SOURCE: The St. Petersburg Times
DATE: Issue #1412 (76), Tuesday, September 30, 2008
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TITLE: Russia Blasts U.S. Over World Affairs Role
AUTHOR: By Edith Lederer
PUBLISHER: The Associated Press
TEXT: UNITED NATIONS — Russia called Saturday for a revival of the global anti-terrorism coalition that formed after Sept. 11, 2001 but started to unravel with what it called the subsequent domination by a single power — a veiled reference to the United States.
“The solidarity of the international community fostered on the wave of struggle against terrorism turned out to be somehow ‘privatized’,” Russian Foreign Minister Sergey Lavrov told the U.N. General Assembly’s annual ministerial meeting.
Lavrov cited the U.S. invasion of Iraq “under the false pretext of fight on terror and nuclear arms proliferation” and questions of excessive use of force against civilians in counterterrorism operations in Afghanistan.
And he said the recent crisis over Georgia’s breakaway provinces of Abkhazia and South Ossetia proved again that “it is impossible or even disastrous to try to resolve the existing problems in the blindfolds of the unipolar world.”
“Today, it is necessary to analyze the crisis in the Caucuses from the viewpoint of its impact on the region and the international community on the whole,” Lavrov said.
“It has become crystal clear that the solidarity expressed by all of us after 9/11 should be revived (without double standards) when we fight against any infringements upon the international law,” he said.
Lavrov called for a new “solidarity” of the international community and a strengthened United Nations, saying only in the post-Cold War world can the organization “fully realize its potential” as a global center “for open and frank debate and coordination of the world policies on a just and equitable basis free from double standards.”
“This is an essential requirement, if the world is to regain its equilibrium,” he said.
Lavrov also lashed out at Georgia’s “aggression” and bombing of South Ossetia’s sleeping capital of Tskhinvali on Aug. 8 and defended Russia’s intervention “to repel aggression” and fulfill its peacekeeping commitments.
Georgia disputes this, claiming that the Russian side initiated the conflict. The United States and the European Union have backed Georgia, contending that the Russian response was disproportionate.
But Lavrov made clear that Moscow would not brook any challenge to its recognition of the unilateral declarations of independence of the two breakaway provinces.
“This problem is closed now. The future of the peoples of Abkhazia and South Ossetia has been reliably secured by the treaties between Moscow (and their governments),” he said. “The situation around the two republics is finally going to be stabilized.”
Declaring that Europe’s security architecture “did not pass the strength test” in Georgia, Lavrov reiterated Russian President Dmitry Medvedev’s proposal in June for a new Treaty on European Security.
It would strengthen peace and stability and participants would reaffirm the non-use of force, peaceful settlement of disputes, sovereignty, territorial integrity and noninterference in another country’s affairs, he said. Finally, he added, it would promote “an integrated and manageable development across the vast Euro-Atlantic region.”
Lavrov said work on the new treaty could be started at a pan-European summit and include governments as well as organizations working in the region.
He referred to it as “a kind of `Helsinki-2’,” a follow-up to the 1975 Helsinki Treaty between all European nations, together with the U.S. and Canada, which evolved into the present-day Organization for Security and Co-operation in Europe, the largest conflict-prevention and security organization on the continent.

TITLE: Venezuela Invites In Russian Oil Firms
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — Venezuelan President Hugo Chavez agreed Friday to give broad access to his country’s oil riches to five Russian companies, Russian Energy Minister Sergei Shmatko said. 
The deal came after a meeting between President Dmitry Medvedev and Chavez in Orenburg, where the Venezuelan leader reiterated his support for Russia’s actions in last month’s military conflict with Georgia. 
It also came a day after the announcement of a $1 billion loan for Venezuela to buy Russian military hardware. 
State-controlled Gazprom and Rosneft, as well as private companies Lukoil, TNK-BP and Surgutneftegaz, plan to pour “tens of billions of dollars” of investment into Venezuela, Shmatko said. 
The Russian and Venezuelan energy ministries signed a memorandum of understanding Friday that calls for the Russian companies to link up in a consortium to form a joint venture with Venezuelan state oil company Petroleos de Venezuela SA, or PDVSA, Shmatko said. 
“It is a colossus being born,” Chavez said live on Venezuelan state television from Russia. 
Venezuela is the fourth-largest supplier of crude to the United States. It holds 7 percent of the world’s proved oil reserves, Gazprom said. 
This visit was the second for Chavez, a fervent critic of the United States, since July, as relations with the two energy-rich nations appear to be on the rise after Russia drew scathing criticism from the West over the brief war with Georgia and its subsequent recognition of the independence of the breakaway Georgian regions of South Ossetia and Abkhazia. 
Chavez said Venezuela fully supported Russia in the conflict. 
“We know how the peaceful people of South Ossetia were attacked,” he said. “Our support may be modest, but it is full and firm.” 
Chavez did not, as some had expected, follow Russia’s lead in offering official recognition of South Ossetian and Abkhazian independence. Nicaragua remains the only country to have joined Russia in the move. 
Prime Minister Vladimir Putin offered the $1 billion military loan at a meeting with Chavez on Thursday and said Russia might work on the development of nuclear energy in Venezuela. 
Russia sent two Tupolev-160 strategic bombers on a training mission to Venezuela this month and is planning joint naval exercises there in October. 
The joint oil venture, in which PDSVA will have a majority stake, will also look beyond Venezuela at countries like Cuba and Bolivia, Shmatko said. 
“I think the geography could be expanded later,” Shmatko said, Interfax reported. 
Regardless of where it operates, it will seek to control the business, from exploration and the development of fields to refining and the sale of petroleum products, he said. 
The firms in the Russian consortium might hold equal stakes, but no final decision had been made, Shmatko said. 
Gazprom chief Alexei Miller said Gazprom was likely to lead the consortium because it had been working in Venezuela since 2005, when it won a license for offshore gas exploration at two fields. 
Earlier this month, Gazprom and PDVSA agreed to join forces in a project to explore and produce gas at another offshore field. 
As Medvedev and Chavez watched Friday, Miller and Venezuelan Oil Minister Rafael Ramirez signed a broader memorandum of understanding envisioning cooperation on developing fields, building infrastructure, producing oil and gas and refining, Gazprom said in a statement. 
The memorandum also lists transportation of hydrocarbons, exploration and evaluation of reserves, production of liquefied natural gas and field services, including drilling and well maintenance, as areas of joint interest, Gazprom said. 
LUKoil, Russia’s second-largest oil producer, also has experience working with PDVSA. The companies began working together on the exploration of the Junin-3 block near the Orinoco River in 2005, a project that was extended during Chavez’s July visit.

TITLE: Experts: 64 Percent of Russian Pregnancies End in Abortion
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The number of infertile women in Russia is growing by 200,000 to 250,000 each year, with the main cause being complications from abortions, Marina Tarasova, deputy head of the St. Petersburg Reseach Institute For Gynecology and Obstetrics of the Russian Academy of Sciences, said on Monday.
Speaking at an international conference highlighting new methods of oral contraception, Tarasova warned that by the end of 2007 there were already more than 5.5 million infertile couples in Russia.
The low birth rate remains one of the key reasons behind Russia’s ongoing demographic crisis. According to official statistics, every fourth teenage girl in Russia has some form of gynecological ailment or reproductive health disorder.
Each year in Russia, more than 64 percent of all pregnancies end in abortion, while in Western European countries the level is below 25 percent. By comparison, there are 10 to 15 abortions per 100 pregnancies in the U.K. and 5 or 6 per 100 in the Netherlands.
One in ten women who undergo an abortion in Russia is below 18 years of age, doctors say. Gynecological disease rates for teenage girls in 15-17 age group, have jumped by an alarming 30 percent in the last five years. 
Olga Kurbatova, a researcher at the Institute of General Genetics, said that two major reasons contribute to the high abortion rate: Russians’ traditional risk-taking attitude to their own health and the unavailability of effective birth-control pills to most Russian women due to their relatively high price. Birth control remains traditionally a task for women in Russia, she added.
The best way to reduce the number of abortions and children living without parental care in the country is to develop a culture of family planning, and particularly to instill the habit of using contraceptives.
Doctors admit, however, that most Russian women avoid using contraception, especially birth-control pills, because of widespread prejudice and fear of side effects. In the meantime, abortion remains a common method of birth control. 
The Russian government has been struggling to advertise family values and has campaigned for citizens to have more children. This year was officially designated “The Year of the Family.”
According to official statistics, only 40 percent of pregnancies are planned. However, one in ten planned pregnancies ends up in a miscarriage.
“Over the past five years, female infertility in Russia has increased by 14 percent, and over 1.5 million Russians need advanced medical technology to become pregnant and maintain a healthy pregnancy,” Tarasova said. 
Some experts believe introducing obligatory high fees for abortions would help and encourage more women to use regular contraception. 
Abortions are currently free for Russian citizens at all state clinics.
At the same time, infertility treatments are expensive and far beyond what average Russian families can afford. Skeptics say, however, that paid-for abortions, however high the fee, would not help to increase the birth rate.
Russians marry early, but are also often quick to divorce, in comparison with citizens of countries in Central and Eastern Europe and the former Soviet Union, according to a recent UNICEF report. 
Kurbatova said early marriages that are attempts to legitimize sexual relations between emotionally immature and socially and economically dependent young people are prone to quick breakups, and children born in these unstable unions often become an undesirable burden for parents.
The UNICEF study also found that the share of children deprived of parental care in Russia is the largest among the surveyed countries: More than 420,000 — or one in 70 — children under 17 live in children’s homes, orphanages and boarding schools.

TITLE: Future of SPS Uncertain As Leader Belykh Resigns
AUTHOR: By Nabi Abdullaev, Francesca Mereu
PUBLISHER: Staff Writers
TEXT: MOSCOW — Union of Right Forces leader Nikita Belykh said Friday that he was resigning over proposals by senior party officials to cooperate with the Kremlin, and that the party’s leadership will decide this week whether to disband the party altogether. 
Some members of the Union of Right Forces, or SPS, believe that the party “should reach a compromise with the Kremlin,” Belykh said in a telephone interview. 
“I don’t agree,” he said. “This is the reason behind my decision. I don’t believe that we should keep the party at all costs.” 
Belykh said he would take a two-week break before returning to politics. 
SPS has been in crisis in recent years due in large part to the painful economic reforms in the 1990s that largely discredited the liberal, free-market values at the heart of the party’s platform. 
The party was the target of a smear campaign led by pro-Kremlin forces during last year’s State Duma elections, in which SPS garnered less than 1 percent of the vote. It was the nadir for the party, which once held senior government posts under the presidency of the late Boris Yeltsin. 
SPS deputy head Leonid Gozman will take over for Belykh until Thursday, when the SPS leadership will convene to determine the fate of the party. 
“We are all very sorry that he resigned, but we respect his decision,” Gozman said. “Now the most important thing for our party is to find a way to keep it in the new Russian political landscape.” 
SPS is “considering the option of cooperating with the Kremlin,” Gozman said. “There is such an option, and we will discuss it at the party conference,” he said. 
A Kremlin spokeswoman reached Friday said she could not comment. “We have no information about any plans to cooperate with SPS,” she said. 
Political analysts said Friday that Belykh was attempting to save his political reputation by leaving SPS. 
“It is clear that the Kremlin made SPS an offer they couldn’t refuse, and Belykh had no choice,” said Yury Korgunyuk, a political analyst with the Indem think tank. “He understood that this was the right moment to quit the party.” 
“It was better for him to quit now than to die in shame after becoming another Kremlin project,” Korgunyuk said, referring to an array of smaller parties on both sides of the political spectrum widely seen as created by the Kremlin to give the illusion of plurality. 
The Democratic Party of Russia and Civil Force are seen as Kremlin-sponsored liberal parties. 
Belykh’s resignation is likely to further stall any possible merger of liberal-minded opposition parties, above all with Yabloko. 
“Belykh was the only person in the SPS leadership with whom we could find common ground,” Yabloko leader Sergei Mitrokhin said Friday, Interfax reported.

TITLE: Captain Dies As Pirates Take Cargo Ship
PUBLISHER: Bloomberg
TEXT: The Russian captain of a ship carrying a cargo of battle tanks seized off the coast of Somalia died of a heart attack as pirates demanded a $20 million ransom.
The death of the captain, Vladimir Kolobkov, was announced by his second in command, Russian state broadcaster Vesti-24 reported on its web site today. It gave no further details. A spokesman for the pirates, Sugale Ali Omar, said one crew member had died from hypertension.
Somali pirates seized the Faina, a Belize-flagged vessel with a crew of three Russians, 17 Ukrainians and one Latvian, on Sept. 25, the Ukrainian Foreign Ministry said. It was carrying at least 30 Soviet-designed T-72 tanks to Kenya. Russia sent a warship to Somalia to defend its citizens.
The U.S. has several ships in the area shadowing the Faina, which is anchored off the Somali coast near the port city of Hobyo, near two other pirated ships, Lieutenant Nate Christensen said by telephone from Bahrain.
A Russian warship, the Neustrashimy, or Intrepid, is also en route to the area.
Omar vowed not to surrender. “If they destroy all the assets and the crew members on board, we are also ready to die with them,” he said. “It will not happen that they capture us like goats.”

TITLE: Belarus Opposition Protests Against Vote
PUBLISHER: Agence France Presse
TEXT: MINSK — Loyalists of autocratic Belarussian President Alexander Lukashenko won every seat Monday in parliamentary elections seen as a democracy test but slammed by the opposition as “illegitimate.”
“Not a single opposition candidate was elected” to represent their party, Central Elections Commission chief Lidia Yermoshina told a press conference.
The Organization for Security and Cooperation in Europe also said the polls fell short of Western standards.
The “parliamentary elections in Belarus fell short of OSCE commitments in spite of minor improvements,” the European elections watchdog said in a statement.
Full results of Sunday’s legislative elections indicated that all 110 seats in the lower house would go to allies of Lukashenko, who has been labelled “Europe’s last dictator” by the United States.
The conduct of the vote was “in accordance with the law,” Yermoshina said.
But opposition leader Anatoly Lebedko described the results of the vote as “unfair and illegitimate” in comments broadcasted on Echo of Moscow radio station.
“In most electoral districts, no-one counted the votes,” said Lebedko, the leader of the opposition United Citizen Party. “Huge vote dumping (of opposition ballots) was registered during preliminary voting,” he said.
“This is a defeat for Europe, a defeat of European diplomacy, a defeat of the European politicians who already envisaged making deals here,” he said later at a press conference.
The elections were expected to determine whether Lukashenko’s authoritarian 14-year-old regime would warm to the West or move deeper into Russia’s orbit.
In the lead-up to the elections, Lukashenko made an apparent bid to thaw relations with the United States and European Union, which offered Belarus benefits if the polls showed significant improvements.
The West had offered to ease sanctions, give economic aid and lift a travel ban on Belarussian leaders if there was progress.
The Russian government issued a statement on Monday saying its powerful prime minister, Vladimir Putin, would pay a visit to Belarus on Monday next week.
That and a sweep by pro-Lukashenko parties would likely be read as a snub in Washington and Brussels.
Lukashenko, who has ruled this economically backward former Soviet republic wedged between Russia and the European Union for 14 years, on Sunday hit out at opposition groups for taking “outside” funding.
“A real, constructive opposition is always needed... but not an opposition fed and financed 100 percent from outside,” he told journalists.
Hundreds of opposition activists gathered late Sunday in the capital Minsk to condemn the polls as a “farce” and urged international observers not to recognize the outcome.
Protesters held banners declaring “No to Farce,” “Dictatorship Should Go to the Dustbin of History,” and “No to Russian Military Bases.” They also waved flags of the European Union.
The voter turnout was 75.3 percent, the Central Elections Commission said Monday. That included more than a quarter of the electorate who cast ballots from Tuesday through Saturday, a system the opposition says is open to abuse.
Foreign observers complained Lukashenko’s critics were ignored in state-run media during campaigning — a view shared by the demonstrators in Minsk’s October Square.

TITLE: Arms Deals Agreed On With India
PUBLISHER: Reuters
TEXT: NEW DELHI — India will buy 347 T-90 battle tanks from Russia and build 1,000 more locally with Russian help, the defense minister said on Monday, as the two nations decided to iron out differences that had delayed several arms deals.
India, one of the world’s biggest arms buyers and Russia, a long time supplier, also agreed to speed up delivery of an aircraft carrier that has been slated for delivery in 2012, a defense official said.
The announcement came after a meeting between Russian Defense Minister Anatoly Serdyukov and India’s Defense Minister A.K. Antony, who said the two countries had also decided to extend a defense cooperation deal by another 10 years.
In 2004, India and Russia had signed a $1.6 billion deal to bring the Admiral Gorshkov to India by 2008. India may now have to pay an extra $1.2 billion for the carrier’s refitting costs.
“The Indian side has considered the Russian demand for an escalation in price....the same has been considered and would be placed before the cabinet for consideration,” Antony said in a statement on Monday.
India plans to spend $30 billion over the next four years to modernize its largely Soviet-era arms.

TITLE: Cinema Redevelopment Project Frozen
AUTHOR: By Boris Kamchev
PUBLISHER: Special to The St. Petersburg Times
TEXT: The striking gray building near Pionerskaya metro station is one of the few remaining such sites in St. Petersburg that hasn’t been turned into the kind of multifunctional complex that usually proves very successful when located in similar places.  Such complexes, which include business centers, restaurants, malls and bookstores have mushroomed on the city’s stable real estate market during the last few years, but the building at Pionerskaya metro remains untouched. 
Erected in the mid-eighties, the late Soviet building was designed to be one of the biggest cinemas in the city. During the past two decades, however, the Rusy cinema has never been used for its original purpose. In 2004, Mirazh Cinema tried to establish an entertainment center there and announced that it would invest $16 million by 2006, but there were no companies willing to develop the project. 
Since 1991, the building has been home to the Ringing of Church Bells Christian Gospel sect, which rents several rooms there.
Two years ago, City Hall sold the building and its surrounding land to Novy Mir, a company that is part of the Baltic Construction group, according to Delovoi Peterburg. The company intended to demolish the building before fall 2008 and develop the location into a shopping and entertainment mall. The project is being managed by REIM SMT consultancy, a daughter company of the Baltic Construction group. 
“The value of the project would be up to $150 million, including the purchase of the surrounding land. Exploitation is estimated to begin in 2010. We project a seven-year payback period,” Anton Avdeev, RAIM SMT’s general manager, was quoted as saying to the newspaper earlier this year. He said that the total area of the shopping and entertainment complex would be 130,000 square meters, including 50,000 square meters of parking for 1,850 vehicles. An additional 80,000 square meters was to be used for other commercial activities.
Avdeev was not available to comment on why the project is still frozen and why no construction has taken place at the site.
Analysts say that the area surrounding the metro station is already saturated with numerous commercial objects and this is one of the reasons why the project has still not been developed. 
“The nearby Ramstor and City Mall shopping complexes are Novy Mir’s main competitors. Having such complexes close to the metro station can sometimes be problematic — you have to construct an effective solution as to how to direct the flow of visitors from the metro,” said Yevgenia Vasilyeva, head of the consulting department of Astera real estate services. 
Experts are unanimous that the Pionerskaya and Komendantsky Prospekt metro stations areas are overloaded with commercial objects and shopping malls such as Promenad, Kontinent and Kupechesky dvor that have been opened in the last couple of years.
“A multifunctional complex is the only solution if Novy Mir’s management wants to develop a competitive project in this area. As well as entertainment and commercial facilities, they have to offer business centers and lease offices,” said Arina Sender, retail property department director at Knight Frank.

TITLE: Russia to Talk to N. Korea About Pipeline to S. Korea
AUTHOR: By Shinhye Kang
PUBLISHER: Bloomberg
TEXT: SEOUL — South Korea plans to import $90 billion of natural gas from Russia via North Korea, with which it shares one of the world’s most heavily fortified borders, to reduce its reliance on more expensive cargoes arriving by sea.
State-run Korea Gas signed a preliminary agreement with Gazprom, Russia’s largest energy company, to import 10 billion cubic meters of natural gas over 30 years starting in 2015, the Ministry of Knowledge Economy said in a statement. The accord was signed in Moscow during President Lee Myung Bak’s three-day visit that began Sunday.
Gazprom Chief Executive Officer Alexei Miller said after talks Monday between Lee and Russian President Dmitry Medvedev that the exact delivery route hasn’t been determined and that shipments could begin as early as 2015.
The attempt to secure North Korea’s consent to build a pipeline on its territory comes as six-nation talks aimed at disarming the country’s nuclear capabilities have stalled. South Korea will seek guaranteed Russian gas supplies, whether the fuel is delivered via pipeline or otherwise, said Lee Jae Hoon, vice minister for trade and energy.
“Russia suggested a pipeline via North Korea, which is expected to be more economical than other possible routes,” the minister said in a news briefing. “Russia will contact the North to discuss this.”
Miller said the two sides agreed Monday “to start working on identifying the route for gas deliveries to South Korea,” and that “work will be focused on preparing the basic principles for long-term deliveries.”
The $90 billion estimate for the gas contract is based on current prices, which Russia and South Korea are likely to renegotiate every year, the Ministry of Knowledge Economy said.
“Transporting gas through North Korea could be risky for South Korea,” said Kim Jin Woo, a senior research analyst at Korea Energy Economics Institute. “But the project will ease tensions on the Korean peninsula if Russia successfully persuades North Korea” to accept the plan.
North Korea could earn $100 million a year from the gas-pipeline project, the Ministry of Knowledge Economy said.
In a statement following their talks, Medvedev and Lee said they support joint energy projects in Russia, South Korea and other countries. They agreed to cooperate on developing hydrocarbon deposits on Russia’s continental shelf, particularly the West Kamchatka shelf. Russia welcomes South Korea’s plans to participate in auctions for the right to develop energy reserves and to build petrochemical facilities in Russia’s Far East, the statement said.
The volume of trade between Russia and South Korea may reach $20 billion this year, up from $15 billion in 2007, and “this isn’t the limit,” Medvedev told reporters after the meeting.
Six-way nuclear talks involving the U.S., Russia, China and Japan stalled last month when Kim Jong Il’s regime said it stopped disabling the Yongbyon reactor, the source of its weapons-grade plutonium. North Korea complained about delays in being deleted from the U.S. terrorism blacklist.

TITLE: In Brief
TEXT: <b>Property Prices Fall</b>
MOSCOW (Bloomberg) — Russian developers are cutting apartment prices in the regions as a decline in mortgages lowers demand for housing, Vedomosti reported.
Sales of new apartments in Rostov-on-Don are down 40 percent this month from August, while sales in St. Petersburg have fallen by half since the spring, the Russian newspaper said. Prices have declined as much as 24 percent as a result, Vedomosti said.
Developers in Moscow, where listed prices for apartments have climbed 43 percent this year, haven’t cut prices, though they probably will in two or three months, the newspaper said, citing property consultant IRN.ru.

<b>FDI Expected to Grow</b>
MOSCOW (Bloomberg) — The Russian government expects foreign direct investment to reach $70 billion in 2012, while inflation will slow to 7 percent, Vedomosti newspaper reported.
Foreign direct investment will rise from $47.1 billion in 2007, the Moscow-based newspaper reported, citing a copy of the government’s development plan up to 2012. The annual inflation rate in August was 15 percent.
The government is due to discuss the report on Wednesday, according to the paper. It forecasts that wages will rise 1.4 times by 2012 and banks’ capital will be equal to 10 percent of gross domestic product, Vedomosti said.

<b>Gazprom Propositioned</b>
ST. PETERSBURG (Bloomberg) — Mirax Group, the Russian developer owned by billionaire Sergei Polonsky, has offered Gazprom’s finance unit the opportunity to buy projects in western Moscow, Kommersant reported.
Mirax approached Lider, which manages pension funds for the state-run gas producer, to buy or co-invest in projects it has yet to start, the Moscow-based newspaper said, citing an unidentified Moscow property developer.
Mirax Chief Financial Officer Alexander Paperno said last week that the company may offer stakes in its projects, Kommersant said. 

<b>Capital Outflows ‘High’</b>
MOSCOW (Bloomberg) — Russia will post a “high” net capital outflow this month, First Deputy central bank Chairman Alexei Ulyukayev said in an interview with Itogi magazine.
“Unfortunately” the figure for September will be “high,” after a net capital outflow of $4.6 billion in August, Ulyukayev was quoted as saying in an interview with the Moscow-based magazine published Monday.
Investors pulled money out of Russia after oil prices fell and perceptions of political risk rose after Russia’s five-day war with Georgia in August, Ulyukayev was quoted as saying.

<b>Property Stocks ‘Risky’</b>
MOSCOW (Bloomberg) — Investors should “steer clear” of Russian real-estate stocks because the industry will be the country’s “hardest hit” in the event of a global economic recession, JPMorgan said Monday.
Real-estate and construction companies, already facing higher borrowing costs, may see a drop in demand for property if the global economy contracts, slowing Russian economic growth to 4.5 percent next year under the brokerage’s “pessimistic” scenario, JPMorgan wrote in an investors note.
“When people own more than one apartment, they are likely to sell one in times of financial difficulty,” wrote JPMorgan strategists including Peter Westin in Moscow. “This could bring pressure to bear on currently high property prices.”

TITLE: Deripaska to Appeal For Russian Hearing
AUTHOR: By Nadia Popova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Oleg Deripaska, the majority owner of United Company RusAl, will this week seek to have London’s High Court dismiss a multibillion-dollar lawsuit filed by former associate Michael Cherney, a person close to Deripaska’s Basic Element holding said Friday. 
Cherney is claiming a stake of 13.2 percent in the world’s largest aluminum producer, worth an estimated $4.35 billion. 
Deripaska on Friday will appeal the court’s July decision to consider the case in Britain and argue that it be heard in Russia instead, said the person, who spoke on condition of anonymity because he was not authorized to speak to the media ahead of the hearing. 
Cherney’s lawyers said in an e-mailed statement Sunday that they were confident that the appeal would be rejected. 
“It is in the interests of Mr. Deripaska to solicit a truce as soon as possible because the initial sum of $4.35 billion may increase significantly as the dividends unpaid for the shares in question add up,” a source close to Cherney said by telephone. He spoke on condition of anonymity, citing lawyers’ advice. 
The London court said in July that Cherney made a “good arguable case” of the risks of a trial in Russia, including “assassination, arrest on trumped-up charges and lack of a fair trial.” 
Cherney, a controversial figure in the Russian aluminum industry in the 1990s who now lives in Israel and invests in high-tech and real estate, has accused Deripaska of seizing a stake being held in trust in their joint aluminum business. 
Cherney said he helped Deripaska get his start in the just-privatized aluminum industry, giving him money and helping him get a job as general director at a smelter in Sayanogorsk, according to London court documents obtained by The St. Petersburg Times. The plant later became the cornerstone of Deripaska’s aluminum empire. 
Cherney said he first met with Deripaska in late 1993 or early 1994, according to the court documents. 
Deripaska has said Cherney had never been his business partner “in any normally accepted commercial meaning of the word” and that the two had became acquainted in May 1994. 
Deripaska was the biggest private shareholder with 8.85 percent in the Sayanogorsk plant by Oct. 1, 1993, the source close to BasEl said. 
The source said cooperation began between Trans World Group, or TWG, a metals trader co-owned by Cherney, and Alinvest, an investment vehicle controlled by Deripaska, in July 1994. By then, Alinvest had consolidated about 12 percent of the plant’s shares, while Russky Capital, a TWG-controlled holding, had about 4 percent, the source said. 
TWG and Deripaska cooperated in buying shares in the plant because Alinvest had a brokerage license and Deripaska needed TWG to buy shares to prevent their price from sharply rising, the source said. 
By Nov. 15, 1994, when Deripaska was elected general director of the plant with 98 percent of shareholders’ votes, his firms had consolidated up to 23 percent of the plant’s shares, while TWG had a similar figure, the source said. 
Cherney said he and Deripaska each owned 50 percent in Siberian Aluminum, or SibAl, until 1998, when they reduced their stakes to 40 percent apiece, according to the court documents. Two other people, Anton Malevsky and Sergei Popov, each acquired 10 percent stakes, Cherney said. 
SibAl later merged with the aluminum assets of Sibneft to form Russian Aluminum, or RusAl. SibAl and Sibneft each took 50 percent stakes in RusAl. Cherney said he was entitled to 20 percent of RusAl after the deal. 
In March 2007, RusAl merged with SUAL and Glencore’s alumina assets to become the world largest aluminum producer. The share Cherney was claiming was reduced from 20 percent to 13.2 percent, which he says is worth $4.35 billion. 
Cherney said in the court documents that the heart of the conflict between him and Deripaska lies in two agreements signed at London’s Laneborough Hotel on March 10, 2001. In the first document, Deripaska agreed to pay Cherney $250 million up front for his shareholding in SibAl, while the second document obliged Deripaska to hold 20 percent of RusAl’s shares in trust and sell them between 2005 and 2007 on Cherney’s behalf, Cherney said. 
Deripaska said the second document was to go to Malevsky, not Cherney, according to the court documents. 
Deripaska has paid the $250 million. Malevsky died in a parachuting accident in South Africa in 2001.

TITLE: Chubais Named as JPMorgan Adviser
PUBLISHER: Reuters
TEXT: MOSCOW — JPMorgan Chase said Friday that it had named former Unified Energy System chief Anatoly Chubais to its international advisory board.
He will be the first Russian to join the exclusive group of consultants to the bank, sitting alongside former U.S. Secretary of State Henry Kissinger and Xi-Qing Gao, the chief executive of China’s $200 billion sovereign wealth fund.
Chubais is the head of the cash-rich State Nanotechnology Corporation, one of several firms created last year to jump-start investment in nonenergy sectors.
President Dmitry Medvedev appointed him on Monday to lead the company, which has received $5.1 billion of budget funds.
“It is a great honor that a person with such unique experience as Anatoly Chubais will share with our firm his views and analyses of the ways we invest,” JPMorgan Chase chairman Jamie Dimon said in a statement.
Chubais is held chiefly responsible for the breakneck privatization of Soviet assets in the 1990s, which saw major industries sold off at bargain prices.
In recent years, Chubais has been the architect of the country’s electricity reforms, selling off most of UES’s assets to private investors. The former monopoly was liquidated July 1.

TITLE: iPhones to Hit Russian Shops This Week, Big Sales Expected
PUBLISHER: Combined Reports
TEXT: Several of the country’s largest retailers have announced that they will kick off Apple’s iPhone sales in Russia on Friday, with Eldorado estimating that a total of 150,000 units could be sold by the end of the year. 
“All retailers will begin sales of the iPhone in Russia at the same time, during the night from Thursday to Friday. Our company will also be selling them,” said Nadezhda Senyuk, a PR director at retail chain Tekhhnosila.
Rival chains Eldorado and M.video said in separate statements that they would start selling Apple’s newly released iPhone 3G on Friday.
Eldorado estimated that overall sales of the handset in Russia could reach 150,000 before the end of 2008. It said it was planning to sell around 15,000.
The company said it would sell the iPhone with 8 gigabytes of storage capacity for 22,999 rubles ($930) and with 16 gigabytes for 26,999 rubles (1,070) — the same prices as Russian mobile phone operators will charge for the iPhone without a contract.
The country’s three biggest carriers, Mobile TeleSystems, VimpelCom and MegaFon, had earlier reached a distribution deal with Apple and are currently taking advance orders.
Apple has begun selling unlocked iPhones in Hong Kong that can be used with any cell phone carrier. The move appears to depart from the company’s previous strategy of selling the device through specific service providers, usually with a required service contract. On its Hong Kong web site, the company is advertising unlocked iPhones, saying people can “buy directly from Apple” and choose a carrier. 
(Reuters, AP)

TITLE: Markets Drop as More Banks Bailed Out
AUTHOR: By William Mauldin and Denis Maternovsky
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s Micex Index on Monday dropped the most since regulators closed local stock markets on Sept. 16, led by Sberbank, on concern more European banks will fail with repercussions for borrowing rates and liquidity in the country.
Bank of Moscow also led banking stocks lower. PIK Group, a Moscow-focused apartment builder, and Sistema-Hals, billionaire Vladimir Yevtushenkov’s property company, sank to record lows on speculation demand for property may decrease. Polyus Gold climbed after offering to buy a majority stake of KazakhGold Group.
The Micex fell 5.5 percent, poised for a third day of declines. The dollar-denominated RTS Index slipped 5.8 percent. Russian indexes, dominated by energy producers, also suffered from declines in oil prices.
Fortis, the largest Belgian financial-services firm, received an 11.2 billion euro ($16.3 billion) rescue from three governments while the U.K. seized Bradford & Bingley, the U.K.’s biggest lender to landlords.
In Russia, the MosPrime lending rate among top-tier banks climbed 1.66 percentage points to 7.79 percent, the highest in more than a week. The ruble fell the most against the dollar in three weeks and dropped against the central bank’s currency basket as crude oil tumbled and the credit crisis spread.
“The crisis is far from over and European banks are not immune,” said Sebastien de Prinsac, head of international sales at Trust Investment Bank in Moscow. “Nervousness is still quite present in the market.”
Prime Minister Vladimir Putin said the central bank should make loans available to banks without collateral, while companies may borrow from the state development bank to pay off foreign debts, Interfax reported. Russia pledged more than $100 billion in emergency funding after closing the market for two days this month as stocks plunged.
The RTS has fallen 47 percent so far this quarter, the second-worst among 88 national indexes tracked by Bloomberg. Foreign investors pulled $56.7 billion from Russia between Aug. 8 and Sept. 19 as troops entered neighboring Georgia, according to BNP Paribas.
Stocks have also been weighed down after the government sparked concern it would increase control on business and as the global financial crisis deepened to cause banks into nationalization or bankruptcy.
PIK, the Russian developer scheduled to report first-half earnings Tuesday, dropped 20 percent to a record low and Sistema-Hals sank 12 percent after JPMorgan Chase said investors should “steer clear” of Russian real-estate stocks because the companies will be “hardest hit” in the event of a global economic recession.
Lukoil, Russia’s second-biggest oil producer, retreated 3.8 percent, a third day of declines. Crude oil dropped $5.55 to $101.34 a barrel in New York on concern a U.S. plan to spend $700 billion propping up America’s banks would fail to unlock credit markets and avert an economic slowdown there.
Also Monday, emerging-market bonds fell the most in two weeks as investors sold all but the safest assets on concern more banks will need rescuing after European bailouts for Fortis and Bradford & Bingley.
“The selloff is almost indiscriminate, encompassing both entities that could be prime candidates for state support and those that may not be so fortunate,” said Ivailo Vesselinov, a senior economist at Dresdner Kleinwort in London.
“The environment for emerging markets is deteriorating sharply,” said Lars Christensen, a senior emerging-markets analyst at Danske Bank in Copenhagen. In countries “like Russia with its highly leveraged banking sector, the outlook is quite bleak. A bailout in the U.S. won’t change much for that.”

TITLE: All Change At The Top At MICEX
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: MOSCOW — Central Bank Deputy Chairman Konstantin Korishchenko has been tapped to head the MICEX Group in the first major reshuffle since recent financial turmoil wiped out more than half the value of shares on the country’s leading stock exchange. 
Korishchenko will replace current MICEX president Alexander Potyomkin, who is moving back to work at the Central Bank, which is the MICEX’s largest shareholder. 
At the Central Bank, Korishchenko, who already serves as chairman of MICEX’s board of directory, has overseen exchange rate policy, including the ruble rate against the dollar-euro basket, and the country’s gold and foreign exchange reserves. On his watch, the Central Bank has diversified its reserve holdings away from the dollar and toward the euro. 
The reshuffle comes in the wake of Russia’s worst stock market losses in a decade. 
Putting Korishchenko in to run the exchange, which is 50 percent-owned by the Central Bank, shows that the government is eager to increase market regulation as it prepares to support key stocks with budget funds, analysts said. 
Earlier this month, Korishchenko said the government had the resources to cover all the banking industry’s “conceivable” liquidity needs and could provide as much as 3 trillion rubles ($120 billion) to banks, RIA-Novosti reported.

TITLE: Scared of the Stock Market
AUTHOR: By Andrei Podoinitsyn
TEXT: In light of the Russian stock market’s troubles, it is imperative that the country attracts long-term individual and institutional investors to prevent future market collapses. 
  Aside from the defaults on subprime mortgages and the crash in the roughly $500 billion in mortgage derivatives, one of the main problems that led to a full-scale financial crisis in the United States was the country’s extremely high rate of internal debt. That problem is far more critical in the United States and Europe than in Russia, where people have not grown accustomed to living with debt. Rather than running up the national debt by printing hundreds of billions of dollars to solve the financial crisis, U.S. leaders could have demanded tougher credit and monetary standards across the board, but such measures are unlikely during election campaigns. 
But unlike in the United States, Russia is not going through a financial or economic crisis. We had a liquidity crisis that only an unprecedented infusion of $60 billion in government funds was able to stem.
The sharp drops in the stock market over the past four weeks were followed by the some $40 billion in capital outflow from speculative investors. At the same time, if you look at the country’s economy as a whole and the stock market in particular, there are no objective reasons why the markets plummeted as much as it did — 47 percent in four months. 
The absence of long-term individual and institutional investors, which would normally provide a safety cushion against this level of capital flight, is Russia’s fundamental investment obstacle. By providing emergency funding, however, the government helped avert an even greater drop. Its response was decisive and successful, although some observers feel that it came too late. 
From now until the end of the year, a 20 percent rise in the stock market from current levels is realistic, but of course this will depend on the volatility of world markets and particularly on further developments in the U.S. and European financial sectors. The primary factors influencing Russia’s stock market will be tax liberalization, commodities prices and the global financial crisis. It is safe to say, however, that if the world economy worsens, Russia’s market will not grow.
Today, Russia’s stock market is still highly dependent on the movement of foreign capital. The huge capital flight from foreign investors exposed the vulnerability of the country’s stock market. Moreover, much remains to be done to turn the ruble into a global, or at least regional, reserve currency and to turn Moscow into a global financial center. 
To increase investment, it is critical that the government tackle the country’s high inflation. According to Finance Minister Alexei Kudrin, the rate of inflation will actually increase this year to 13 or 14 percent. The next step is to institute tax incentives that would make it attractive for Russians to put their money into long-term investments. Lawmakers have recently introduced new pro-investment legislation, and this has been a cause for optimism in the business community.
In addition, Russia must increase the number of its private and institutional investors in the stock market. Even though institutional investment is growing by 50 percent annually, it still constitutes a mere fraction of the overall market. 
The options available for Russia’s pension savings, which totals $20 billion, is another area in need of improvement. These funds are not earning adequate investment returns because the number of companies that they can invest in is limited. The investment options should be gradually expanded to increase the rate of return. 
One of the largest hurdles to attracting long-term investment is that Russians are very leery of investing in the stock market. This is compounded by fly-by-night financial investment companies that continue to “guarantee” big returns on investment. These activities require much closer government regulation. 
The government and asset management companies also need to increase people’s understanding of the financial markets. The problem is that when people lack even a basic understanding of proper investment practices, there is a danger they will fall victim to pyramid schemes. The 60 percent annual returns that were common a few years ago are now a thing of the past. The rule of thumb is: The higher the return, the greater the risk. Investors need to understand and take responsibility for the investment strategies they choose. 
About 500,000 Russians — or roughly 0.5 percent of the labor force — own stocks through the country’s mutual funds. That figure is many times higher in more economically developed countries. 
Another reason for the low investment rate is that Russians are not accustomed to planning for the long term, and there is one very good reason. for this: Their life savings have been devalued more than once during the past two decades. Moreover, it is difficult to convey to Russians the basic principles of long-term investing — do not try to catch the market at a low point, do not change your long-term strategy in reaction to the short-term volatility of specific securities, and do not let daily market fluctuations influence your long-term investment strategy. 
Nevertheless, I remain optimistic about the mid- and long-term outlook for the Russian stock market. I suspect that the worst of the crisis is over, and in 2009, as the weakest players will be absorbed by stronger ones, we will see a major consolidation — and strengthening — of the country’s financial institutions. And with this, we should see an improvement in the investment climate and an increase in the number of Russians and foreigners investing in the stock market.

Andrei Podoinitsyn is CEO of UFG Invest in Moscow.

TITLE: U.S. Should Recognize South Ossetia
AUTHOR: By Richard Lourie
TEXT: The United States should recognize the independence of South Ossetia. Short of a major war, South Ossetia will never be part of Georgia again, and half of the country — North Ossetia — is already part of Russia. In addition, the Ossetians wish to be united under Russian rule, as any impartial, internationally monitored referendum would show.
This bold diplomatic gambit obviously could not be made by the current U.S. administration, which is itself very much a part of the problem. The Georgian invasion of South Ossetia was another White House fiasco, the Katrina of the Caucasus. 
Georgia has real geostrategic importance — the Baku-Tbilisi-Ceyhan pipeline, the only route to bypass Russia in shipping oil and gas from the Caspian Sea and Central Asia to the West.
But even political moderates like John McLaughlin, host of “The McLaughlin Group,” a Sunday morning talk show, recently predicted that we would soon discover that the United States gave Georgian President Mikheil Saakashvili the green light to invade South Ossetia. Psyched by being second only to Britain in the number of troops fighting alongside the United States in Iraq, Georgia was also pumped up by the latest in military technology from the United States. Saakashvili felt so close to the current U.S. administration that he even named the highway from the airport into the capital after President George W. Bush, but we all know where that road leads. 
Bush and Co. are not the only culprits. The war in Georgia simply brought to a head the worsening U.S.-Russian relationship. The problems in the relationship mostly stem from America’s foreign policy and Russia’s domestic policy. America’s ill-conceived policy toward Russia flowed from its attitude of triumphalism, treating Russia like a conquered enemy. This led to three errors, two of which have their origins in the administration of Bill Clinton. First, after pledging not to, the United States bulldozed NATO eastward until 10 of its 26 members were either former Warsaw Pact countries or former Soviet republics. Second, the United States pushed for the BTC pipeline across Georgian territory when Russia was weak and not yet bullying its neighbors with its energy muscle. Third, the Bush plan to place interceptors in Poland to thwart an attack by Iran was technically dubious but guaranteed to be seen by Russia as a threatening encroachment.
Russia, for its part, lost the West’s confidence by violating the holy trinity of democracy — opposition parties, freedom of the press and an independent judiciary. The dirty tricks played on 2008 presidential candidates like chess champion Gary Kasparov, the slaying of critical journalists like Anna Politkovskaya and the rigged trial against oil magnate Mikhail Khodorkovsky made the Putin regime look petty, vindictive and despotic. This will prove harder to correct than the defects of U.S. policy. 
The advantage of a breakthrough move like recognizing South Ossetia is that it would give Russia what it insists it needs — acknowledgement as a great power with serious interests in its region. It also would get the United States off the hypocrisy hook; if the United States can violate the borders of an ally as it has been doing in Pakistan, why can’t Russia violate those of an adversary? 
Another advantage of recognizing South Ossetia is that it would throw Russia on the defensive, requiring it to respond in kind — for example, by retracting its recognition of Abkhazia’s independence. 
Russia’s specific response is less important than achieving a transformation of the dialogue. U.S. efforts should not be concentrated on the tit-for-tat level of diplomacy. The United States needs to create a new Russia policy based on a redefining of NATO’s role — especially in Ukraine — and of U.S. energy interests in the Caucasus and Central Asia. After two slack and indulgent decades, it’s time for some realpolitik again. 

Richard Lourie is the author of “The Autobiography of Joseph Stalin” and “Sakharov: A Biography.”

TITLE: Almond Returns With Concert of New Songs
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: A frequent visitor to Russia, British torch singer Marc Almond has not performed a full-fledged concerts here since he was seriously injured in a 2004 motorcycle crash, coming to Russia instead for what he called “appearances” — brief sets where he sang backed by a pianist or a pre-recorded track either at a mall opening or a local gay club. Now he returns with a full concert that is expected to feature new material.
Apart from an upcoming album, tentatively called “Sandboy,” Almond has finished his labor-of-love album “Orpheus in Exile.” Recorded entirely in Russia over two years, it includes the songs written by or made famous by Vadim Kozin, a Soviet singer extremely popular in the 1930s and 1940s.
“Kozin was known as the Russian Orpheus and the album reflects his life through the songs,” wrote Almond on his MySpace blog. “It is a beautiful passionate record that I know will probably only have a limited appeal. I’m very proud of it. As yet it has no label but I will maybe feature some songs on the player in coming months.”
Kozin’s Russian biographies say he performed, alongside Marlene Dietrich, for Joseph Stalin, Franklin D. Roosevelt and Winston Churchill at the Tehran Conference concert in 1943. It is not clear, however, whether such a concert ever took place.
Kozin was arrested in 1945 and sentenced to eight years . Different sources cite different charges, from anti-Soviet propaganda to homosexuality. There is also a dispute on whether Kozin was born in 1903, 1905 or 1908. He kept a low profile after his arrest, choosing not to return from Magadan where he spent his sentence. He died in 1994.
Almond released “Heart of Snow,” an album of Russian songs performed with such Russian artists as Soviet pop-folk diva Lyudmila Zykina and Akvarium’s frontman Boris Grebenshchikov, in 2003.
Chaotic in its choice of Russian collaborators and material, the album was also under-promoted and Almond, at short notice, canceled concerts in Moscow and St. Petersburg that he had earlier scheduled to promote the record. The motorbike crash came the next year.

<i>Marc Almond will perform on Wednesday at Manezh Kadetskogo Korpusa. www.marcalmond.co.uk</i>

TITLE: Paul Newman Dies Aged 83
PUBLISHER: Reuters
TEXT: LOS ANGELES/LONDON — Images of U.S. actor Paul Newman, who died late Friday, adorned newspaper front pages around the world on Sunday, his piercing blue eyes vying for attention with the global financial crisis.
Tributes came from as far away as Iran as well as from Hollywood colleagues. Elizabeth Taylor, who co-starred with Newman in “Cat on a Hot Tin Roof,” offered emotional comments.
“I loved that man with all my heart. He was goodness and kindness and pure integrity,” she said in a statement. “Knowing him, being his friend, was as golden as the sunset and a privilege I’ll never forget.”
A Newman spokesman said memorial services for the actor, who died on Friday of cancer at age 83, would be private.
Talking to TV reporters outside the family home in Westport, Connecticut, daughter Lissy Newman encouraged people who wanted to pay tribute to simply show kindness to a friend, donate money to charity or vote in the U.S. elections.
“Just look out for each other. That’s really what he was all about,” Lissy Newman said. “He was awesome to the end, and he is an awesome guy and his spirit will be with us forever and ever and ever.”
“There is a point where feelings go beyond words,” said Robert Redford, his longtime friend and co-star in “Butch Cassidy” and “The Sting.” “I have lost a real friend. My life — and this country — is better for his being in it.”
“He comes from that era of actors along with the Deans, Brandos and Clifts that I, that we all looked at, as actors who changed the art form,” said Leonardo DiCaprio.
Eva Marie Saint, who starred with Newman in “Exodus,” said: “Yes, his eyes were that blue and beautiful. ... His legacy as a humanitarian for children around the world is unmatchable.”
Indeed, in 1982 Newman co-founded Newman’s Own food products and decided to funnel much of his profits to charity. Over the years, his Newman’s Own Foundation has given some $250 million to charitable and other organizations.
Newman sponsored 11 Hole-In-The-Wall camps worldwide that helped 135,000 kids experience the fun and healing powers of outdoor activities.
“His heart and soul were dedicated to helping make the world a better place for all,” said Newman’s Own Foundation Vice Chairman Robert Forrester.
Underlining Newman’s broad appeal was the global response. Britain’s Independent Sunday newspaper featured his photograph across the whole of page one, relegating the latest news of the country’s banking woes to the inside pages.
“Paul Newman: Death of King Cool” ran the caption headline in the Sunday Times above a portrait of the heartthrob and philanthropist.
In Germany, as elsewhere, TV news channels have been showing clips from his films, and in France, President Nicolas Sarkozy hailed Newman as a “Hollywood legend.”
He earned nine Oscar nominations for acting and won the best actor award for 1986’s “The Color of Money.”
Newman is survived by his wife of 50 years Joanne Woodward, five daughters, two grandsons, and his older brother, Arthur.

TITLE: Ballet Stars Dazzle in France
AUTHOR: By Kevin Ng
PUBLISHER: Special to The St. Petersburg Times
TEXT: LYON, France — The 2008/9 opera and ballet season started early in France. Last month the New York City Ballet commenced its two-week tour at the Opera Bastille in Paris, while the Opera Garnier opened with the touring Bolshoi Opera. In Lyon, there was a Russian ballet gala at the huge Amphitheatre in the Cite Internationale Convention Center. The artistic director of this one-night gala was Natalia Osipova, a soloist of the Mikhailovsky Ballet in St. Petersburg, whose own season began on Sept. 18.
The three-hour Lyon gala brought together 10 dancers from the Mariinsky and Mikhailovsky ballet companies in St. Petersburg, as well as from Moscow’s Bolshoi Ballet and Stanislavsky Ballet. Top of the bill was the sensational young Bolshoi star couple, Natalia Osipova (no relation to her above-mentioned namesake Natalia Osipova from the Mikhailovsky) and 19-year old star Ivan Vasiliev. They are currently the most acclaimed cast of the Bolshoi’s production of “Don Quixote,”excerpts of which were performed at the close of the Lyon gala. However they didn’t dance the duet, but only the solos and the coda. Their technical bravura was spectacular and brought the house down.
Earlier, in the first half, Osipova and Vasiliev also danced the duet from “The Flames of Paris.” The Bolshoi Ballet has just premiered a new version of this 1932 Vasily Vainonen ballet by its current director Alexei Ratmansky. A Soviet ballet about the French Revolution, it was fitting to see it performed on French soil. Vasiliev was hugely exciting in his two solos with his multiple pirouettes and grands jetes. Osipova also dazzled with her high jumps, arms thrown back. This number had a backup female corps de ballet of 12 French students.
Dominating the gala was Andrei Merkuriev, the outstanding Bolshoi soloist (and former Mariinsky soloist) who joined the Bolshoi in 2006 and has seen his career renewed and blossoming further with a bigger and more diverse repertory to suit his talent in dramatic and modern ballets. For this Lyon gala, he danced four of his best roles from his Mariinsky past.
Back in 2002, during his first season with the Mariinsky, Merkuriev had already been picked by Ratmansky to create the role of the prince in his production of “Cinderella,” partnering Mariinsky star Diana Vishneva. In Lyon, he danced the “Cinderella” duet with the Mariinsky soloist Yekaterina Osmolkina. Her dancing was warm and lyrical. A recurrent motif in this duet was the frequent circling of the arms, signifying an intimate conversation between the prince and Cinderella.
Merkuriev was the greatest Espada in the Mariinsky’s production of “Don Quixote,” and no dancer has surpassed him since in charisma and sheer brilliance. It was good to see him in Lyon reprising the Mariinksy choreography in excerpts from this 19th century classic. He danced the second solo superbly. The first was danced by a young talented Mariinsky coryphee dancer Konstantin Zverev, who had just made his debut as Espada in the Mariinsky Ballet’s Birmingham tour in May.
Merkuriev, partnering Elena Evseeva, was also a stylish prince in the grand pas de deux from “Sleeping Beauty,” which he only danced in his last season with the Mariinsky. 
The gala will be released on DVD by Advantage Studio.

TITLE: Guitar Genius Straddles Art and Rock
AUTHOR: By Tim Gane
PUBLISHER: Special to The St. Petersburg Times
TEXT: Rhys Chatham, the New York-born, Paris-based avant-garde composer, guitarist and trumpet player, will open this year’s Aposition festival of innovative and experimental music on Thursday by leading a for-the-occasion band of local rock musicians through his work, "Guitar Trio (G3)."
Born in Manhattan in 1952, he has been influenced by experimental music and, later, by punk rock and No Wave, working with minimalist icon Tony Conrad and avant-garde guitarist Glenn Branca.
His composition "Guitar Trio" dates back to 1977. With it, Chatham became the first composer to make use of multiple electric guitars in just intonation to merge the extended-time music of the 1960s and 1970s with serious hard rock.
Conducted by Tim Gane, the leader of the British rock band Stereolab, the following interview was originally commissioned by editor Christopher Gordon for Hermitage Magazine as an exclusive. A different version of the article appears here. 
TG: You are performing in St. Petersburg this week. What are you looking forward to most from the experience? What do you plan to perform?
RC: This will be my first time in Russia, so I’m very excited about that.  I will be performing “Guitar Trio (G3)," for numerous electric guitars, electric bass and drums with "Pictures for Music" by Robert Longo. I will be leading the group, and all the participating musicians will be musical luminaries from the region of St. Petersburg.
TG: ?Guitar Trio? was one of the first pieces to break down the barrier between ?Rock? and ?Art? music. Did you feel you were transcending or transgressing at the time?
RC: Briefly, yes, everyone was transgressing at the time. You had Brian Eno in art galleries, you had me in rock clubs, and you had Oliver Lake in concert halls. We were all concerned with breaking down musical barriers and hierarchies that existed, we felt like "secret agents" invading an alien territory. We were all playing in spaces that we weren’t supposed to be playing in.  However, by 1990, this became the norm, and there was no longer a feeling of transgression.
TG: Then what happened?
RC: A couple of years ago, the owner of my record company asked me to recreate the original version of “Guitar Trio," the version we did back in the ‘70s.  In the original version, the performance lasted between 40–60 minutes. Later, during the ‘80s and ‘90s, we used it as a kind of signature piece that we played at the end of each concert we shortened the duration to around 8 minutes.  This was the version that we played with for many years.
Then, in Atlanta, Georgia, a couple of years ago, we decided to play the original, hard-core minimalist version:  the version that we played at the height of the punk days at CBGBs and Max’s in New York.
In the original performance, I was a friend of visual artist Robert Longo, who made a series of slides to go with the performance. We transferred the slides to DVD and showed those at the performance we did two years ago in Atlanta. Another change we made was that instead of having only three guitarists, we upped the number to 6, plus a bassist and drummer.
The performance was such a success, that a few months later, we did a 14-city American tour called "Guitar Trio is My Life." We recorded everything, and the music from the tour has come out as a 3-CD box set, released by Radium Records, a subsidiary of the Table of Elements Records. My pals from Sonic Youth and Tortoise took part in the performances and are on the record, as well as ex-musicians from Swans, Husker Du, US Maple, and many other friends.
This year we decided to do the tour in Europe, and the performance in St. Petersburg is part of this. 
TG: When I first heard your music in the early/mid-‘80s I remember being quite astounded by it. It set me on a path to thinking Simplicity = Complexity. Was this equation ever in your head when writing? Were you after fundamental simplicity with complex resonances?
RC: I was a hard-core minimalist. And an idea in early minimalist work could indeed be said to focus on how much complexity we can find in something seemingly basic: a basic beat, a basic sound.
"Guitar Trio," now known as "G3," was the first piece I made that I considered not to be a student piece. It was premiered in 1977 with Nina Canal of Ut on guitar, me, and I gave a guitarist friend of mine named Glenn Branca, who played in a group called The Theoretical Girls, a guitar that was all tuned in low E strings. Nina and I played in a standard tuning, but altering the strings slightly so that they were in just intonation.  I explained to Nina and Glenn what overtones were, and we were good to go!
The idea of this piece was to listen to what amounted to basically one chord. Now this sounds boring, right? It ended up not being boring at all, quite the reverse. What I wanted to do was get people to hear overtones, the way a piano tuner might. Electric guitar turned out to be the ideal instrument to do this with. Overtones are very soft, so in order to hear their subtlety and poetry, we turned up the guitars, really loud…
We played the piece at Max’s, and I was a little nervous. The kids who went to Max’s were not into art music, they were into rock. They threw beer cans at you, with the beer still in them, and that was if they liked you!
We blew the audience away. Wharton Tiers, also from Theoretical Girls, was on drums at that point. We had people coming up to the soundman asking where we were hiding the singers.  They were hearing singers! Of course there were no singers in the band, they were hearing the neon-colored overtones from the low E strings of our roaring, nitrogen jukebox electric guitars!
But at the end of the ‘70s, if you tried to play something at CBGBs or Max’s that remotely smelled of art, you wouldn’t get out of either of those places alive. I guess what I’m trying to say is that I had no interest in "appropriating" rock elements and putting them in my "classical, arty" pieces. I wanted to be true to myself as a musician and a minimalist, true. But I also wanted to be true to the rock music that I love.  
TG: You’ve influenced many Noise and Drone rock groups over the years. How do you feel about them extracting elements and reproducing certain aspects of your sound back in the world of rock and pop music where just intonation is not necessarily the first thing on the minds of the people in the front rows of the audience?
RC: First of all, I’ve really gotta say that just intonation certainly wasn’t the first thing on people’s minds when they first heard "Guitar Trio" or "Drastic Classicism" in NY rock clubs, lemme tell ya!!  
What a critic like Tom Johnson or Gregory Sandow might have picked up on as a radical new strain of minimalism, the audiences at CBs and Max’s were hearing a wall-of-pure-and-unadulterated rock. Well, ok… noise rock, maybe, but rock in any case.
There is a grand tradition in rock of a generation of guitarists hearing what came immediately prior to them and incorporating it into their music, in many cases having no idea where it came from. And this just doesn’t happen with the generation immediately following, it can happen 20 years later, even.
I think this is great! It leads to fresh approaches to older ideas.

<i>Rhys Chatham Guitar Trio (G3) at Etazhi Loft Project, 74 Ligovsky Pr., 4th floor, Tel.: 339 9836, M.: Ligovsky Prospekt, at 7 p.m. on Thursday. www.rhyschatham.com

Tim Gane is the leader of the British rock band Stereolab.</i>

TITLE: 1920s Russian, German Architecture on Show
AUTHOR: By Matt Brown
PUBLISHER: Staff Writer
TEXT: The Goethe Institute, which promotes German culture around the world, opens an exhibition on Tuesday that intends to focus attention on the preservation of constructivist architectural monuments and the interaction that took place between Russian and German architects in the 1920s.
“Embodying Utopia — New Architecture of the 1920s: Russia-Germany” at the Russian Arts Academy takes place as part of the Petersburg Dialogue International Forum’s Week of Russian Avant Garde in St. Petersburg project.
The exhibit will feature the work of two German architects, Bruno Taut (1880-1938) and Erich Mendelsohn (1887-1953), displayed alongside similar examples taken from the architecture of Leningrad (St. Petersburg) in the same period. 
“Taut and Mendelsohn were key German architects of the 1920s and leaders of the most forward-looking artistic movements of their age,” the exhibition organisers said. “These included Expressionism, and, in particular, ‘das Neue Bauen’ (New Building) which had close links to Soviet Constructivism.” 
While Taut’s work is largely limited to the time period covered by the exhibition, Mendelsohn, following emigration to the U.K. in 1933 because of the rise of anti-Semitism, continued to work extensively in England, Palestine and the U.S. well past the 1920s.
In the 1920s, Mendelsohn became interested in the Socialist experiments being made in the Soviet Union. He was said to be the first foreign architect to work in U.S.S.R. with his design for Leningrad’s Red Flag Textile Factory in 1926 (still standing on the corner of Pionerskaya Ulitsa and Korpusnaya Ulitsa near Metro Chkalovskya on the Peterograd Side).
Taut was a central figure in the mass housing construction of the 1920s in Germany, a master of convincing aesthetic solutions for low-cost housing. 
Mendelsohn, unlike Taut, created little in the way of residential buildings, but throughout his working life maintained a fantastical, visionary faith in the German Expressionist style, despite the fact that it died out as a popular movement at the end of the 1920s. Working for the most part for prosperous private clients, Mendelsohn managed to maintain the audacity of his original sketches for designs, something that can be seen at the exhibition that places the sketched designs alongside images of the finished works.
One of the most significant architects of the pre-War period in Leningrad was Alexander Nikolsky. He continually searched for new formal solutions, experimenting and exploring new theories. 
A significant portion of the architect’s work is presented at the exhibition as models of buildings, many of which were not actually constructed. These models are being exhibited for the first time.
The exhibition is accompanied by a series of discussions on the topics it raises throughout the month of October. 

For more information contact Yekaterina Gromova, dolm@stpetersburg.goethe.org. Tel: 363 1125

TITLE: China Hails Space Walk Astronauts
PUBLISHER: Reuters
TEXT: BEIJING — Three Chinese astronauts landed safely back on earth on Sunday after a 68-hour voyage and space walk that showcased the country’s technological mastery and were hailed as a major victory by its leaders.
Their Shenzhou (“sacred vessel”) spacecraft parachuted down to the steppes of northern Inner Mongolia region at dusk. Doctors rushed to open the capsule and check the men as they readjusted to gravity and recovered from the punishing re-entry.
Spacewalker Zhai Zhigang was the first to emerge and was helped to a nearby folding chair, where he was greeted with flowers and applause and said he was “proud of his motherland.”
Premier Wen Jiabao told the nation minutes later that the three were heroes for their efforts, which put China in an elite club of three nations that have managed a space walk.
“The complete success of the manned Shenzhou VII is a great stride forward for China’s space technology,” he said, adding that the country’s efforts were focused only on science.
“Chinese people have ceaselessly sought the peaceful development and use of space technology,” he said. China’s rapidly advancing program has raised disquiet among Western governments and in Japan that it may have military ambitions in space, especially after conducting an anti-satellite missile test last year.
Zhai’s brief but historic outing in a Chinese-designed space suit that cost $4.4 million capped a year in which the country has both coped with the tragedy of the devastating Sichuan earthquake and reveled in the Beijing Olympics.
The ability to conduct a space walk is key to a longer-term goal of assembling a space lab and then a larger space station, and maybe one day making a landing on the moon.
The feat has also provided the government with a welcome diversion from a scandal about toxic milk that has poisoned thousands of infants and killed four, inciting anger at home and tainting the “made in China” brand abroad.
From cosmopolitan Beijing and Shanghai to tiny rural hamlets, the astronauts’ exploits have been followed on television by a mesmerized population, with millions glued to live broadcasts of the takeoff, space walk and landing.
The trio can expect an adoring welcome from the whole country when they are allowed out of quarantine, which the official Xinhua agency said would last around half a month.
Previous space pioneers, now national icons, have been showered with tributes and gifts ranging from luxury housing to traditional operas performed in their honor.
The fast-growing Asian power wants to be sure of a say in the future use of space and its resources, and has come a long way since late leader Mao Zedong lamented that China could not even launch a potato into space.
China’s first manned spaceflight was in 2003, followed by a two-man flight in 2005. The only other countries that have sent people into space are Russia and the United States.
The mission is also a great success for the Chinese Communist Party, which next year celebrates the 60th anniversary of its ascent to power, and Premier Wen’s speech was peppered with jargon that emphasized its role in the space program.

TITLE: World Rocked By U.S. Financial Crisis
PUBLISHER: Reuters
TEXT: WASHINGTON — As U.S. lawmakers prepared to vote on Monday on a $700 billion government fund to buy bad debt, the global financial crisis kept markets on tenterhooks by forcing European authorities to rescue troubled banks.
As investors around the world hung on every twist and turn in Washington, Belgian-Dutch group Fortis was nationalized and British mortgage lender Bradford & Bingley faced the same fate.
Fortis is the first major European bank to buckle since U.S. mortgage defaults triggered global financial turmoil in August last year.
Investor reaction to the U.S. bailout was overshadowed by the renewed worries that the banking system troubles are spreading across the globe. Financial shares helped lift Japan’s Nikkei average up 0.5 percent, but markets in South Korea and Hong Kong fell.
U.S. stock market futures fell, shedding early gains.
The dollar edged up, but mainly because the euro and pound took a hit as the toll on financial firms spread across the Atlantic.
“It’s definitely moving toward Europe,” said Joseph Kraft, head of Japan capital markets at Dresdner Kleinwort. “It’s the beginning of the end and a necessary step, so we should see more institutions nationalized, absorbed or going into default.”
The latest upheaval will only worsen the severe strains in money markets as financial firms have stopped lending to each other, partly as they prepare to close their books on the third quarter on Tuesday, analysts said.
In the United States, House Republicans are seen as the main sticking point to passage of the bailout bill, balking at spending so much public money just before elections in November.
But senior Republican Senator Judd Gregg of New Hampshire threw his weight behind the deal, saying he expected the House to vote on the bill on Monday.
U.S. President George W. Bush said in a statement the plan being finalized by Congress provides the tools and funding to protect the U.S. economy from a “system-wide breakdown,” and expressed confidence it would be passed quickly.
House of Representatives Speaker Nancy Pelosi, a Democrat, said the plan was not a “bailout of Wall Street” but a way to protect taxpayers and turn around the economy. She stressed it now needed bipartisan support. Senate Majority Leader Harry Reid said the Senate could take up the bill by Wednesday.
U.S. Treasury Secretary Henry Paulson said he was confident the programme will be enough to free up jammed financial markets and keep credit flowing.
Congressional leaders from both parties said they had a tentative agreement on Sunday, but questions abound as to whether the U.S. financial rescue plan, which would use taxpayer funds to buy up toxic mortgage debt, would restore confidence to shaky markets and head off a deeper economic downturn.
“We will be given nitroglycerin to prevent a heart attack and get some color back in our face,” said Sung Won Sohn, professor of economics at California State University.

EUROPEAN BANK RESCUES
In a sign the year-long credit crisis is spreading, Belgian-Dutch financial group Fortis underwent a shotgun nationalization after European Central Bank President Jean-Claude Trichet held emergency talks with Dutch and Belgian officials to rescue one of Europe’s top 20 banks.
The Belgian, Dutch and Luxembourg governments agreed to inject 11.2 billion euros ($16.4 billion) into the banking and insurance company, which has 85,000 staff worldwide.
In London, regulators were also preparing to nationalize troubled mortgage lender Bradford & Bingley as Spanish bank Santander agreed to buy its retail deposits and branch network.
In Germany, Hypo Real Estate struck a last-minute deal with a consortium of banks to resolve a financing squeeze.
David Dietze, chief investment strategist at Point View Financial Services in New Jersey, described the Fortis news as “a whopper.”
“Now investors may say ‘Gee, even though a bill may get passed in the U.S. ... can the Europeans move as quickly? Do they understand the problem?’” he said.
The U.S. banking system also faced more upheaval. Wachovia Corp is in talks with rivals to be taken over, sources familiar with the situation said on Sunday.
Citigroup Inc is among the parties in talks with Wachovia, the two sources said, and one source said Wells Fargo & Co was also in discussions.

QUALIFIED 
BIPARTISAN SUPPORT
U.S. congressional leaders from both parties emerged early on Sunday with a tentative agreement that altered key parts of a Wall Street bailout program initially proposed by the Bush administration.
Both U.S. presidential candidates offered qualified support for the bailout proposal, an issue that threatens to overshadow their campaigns with less than six weeks until the election.
“This is something that all of us will swallow hard and go forward with,” Republican John McCain said in an interview with ABC television. “The option of doing nothing is simply not an acceptable option.”
Democrat Barack Obama said he was likely to back the package. “My inclination is to support it,” he told CBS television’s “Face the Nation.”

PUBLIC ANGER SIMMERS
With many Americans struggling to save their homes from foreclosure, lawmakers were bracing for a grassroots backlash against a bailout for Wall Street banks, which many blame for creating the overheated housing market and bad loan crisis.
In the final hours of talks, Democrats and Republicans rushed to add safeguards for taxpayers and provisions that would allow the government to recover funds if housing prices recover and its holdings of bad debt gain value.
House Republican leaders were spending more than two hours behind closed doors answering members’ questions about details of the legislation but there were few signs the bill was endangered.
“They are much happier now” than last week when anger boiled over with the Treasury’s initial proposal, said Rep. James Walsh of New York about his Republican colleagues.
Representative Marsha Blackburn, a Republican from Tennessee, said she was leaning against the measure, but added “probably it’s going to pass.”
The proposed legislation would disburse the $700 billion in stages. The first $250 billion would be issued when the legislation is enacted, while another $100 billion could be spent if the president decided it was needed. The remaining $350 billion would be subject to congressional review.
Institutions selling assets under the plan would issue stock warrants to the government, a step intended to give taxpayers a chance to profit if markets recover.
The plan would also let the government buy troubled assets from pension plans, local governments and small banks.
In response to a clamor for limits on executive pay, no executives at participating firms could get multimillion-dollar severance packages — known as golden parachutes.
An oversight board of top officials, including the Federal Reserve chairman, would supervise the program, while its management also would be under close scrutiny by Congress’ investigative arm and an independent inspector general.

TITLE: Television Nightmare Scenario Comes Closer For Americans
AUTHOR: By Nellie Andreeva
PUBLISHER: Reuters
TEXT: LOS ANGELES — What if the current financial crisis in the U.S. becomes so severe that Americans start to flee the country? 
Welcome to “Americatown,” a Chinatown-like enclave of U.S. immigrants in cities around the world.
HBO television is developing the futuristic drama series, which hails from writer Bradford Winters and producers Tom Fontana, Barry Levinson, Frank Marshall and Kathleen Kennedy.
Set 25 to 40 years in the future, when the precipitous decline of the U.S. leads to a mass exodus of its citizens, “Americatown” centers on a cluster of newly arrived American immigrants in a big foreign city.
“By presenting Americans as immigrants in the near future, as both underdog and hero in the drama of global dislocation, we substitute a mirror for the rancor that informs much of the partisan debates on immigration,” Winters said.
The deal at HBO caps a decade-long development process for Winters, who at different points shepherded the project as a series, movie, miniseries and a book. His original idea, which he shared with Fontana, was to take a “Traffic”-style look at immigration in present-day New York from different points of view. About a year ago, Winters came up with the futuristic idea that would become “Americatown.”
In his research for “Americatown,” Winters had explored possible nightmare scenarios that could bring the U.S. to a collapse decades down the road. 
Among these hypotheticals: the price of oil skyrocketing and natural disasters reaching catastrophic proportions. Then suddenly oil hovered near $150 a barrel this summer, floods hit the Midwest and the South, and Wall Street crashed under the weight of the mortgage crisis.
How does Winters feel seeing a number of the dire circumstances in his fictional tale become reality?
“What is happening right now is such a terrible disaster for so many people and, in some ways, I think it makes it less hard to argue that the events in ‘Americatown’ are impossible,” he said.