from Europe.
The reality is that Russian tradition has little appreciation for the notion of equality of nations, which is the fundamental principle that governs Europe today. On the contrary, Russia believes in the hierarchy of raw power through which the Kremlin is trying to restore its status in the world. But the country’s leaders have failed to understand that in the 21st century, violence is not the most effective means to attain that objective. 
It is in this sense that the Kremlin’s thinking and actions are so anachronistic for 21st-century Europe. Russia, which is still stuck in the pre-World War II era, has stood apart from the great European transformation that was instituted after 1945. After the end of World War II, three principles guided relations between European nations: There should be no more war in Europe, large states should respect the autonomy of smaller states, and power must be kept under strict restraints. The events of the last few weeks have demonstrated that Russia is moving rapidly away from the Europe that Europeans have painstakingly constructed over the last 60 years.

Gyorgy Schopflin, formerly Jean Monnet professor of politics at University College London, is a member of the European Parliament for Hungary.
By Vasily Likhachev

President Dmitry Medvedev’s recognition of the independence of Abkhazia and South Ossetia is completely justified and logical. He made this decision to fulfill Russia’s international political and legal obligations, achieve stability in the region, halt Georgia’s military escalation, and address the humanitarian catastrophe in the conflict zones in Abkhazia and South Ossetia. That step was legal and correct from every perspective — historical, political, economic, legal and humanitarian. The main consideration has been to respond to the will of the people in those republics.
For many years, our leaders participated in negotiations between those territories and top officials in Tbilisi, relying on our own diplomats as well as those from the United Nations and the Organization for Security and Cooperation in Europe. But the events in August — Georgia’s aggression and U.S. geopolitical expansion in the Caucasus — forced Russia to take appropriate and necessary measures. The Kremlin was the first to recognize the independence of Abkhazia and South Ossetia within the framework of international law.
It is only a matter of time before more countries follow suit. For now, however, the reaction of the international community to Russia’s actions has been reserved at best and excessively critical at worst. Have purely political goals played any role in these responses? What could be the motives behind this attack aimed at the Kremlin? We see that the accusatory voices come from a broad array of NATO member states. The reactions have at times been biased, one-sided and seemingly Russophobic, but Russia will not tolerate attempts by the United States and its allies to constrain its foreign policy, nor will it allow the United States to encircle Russia with NATO members.
Russia’s policy is to defend fundamental values and actions based on the principles of international law. It was Russia that rescued the peoples of South Ossetia and Abkhazia from Georgian genocide. 
When Medvedev recognized Abhkaz and South Ossetian independence, it was a big blow to U.S. global legal nihilism that Washington had practiced for so many years. Georgia’s aggression against South Ossetia has proven to be a huge liability for the West because it showed President Mikheil Saakashvili’s true face and his warped definition of democracy. It seems that Washington reached a pragmatic conclusion on this issue, seeing a need to turn the situation around quickly with a nonconfrontational approach. 
It is now crucial that the United States and Russia work together to develop a new, constructive partnership. That relationship cannot be held hostage to electoral ambitions and neoconservatives in the White House, who are largely responsible for President George W. Bush’s foreign policy and dream of dominating the world. It would be useful to hold talks to discuss the fate of the world and its values, with the participation of Russia, the United States, the European Union, China, India, Brazil and other countries. We need to establish mutual trust among all nations and actively safeguard and deepen that trust.
Now is the time for all states and peoples to consider creating a code of laws guiding the conduct of civilized states in the 21st century. Russia is already making its contribution to that process. One positive example is Medvedev’s proposal for a new EU-Russia security pact. All responsible nations should unite around this vital diplomatic initiative. 

Vasily Likhachev, formerly Russia’s ambassador and permanent representative to the European Union in Brussels, is the deputy chairman of the International Affairs Committee in the Federation Council.

TITLE: Georgia Splits the Kremlin
AUTHOR: By Andrei Piontkovsky
TEXT: The Georgia crisis revealed a new strategic force in the Kremlin that opposes both Prime Minister Vladimir Putin and President Dmitry Medvedev. We still cannot name its players, but we are aware of its interests and impact on events in the same way that astronomers discern a new but invisible planet by recording its impact on known and visible objects in space.
One after another, loyal Kremlin pundits have appeared on television and radio to denounce “provokers,” whom they dare not name, for “planning the incursion of Russian troops all the way to Tbilisi and the establishment there of a pro-Russian government.”
The line in the sand that U.S. President George W. Bush drew on the night of Aug. 11, warning against Russian air strikes on Tbilisi’s airport and shortly thereafter sending Secretary of State Condoleezza Rice to visit Tbilisi, provoked a split in the Kremlin. The split divides those who are and are not concerned about the fate of Russian elites’ vast personal holdings in the West.
I call these camps Russia’s global and national kleptocrats. Both sides firmly agree that there is nothing that the “weakened and cowardly West” can do to restrain Russia, a nuclear and petroleum superpower, beyond financial retribution against those Russian rulers with vast assets abroad.
But the national kleptocrats seem to believe that they can live without overseas assets, or without educating their children and maintaining residences in the West. Instead, they are content to own properties in elite areas around Moscow and in Sochi.
Both Putin and Medvedev (and their television propagandists) currently reflect the views and goals of the global kleptocrats. Neither leader wants to capture Tbilisi. Putin, of course, would have been glad to see Georgian President Mikheil Saakashvili, his sworn enemy, put in a cage. But other, more down-to-earth considerations are more important to him.
That said, Putin is keeping his options open to join the national plutocrats, in case their position dramatically strengthens. If he crosses over to their side, he could even become their leader and triumphantly return to the throne that he formally abandoned only recently.
While no one yet knows the national plutocrats’ names, I believe that they are new, influential players in or associated with the Kremlin, and that they have now become bold enough to challenge both Putin and Medvedev. Russia’s military chiefs, for whom it is psychologically difficult to be ordered by politicians to abruptly end a large-scale and successful military operation, are their natural allies. 
I cannot predict who will win this growing confrontation. But even if the global kleptocrats sustain their more “moderate” position on Georgia, theirs could be a Pyrrhic victory. Every day and every hour, by means of their own propaganda, these globally minded kleptocrats, are setting the path to power for the nationalists.
In order to justify their authoritarian rule and camouflage from the Russian public their massive theft of the country’s resources, the global kleptocrats have already convinced ordinary Russians that they are surrounded by ruthless enemies who are trying to dismember and destroy Russia. Now it is becoming increasingly difficult for them to explain why their wives and children are buying palaces in the capitals of countries that are supposedly Russia’s sworn enemies.
By contrast, the national kleptocrats’ position is more consistent. They are not constrained by huge assets in the hated West. It would not be difficult for them to convince ordinary Russians, who have already been primed by today’s xenophobic propaganda, that Tbilisi, Sevastopol, Astana, and Tallinn belong to Russia and should be taken by force. 
Putin once said that “the greatest geopolitical catastrophe of the twentieth century was the fall of the Soviet Union.” The national kleptocrats may soon start calling for its reversal, and they are in an increasingly strong position to do so.

Andrei Piontkovsky is an independent political expert and a researcher at the Russian Academy of Sciences. © Project Syndicate

TITLE: GOP Convention Curtailed by Hurricane
PUBLISHER: The Associated Press
TEXT: ST. PAUL, Minnesota —The traditional festive opening of a national political convention was overshadowed by cancellations Monday, as John McCain and GOP officials tried to balance the desire to invigorate their partisans with showing empathy for those in Hurricane Gustav’s path.
Monday’s seven-hour program was pared back to roughly three, all of it strictly business and none of it in prime time. Network anchors who had planned to be in Minnesota instead were dispatched to the Gulf Coast. Democrats stood down in the war room they’d established to give rapid response to the Republicans.
And the delegates themselves shifted their gaze from the convention podium to their relatives, friends and neighbors along the Gulf Coast.
McCain, the presumptive GOP presidential nominee, urged delegates to take off their “Republican hats” and put on “American hats,” shifting their organizing and fundraising power from party politics to the needs of the evacuees.
“I know you’ll agree with me,” he said. “It’s time to open our hearts, our efforts and our wallets, our concern, our care, for those American citizens who are now under the shadow and the possibility of a natural disaster,” the senator said.
Mike Hubbard, chairman of the Alabama Republican Party, predicted the GOP convention would be “a little less of a party, celebratory and partisan show, like you saw last week on television with the Democrats, because of what is going on. Everybody understands it, understands the magnitude of it.”
Undeterred, protesters planned to go forward with a peace march that had been expected to draw 50,000 people to the state capital.
“Our voices will be front and center, and it will be the main news that is happening,” said Jess Sundin, spokeswoman for the Coalition to March on the RNC and Stop the War.
McCain saw his own pre-convention momentum blunted by public focus on the massive storm. Gustav headed toward the Gulf Coast on Sunday, as more than 1 million Americans made wary by Hurricane Katrina took buses, trains, planes and cars out of New Orleans and other coastal cities. Gustav packed winds near 115 mph (185 kph), and forecasters said it could gain strength before making landfall Monday.
Mindful that President Bush and the Republican Party lost credibility after the federal government’s botched response to Hurricane Katrina three years ago, McCain and new running mate Sarah Palin visited Mississippi on Sunday in advance of the storm and promised swift recovery efforts.
“I have every expectation that we will not see the mistakes of Katrina repeated; in fact, I’m very optimistic that we will see a degree of cooperation and effort on behalf of any victims, of anyone whose lives are touched by this great natural disaster,” McCain later told reporters in St. Paul via satellite from St. Louis.
The Arizona senator said the remainder of the convention schedule would depend on the destruction caused by the storm. He raised the possibility of accepting the nomination on Thursday in a Gulf Coast speech beamed back to the delegates 1,000 miles to the north.
Barack Obama, for his part, received a briefing Sunday from Homeland Security Secretary Michael Chertoff. The Illinois senator, who has smashed all fundraising records during his presidential campaign, also pledged to use his vast supporter e-mail list to raise money and provide goods for those affected by the storm.
He also said he might visit storm-damaged areas once things have “settled down.”
The storm and the political changes it brought came just as Republicans were ready to uncork their quadrennial celebration.
The Xcel Energy Center, home to NHL hockey’s Minnesota Wild, has been converted into a massive television studio, its floor covered in bright red carpet and one-third of its width filled with a video backdrop behind the podium from which McCain was to speak.
Nets full of red, white and blue balloons hung overhead but hanging in the air was the question of whether they would ever fall.
Republican National Committee Chairman Robert “Mike” Duncan said that by law, the convention had to be called to order on Monday. In addition, a quorum of at least half plus one of the 2,400 delegates was needed to conduct business such as securing a report of the Credentials Committee, adopting the convention’s rules, electing the convention’s officer and adopting the party’s platform.

TITLE: Heavyweight Champ Valuev Regains Title
PUBLISHER: The Associated Press
TEXT: BERLIN — Russian giant Nikolai Valuev won the WBA heavyweight championship Saturday night, using his left jab to outpoint American John Ruiz in an unanimous decision.
The fight was first declared a split decision, but the score was officially later changed to give Valuev all three of the judges’ votes.
The 7-foot- (213 centimeter)-tall Valuev (49-1), who calls St. Petersburg home,  regained the title he lost to Ruslan Chagaev in April 2007 and beat Ruiz (43-8-1) for the second time.
The judges scored it for Valuev, 116-113, 116-111 and 114-113.
WBA delegate John Mack said one of the officials, Japanese ringside judge Takeshi Shimakawa, alerted him after the first split decision was read out that he too had given the fight to Valuev.
The Japanese official explained that one of the cards had the names of the fighters in a different order, therefore resulting in the confusion. Shimakawa was the judge who scored it 114-113.
The decision wasn’t popular with everyone in the Max Schmeling arena in Berlin, with some of the crowd booing the outcome.
Valuev, with a massive advantage in height, weight and reach, also won a disputed decision over Ruiz in December 2005.
“I thought I won the fight,” Ruiz said. “I don’t know what was going with the scorecards.”
The scorecards were taken back and fourth from the ring several times.
Valuev landed a few big rights, but not enough to put Ruiz into trouble. Ruiz could not connect with more than one punch at a time.
“I did not do what I wanted to do 100 percent,” Valuev said.
The 35-year-old Valuev looked trimmer and quicker than in previous fights after changing his diet and training regime. He settled for keeping Ruiz at a distance with his left jab, but never delivered a punch that could shake Ruiz.
Ruiz appeared to shake Valuev with a right in the second round but the Russian recovered quickly. Every time Ruiz appeared to get close, Valuev’s left jab would keep the American away.
Ruiz and Valuev were given a title fight after the WBA declared Ruslan Chagaev “champion in recess,” following an Achilles’ tendon injury that forced him to call off a rematch with Valuev.

TITLE: Djokovic Electrifies U.S. Open
PUBLISHER: Reuters
TEXT: NEW YORK — Novak Djokovic illuminated New York’s midnight hour with an electrifying performance on Sunday, surviving a 234-minute battle to reach the fourth round of the U.S. Open.
The Serbian third seed soaked up the full force of Marin Cilic’s armoury to stay in the hunt for the title with an absorbing 6-7 7-5 6-4 7-6 victory in a contest that ended at 12.48 a.m. local time.
The 21-year-old squandered two match points in the 10th game of the fourth set but roared through the last 11 points of the match to seal the win when Cilic dragged a service return wide.
Asked on court how he was feeling, the Australian Open champion replied: “You’re asking me how I’m doing after a four hour match, not fresh, for sure.
“Thanks everybody for staying so late for us. I had a very very difficult match and even if I lost today, he would have deserved it. He played great.”
Djokovic discovered he was in for a long night when set point up in the opening set, he was made to scamper around like a demented bunny only to lose a 31-shot rally.
Cilic, 19, kept up the intensity throughout but eventually was undone by his lack of experience, cracking down 12 double faults to undo his hard work.
Djokovic’s next test will be against 15th seed Tommy Robredo.
While Djokovic kept the midnight oil burning, Roger Federer and Jelena Jankovic were enjoying an early night, thanks to their relatively smooth progress during the day session.
After a week of lukewarm performances, four-times champion Federer turned on the heat with a masterful 6-3 6-3 6-2 destruction of Czech 28th seed Radek Stepanek.
Women’s world number two Jankovic looked to be heading for another long workout but found her range to end the plucky challenge of Danish teenager Caroline Wozniacki in the fourth round with a 3-6 6-2 6-1 victory.
As temperatures soared on day seven of the hardcourt major, an ailing Marion Bartoli said it was a “miracle” she could battle on for more than three hours in the stifling conditions. She eventually fell 7-6 0-6 6-4 to Austrian Sybille Bammer.
“I had very low blood pressure and very weak pulse and the trainer advised me not to continue, especially because it was so hot,” said the 12th seed, who had her pressure checked on court midway through the first set.
“I was sick since yesterday morning because I caught a stomach virus. Since then I had not eaten anything except one glass of orange juice.”
While Bartoli wilted under sunny skies, Federer flourished.
In his first two matches, the Swiss master had fallen well short of proving his title credentials as he piled up 66 unforced errors and converted only 11 of 28 break points.
On Sunday, he dazzled Stepanek and 23,000 wide-eyed fans on Arthur Ashe Stadium court when his game clicked into overdrive.

TITLE: Africans Root For Obama
PUBLISHER: The Associated Press
TEXT: LAGOS, Nigeria — The performers pounded on animal-skin drums, the singer howled praise for Barack Obama, and the audience of fist-bumping supporters of the U.S. presidential candidate joined in the chorus: “We can do it! Yes we can!”
The shindig, held by a group calling itself “Africans for Obama 08,” drew hundreds of people from the Nigerian business elite. Each paid more than $2,000 to munch on grilled snails, sip from flutes of Veuve Cliquot and Moet & Chandon and join in a lively, if poorly executed, series of the “fist bumps” popularized by Obama and his wife, Michelle.
Interest in the U.S. presidential race is blooming around the world’s poorest continent as Obama emerges as the Democratic candidate, stunning many here who never believed that a son of Africa had a real shot at leading the United States. Now, with roasted snails and Champagne, text messages and T-shirts, both political organizers and entrepreneurs are seeking to harness the growing enthusiasm for Obama’s message of youthful change, which resonates on a continent where leaders often hang on as long as possible.
“In Africa, we just keep recycling the same old people, so change isn’t welcome. Let people who are unique, who are young, who have ideas — let them come up,” said Robinson Allen, a 40-year old banker at a recent gala in support of Obama. He said Obama’s achievements show a triumph over discrimination. “It’s an event that’s enabling for all people.”
The group says it plans to use the proceeds for advertisements in African media urging people to pray for Obama. The message, according to one organizer: “We can’t vote for you, but we can pray for you.” Similar efforts are under way in Tanzania, South Africa and Kenya, organizers said.
Another Nigerian group, “Blacks Unite for Obama 08,” is running full-page ads in the country’s mass dailies asking customers to send text messages costing about 75 cents in support of Obama, while registering to win a trip to the United States.
In Ghana, songs boosting Obama run on the radio. An artist called Blakk Rasta sings in pidgin English of his pride at Obama’s quest: “Originally stepping out of Kenya, Africa/Adopted into the cold woodlands of America/Dem youthboy defied every order and turned a Senator.”
And in Uganda, about 5,000 students at Makarere University have joined the Obama Solidarity Group, essentially a fan club for the candidate. Its leader, Patrick Rutalo, cited Obama’s example in his own successful drive for student body president. “He inspires young leaders to go for the highest offices,” said Rutalo.
In fact, the Obama infatuation seems to have somewhat annoyed Ugandan President Yoweri Museveni, who told Ugandans to turn their attention in more self-fulfilling directions. “Obama, Obama, Obama. He is an American. Why are you looking at him and not yourself? Why don’t you build your strength here?” Museveni said at a news conference.
The interest in Obama may be highest in Kenya, where his father was born and lived before traveling to study in the United States. There, vendors sell T-shirts, key chains, banners and hats to capitalize on the popularity of the candidate locals consider practically a native son.

TITLE: McCain’s Unknown Running Mate Can ‘Take On Russians’
PUBLISHER: The Associated Press
TEXT: ST. PAUL, Minnesota — Wait, now, say the Republicans. You think that Alaska Gov. Sarah Palin lacks experience? You think that at 44, with less than two years running the nation’s northernmost state, she doesn’t have what it takes yet to be a heartbeat away from the presidency?
Pshaw.
What about the fact that she stood up to embattled Alaska Senator Ted Stevens? What about her oversight of her state’s National Guard contingent? Her experience as a mother? And, hey — what about the fact that she runs a state that happens to be very close to Russia?
Each of these characteristics has been cited by a Republican since Friday as an ingredient in John McCain’s conclusion that Palin is qualified to become vice president of the United States.
“She has experience not only in politics but in life,” former Republican Senator Fred Thompson of Tennessee said Sunday on CNN.
None of this suggests that Sarah Palin is not a skilled, competent, multitalented public servant. But it means that, in the face of fierce Democratic assertions that she is too green to be elevated to vice president, the GOP is looking for whatever it can to show that’s not the case and to bolster her credentials, particularly in national security.
And in some cases, the responses from Republicans who showed up on the Sunday morning talk-show circuit to promote Palin’s qualifications are unexpected, to say the least.
Thompson: “She’s a mother of five children. ... And she has more experience than Barack Obama.”
Senator Lindsay Graham of South Carolina: “Governor Palin took on Ted Stevens. If she can take him on, she can take on the Russians.” Stevens, a Republican senator, is facing corruption charges and running for re-election.
Minnesota Governor Tim Pawlenty: “Palin is commander-in-chief of the Alaskan National Guard.” The state’s Guard has about 4,000 members.
From McCain’s wife, Cindy, came a geographic assessment of qualification: “Alaska is the closest part of our continent to Russia. So, it’s not as if she doesn’t understand what’s at stake here.”
What these traits say about Palin’s ability to serve as vice president or, in an emergency, as president is not entirely clear. But the flurry of comments by leading Republicans hint at a flood-the-zone strategy when it comes to Palin, whose gender, Christian faith and conservative chops infused a lively crackle into John McCain’s campaign during the weekend between the two national conventions.
The GOP has also implied that Democratic reactions to Palin’s selection are sexist, particularly since, they contend, her time as Alaska’s governor gives her the edge over Barack Obama in executive experience. Obama, 47, has spent almost 12 years in office, all of it as a lawmaker — eight years as an Illinois state senator and nearly four as a U.S. senator. Palin’s total is 12 — she spent 10 as a city council member and mayor, and nearly two as governor.
Some of the comments seemed a bit non-sequitur. Russia, for example.
Major General Craig Campbell, adjutant general of the Alaska National Guard, considers Palin “extremely responsive and smart” and says she is in charge when it comes to in-state services, such as emergencies and natural disasters where the National Guard is the first responder.
But, in an interview with The Associated Press on Sunday, he said he and Palin play no role in national defense activities, even when they involve the Alaska National Guard. The entire operation is under federal control, and the governor is not briefed on situations.

TITLE: Zenit Beat Manchester Utd in Euro Fixture
PUBLISHER: Reuters
TEXT: MONACO — UEFA Cup holder Zenit St. Petersburg became the first Russian team to lift the European Super Cup after beating Champions League winner Manchester United 2-1 on Friday.
Goals from Pavel Pogrebnyak and record-signing Danny, on his debut, gave Zenit’s Dutch coach, Dick Advocaat, victory over his old rival Alex Ferguson, who was bidding to become the first manager to win the trophy for the third time. Ferguson’s mood was not helped by midfielder Paul Scholes’ 90th-minute red card for handball, his second caution.
United’s best moment arrived when defender Nemanja Vidic pulled a goal back 17 minutes from time but Zenit, playing in front of 7,500 of their own fans as well as Chelsea’s billionaire Russian owner, Roman Abramovich, held on for victory.
Pogrebnyak, who missed the UEFA Cup final win over Rangers through suspension, put Zenit in front after 44 minutes when he headed home a flick from Igor Denisov after a well-delivered set-piece by Alejandro Dominguez.
Danny, who joined earlier in the week in a $44.12 million deal from Dynamo, doubled the lead after a superb solo run 15 minutes later. He picked the ball up just inside United’s half and finally beat Edwin van der Sar with a low shot. 
Advocaat, meanwhile, ended media speculation over a move to England for Andrei Arshavin, saying the Russia playmaker would be staying with the UEFA Cup holders.
“Tottenham did not offer [$40.28 million] we wanted for him and what we think he is worth. They offered [$20.8 million] and, with respect, that is not enough so that’s the end of it,” he said.
n Tottenham completed a deal Saturday to buy Roman Pavlyuchenko from Spartak, The Associated Press reported. Tottenham did not disclose details of the deal, which came just two days before the Premier League transfer window closed at midnight on Monday.

TITLE: Draw for Chelsea
PUBLISHER: Reuters
TEXT: LONDON — Chelsea and Liverpool, the only teams to start the Premier League season with two wins, lost their 100 percent records on Sunday when they drew with Tottenham Hotspur and Aston Villa respectively.
Chelsea had scored five goals and conceded none in their opening wins, while Spurs lost both of theirs but they drew 1-1 at Stamford Bridge after Darren Bent cancelled out Juliano Belletti’s opener for the home side.
Liverpool, who needed a late extra-time goal to get past Standard Liege in their Champions League qualifier in midweek, looked short of inspiration in a goalless draw at Villa Park.

TITLE: U.S. Army Hands Over Hotspot to Iraqi Forces
PUBLISHER: Agence France Presse
TEXT: RAMADI, Iraq — Iraqi forces Monday took over control of Anbar, once the most explosive battlefield in Iraq, from the U.S. military, symbolising the growing security gains in the war-torn country.
The ceremony to transfer Anbar to local forces took place at the provincial governate building in Ramadi, the provincial capital.
It marks the handover of the 11th of Iraq’s 18 provinces and the first Sunni province to be returned to the control of the Iraqi government.
“I would like to announce that the (Anbar) transfer from the U.S. to Iraqi forces is done,” said Muwaffaq al-Rubaie, Iraq’s national security advisor at the handover ceremony.
“The province of Anbar which was one of the hottest regions in Iraq is today celebrating the receiving of the security file.”
Police said tens of thousands of Iraqi and U.S. troops were on alert across the vast desert province in western Iraq.
Majid al-Assafi, the provincial police chief, said on Sunday that his forces were ready to accept security responsibility in Anbar, the country’s largest province and home to about two million people.
The U.S. military said the transfer of security was an “important milestone with regard to security” in the province.
But the “transfering of security does not necessarily mean that the security situation is stable or better,” the military statement said.
“It means the government and the provincial authorities are ready to take the responsibility for handling it.”
Martin Post, a top U.S. commander in Anbar, said there would be some incidents but they “will be part of the normal life.”
“Iraqi police have better intelligence than ours. They have more abilities than U.S. to do the job,” he added.
After the transfer, U.S. forces will withdraw to their bases and will take part in military operations only if requested by the provincial governor.
Ahead of the handover, police tightened security and the U.S. military stepped up patrols on the main streets of the provincial capital Ramadi, as locals prepared for the Muslim holy month of Ramadan.
Iraqi Sunnis began observing Ramadan from Monday. Shiites are to follow on Tuesday.
Sunni Arabs in Anbar were the first to turn against U.S. forces after the toppling of Saddam Hussein’s regime by U.S.-led invasion forces in 2003, mounting a raging insurgency that tore through the world’s most sophisticated military.
In the first years after the invasion, the country’s biggest province became the theatre of a brutal war focused on the cities of Fallujah and Ramadi, while a string of towns along the Euphrates valley became insurgent strongholds and later safe havens for Al-Qaeda.
Around one third of U.S. forces or 1,305 troops have been killed in Anbar which shares borders with Saudi Arabia, Jordan and Syria.
The most lethal threat to U.S. troops, “improvised explosive devices” or makeshift bombs, first made their appearance in Anbar, causing more than 40 percent of American casualties between 2003 and 2006.
The brutal Al-Qaeda-led insurgency also killed around 6,000 civilians in the province, according to independent website Iraqbodycount.org.
The violence in Anbar began ebbing only after local Sunni Arab tribes — weary of Al-Qaeda’s extreme brutality — revolted against the jihadists in September 2006 and sided with U.S. forces.
Sunni tribes formed Sahwa (Awakening) groups which began fighting Al-Qaeda militants and within a year the province became the safest in Iraq.
The U.S. military currently has 28,000 soldiers in Anbar, down from 37,000 in February, according to U.S. army figures.

TITLE: Thai Government Still Under Seige
PUBLISHER: Agence France Presse
TEXT: BANGKOK — Thailand’s biggest union on Monday called for a strike to support anti-government protesters who are squatting in the main government complex to demand the resignation of Premier Samak Sundaravej.
The threat came after a small bomb exploded during the night near the Government House compound, causing no injuries but rattling nerves near the site which thousands of protesters stormed seven days ago.
The activists accuse Samak of acting as a puppet for ousted prime minister Thaksin Shinawatra, who now lives in exile in Britain after the same protest group helped topple his government in 2006.
The 200,000-strong State Enterprises Workers’ Relations Confederation called for a strike Wednesday to add pressure on Samak, saying they would cut power and water supplies to government agencies.
“We will stop utilities services to government agencies to put pressure on the government to quit and stop damaging our country,” said Sawit Kaoewan, secretary of the confederation.
All the union’s members have never actually held a strike before, despite threats by their leadership.
One top government official accused the protesters of “guerrilla warfare,” urging the workers not to join the protests that have already won support from railway crews who have crippled national train services since Thursday.
“We think that their strategy is guerrilla warfare,” the official told reporters, speaking on condition of anonymity.
“The bomb last night is a case in point and we hope that this disruption will not expand,” he said.
“We hope that the electricity and water [are not disrupted.] I think all the government team are in negotiation [with unions] to make sure they don’t initiate those moves.”
The protests had erupted in clashes with riot police on Friday, causing dozens of minor injuries. Activists had also taken their campaign to the provinces, closing key regional airports for two days, including the nation’s second-busiest hub on the resort isle of Phuket.
Samak called an emergency session of parliament on Sunday, but the debate failed to produce any plan for ending the protests and the premier angrily rejected calls to dissolve parliament and hold new elections.
“Why are the only solutions house dissolution and resignation? Why can’t we choose the third option, which is to show the world that we maintain our democracy,” he said.
The leaders of the so-called People’s Alliance for Democracy (PAD) have already said that they would not accept a parliamentary solution to the crisis.

TITLE: Unrest in India
PUBLISHER: Reuters
TEXT: BHUBANESWAR, India — Hindu mobs have burnt at least four more churches in Orissa, officials said on Monday, as religious violence appeared to spread.
Thousands of people, mostly Christians, have taken shelter in makeshift camps, where Hindu mobs went on the rampage last week after a Hindu leader was killed.
Last week officials said the violence appeared to be abating after Hindu and Christian leaders called for calm, but over the weekend it spread to new parts of the state.
Mobs set fire to four churches in the districts of Koraput and Rayagada, Orissa’s Director General of Police, Gopal Chandra Nanda, told Reuters.
Two churches and several houses were also burnt in the Kandhamal district, the epicentre of the tension, despite a curfew imposed in most of its towns, one of the state’s leading newspapers, The Samaja, reported on Monday.
Officials said they could not confirm that report.
The violence has drawn international condemnation, including from Pope Benedict. Local government officials revised the death toll to 14 and said they had received unconfirmed reports that two more bodies had been found.

TITLE: China’s Post Olympic Glow Dimmed by Deadly Quake
PUBLISHER: The Associated Press
TEXT: BEIJING — Rescuers appealed for temporary housing and tents Monday after a weekend earthquake in southwest China killed at least 36 people, injured hundreds and left tens of thousands of homes in ruins.
The temblor Saturday in Sichuan province, which the U.S. Geological Survey measured at magnitude 5.7, struck along the same fault line as a May 12 earthquake that killed nearly 70,000.
“We need temporary houses ... we need more than 10,000 tents,” said Zhang Hai, head of the foreign liaison office of the Communist Party propaganda department in Panzhihua city. “This is a mountainous place and so we can’t build temporary houses everywhere.”
The beginning of the school year, which was supposed to be Monday, was postponed for a week because authorities were inspecting damage in classrooms, he said.
“We still can’t bring all kids back to their previous classrooms,” Zhang said.
China is still basking in the glory of hosting an extravagant and widely viewed Olympic Games that International Olympic Committee President Jacques Rogge called “truly exceptional.” But the earthquake underscores the country’s need to turn its attention back to pressing domestic issues such as high inflation, pollution, and now disaster relief.
The quake killed five people in Panzhihua and surrounding rural areas, and the death toll also included 25 victims in Sichuan province’s Huili county, local officials said. Authorities in the Chuxiong Yi Autonomous Prefecture in neighboring Yunnan province reported six deaths.
“We are trying to maintain order and make sure that there’s enough supply. The disaster relief office has sent 17 medical teams made up of over 200 people,” said Song Ming, an official in the propaganda department of Liangshan prefecture, which includes Huili county.
Saturday’s quake killed 36 people, state broadcaster China Central Television said on its noon newscast. The temblor destroyed 258,000 homes, damaged major bridges and cracked three reservoirs, the official Xinhua News Agency reported.

TITLE: Power-Sharing Talks Falter In Zimbabwe, MDC Stands Firm
PUBLISHER: Reuters
TEXT: HARARE, Zimbabwe — Zimbabwe’s main opposition party said on Sunday the latest talks on power-sharing with the ruling ZANU-PF that resumed on Friday in South Africa did not reach agreement.
“All the negotiating teams are back. Nothing was achieved in the latest round of engagement in South Africa to break the deadlock. We remain where we were,” the Movement for Democratic Change (MDC) spokesman Nelson Chamisa said.
Negotiators from ZANU-PF, the main MDC and a smaller breakaway MDC faction on Friday separately met South African President Thabo Mbeki, who is mediating the talks.
Mbeki’s spokesperson Mukoni Ratshitanga told Reuters on Sunday that the dialogue would continue, but declined to give details.
“It is a continuous process, not a single event,” Ratshitanga said.
The power-sharing talks have stalled over how executive power should be shared by President Robert Mugabe and MDC leader Morgan Tsvangirai, who refused to sign an agreement that would have made him prime minister two weeks ago. 
Tsvangirai has protested against the proposed deal, saying it did not give him enough executive powers in government.
The opposition leader beat Mugabe in a March 29 election but fell short of enough votes to avoid a run-off vote, which was controversially won by Mugabe after Tsvangirai pulled out citing violence and intimidation against his supporters.
ZANU-PF officials were not immediately available to comment on the matter, but state media reported on Sunday that Mbeki would soon “chart a way forward” in the talks.
“I can confirm that we went to South Africa for separate bilateral discussions with the facilitator,” state media quoted Justice Minister Patrick Chinamasa, ZANU-PF’s chief negotiator, as saying.
“The meeting was convened because the facilitator wanted to search for a way forward,” Chinamasa added.
The MDC has accused Mugabe of flouting a framework agreed by the negotiating parties not to convene parliament or appoint a cabinet.