SOURCE: The St. Petersburg Times
DATE: Issue #1417 (81), Friday, October 17, 2008
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TITLE: Russian Stocks Fall As Oil Prices  Tumble
PUBLISHER: Combined Reports
TEXT: MOSCOW — Russian stocks fell to the lowest in three years, led by Rosneft and Lukoil, as sinking oil prices hurt the outlook for Russia’s economy and equities dropped around the world.
The market value of Gazprom, Russia’s biggest company, fell below $100 billion for the first time in three years.
The Micex Index fell 11 percent to 616.72 at 4:12 p.m. in Moscow, the lowest since June 2005. The Micex Stock Exchange halted trading for an hour because of the slump. The dollar-denominated RTS Index sank 10 percent to 708.31.
Crude futures fell 1.9 percent to $73.12 a barrel Thursday after dropping 5.2 percent Wednesday in New York. The Standard & Poor’s 500 Index of U.S. stocks dropped 9 percent Wednesday, the biggest loss since 1987.
“Russian equities will continue to blow in the wind until the global financial-stability effort starts to take effect and we have a handle on the damage inflicted on the global economy,” said James Beadle, chief investment strategist at Pilgrim Asset Management in Moscow.
Russia’s international reserves, the world’s third largest, fell $15.5 billion last week after the central bank sold currency to prop up the ruble as investors pulled money out of the country.
Moscow-based natural gas exporter Gazprom slid 13 percent to $4.05 on Moscow’s RTS exchange, giving the company a market value of $95.9 billion.
Rosneft, Russia’s biggest oil producer, fell 10.5 rubles, or 10 percent, to 91.24 rubles. Lukoil, the second-biggest, sank 150.88 rubles, or 15 percent, to 877.06 rubles.
Mosenergo, a regional power generator, fell 9.3 kopeks, or 8.8 percent, to 96.1 kopeks. The country’s electricity producers wrote a letter to Deputy Prime Minister Igor Sechin saying they urgently need $50 billion in financing to continue investing in new generating capacity, Kommersant reported.
“Everybody thought that this was the bottom and there would be a recovery,” said Vladimir Matias, managing partner at Asset Capital Partners, referring to Tuesday’s rally. 
“Despite a signal as strong as the European Union intervening, the confidence of the market is still not in place,” he said.
James Fenkner, director of Red Star Asset Management, said the continuation of the markets’ decline indicated that the economy was in the middle of a two-part financial crisis.
“Right now we’re in the stage where all assets get marked down,” Fenkner said. “Stage 2 is when the whole world realizes that all their assets were marked down and they stop spending.”
Although the Russian financial market is relatively insulated from the rest of the economy, the problems experienced by the banking sector are already expanding into other industries, Fenkner said.
“As an emerging market, Russia’s got a front row ticket [to the crisis],” he said, referring specifically to the news that X5, owner of supermarket chain Perekryostok, would be marking down selected goods by 20 percent in Moscow and St. Petersburg.
X5 chief Lev Hasis said in a statement Wednesday that the long-term price cuts were instituted to combat rising food prices and pressure on consumers’ pocketbooks. 
His announcement came as the State Statistics Service said prices have risen 11 percent this year through Monday. The government has not yet revised its full-year target of 11.8 percent.
(Bloomberg, SPT)

TITLE: Mixed Reviews for Governor’s First 5 Years
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Both critics and supporters of Valentina Matviyenko, who celebrates five years in office as St. Petersburg governor this week, often compare her to a battleship: dynamic, forceful, and hard to stop or turn around.
That makes her either an effective leader or an autocrat and bully, depending on which end of the cannon you are on.
When directly confronted by reporters on Wednesday, Vadim Tyulpanov, the speaker of the St. Petersburg Legisaltive Assembly, refrained from mentioning any shortcomings of Matviyenko’s performance as governor as well as talk of any weaknesses in her character.
“A forceful and responsible governor like Matviyenko is exactly what the city needs,” Tyulpanov said. “One of her greatest achievements was overcoming the confrontation between the parliament and City Hall. As for the disadvantages, I will not mention those because they are easily compensated for by the governor’s brilliant achievements.”
Indeed, no criticism of the governor’s work has been heard from the city parliament since the local branch of the democratic party, Yabloko, was removed from the parliamentary elections in spring 2007 on a technicality, and subsequently lost its representation in the assembly.
Yabloko politicians are now challenging the governor with street protests and meetings. And what Tyulpanov saw as “overcoming the conflict between the parliament and the City Hall,” Yabloko politician Boris Vishnevsky perceives as a “City-Hall-orchestrated campaign aimed at preventing Yabloko from getting into the parliament and ultimately turning the assembly into a toothless puppet.”
Some of the most resonant pledges the future governor made during her election campaign included putting an end to the practice of in-fill construction and the destruction of green areas; spending more from the city budget money to raise salaries; creating a comfortable climate for medium and small business; attracting big taxpayers to the city.
“True, big business has come to the city but the residents are paying the price,” Vishnevsky said. “In-fill construction is rampant, and parks and gardens are being removed as we speak.” 
Some of the world’s largest companies, including Toyota, General Motors, Nissan, and Suzuki, have come to St. Petersburg during Matviyenko’s governorship. In 2007, foreign direct investment in St. Petersburg totaled $380.7 million, a 20 percent jump over 2006.
At the same time, the 2007 Worldwide Quality of Living Survey by Mercer Human Resources Consulting gave the city one of its lowest ratings. In Mercer’s health and sanitation rankings, St. Petersburg comes in 184th, with a score of 50.5 points. Even the significantly smaller and inland Russian city of Kazan fared better, coming in at No. 174. By comparison, Helsinki was No. 3, with a 128.5 rating. 
Matviyenko was elected governor of St. Petersburg in October 2003. Her rivals complained that during the campaign they were treated unfairly and denied access to the media. Voter turnout, barely over 25 percent, was among the lowest in the city’s history. Matviyenko took two-thirds of the ballots cast.
Born in the Ukrainian village of Shepetivka in 1949, Matviyenko arrived in what was then Leningrad to study at the city’s Institute of Chemistry and Pharmaceuticals. She enjoyed a meteoric rise in the communist youth league, the Komsomol, and the Communist Party, holding senior positions in the central districts of Leningrad. 
In 1989, as Mikhail Gorbachev’s perestroika policies were transforming the party, she was elected to the Soviet parliament, where she chaired a committee on women’s issues. Then, after retraining as a diplomat, she served as Russian ambassador to Malta and Greece. 
During her tenure in Athens in the 1990s, Matviyenko astounded politicians across Europe by clinching a deal to sell Russian Zubr military ships to Greece.
In 1998, the prime minister, Yevgeny Primakov, invited her to become his deputy. Matviyenko outlasted Primakov and served as deputy prime minister for social policy until 2003.
She enjoys approval ratings of 50 to 70 percent, and in 2007 she agreed to have her name put on the United Russia party’s list for elections to the State Duma, saying the move was intended to boost voter turnout and not to win her a seat in the State Duma. 
Whether it be nonsense, a dissenting view, or even a well-meant suggestion, if Matviyenko — Russia’s only female city governor — doesn’t like the sound of it, she will typically shoot it down with heavy artillery. 
In a notorious case in April, 2008, a group of St. Petersburg cultural luminaries — architects, artists, writers, and filmmakers — sent an open letter to the State Duma, the Federation Council and the Russian government calling on them to save the city’s historic center from destruction. The signatories accused Matviyenko of disfiguring St. Petersburg by demolishing historic buildings to create space for the needs of deep-pocketed private companies.
Her response was swift. In a speech to the city parliament, Matviyenko claimed the activists were “zombifying the population by screaming and moaning about hundreds of architectural treasures allegedly lost in recent years.”
Within days the authors of the letter said they received phone calls from City Hall. Some said they were even approached by the governor, her deputies, and other government officials with a request to reflect on the contents of the letter and revise their opinion. City officials have never responded to the charges.
One signatory, retired mountaineer and honorary citizen of St. Petersburg Mikhail Bobrov, published an open letter to Matviyenko in a local daily newspaper withdrawing his signature and offering a lengthy apology. “A discussion on the subject with Viktor Lobko, the vice governor of St. Petersburg, has convinced me that all the dilapidated historic buildings in the city are being renovated,” Bobrov wrote in the letter, which caused an outcry among civil society groups.
“I express my deepest apologies,” Bobrov continued. “...We have made a mistake ... and in the future we will refrain from signing appeals without a preliminary consultation with the appropriate bodies.” 
The opening of a photography exhibition in Peter and Paul Fortress on Monday dedicated to Matviyenko’s five years in the office started with pomp but was marred by the interference of National Bolshevik Andrei Milyuk who attended the event with a heap of alternative photographs showing the negative sides of Matviyenko’s rule. Milyuk was escorted out of the hall.
Matviyenko’s allies are never short of praise for her.
“Since Matviyenko took office in 2003, we’ve seen a continued and rapid growth in the city’s revenues, which is a very positive trend,” says Vatanyar Yagya, a United Russia lawmaker in the Legislative Assembly. “The governor is sticking to her electoral promises. She has fulfilled her pledge to triple the city budget, a tremendous achievement in such a short period of time,” Yagya said.
Yet to her critics, that achievement has come at the expense of free speech, political diversity, the city’s architectural heritage, and the welfare of the poor.
“Judging from her actions, there’s only one voter whose opinion really matters for Matviyenko ... Vladimir Putin,” said Natalya Yevdokimova, a member of the St. Petersburg Human Rights Council and an adviser to Sergei Mironov, speaker of the Federation Council, the upper house of parliament, and leader of the Just Russia party.

TITLE: What Crisis? Kremlin Downplays Extent of Financial Woes
AUTHOR: By Catrina Stewart and Nataliya Vasilyeva
PUBLISHER: The Associated Press
TEXT: MOSCOW — Talking to Russians on the street, you’d be forgiven for thinking there was no economic crisis.
TV channels gloss over the subject and state news agencies are under orders to avoid frightening language. But beyond the spin, Russia’s stock markets are plunging, some grocery shelves are empty and one newspaper has even suggested its readers stash some cash — under the mattress.
The Kremlin is grappling with its worst financial crisis in a decade — feeding a liquidity crunch as banks clamp down on lending. And economists are now fretting about how deep the slowdown will be.
In dozens of supermarkets in Moscow this month, shoppers have encountered shelves empty of even the most basic items. At one chain on Wednesday, meat, fish, vegetables, fruit and cigarettes were nowhere to be seen. The dessert section was empty except for a pricey brand of imported Scottish shortbread — priced at $48 — while sugar and salt were in plentiful supply.
Still, Nikita Bondarev, an academic researcher in his early 30s shopping at the Samokhval chain, said he had no particular concerns about the crisis.
“I’m not playing the (stock) market, and I’m getting my salary as usual,” he said. But the sight of empty shelves, “brings up unpleasant memories of Soviet times.”
This is not the early 1990s, when images of bread lines and food shortages were beamed across the world. But small businesses and even some mid-size chains like Samokhval are finding it impossible to get credit or that it is available only at exorbitant rates.
In the case of Samokhval, which has 60 stores in the Moscow area, and Mosmart, which has 54 stores and four superstores, suppliers are refusing to deliver goods because of outstanding debts, distributors said.
The problems appear to be limited to a few chains so far in a city that is still enjoying a consumer boom — fed by robust economic growth averaging more than 7 percent over the past eight years and windfall oil profits.
Still, memories of the financial collapse of 1998 are fresh in the minds of many. Savings were wiped out amid a wave of bank foreclosures fed by a crisis of confidence. And that’s something the Kremlin is eager to avoid repeating.
Last week, the RTS stock exchange suffered its worst trading day on record, plunging 19 percent. The markets were hit after oil prices — the backbone of Russia’s economy — slid heavily amid mounting concerns over the global economic meltdown.
But in Russia, it didn’t even make the evening news on the three state-controlled channels.
Instead, they aired a meeting between President Dmitry Medvedev and one of the country’s richest billionaires, Mikhail Fridman, in which the two discussed the investment opportunities created by the global crisis.
Vladimir Varfolomeyev, first deputy editor at Ekho Moskvy radio, wrote in his blog that the Kremlin recently sent an order to all broadcasters banning the words “collapse” and “crisis.” The word “fall,” the memo said, should be substituted with “decline.” His blog promptly went down.
Meanwhile, a memo circulated at the state-run ITAR-Tass news agency reportedly advised reporters not to publish “provocative reports that can cause panic.”
“We’re requesting you to STOP covering queues at banks and a shortage of banking funds,” said the memo, circulated by several respected bloggers.
Many newspapers, which operate under more liberal constraints, have carried reports of depositors switching their savings from less-secure private to state-owned banks, while noting some smaller lenders have frozen early withdrawals of accounts.
Still, the Kremlin’s message seems to be getting across.
In a poll carried out in late September by the Public Opinion Foundation, one-quarter of those questioned said they had heard nothing about the global financial crisis, while 57 percent said they were satisfied with the country’s economy — up from 53 percent in July.
The survey of 1,500 people in 102 cities across Russia had a margin of error of 3.6 percentage points, according to the foundation Web site.
Ignoring domestic factors, such as Russia’s five-day war with Georgia in August and growing fears of government interference in business, Medvedev and Prime Minister Vladimir Putin have repeatedly singled out the U.S. as the chief culprit for the global financial crisis and Russia’s economic troubles.
“Trust in the United States as the leader of the free world and the free economy, and confidence in Wall Street as the center of that trust, has been damaged, I believe, forever,” Putin said recently.
The pro-Kremlin newspaper Izvestia, meanwhile, has suggested readers set aside enough cash to cover three months of living expenses — and stash it under their mattress. The advice recalls more difficult times for Russians, when confidence in the banking system was shattered.
For a government that has built its popularity on an eight-year economic boom, the prospects of a severe downturn and a long-term crisis in its financial sector are alarming indeed.
“All we have at the moment are anecdotes, so we simply don’t know” how serious the problems are in Russia, said Rory MacFarquhar, a managing director at Goldman Sachs. “The scary anecdotes have just started to come out with the acute phase of this financial crisis basically starting in October. For a statistical reading ... we’re going to have wait a whole month. So we’re left guessing.”
Still, there are signs everywhere.
Construction has been hard hit, with many projects put on hold or canceled. At Moscow’s flagship business center Moscow City — a scene of feverish building activity a few months ago — there were only a few workers at the site this week.
The head of Mirax construction group Sergei Polonsky recently urged journalists in an open letter not to fan the flames of crisis.
“We are already lying on our backs, but we still have some strength left to climb back,” he wrote. “We beg you to give us reasoned coverage of this sector.”

TITLE: Drunk Tries Hijacking Petersburg-Bound Plane
AUTHOR: By Irina Titova and Selcan Hacaoglu
PUBLISHER: The Associated Press
TEXT: A drunk man claiming to have a bomb tried to hijack a Russian-bound Turkish Airlines plane on Wednesday but fellow passengers quickly overpowered him, officials said.
Russian transport police detained him after the plane landed safely in St. Petersburg, prosecutor Alexander Bebenin told reporters at the city’s Pulkovo airport.
Bebenin said the man had threatened to blow up the plane if his demands of diverting the flight to Strasbourg, France, were not met. Passengers overpowered him after he had handed a note to attendants with his demands, he said.
No explosives were found on the passenger or the plane, he said.
The man, whose identity has not been disclosed, is a native of Uzbekistan, Turkish and Russian officials have said. Bebenin said he was a Russian citizen but the head of Turkey’s civil aviation authority, Ali Ariduru, said in remarks televised in Russia that he was an Uzbek citizen.
Most of the 164 passengers aboard the flight were unaware of the hijack attempt and only found out on emerging from the plane after a two-hour wait on the tarmac, Bebenin said.
“We didn’t see anything on board, and we knew nothing about the problems,” said Aleftina, one of the passengers of the plane — who refused to give her last name — on leaving the airport.
“We realized that there was something wrong with our flight when we landed and they asked us to stay in our seats,” she said, adding that passengers’ belongings were searched.
The plane departed from Turkey’s Mediterranean resort city of Antalya, a popular destination for Russian tourists.

TITLE: Georgia Talks Delayed to Nov. 18
AUTHOR: By Jonathan Lynn
PUBLISHER: Reuters
TEXT: GENEVA — Talks over Georgia’s breakaway regions were suspended until next month as soon as they started Wednesday, with both Russia and Georgia blaming each other for the breakdown.
The European Union’s special envoy to Georgia said the talks hit an impasse because of “procedural difficulties.”
A compromise allowing the participation of representatives from South Ossetia and Abkhazia proved impossible to find, comments from Russian and Georgian participants showed.
Russia and Georgia fought a five-day war in August and remain at odds over South Ossetia and Abkhazia, two breakaway Georgian provinces that Moscow has recognized as independent states under its protection.
“All of the parties expressed their points of view. Today we encountered procedural difficulties. That is why we decided to suspend the discussions this afternoon and pursue the process of discussions,” EU envoy Pierre Morel said at a briefing.
He said new talks had been provisionally set for Nov. 18.
The European Union, United Nations and Organization for Security and Cooperation in Europe had organized the one-day meeting, which they had hoped would lead to talks every two weeks to build confidence and help resolve the conflict.
In Brussels, Georgian President Mikheil Saakashvili blamed Russia for the failure of the first day’s talks.
“Russia has just walked out of the Geneva talks ... which basically means that Russia has no interest whatsoever at this stage in any diplomatic process,” he told reporters.
But the head of Russia’s delegation, Deputy Foreign Minister Grigory Karasin, said the meeting had initiated a process to resolve the conflict with the participation of Abkhazia and South Ossetia.
“The event was de facto broken up by Georgia, which refused to take part in the plenary session,” Karasin said, Interfax reported. 
“They failed to break up the meeting, it took place, and that is extremely important,” he said.
Feverish diplomatic efforts to find an acceptable format for the talks included a news blackout and a ban on photographers from taking pictures of the delegations as they entered the UN European headquarters in Geneva.
The United States, which sees Georgia as an ally in the volatile Caucasus region, also took part in the talks.

TITLE: Mitvol in Yabloko Leadership Talks
PUBLISHER: The St. Petersburg Times
TEXT: Oleg Mitvol, former deputy head of the country’s environmental watchdog, is in negotiations to become a leader of the liberal Yabloko party.
Mitvol said Wednesday he had presented Yabloko with a plan to reform the party’s structure and change its program, Interfax reported. The changes are needed “to boost the party’s competitiveness,” Mitvol told Kommersant in an interview published Wednesday.
Mitvol might supervise the party’s electoral, political and financial activities, Kommersant said. In the interview with Interfax, Mitvol added environmental activities to the list.
Yabloko will vote on Mitvol’s candidacy as a party leader at a national congress in January or February, an unidentified party source told Interfax. 
Yabloko would be “glad” to see Mitvol in its ranks, party head Sergei Mitrokhin told Interfax.
Mitvol is perhaps best known for opening investigations into alleged environmental violations by oil companies.

TITLE: Georgia Talks Delayed to Nov. 18
AUTHOR: By Jonathan Lynn
PUBLISHER: Reuters
TEXT: GENEVA — Talks over Georgia’s breakaway regions were suspended until next month as soon as they started Wednesday, with both Russia and Georgia blaming each other for the breakdown.
The European Union’s special envoy to Georgia said the talks hit an impasse because of “procedural difficulties.”
A compromise allowing the participation of representatives from South Ossetia and Abkhazia proved impossible to find, comments from Russian and Georgian participants showed.
Russia and Georgia fought a five-day war in August and remain at odds over South Ossetia and Abkhazia, two breakaway Georgian provinces that Moscow has recognized as independent states under its protection.
“All of the parties expressed their points of view. Today we encountered procedural difficulties. That is why we decided to suspend the discussions this afternoon and pursue the process of discussions,” EU envoy Pierre Morel said at a briefing.
He said new talks had been provisionally set for Nov. 18.
The European Union, United Nations and Organization for Security and Cooperation in Europe had organized the one-day meeting, which they had hoped would lead to talks every two weeks to build confidence and help resolve the conflict.
In Brussels, Georgian President Mikheil Saakashvili blamed Russia for the failure of the first day’s talks.
“Russia has just walked out of the Geneva talks ... which basically means that Russia has no interest whatsoever at this stage in any diplomatic process,” he told reporters.
But the head of Russia’s delegation, Deputy Foreign Minister Grigory Karasin, said the meeting had initiated a process to resolve the conflict with the participation of Abkhazia and South Ossetia.
“The event was de facto broken up by Georgia, which refused to take part in the plenary session,” Karasin said, Interfax reported. 
“They failed to break up the meeting, it took place, and that is extremely important,” he said.
Feverish diplomatic efforts to find an acceptable format for the talks included a news blackout and a ban on photographers from taking pictures of the delegations as they entered the UN European headquarters in Geneva.
The United States, which sees Georgia as an ally in the volatile Caucasus region, also took part in the talks.

TITLE: Billionaire Baturina Told She Can’t Buy Chalet
AUTHOR: By Nikolaus von Twickel
PUBLISHER: Staff Writer
TEXT: MOSCOW — Yelena Baturina, the billionaire wife of Mayor Yury Luzhkov, has lost a bid to buy a luxury chalet in Austria, where she and her husband have vacationed in the past.
The property commission of the Austrian state of Tyrol ruled that the sale was not in the public interest, the body’s chairman, Christian Visinteiner, announced Wednesday. 
The decision deals a blow to Baturina, who has been running a charm campaign in Kitzbuhel, a posh ski resort. Her property development firm, Inteko, sponsors a lavish jazz festival there that starred Stevie Wonder last summer. Baturina has also invested millions of dollars in sports sponsorships and on a massive golf course, local media reported.
Kitzbuhel property authorities approved the chalet sale, but this spring the state property commissioner decided to block it. Last week, the property commission in the regional capital, Innsbruck, vetoed the acquisition of the chalet by Tirus, an obscure tourism firm that, according to Visinteiner, is co-owned by Baturina.
The sale contradicts local zoning law and the property’s residential status, Visinteiner said by telephone from Innsbruck.
He said that the firm had said in its application that the mansion was needed purely for commercial use. “This is a completely residential area,” he said.
Tyrol’s stringent laws stipulate that sales to non-EU residents must be in the public interest and foreigners may only acquire private property if they prove that they plan to live there permanently.
Visinteiner said the three-member commission made up its mind quickly when the case was heard last week. “We discussed the possibilities of the sale being in the public interest, but that did not take very long,” he said.
He said the decision, which was faxed to the parties concerned Wednesday morning, renders the sale invalid and that the buyer and seller had a right to appeal to Austria’s High Court.

TITLE: Growth Costs Eat Into Rosinter Profit
PUBLISHER: Combined Reports
TEXT: Rosinter Restaurants Holding said Wednesday that it saw a 75 percent decline in first-half profit on higher expansion costs. 
Net income totaled $1.3 million under international financial reporting standards, the company said in a statement without giving a year-earlier figure. This figure is down from $5.3 million in the first half of 2007. Sales rose 36 percent to $164.9 million. 
Rosinter, which opened its 300th property in St. Petersburg last week, is adding restaurants as energy exports drive a 10th straight year of economic growth, spurring more people to dine out. The company, the local franchisee for the T.G.I. Friday’s and Benihana chains, plans to add 90 outlets this year, more than the 58 that started doing business in 2007. 
The company, Russia’s only publicly traded restaurant company, also owns the Il Patio and Planeta Sushi chains.
“Higher startup expenses for new restaurants and incremental selling, general and administrative expenses” stemming from a plan to set up a so-called hub city structure in the regions hurt profit, chairman and majority owner Rostislav Ordovsky-Tanaevsky Blanco said in the statement. Increased labor costs also cut profitability, he added.
Sales will gain 39 percent this year at Rosinter’s casual-dining unit, which accounts for most of sales, chief executive Lori Daytner said in the statement. The company has forecast a gain of 46 percent to 49 percent in total annual revenue. 
Nine-month sales climbed 35 percent to $254.7 million, the company said. They gained 26 percent in dollar terms at restaurants open at least two years, as the number of visitors increased 6 percent. EBITDA margin fell to 9.4 percent from 15.3 percent, and gross margin decreased to 37.4 percent from 38.7 percent.

(Bloomberg, Reuters, SPT)

TITLE: 9 Airlines Grounded Over Unpaid Debts
AUTHOR: By Maria Levina
PUBLISHER: Special to The St. Petersburg Times
TEXT: Nine airlines will be grounded by the end of the week due to overdue debts, aviation authorities announced Wednesday.
Three of the airlines — Interavia, Dalavia and Omskavia — had all but suspended flights already, stranding hundreds of passengers.
Moscow-based Interavia, which topped the list with an overdue debt of 19.2 million rubles ($729,000) has not flown since Oct. 9, missing 23 flights as of Wednesday, according to the web site of Domodedovo Airport.
Other big debtors include state-owned Dalavia, with 18.4 million rubles in overdue payments, and Omskavia, part of the troubled AirUnion alliance, with late payments of 4.9 million rubles. 
The Federal Navigation Authority said the airlines had repeatedly been asked to pay their debts and that, in line with legislation, they had gotten a warning, followed by restriction of services on charter flights and now suspension of services for all flights, Interfax reported.
The process of withdrawing Interavia’s license might start on Oct. 26, the report said.
An Interavia representative at Domodedovo Airport said hundreds of passengers were waiting for information about when they could expect to fly.
“We do not know when the airline’s services will resume,” he said. “We do not know anything except that the airline is deeply in debt and we have not been paid for three months.”
Domodedovo spokesman Ildar Tuzmuhametov said the airport was waiting for the carrier to take action but would not comment on how soon the problems might be resolved or what was causing the delays. 
He stressed that the delays were an internal problem of Interavia. “Flights of all other carriers at Domodedovo are landing and departing on time,” he said.
High fuel prices have caused problems for domestic carriers, resulting in last month’s government bailout of AiRUnion and the transfer of its stake to state-run Russian Technologies with instructions to form a new carrier. AiRUnion’s assets are being folded into a new holding, together with Atlant-Soyuz, controlled by the Moscow city government and several regional airlines.
Russian Technologies said it would take at least nine months to create the holding. The state corporation will repay $100 million of AiRUnion’s estimated $800 million debt and plans to renegotiate the rest.
The Federal Navigation Authority said that the other airlines that will be grounded as of Friday are Tesis, Vyborg, Aeroshchit, Irkutsk Bezbokov ASK ROSTO, Ulan-Ude Aviation Plant and Buguruslanskoye Letnoye Uchilishche.

TITLE: Russians Trust Property, Sberbank in Times of Crisis
PUBLISHER: Bloomberg
TEXT: Russians prefer to put their money in real estate, gold or accounts at state-run Sberbank, the country’s biggest bank, as the government seeks to stem the worst financial crisis since 1998.
More than half of those surveyed, 51 percent, think property is the safest investment, up from 45 percent in 1998, the poll by the All-Russian Center for the Study of Public Opinion, or VTsIOM, showed.
Trust in Moscow-based Sberbank almost doubled to 17 percent from 9 percent 10 years ago, VTsIOM said in an e-mailed statement Thursday. Fewer than one-third of survey participants have bank accounts and 41 percent of them worry about losing their money.
Russia, with the second-worst stock market of 88 tracked by Bloomberg last quarter, is battling its most damaging financial crisis since 1998, when the near-bankrupt government defaulted on $40 billion of domestic debt and devalued the ruble, causing banks to collapse and wiping out people’s savings.
Only seven percent of the respondents said they trusted foreign currencies, compared with 39 percent in 1998. Thirteen percent believe in holding rubles in cash, little changed in the past decade, while eight percent consider the stock market to be a reliable investment, compared with three percent in 1998.
Twenty-three percent of the population aren’t taking any special measures to guard their savings, according to the poll. VTsIOM surveyed 1,600 people in 42 regions on Oct. 4-5 and the poll has a margin of error of 3.4 percentage points.

TITLE: Gazprom Neft to Appeal FAS Ruling
PUBLISHER: Bloomberg
TEXT: Gazprom Neft, the oil arm of Russia’s natural-gas exporter, plans to challenge an antitrust ruling that it violated competition rules by driving up prices for refined products.
“We are absolutely convinced that market conditions determined our prices,” Deputy CEO Elena Ilyukhina said in an interview with the company’s magazine, Sibirskaya Neft, published on the crude producer’s web site Thursday.
The Federal Anti-Monopoly service said Sept. 26 that Gazprom’s oil unit and BP Plc’s Russian venture, TNK-BP, had abused their dominant market position. High global energy prices and intermediaries caused the increase in jet-fuel and other oil-product prices, while rates at Gazprom Neft’s gasoline stations have dropped with falling crude prices, Ilyukhina said.
“We will appeal the decision and defend our position,” Ilyukhina said in the interview.
The regulator started a probe into the practices of Russia’s five largest oil companies after Prime Minister Vladimir Putin called for a cut in jet-fuel prices following a 70 percent surge from November to June.
Gazprom’s oil-product unit in Astrakhan was fined $543,000 last month for charging gasoline and diesel prices identical to Lukoil’s unit, which was told to pay a fine of $164,000.

TITLE: Power Firms to Ask For Billions in Loans
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — A partnership of electricity producers said Wednesday that its members were planning to ask the government for tens of billions of dollars of cheap loans to finance their efforts to build up capacity amid the global liquidity crunch.
The request would be the latest addition to a growing choir of pleas for government help from a number industries, including carmakers and oil and gas producers. 
The electricity companies looking for government loans include OGK-5, controlled by Italy’s Enel, Viktor Vekselberg’s power holding Integrated Energy Systems, Oleg Deripaska-controlled EuroSibEnergo and seven other members of the nonprofit partnership Council of Electricity Producers. 
Igor Mironov, director of the partnership, announced the decision in a statement e-mailed by the group’s press service.
“Generators could encounter the danger that the investment projects they began will not have sufficient funds for completion,” IES president Mikhail Slobodin said in a statement e-mailed by a company spokesman.
The sector needs to invest a combined 4 trillion rubles ($154 billion) to expand capacity, an obligation they accepted when buying assets of the former electricity monopoly, Unified Energy System. The government recently created a special commission chaired by Deputy Prime Minister Igor Sechin to oversee their compliance with the investment plans.
The generators issued additional shares in hopes of raising half of their investment budgets, but growing construction costs have meant that budgets are now only met by one-quarter, Slobodin said. In addition, the financial crisis has “substantially” reduced their chances of taking out cheap, long-term loans from banks, Slobodin said.
Tens of billions of dollars — but not more than $50 billion — in government loans will be needed, a spokeswoman for the nonprofit partnership said.
Most of the facilities that the companies want the government to finance are already under construction or ready for construction to start, Slobodin said.
En+, a subsidiary of Deripaska’s Basic Element holding that controls EuroSibEnergo, also backed the idea of enlisting government help. 
“If measures are not taken to support the investment projects ... at the state level, their implementation will be called into question,” En+ chief executive Vladimir Kiryukhin said in a statement e-mailed by a EuroSibEnergo spokeswoman.
Dominique Fache, chairman of OGK-5, said the efforts to construct new generating facilities were essential for economic development. “It’s a key program of building new capacity that is necessary for reliable development of the industry,” he said, Interfax reported.
Calls to an OGK-5 spokesman went unanswered Wednesday afternoon.
The government must help the companies finance their investment in exchange for equity stakes, said Dmitry Skryabin, an analyst at VTB. 
“These private investors, who thought they would make money, accepted a market risk, and it materialized,” Skryabin said.

TITLE: Nanotechnology Venture Deal Signed
AUTHOR: By Svetlana Osadchuk
PUBLISHER: Staff Writer
TEXT: MOSCOW — The State Nanotechnology Corporation, engine builder Saturn and Gazprombank signed a contract Wednesday to create a joint venture that will build equipment for the aviation and engineering industries.
The agreement, worth an estimated 1 billion rubles ($38.3 million), is the first deal for the nanotechnology corporation since President Dmitry Medvedev asked former UES chief Anatoly Chubais to head the company, also known as Rosnano, last month. 
“This project will be highly effective financially,” Rosnano managing director Sergei Polikarpov said in a statement. “The creation of a metal-cutting tool with a nanostructure covering marks a significant contribution to the competitiveness of Russian engine building.”
The special coating will allow the tools to be used up to a dozen times, while going through more than double the amount of metal they are normally able to cut, the statement said.
Chubais was on hand to sign the agreement with Saturn CEO Yury Lastochkin and Gazprombank vice president Anatoly Milyukov. 
Both Saturn and Gazprombank will have 25 percent stakes, while Rosnano will invest half the total sum. 
The company, which will manufacture hard-alloy tools to detail parts for airplane engines, will base its production at a Saturn facility in Rybinsk, in the Yaroslavl region.
Saturn is expected to consume up to 30 percent of annual production, while the rest will be sold to domestic manufacturers. Lastochkin said the venture would consider the possibility of eventually entering the international market.
Asked how the ongoing financial crisis would affect Rosnano, Chubais said he expected it would spur an increased appetite for innovation. 
“I’d say this crisis is the worst since the Great Depression. We shouldn’t dismiss it as if we don’t care or aren’t worried. We do care.”

TITLE: AvtoVAZ Says State to Help Boost Domestic Car Sector
PUBLISHER: Bloomberg
TEXT: AvtoVAZ, Russia’s largest automaker, said the government has pledged to bolster the domestic car industry as it competes with foreign producers amid the economy’s worst crisis in a decade.
The heads of Russian car companies urged Deputy Prime Minister Igor Sechin to take “immediate action to support the domestic automotive industry” at a meeting Wednesday in the Volga region city of Togliatti, AvtoVAZ said in an e-mailed statement received Thursday.
The government agreed to place state orders for cars, trucks and buses with producers in the next three years to counter declining sales, AvtoVAZ said. Sales of foreign-brand cars in Russia such as those produced by Toyota Motor Corp. and Ford Motor Co. rose 22 percent last month, according to the Association of European Businesses.
Falling oil prices and Russia’s conflict in Georgia, combined with a cash crunch triggered by slumping asset prices and capital flight have pushed Russia to its worst economic crisis since the 1998 default. Higher credit costs and the expectation of an economic slowdown forced billionaire Oleg Deripaska’s carmaker GAZ and truckmaker KamAZ to reduce output this month.
The proposed measures included tariff changes and tax breaks, while the nation’s biggest banks may help the automakers with loans and refinancing existing debt, AvtoVAZ said.

TITLE: Renaissance Group to Cut 100 Jobs
PUBLISHER: Bloomberg
TEXT: MOSCOW — Renaissance Group, a Moscow-based financial company, is cutting 100 jobs amid Russia’s worst economic crisis in a decade.
The cuts are in the group’s investment banking, merchant banking, and asset management divisions, which together employ 1,481 people, spokesman Quinn Martin said by phone Thursday. Most of the employees in the units affected work in Moscow. Renaissance also has offices in New York, London, Cyprus, Kazakhstan, Kenya, Nigeria and Ukraine. The group’s consumer bank won’t be affected.
“Renaissance Group is reducing its headcount by 100 people as it continues to adjust its business structure and resources to best manage current market conditions,” Martin said.
Billionaire Mikhail Prokhorov and Renaissance Group founder Stephen Jennings announced Sept. 22 that Prokhorov’s Onexim Group had agreed to buy 50 percent minus one share of Renaissance Capital, the group’s investment banking unit, for $500 million in cash. That was less than a quarter of the value the investment bank had a year earlier, when VTB Group sought to take it over, according to a Vedomosti report.
Renaissance Capital boosted staff by two-thirds last year to 1,145, according to the company’s annual report. Total personnel expenses at the investment bank more than doubled to $366 million in 2007.

TITLE: Largest Bubble Burst in History
AUTHOR: By Nouriel Roubini
TEXT: The rich world’s financial system is headed toward a meltdown. Stock markets have been falling most days, money markets and credit markets have shut down as their interest-rate spreads skyrocket, and it is still too early to tell whether the raft of measures adopted by the United States and Europe will stem the bleeding on a sustained basis. 
A generalized run on the banking system has been a source of fear for the first time in seven decades, while the shadow banking system — broker-dealers, nonbank mortgage lenders, structured investment vehicles and conduits, hedge funds, money market funds, and private equity firms — is at risk of a run on their short-term liabilities. 
On the real economic side, all the advanced economies — representing 55 percent of global gross domestic product — entered a recession even before the massive financial shocks that started in late summer. So we now have a recession, a severe financial crisis and a severe banking crisis in the advanced economies. 
Emerging markets were initially tied to this distress only when foreign investors began pulling out their money. Then panic spread to credit markets, money markets and currency markets, highlighting the vulnerabilities of many developing countries’ financial systems and corporate sectors, which had experienced credit booms and had borrowed short and in foreign currencies. Countries with large current-account deficits or large fiscal deficits and with large short-term foreign currency liabilities have been the most fragile. But even the better-performing ones — like Brazil, Russia, India and China — are now at risk of a hard landing. Many emerging markets are now at risk of a severe financial crisis. 
The crisis was caused by the largest leveraged asset bubble and credit bubble in history. Leveraging and bubbles were not limited to the U.S. housing market, but also characterized housing markets in other countries. Moreover, beyond the housing market, excessive borrowing by financial institutions and some segments of the corporate and public sectors occurred in many economies. As a result, a housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble and a hedge funds bubble are all now bursting simultaneously. 
The delusion that economic contraction in the United States and other advanced economies would be short and shallow — a V-shaped six-month recession has been replaced by certainty that this will be a long and protracted U-shaped recession, possibly lasting at least two years in the United States and close to two years in most of the rest of the world. And, given the rising risk of a global systemic financial meltdown, the prospect of a decade-long L-shaped recession — like the one experienced by Japan after the collapse of its real estate and equity bubble — cannot be ruled out. 
Indeed, the growing disconnect between increasingly aggressive policy actions and strains on the financial market is scary. When Bear Stearns’ creditors were bailed out to the tune of $30 billion in March, the rally in equity, money, and credit markets lasted eight weeks. When the U.S. Treasury announced a bailout of mortgage giants Fannie Mae and Freddie Mac in July, the rally lasted just four weeks. When the $200 billion rescue of these firms was undertaken and their $6 trillion in liabilities taken over by the U.S. government, the rally lasted one day. 
Until the recent U.S. and European measures were announced, there were no rallies at all. When AIG was bailed out to for $85 billion, the market fell 5 percent. Then, when the $700 billion U.S. rescue package was approved, markets fell another 7 percent in two days. As authorities in the United States and abroad took ever more radical policy steps from Oct. 6 to Oct. 9, stock, credit and money markets fell further, day after day. 
Do the recent measures go far enough? When policy actions don’t provide real relief to market participants, you know that you are one step away from a systemic collapse of the financial and corporate sectors. A vicious circle of deleveraging, plummeting asset prices and margin calls is underway. 
So we cannot rule out a systemic failure and global depression. As we have seen in recent days, it will take a big change in economic policy and very radical, coordinated action among all advanced and emerging market economies to avoid disaster. This includes: 
• another rapid round of interest-rate cuts of at least 150 basis points on average globally; 
• a temporary blanket guarantee of all deposits while insolvent financial institutions that must be shut down are distinguished from distressed but solvent institutions that must be partially nationalized and given injections of public capital; 
• a rapid reduction of insolvent households’ debt burden, preceded by a temporary freeze on all foreclosures; 
• massive and unlimited provision of liquidity to solvent financial institutions; 
• public provision of credit to the solvent parts of the corporate sector in order to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses; 
• a massive direct government fiscal stimulus that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower-income households and provision of grants to cash-strapped local governments; 
• an agreement between creditor countries running current-account surpluses and debtor countries running current-account deficits to maintain an orderly financing of deficits and a recycling of creditors’ surpluses to avoid disorderly adjustment of such imbalances. 
Anything short of these radical and coordinated actions may lead to a market crash, a global financial meltdown and worldwide depression. The measures adopted by the United States and Europe are a start. Now they must finish the job. 

Nouriel Roubini is professor of economics at the Stern School of Business at New York University and chairman of RGE Monitor.© Project Syndicate

TITLE: Blind Faith of Free-Market Cheerleaders
AUTHOR: By Boris Kagarlitsky
TEXT: Vasily Koltashov was relatively unknown among Moscow’s economic analysts. That is, until the young journalist moved to Athens and began publishing his economic forecasts there — each prediction was more dire than the last. Unfortunately, they all came true. 
After a closer reading of his analyses, it is possible to draw parallels with Karl Marx’s “Das Kapital” and the theories of Soviet economist Nikolai Kondratyev, who argued that capitalist systems go through 50- to 60-year cycles of boom followed by depression.
During the past decade, many economic analysts not only refused to consider the criticisms that leftist authors leveled at the global economic order, but they also ignored intrinsic contradictions and problems of the free market that even avowed supporters of capitalism articulated. 
As a result, economic advisers have tended to act as cheerleaders of the status quo economic model. In addition, politicians and business people, who also believed in the infallibility of the existing system, made one bad economic decision after another. They had blind faith in the virtue of Adam Smith’s “invisible hand” — that market mechanisms would somehow automatically correct their foolish decisions. In practice, however, the cult of the free market turned into a bacchanalia of greed, negligence, irresponsibility and deceit. 
By nature, people like to believe that things will turn out well — especially when it involves the consequences of their own decisions and actions. The flip side is also true: As an automatic self-defense mechanism, they tend to dismiss or diminish warnings from others that their actions may be risky. 
In Greek mythology, nobody listened to Cassandra and Laocoon’s gloomy prophecies for the very reason that they spoke the truth. Similarly, liberal critics of globalization were dismissed and ridiculed, and their analyses and warnings were ignored or rejected outright. As a result, for the past 15 years, authorities failed to put even minimal economic safeguards in place. To make matters worse, many countries dismantled their economic and social regulatory agencies on the grounds that they obstructed the free market.
Then, when the unobstructed free market finally led to an unprecedented global financial crash, politicians rushed in to save the economy by infusing hundreds of billions of dollars in taxpayer money to bail out the bankrupted private sector. Unfortunately, this life buoy won’t save the sinking economy. Indeed, the United States’ $700 billion and Russia’s roughly $200 billion allocated for bailing out their respective economies will not accomplish much — not only because the financial holes these funds are intended to fill will get bigger and bigger, but because there are no channels or mechanisms that can guarantee that the money will be delivered to the right place or used in the right way. 
We are witnessing a fundamental breakdown of the global financial system. Under such conditions, the usual cyclical recession turns into an uncontrollable disaster for which there is no miracle cure. And the problem is not how to stave off the crisis or soften its impact, but how to devise a new economic system to replace the ruins left by the current economic model.
The attempt to build a world order based on a free market economy has turned into a catastrophe on a global scale. The only good news is that the global economy will collapse long before humanity has time to destroy the planet’s ecology. Thus, we still have a chance to save Earth from physical extinction, and that is the best news to come out of all of this. 
Who knows, there may be a silver lining to the current global economic crisis after all. Our descendants may look back at it as marking the start of a new, more humane epoch in history.

Boris Kagarlitsky is the director of the Institute of Globalization Studies.

TITLE: Locating Utopia
AUTHOR: By Laurence Doering
PUBLISHER: Special to The St. Petersburg Times
TEXT: Nowadays high-heels and patent-leather loafers tread the streets of St. Petersburg, but, just a couple of generations back, the same cobblestones were trodden by the marching boots of revolution — not only in politics, but in the arts.
“The streets are our brushes, the squares our palettes,” declared revolutionary poet Vladimir Mayakovsky in 1917. 
But what became of the streets, rooms and taverns which knew such icons as poet Alexander Blok (1880-1921), artist Kazimir Malevich (1878-1935) and stage director Vsevolod Meyerhold (1874-1940) who personified the Russian avant garde, the artistic movement that closely paralleled the Bolshevik Revolution? 
The influence of these figures can still be found in St. Petersburg today in such places as the Matiushin House museum, the Stray Dog Cafe, the Blok Apartment museum, the Anna Akhmatova museum and in the collections of the Russian Museum.
The exponents of the Russian avant garde were Utopianists who sought above all to break out of established art forms by expanding the horizon of artistic expression into the abstract. 
In the process, they created a whole host of new styles and aesthetics: Futurism, Suprematism, and Constructivism, among others. The movement was by nature interdisciplinary. 
Vladimir Burlyuk (1886-1917), Elena Guro (1877-1913), Alexei Kruchenykh (1886-1968) and Mayakovsky (1893-1930) were painters as well as poets.
Painters, photographers, graphic designers, poets and practitioners of the theatrical arts, film and music closely collaborated with each other and fertilized each other’s ideas. In line with non-objective visual media, poets freed language from its syntactic straight-jacket, attempting to communicate directly the internal state of the speaker through uttering mere sounds, as in the zaum (beyond meaning) poetry movement.
If this sounds like Dadaism, it is because the Russian movement drew many influences from contemporaneous Western movements such as Dadaism, Cubism, Futurism, and Bauhaus. Conversely, Russian innovations were absorbed in Europe and America. The political circumstances under which the Russian avant garde took place, however, were unique. 
The pluralist characteristic of the early Russian avant garde gradually narrowed as art production was faced with the universal purpose of being “useful,” in the sense of contributing to the greater good of the greatest number. The artist was to be an instrument in the service of the state by communicating the goals of Socialism to the masses.
After flowering in the first phase of Soviet power, in 1932 the Communist Party disbanded all existing artistic organizations and replaced them with party-led artists’ unions. In 1934 Socialist Realism was proclaimed the approved style for Soviet artists, who were “to depict reality in its revolutionary development.” The avant garde died under the weight of Stalinism, and so did most of its brightest proponents.
Mayakovsky shot himself. Meyerhold, the ingenious actor and director, was tortured, then shot. They were linked through a play, penned by the former and produced by the latter, likening Stalin to a bed bug. It may seem characteristic of the dictator’s sense of humor that he vindicated Socialist Realism using Constructivist vocabulary, asserting that the artist was “an engineer of the human soul.”
However, what seems like a cruel joke may arguably point towards a more fundamental connection. It was initially the Futurists who, through their manifestos, introduced an intolerant and absolutist tone into the Soviet artistic debate. 
The idea of “State Art” appeared first as an avant garde invention and many of its members held key positions in the early Soviet Union’s artistic and educational institutions. Perhaps the martyrdom of the avant garde and its leading lights at the hands of the repressive machine that followed was inevitable.

AVANT GARDE PETERSBURG
In every sense, Stalin’s hated St. Petersburg was their town. It was here that they walked their dogs and bought cigarettes. In the smell of a decaying staircase, the rippled texture of wallpaper, and the smooth coolness of a tiled stove for years unheated we can feel the Russian avant garde breathe again.
The puddle-gray wooden house at 10 Ulitsa Professora Popova (formerly Pesochnaya) was the home of Mikhail Matiushin (1861-1934) and his wife Elena Guro, and it was here — in a paradoxically sedate setting — that Futurism took shape. 
“We limitlessly loved life, the world, and that wooden house on Pesochnaya, inhabited by Yelena Guro and her little nest of words,” wrote artist Vasily Kamensky (1884-1961), one of the regular visitors to the house. 
The house was an epicenter of avant garde production from 1912 to the early 1930s. Guro, Matiushin and Malevich painted and created “organic” sculptures from wood, Matiushin developed “quarter tone” music, Velimir Khlebnikov (1855-1922), Vasily Kamensky, Kruchenyk and Mayakovsky held poetry and prose readings. It was here that the Futurist plays “Victory over the Sun” and “Vladimir Mayakovsky” were conceived. 
Although the original house burned down in the late 1980s, the present replica, set up according to Matiushin’s photographs, still breathes creative energy. 
The permanent exhibition that opened three years ago sensitively balances documentary material about the early Futurists — first editions of their books, newspaper satire mocking the young movement, some fantastic photographs, many of which were taken by Matiushin himself — and glimpses of the original living quarters. The house also has some fine paintings by its former inhabitants. 
In all, the Museum of the Petersburg Avant Garde, as the Matiushin House is officially known, offers probably the most intimate and inspiring encounter with the people behind the movement.
At 5 Ploshad Iskusstv (Arts Square), on the corner of Italianskaya Ulitsa, one can take the steps down to the basement of the Stray Dog and an attempt to recreate the atmosphere of the avant garde’s main nocturnal dive between 1912 and 1915.
After decades of closure the Stray Dog reopened in 2000, extended by two rooms to create a cafe and restaurant alongside the original cabaret stage. As the manager said in a recent interview with The St. Petersburg Times, the revived Stray Dog tries to preserve its forerunner’s practice of staging poetry and song recitals. The program is varied, if not daring. 
The two front rooms serve as exhibition space for contemporary commercial artists that change on a monthly basis. The new rooms are also cluttered with all sorts of dog-related paraphernalia, which misses the avant garde mark by a mile. The old part, however, really does have character. 
Two rooms under a low arched ceiling are connected through a small stage, as they were in the 1910s, although the original white plaster has been knocked off to expose the brickwork. Back then there was a cold buffet in the back room, instead of the freshly cooked food there is now. Take a stroll towards the toilets to come upon some marvellous photographs of the legendary avant gardists who hung out here: poet Anna Akhmatova (1889-1966), artist Nikolai Kulbin (1868-1917), author and playwright Mikhail Kuzmin (1872-1936), and Mayakovsky, to name but a few.
Among other regular visitors were also Blok and his wife, the actress Lyubov Blok (1882-1939). Between 1912 and the poetis death in 1921 the couple lived at 57 Ulitsa Dekabristov, in the corner house overlooking the Pryazhki canal. Today the property houses the Blok Apartment Museum. 
The Bloks lived on the fourth floor until 1920 when they were forced to move in with Alexander’s mother and step-father on the second floor because their apartment was turned into a kommunalka, a communal flat shared with other families. [The kommunalka system involved the forced appropration of apartments for multiple families to solve a severe housing shortage caused by the Revolution and Russian Civil War.]
The move marked Blok’s disillusionment with the Soviet system and the end of the most prolific phase in his life (as many as a quarter of St. Petersburg families continue to live in kommunalki in 2008). 
It was in the upstairs flat that Blok had created his most famous works, including the first poems to glorify the revolution — “The Twelve” (1918) and “Scythians” (1918). This apartment is currently being renovated and will re-open as a museum on Nov. 1. 
Meanwhile, the flat in which Blok joined his mother for the last two years of his life features an exhibition heavily based on text and photographs (with no English-language explanations). There are first editions of Blok’s books, here and there with a scribble in Blok’s hand, but it is the corner room that is most interesting. 
It is here that Blok finally gave way to a combination of asthma, angina, dysfunctional blood circulation, scurvy and malnutrition that had plagued him for a year. His death mask is on display in the room, alongside his desk, his ink pens and his ashtray in the shape of a Dachshund - which merrily outlived its master.

BREAKING BARRIERS
In recognition of Blok’s initial commitment to the revolutionary cause and his work on the publishing panel of the People’s Commissariat for Enlightenment, he was appointed director of the Bolshoi Drama Theater in 1919. Before this time the theater had a classical repertoire of Shakespeare, Moliere and Schiller while Blok’s own plays were performed, often under Meyerhold, at the more experimental Kommissarzhevskaya theater which was located just down the road on 39 Ulitsa Dekabristov. 
Meyerhold, in St. Petersburg since 1907, also worked as a director at the Alexandrinsky Theater and the Mariinsky Theater, developing his method of abstract theater and collaborating with such leading artists as Alexander Golovin (1863-1930), Nikolai Kulbin, Mstislav Dobuzhinsky (1875-1957) and Boris Anisfeld (1879-1973) on set designs. Visiting these theaters today remains an experience in time travel. 
Anyone intent on tracing the avant garde will head to the Russian Museum to see their very brushstrokes preserved on paper and canvas. But the museum is a contrived setting for artists who, following Italian Futurists, called for a boycott of such institutions. Thick walls of marble insulating the world of art from the world outside ran counter to Futurism as a movement without borders. Burlyuk, Kamensky, Mayakovsky and Malevich painted on their faces to promenade their works around town. Art was also displayed in the streets, random staircases and abandoned shops. 
The art theorist, painter and poet Pavel Filonov (1883-1941) suggested that museums be transformed into research institutes - “laboratories” where artists could analyze composition and form. In that vein, Malevich set up the State Institute for Artistic Culture in 1923, at 9 St. Isaac’s Square. It was here that students were inducted into the five spheres of modern art — Impressionism, “Cezanneism,” Cubism, Futurism and Suprematism — by means of a dictatorial regime thought to enable them to relive the sentiments and mind-set of each art form. 
The neo-classical building now houses government offices and, although there is no trace of the Institute, a “Black Square”-inspired plaque around the corner tells us that Malevich lived and died here. Two houses down, towards the River Neva, at 5 St. Isaac’s Square, is the State Institute of Art History, established in 1912 and host to various avant gardist meetings and lectures. The plaque at the door reads like a who’s who of the movement. It’s still a functioning educational institution, so you may be able to con your way in. Use the ivisiting scholari trick.
Easily the most accessible of the existing temples of the Russian avant garde is, however, the Anna Akhmatova Apartment Museum in the Fointain House(entrance at 53 Liteiny Prospekt). The door to the apartment is in a leafy park, hidden from the bustle of the road outside. 
Akhmatova lived here with her husband, the art theorist Nikolai Punin (1888-1953), from the mid 1920s to the 1950s. The museum stands as a fine monument to Akhmatova, for so many decades the moral center of Russian arts and letters, and frequently holds exhibitions, performances and readings reflecting her place in the Russian avant garde, as well as other movements and eras she was part of and influenced.
The shock and scandal of the Russian avant garde still reverberate in our ears. Its ideas are often fresh and bizarre, and remain pertinent. Its derisive manifestos, poses and prances were enacted on the stage set that the city of St. Petersburg so often resembles. It remains possible to see the city through the eyes of its proponents, where the streets are red and the squares are black. 
To quote Oscar Wilde, in “The Soul of Man under Socialism” (1861), “a map of the world that does not include Utopia is not worth even glancing at.”
www.spbmuseum.ru/matyushin, www.spbmuseum.ru/blokmuseum, www.akhmatova.spb.ru

TITLE: Chernov’s
         choice
TEXT: When visited this week, the popular arty indie bar <b>Fidel</b> boasted a sign on its door saying “No Entrance for George W. Bush, Condoleezza Rice and Mikhail Saakashvili,” the name of the U.S. Secretary of State spelt with five typos. The name of Ukraine’s president Viktor Yushchenko was added in handwriting.
“It’s a sad fact. It resembles 1933, doesn’t it?” said Alexei Nikonov, the frontman of punk band <b>Posledniye Tanki v Parizhe</b> (also known as <b>PTVP</b>), discussing it by phone on Thursday.
“The saddest thing is that the people are proud of it,” he said. 
“Five years ago I was saying that the war in Chechnya divided the underground into two. Now it’s happened on a larger scale.
“Basically, there is no difference [between the two wars], because people, in their hearts, still think that Georgia is our territory.”
In late August, PTVP performed a concert against the war in Georgia, something that few bands did. 
“It went fine! There were more people there than ever,” said Nikonov. 
“But the number of people doesn’t matter; I was surprised that that many people understood our stance. It was the peak of patriotism at that time, and despite this there were very many people who shared our views.”
The band, which supported Iggy Pop and The Stooges at their local concert last month, will perform two concerts at Zoccolo on Monday and Tuesday.
Nikonov said the plan is to perform four albums in full over the two days. “Zerkalo” (Mirror) and “Hexagen” will be performed on Monday, and “2084” and “Svoboda Slova” (Freedom of Speech) on Tuesday.
“I think different people like different albums, so we will have different crowds on different nights. Or maybe not,” he said.
Nikonov will also recite poetry from his new collection “Hallucinations” at The Point on Saturday.
<b>Televizor</b>, an older politically-minded band that PTVP performed with twice this year, will play at Orlandina on Friday.
As for international acts go, <b>Jay-Jay Johanson’s</b> local concert has been cancelled, though he plays Moscow on Thursday. According to Ilya Bortnyuk, the owner of the Light Music agency that was planning to bring Johanson to St. Petersburg, the cancellation was caused by a “change in plans.”
However, Bortnyuk said Light Music might promote a concert by Johanson next year. He said Light Music has no immediate plans for concerts at big venues, but it will be bringing a couple of artists to local clubs.
Bortnyuk said that <b>Marina Celeste</b>, who sang with <b>Nouvelle Vague</b>, the French band responsible for soft pop covers of punk and new wave classics, will perform at The Place on Oct. 31, while the British act <b>Client</b> will perform at A2 next month.
<i>-- By Sergey Chernov</i>

TITLE: Directors Lounge on the Neva
AUTHOR: By Elmira Alieva
PUBLISHER: Special to The St. Petersburg Times
TEXT: Directors Lounge began in 2005 as a meeting point for filmmakers and video artists interested in experimental forms of cinema at the Berlin International Film Festival. It presented rare, experimental or unknown works which don’t fit into any category of the Berlinale. Since then the festival has become an annual event that takes place every February in Berlin. 
Directors Lounge has, within a very short space of time, gained recognition for its unique character. This is more than a festival; this is a cinema, club and bar where directors and film aficionados share their ideas. At each event the festival presents special screenings that explore new trends in experimental cinema and video-art, video installations, live events, meetings and discussions with directors.
Directors Lounge travels the globe to present its best films several times a year, and St. Petersburg is one of the few cities which the festival will be visiting this year. For the first time Andre Werner and Klaus W. Eisenlohr, the founders of Directors Lounge, will come to St. Petersburg to hold the festival on October 15-19, organized by the Rodina cinema center and the Tour de Film company under the auspices of the Goethe cultural center.
“This is a festival of experimental forms of cinema, but it doesn’t mean that these films are only for professionals. Sometimes the audience can find it difficult to understand auteur cinema, but Directors Lounge offers films which do not require any special cinematographic knowledge — this cinema is watchable,” said Alexei Dmitriev, curator of the project.
The directors of the festival’s screenings come from all around the world; most of them are not professional filmmakers, but photographers, artists, philologists and other people with backgrounds outside of the film world. “It is a common fact that quite often good experimental and auteur cinema is made by non-professionals. This kind of cinema involves a search for innovations and discoveries in visual arts, so non-professional filmmakers feel free not to follow any rules, they experiment and look for new forms of cinema,” said Dmitriev.
The festival in St. Petersburg will present the best Directors Lounge films, including two Russian screenings: “Untitled #1” by Masha Godovannaya and “Dubus” by the AV project. The 4-minute black-and-white film by Masha Godovannaya was shot in St. Petersburg. It examines a young girl’s mature dance performance on the city streets. “Dubus” is a 4-minute collection of classical American film clips given a new musical accompaniment.
Urban research is one of the major subjects of the festival. There will be a special day devoted to the theme of architecture and its influence on social space. The opening film of the festival is “Slow Space” by Klaus W. Eisenlohr. This film investigates the relationship between the body and the urban architectural environment through the example of Chicago. The film will be shown on 16 mm film for the first time in the post-Soviet history of St. Petersburg.
“Experimental cinema is completely different from commercial mainstream cinema. In these films actors don’t talk a lot, they like singing in Japanese, the camera is often static, and the colors are monochrome. Such films are minimalistic; they don’t have a lot of details. The accent is on the visual perception,” explains Dmitriev. 
The last day of the festival will be marked by a retrospective of Andre Werner’s films. This is auteur cinema with Asian motifs and minimalism. All programs will be introduced by curators and followed by discussions. 
“Experimental cinema is a kind of modern art. We are organizing Directors Lounge in St. Petersburg to familiarize its citizens with the modern trends in non-commercial cinema from different countries,” said Dmitriev.
Directors Lounge runs from Oct. 15 through Oct. 19. All screenings are held at Rodina cinema center.
Oct. 15, 9 p.m. 
“Slow Space” by Klaus W. Eisenlohr.(Germany-USA 2005.)
Oct. 16, 7 p.m.  
“Slow Space” and discussions at the Goethe cultural center.

Oct. 17, 9 p.m.  
“Best films of Directors Lounge.”
Oct. 18, 9 p.m. 
“Urban research.”

Oct 19, 9 p.m.  
“Retrospective of Andre Werner films.”

TITLE: A hollow war
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Local channel 100TV opened its evening newscast on Wednesday last week with a report that Moscow director Yury Grymov’s film “Strangers” (Chuzhiye) had been banned in the U.S. The film is due for release in November, and critics suggest this “news” was part of the publicity campaign for the film, which kicked off last week. The channel itself was hard pressed to name its source, claiming it arrived by e-mail from a news agency.
“Grymov’s film ‘Strangers’ has been banned in the U.S.,” said the newscast’s presenter. “Condoleezza Rice’s staff has not recommended it for distribution.”
“Most likely, this has something to do with the anti-American mood of the picture, which would be inappropriate in view of the upcoming presidential elections in America.”
It is unlikely that the station’s claims have any real basis. The U.S. Secretary of State’s purview does not include monitoring either new Russian films or, more to the point, giving recommendations to U.S. film distributors. 
The report was, however, in tune with anti-American sentiments in the Russian media, which have been on the rise in the aftermath of the war in Georgia. TV100 did not provide any sources for their report.
The report ended with a fragment of a tape-recorded telephone conversation with Grymov, a TV ad maker turned feature-film director. He described the news as a “surprise.”
“I think this is nonsense, but everything is possible. I don’t know anything about it for certain yet,” he said.
The 100TV report also aroused suspicions because, as a Google News search revealed, there was no mention of the subject, or even of Grymov, in the international media.
100TV editor-in-chief Andrei Radin did not respond to an e-mail inquiry sent on Oct. 9, but when called on his cell phone on Thursday he said he “did not know” the source of the information. 
Yekaterina Dodzina, 100TV news editor and the evening newscast presenter (who Radin referred to), said the news came by e-mail from an agency, although she does not remember the name of the agency.
“We were surprised as well, but we checked it with Grymov and his assistant,” she said by phone on Thursday. However, Dodzina said she did not verify the information with anyone in the U.S. or with U.S. officials.
According to the film’s official website, “Strangers” is set in a war zone in a third-world country. The plot involves doctors from a U.S. charity organization who become responsible for some terrible crimes as the film unfolds.
“Viewers will see how the American nation tries to instill its morals in another world but at the same time it doesn’t understand one simple thing—there is no such thing as one’s ‘own’ morals. Since morals are one and the same for all,” states the film’s English-language press release.
The news was picked up by several publications, most of them web-based. All of them referred to different sources for their information.
Gazeta.ru quotes the RIA Novy Region news agency, which, in turn, refers to “news agencies that quote Condoleezza Rice’s staff.” 
Research has revealed that the news originated on Internet forums and was subsequently cross-posted in several blogs.
Russian entertainment website Life.ru refers directly to “Condoleezza Rice’s staff,” adding that “censorship as such does not exist in American film distribution but in this specific case the U.S. State Department recommended that U.S. film companies not distribute “Strangers” within [the U.S.].” Life.ru is published by OAO News Media, which also publishes the tabloids Zhizn and Tvoi Den.
The website also added that the U.S. Department of State had previously not recommended Michael Moore’s “Fahrenheit 9/11.” In reality, Moore’s film had a general release in the United States in June 2004. It became the highest-grossing documentary of all time on its first weekend in release, taking in $21.8 million.
However, at least two publications soon deleted the news from their websites, although they did not publish corrections or disclaimers. The local edition of Argumenty I Fakty newspaper published an article entitled, “Condoleezza Rice Is Unhappy About Grymov’s Film ‘Strangers’,” on its website on Oct. 9. When accessed on Saturday, this page was blank. Cinema website Film.ru also later removed its article on the apparently fake controversy.
But it was in the blogosphere where the story gathered real force. There, the news was reposted dozens of times after the initial report on TV100.
The most persistent blogger on this front was Alexander Korsunov, who writes under the nickname “jordan_korsun.” Korsunov uploaded the video link from 100TV to the popular Livejournal.com community “ru_politics,” and he was especially active in responding to the comments and misgivings of other bloggers. In several postings, he corroborated the veracity of the report, claiming that American film distributors obey the recommendations of the U.S. State Department.
Research on the web has shown that Korsunov works in public relations and has himself been involved in the blogosphere advertising campaign for “Strangers.”
On Livejournal.com, the business offer that Korsunov made to Ruslan Paushu, who blogs under the nickname “goblin-gaga,” was found.
“Do you remember how you and I tried to launch a campaign against Ukraine over the ‘gas war,’” Korsunov wrote to Paushu on Sept. 30.
“I want to invite you to take part in a PR campaign [in the blogosphere]. Grymov is releasing a new film, ‘Strangers,’ about American doctors, Arabs, and the Russian military. The film is patriotic and ideological, especially in connection with the [war in] South Ossetia. […] If [you’re] interested, please write to [inform me] about your conditions […] and come to the pre-release screening.”
Last year, Paushu was identified by Vedomosti newspaper as one of two bloggers who launched an infamous advertising campaign for Utkonos, a Moscow store chain. Several popular Livejournal.com bloggers almost simultaneously made similar postings advertising the chain.
Dozens of popular bloggers were caught placing Utkonos ads in their postings. According to Vedomosti, Paushu said the postings were commissioned by an advertising agency that he declined to identify. He added that bloggers are usually paid $50 to $300 for covert product placements in their blogs.
In a posting to another blogger (the deleted comment is available in the cache of search engines), Korsunov confessed that there was a budget for advertising “Strangers” in the blogosphere.
“There is a budget for PR, not especially large, but I think the stance of the film is close to yours and you’ll find it interesting,” he wrote.
Further research showed that the news originated in two places, a Canadian website (where it was later deleted) and an Arabic-language forum. There, the report, which had apparently been translated into Arabic from Russian by a computer program, was still available as of Thursday. In another discussion on Livejournal.com, which took place on the afternoon of Oct. 8, several hours before the 100TV evening newscast, Korsunov referred to the Arabic version as the “original.”
Korsunov first achieved a modicum of fame in 2005, when, as a 22-year-old student, he launched the website Skaji.net. Now defunct, it was described as a source of political news independent from the Kremlin. “Information is the first step toward democracy,” he said in an interview with The Moscow Times at the time.
Film critic Stanislav Zelvensky, who writes for Afisha, arguably Russia’s leading listings magazine, said the news that Grymov’s film had been banned in the U.S. could easily be part of the film’s advertising campaign.
“When I first saw, or rather read this [on the web], I thought it was an advertising campaign,” he said. “It looks like a publicity stunt.”
Zelvensky said film companies occasionally hire bloggers to advertise a movie, but more often their own publicists do the work.
“I’ve read all this, but it’s not clear who was paid and who was not,” he said.
“Actually, they do not pay many people. Usually, it’s someone who works for the film company itself. This person launches a blog, or starts to write to Internet film communities about what a wonderful film it is.
“To put it crudely, there is a girl on salary who sits and types postings to endless numbers of silly [Live Journal] communities. ‘Such-and-such a film is being released, and I would love to see it. Guys, do you know what it’s about?’”
However, such stunts like the one probably used to advertise “Strangers” help film companies economize on their advertising budgets, according to Zelvensky.
“It’s clear that there’s a certain advertising budget in any case, and a portion of it can go to blogs,” he said.
“But it’s more effective when some copywriters come up with something like this, and it spreads all by itself, and then, when you realize that it’s fake, it’s already all over the place.”

TITLE: Interpreting Beethoven
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Watching drama in Russian theaters often leaves one wondering how most companies in the country manage to fuse almost any play with a humane and somewhat melancholic Chekhovian twist. Whichever dramatist is brought on the Russian stage — Beckett, Shakespeare, Brecht or Eugene O’Neal, any you care to name — gets a distinct Chekhovian flavor that lingers long after you leave the auditorium.
Something similar came to mind at this year’s Beethoven Festival in Bonn in October, which saw a Russian student orchestra perform Beethoven’s Pastoral Symphony. The Anton Rubinstein symphony orchestra of the St. Petersburg State Conservatory, under the baton of acting rector Sergei Stadler, injected the composer’s Sixth Symphony with a near-lethal dose of romanticism and gave the interpretation a heavy philosophical flair. The musicians’ age and temperament can only take part of the blame. Billed in the program as an eye-opener to the “Russian Beethoven,” the performance made him emphatically Russian.
Whatever the Russian classical musicians are performing, I thought, what they have in mind when they play is actually Tchaikovsky.
Worshipped in musical schools, Tchaikovsky, however, has not become a Russian — or St. Petersburg — brand in the way that Beethoven is for Bonn. The Beethoven festival, which was first held in 1845, on the 75th anniversary of the composer’s birth, and had Franz Lizst as its first artistic director, has grown into an internationally established month-long affair running from mid-September to mid-October involving some of the world’s most acclaimed performers.  
As a classical composer-turned-brand, Bonn’s Beethoven competes with, for example, Salzburg’s Mozart.
“I am convinced Beethoven is a better brand,” said the festival’s director, Ilona Schmiel. “Operas are naturally a big advantage of Mozart’s repertoire, as Beethoven only wrote one opera, ‘Fidelio,’ but Beethoven’s symphonic works are much bigger, more powerful and more emotional, and easier to understand than Mozart’s works.”
This year’s event revolves around works of Beethoven’s that were influenced by political events. With Beethoven’s political legacy as a starting point, the festival sought to explore how the composer’s successors and their music were either used by political regimes of the 20th century or stigmatized and turned into social outcasts.
“These were confronted, on the one hand, by compositions which were written in reaction to political trends, such as Hanns Eisler’s ‘Deutsche Symphonie,’ said Schmiel. “On the other hand we heard the music written in Theresienstadt by outlawed composers, and works by George Gershwin which were banned by the Nazis.”
“Macht Music” — a powerful combination of words signaling several layers of meanings at once, from the power of music to the relations of political power and the art of music —  became the festival’s motto.
The Ninth Symphony — arguably the most politically exploited work in the history of music, which was notoriously performed on Hitler’s birthdays and used by Chinese dictator Mao Zedong to motivate armies of workers — was the focal point of the event.
The festival kicked off with the Deutsche Kammerphilharmonie Bremen performing Beethoven’s Ninth Symphony under the baton of Paavo Jaarvi. 
“Beethoven’s Ninth Symphony was created as the composer’s avowal of the spirit of the Enlightenment, to be later misused as propaganda by the Third Reich, and eventually become the freedom anthem during celebrations of German unification,” Schmiel said. “This year we also had a special role for Kurt Masur as one of the pioneers of the peaceful revolution from 1989: with his Orchestre National de France he conducted a complete cycle of Beethoven symphonies.” 
The visit of the St. Petersburg orchestra was part of the festival’s Campus Project, now in its eighth rendition. Every year, the festival invites a student orchestra from non-Western and Central European territories which rehearses with a specially assigned conductor — the Anton Rubinstein orchestra was working with Peter Gulke — and gives a series of concerts. Before the Russian musicians, Beethovenfest had received student orchestras from around the globe, with orchestras from South Africa, China, Egypt, Poland and Georgia among them.
The Russian participation in the program this year was by no means limited to the Anton Rubinstein orchestra. “Caprice for Violin and Orchestra,” a new work by up-and-coming Russian composer Kuzma Bodrov, the winner of this year’s composers’ prize established by Deutsche Welle, gained a positive response from the festival’s audiences. 
Bodrov, 28, who studied with Alexander Chaikovsky, the former rector of the St. Petersburg Conservatory, said in an interview with DW during the festival that Pyotr Tchaikovsky is his greatest ideal in the classical music heritage. 
“Tchaikovsky is an absolute favorite, while Beethoven is inevitably the number one mentor for any musician,” Bodrov said. “Beethoven’s music incorporates everything: laws of the development of the score, the laws of logic, the laws of form and experiments with the form. Importantly, Beethoven’s music — just like the works of Bach or Mozart — have no nationality. They are beyond that level.”
Conveniently for Bodrov, his piece was performed alongside Beethoven’s Sixth Symphony and Tchaikovsky’s symphonic fantasy “Francesca da Rimini.” The juxtaposition served to strengthen the Russian twist to the performance, which had been the intention. 
Since she took up the job as the festival’s director six years ago, Schmiel has consistently been able to assemble a pantheon of celebrated classical performers at every event. Lorin Maazel and the New York Philharmonic orchestra, Riccardo Chailly and the Gewandhausorchester Leipzig, Jonathan Nott and the Bamberger Symphoniker, Daniel Harding and the London Symphony Orchestra, pianist Helene Grimaud, soprano Annette Dasch, violinist Daniel Hope, pianist Andras Schiff and ensemble Die Prinzen were some of the fesival’s biggest names this year.
Schmiel was the brains behind the regional concept of the Beethoven Festival, which aimed to highlight diversity in Beethoven interpretations with a national character and trace mutual influences between the composer and musical cultures of various regions, putting the German composer in the context of a specific region of Europe. Schmiel introduced the country focus in 2004, when the music of the Czech regions of Bohemia and Moravia was featured prominently in the program. This was followed by a French focus in 2005 and a Russian theme in 2006. In 2007, when the series concluded, the festival was exploring the connection between Beethoven and Great Britain. 
www.beethovenfest.de

TITLE: Crisis in the Arts? What Crisis?
AUTHOR: By John Varoli
PUBLISHER: Bloomberg
TEXT: Christie’s International and Sotheby’s, the world’s biggest auction houses, will display about $500 million of art in Moscow this week in an effort to bolster sales depressed by the global financial crisis.
Works by Francis Bacon, Edgar Degas, Wassily Kandinsky, Jeff Koons, Henri Matisse, Claude Monet, and Pablo Picasso are among those shipped to previews in Moscow as auction houses prepare for sales season in New York and London, starting this week.
Demand for art in Russia and former Soviet republics has risen as a boom in oil and metals prices created new billionaires. Ukraine’s Victor Pinchuk said he was a buyer at the Damien Hirst auction at Sotheby’s in London on Sept. 15-16, when 223 lots sold for $199 million.
“There are collectors who have developed a passion for contemporary art and are acquiring masterpieces,’’ said Alexander Rotter, Sotheby’s senior vice president, in an e-mail.
The drop in world equity markets this year has threatened to halt a decade-long bull market in art. Earlier this month, Sotheby’s sold $141.7 million of art at its autumn sale in Hong Kong, almost half the presale estimate for the 1,700 items offered.
The sales in London and New York will test how Russian demand has been affected by slumping oil, commodities and share prices. Russia’s Micex stock index has fallen by 60 percent this year. Crude oil has fallen 43 percent since peaking on July 3.
“Many people suffered from the stock market crash, but many were also able to pull money out and now they need somewhere to invest it,’’ said Mikhail Kamensky, head of Sotheby’s in Moscow.
On Tuesday and Wednesday, Christie’s exhibited 46 paintings worth about $250 million, including Bacon’s “Study for Self- Portrait,’’ with an estimate of $40 million to $60 million. It will be offered in New York on Nov. 12.
Monet’s “Dans la Prairie,’’ 1876, was first shown in Paris in 1877. It has an estimate of 15 million pounds, and goes under the hammer on Feb. 4 in London.
Matisse’s 1936 “Nude Amid Leaves on a Black Background’’ has an estimate of $12 million to $18 million; Kandinsky’s 1910 “Study for Improvisation 3’’ has an estimate of $15 million to $20 million. Both will be auctioned on Nov. 6 in New York.
The viewing was by invitation only for existing and potential clients, Christie’s said.
“In the last two years art has became fashionable, and some understand acquiring it gets you into an exclusive society,’’ said Teresa Mavica, head of the Contemporary City Foundation in Moscow.
Over the weekend, Sotheby’s hosts its largest exhibition in Russia, with 50 paintings worth about $250 million. The preview is also by invitation only.
Works on view include an 1879 Degas, “Dancer Resting,’’ a pastel and gouache work. It has an estimate of “more than $40 million,’’ Sotheby’s said.
Edvard Munch’s “Vampire,’’ 1894, has never been offered at auction and is expected to sell for more than $35 million, said Sotheby’s. Picasso’s 1909 Cubist painting, “Arlequin,’’ is estimated to fetch more than $30 million. These works will be offered on Nov. 3 in New York.
Contemporary works on display include Jeff Koons’s “Cheeky,’’ 2000; Richard Prince’s “Everglade Nurse,’’ 2003; and Roy Lichtenstein’s 1968 “Study for New York State Mural.’’ All have estimates of $4 million to $6 million, and sell on Nov. 11 in New York.

TITLE: Photo Food
AUTHOR: By Lauren Abman
PUBLISHER: Special to The St. Petersburg Times
TEXT: Cabinet Portrait prides itself on being the first “Photo-Restaurant” in St. Petersburg. As far as I know, it’s the first photo-restaurant to open anywhere. The restaurant takes its name seriously in the decor, creating a sense of vintage nostalgia intended to bring its diners back to the early days of photography. When entering the restaurant you are shuffled past shelves full of vintage cameras and into a large room with leather seats tucked around oak tables. Collages of black and white portraits are framed on white walls with oak trim, tasteful jazz music plays softly in the background, and silent Charlie Chaplin movies continuously loop on the plasma screen TV above the bar. The dinner party next to us was remembering yester-year even more than the restaurant, telling stories at their family reunion. About half the diners were large parties who had reserved tables ahead of time, the other half were pairs of diners like ourselves. 
The best way to start a meal at Cabinet Portrait is with one of their salads. Try either the fresh fruit and greens salad (380 rubles, $14.50) featuring star fruit, a crispy fresh mix of greens including dandelion leaves, slices of oranges, pineapple and currants served with a strawberry dressing on the side topped with fresh mint; or the fresh vegetable salad (280 rubles, $10.70) served in a fried cheese bowl featuring chopped cucumbers, peppers, tomatoes and Greek cheese drizzled with olive oil and basil. Both salads are extremely photogenic, served on clean simple white dishes and are best accompanied by fresh bread brought to the table warm. Cabinet Portrait has a less-than extensive wine list, organized by country featuring wines from Chile, Spain, Italy and France.
The grilled Georgian style lamb (700 rubles, $26.70) was worth the 40 minute wait. The outside was not too crisp and the inside was pleasantly soft and juicy. The meat itself was flavorful and accompanied by a savory dipping sauce, slices of onion and a puzzling amount of dill, and parsley sprigs. This dish is also available with chicken or beef. The steak was not worth the splurge at 850 rubles ($32.43). It was served overcooked and dry on a bed of green beans drizzled in a sweet sauce with two miniature potatoes sitting sadly by its side. The presentation was nice, the green beans on the side were delicious, but the steak itself was terrible. The menu also offers a wide selection of grilled chicken and fish dishes, and enough vegetable options to satisfy a vegetarian diner.
The grilled vegetable roulettes (250 rubles, $9.50) that were ordered to keep our taste buds busy while waiting for the main dish were served after the main course, but were welcomed after a disappointing steak. Thin slices of zucchini and eggplant are wrapped around tomatoes and soft, feta cheese and held together with an olive-topped toothpick and served in a mildly sweet tomato sauce. 
The waitresses in their long, pinstripe aprons were outstandingly sweet, ours even offered to box up our leftovers. However, she could not recommend a dessert for us, understandable after we sampled the fruit tar-tar (350 rubles, $13.35), which was nothing more than an overpriced pile of chopped fruit, and the chalky ice cream served with (just a touch of) fresh mint (180, $6.86). Disappointingly, the photographer was busy with a private party, so we weren’t able to get our dining portrait taken; it’s such a shame to let our best Norma Desmond impressions go to waste like that. “All right, Mr DeMille, I’m ready for my close-up.”

TITLE: In the spotlight
AUTHOR: By Anna Malpas
PUBLISHER: Staff Writer
TEXT: On Saturday, TNT started its latest reality show, “Who Doesn’t Want to Be a Millionaire.” The nine participants are locked in a bunker underground and have to agree on which of them wins a $1 million prize. The catch is that every time one of them walks out, the prize money is cut in half. The idea comes from the United States, where the show aired on Fox as “Unan1mous.” It has also been shown on Britain’s Channel Four.
In the Russian version, the host is It Girl Ksenia Sobchak. On Saturday, she didn’t actually go down into the bunker but only appeared on a video screen in a sober suit and dark-framed glasses. At the beginning, she announces that the contestants are 300 meters underground, although disappointingly, we have to take her word for it and don’t see any winding tunnels.
The bunker looks quite pleasant inside, with a central hall where the contestants vote, a smaller room where they argue with each other around a table, and women’s and men’s dorms similar to those in “Big Brother.” It also seems to be rather hot, as the contestants constantly wipe their brows. This is possibly just a tactic to enable the more photogenic ones to show off their hotpants. 
The choice of contestants follows the usual logic of reality shows, running the full range from loud and shouty obnoxious man to blonde stripper to gesticulating gay guy. The contestants are pigeonholed with brutal directness in the script. One is announced as “an open homosexual,” while another is labeled as “a representative of the Armenian diaspora” (read: successful businessman).
In the first episode, the contestants agreed right away that they would have to share the money in some way. All but two contestants — the gesticulating gay guy, Pyotr, and the shouty obnoxious man, Mikhail — wanted to nominate the most reliable-looking contestant to take the million and divvy it up. They picked out Maria, who said she was an encyclopedia publisher. And you know what, they were right, as she does exist and has even won an award from President Vladimir Putin. 
Mikhail, who is a market trader in Rostov-on-Don and looks far older than the advertised 26, said he didn’t trust Maria, as “99.9 percent of people would take the money and run.” With that prize, you could afford some cosmetic surgery to change your appearance, he pointed out. Cue discussions with Alexander, who boasted of contacts who could “find anyone” and talked knowingly of how a “fake passport isn’t so easy to get nowadays.” They ended up forcing Maria to write down all her passport details and cell phone numbers of her friends.
Maria said she wanted to give her share to a hospice but also mentioned a loopy plan to build a center in the Moscow region that would help people live longer with stem cell therapy. 
As my opinion of human nature plummeted, gesticulating gay guy Pyotr coyly hinted in diary room asides that his sob story was not entirely true. He had won some sympathy from the other contestants with a story about how he accidentally burnt down a wooden house and had to compensate the residents to the tune of 4.5 million rubles ($172,000). This story did not gel very well with his carefully teased hair, new-looking clothes and tan. 
Winning the contest is supposed to be all about strategy — and one of the contestants is even a poker player. That could be interesting to watch, but this is definitely a case where the nice guys finish last.

TITLE: Final U.S. Presidential Debate Takes Personal Turn
PUBLISHER: The Associated Press
TEXT: HEMPSTEAD, New York — John McCain repeatedly assailed Barack Obama’s character and campaign positions on taxes, abortion and more Wednesday night, hoping to transform their final presidential debate into a launching pad for a political comeback. “You didn’t tell the American people the truth,” he charged.
Unruffled, and ahead in the polls, Obama parried each accusation, and leveled a few of his own.
“One hundred percent, John, of your ads, 100 percent of them have been negative,” Obama shot back in an uncommonly personal debate less than three weeks from Election Day.
“It’s not true,” McCain retorted.
“It absolutely is true,” said Obama, seeking the last word.
McCain is currently running all negative ads, according to a study by the University of Wisconsin-Madison. But he has run a number of positive ads during the campaign.
The 90-minute encounter, seated at a round table at Hofstra University, was their third debate, and marked the beginning of a 20-day sprint to Election Day. Obama leads in the national polls and in surveys in many battleground states, an advantage built in the weeks since the nation stumbled into the greatest economic crisis since the Great Depression.
With few exceptions, the campaign is being waged in states that voted Republican in 2004 — Virginia, Colorado, Iowa — and in many of them, Obama holds a lead in the polls.
McCain played the aggressor from the opening moments of the debate, accusing Obama of waging class warfare by seeking tax increases that would “spread the wealth around.”
The Arizona senator also demanded to know the full extent of Obama’s relationship with William Ayers, a 1960s-era terrorist and the Democrat’s ties with ACORN, a liberal group accused of violating federal law as it seeks to register voters. And he insisted Obama disavow last week’s remarks by Rep. John Lewis, a Democrat, who accused the Republican ticket of playing racial politics along the same lines as segregationists of the past.
Struggling to escape the political drag of an unpopular Republican incumbent, McCain also said, “Sen. Obama, I am not President Bush. ... You wanted to run against President Bush, you should have run four years ago.”
Obama returned each volley, and brushed aside McCain’s claim to full political independence.
“If I’ve occasionally mistaken your policies for George Bush’s policies, it’s because on the core economic issues that matter to the American people — on tax policy, on energy policy, on spending priorities — you have been a vigorous supporter of President Bush,” he said.
McCain’s allegation that Obama had not leveled with the public involved the Illinois senator’s decision to forgo public financing for his campaign in favor of raising his own funds. As a result, he has far outraised McCain, although the difference has been somewhat neutralized by an advantage the Republican National Committee holds over the Democratic Party.
“He signed a piece of paper” earlier in the campaign pledging to accept federal financing, McCain said. He added that Obama’s campaign has spent more money than any since Watergate, a reference to President Nixon’s re-election, a campaign that later became synonymous with scandal.
Obama made no immediate response to McCain’s assertion about having signed a pledge to accept federal campaign funds.
Asked about running mates, both presidential candidates said Democrat Joseph Biden was qualified to become president, although McCain added this qualifier: “in many respects.”
McCain passed up a chance to say his own running mate, Alaska Gov. Sarah Palin, was qualified to sit in the Oval Office, though he praised her performance as governor and noted her work on behalf of special needs children. The Palins have a son born earlier this year with Down Syndrome.
Obama sidestepped when asked about Palin’s qualifications to serve as president, and he, too, praised her advocacy for special needs children.
But he quickly sought to turn the issue to his advantage by noting McCain favors a spending freeze on government programs.
“I do want to just point out that autism, for example, or other special needs will require some additional funding if we’re going to get serious in terms of research. ... And if we have an across-the-board spending freeze, we’re not going to be able to do it,” he said.
In addition to differences on taxes and spending, McCain said Obama advocated trade policies that recalled those of Herbert Hoover, who presided over the start of the Great Depression.
Obama has called for tougher provisions in trade negotiations, arguing that is necessary to avoid undercutting the wages paid American workers.
McCain also said Obama has aligned himself with “the extreme aspect of the pro-abortion movement in America” and had voted present while in the Illinois Legislature on a measure to ban one type of procedure late in a woman’s pregnancy.
Obama said the bill would have undermined Roe v. Wade, the Supreme Court ruling that granted abortion rights, and had been opposed by the Illinois Medical Society.
“I am completely supportive of a ban on late-term abortions, partial-birth or otherwise, as long as there’s an exception for the mother’s health and life, and this did not contain that exception,” he added.
McCain sarcastically paid tribute to “the eloquence of Senator Obama. He’s (for) health for the mother. You know, that’s been stretched by the pro-abortion movement in America to mean almost anything.”

TITLE: England, Germany Among World Cup Contenders
PUBLISHER: The Associated Press
TEXT: England, Spain and the Netherlands maintained perfect starts in World Cup qualifying Wednesday night to open big leads for spots in the 2010 tournament in South Africa, while Italy and Germany also were victors heading into a six-month break.
Wayne Rooney scored twice for England in a 3-1 victory at Belarus, four days after he had two goals in a 5-1 win over Kazakhstan at Wembley. Defending champion Italy won 2-1 over visiting Montenegro, Germany won 1-0 at home against Wales and European champion Spain won 2-1 at Belgium.
At night, Brazil was booed during a 0-0 tie at home against Colombia, and Chile beat visiting Argentina for the first time since 1973, winning 1-0 on a goal by Fabian Orellana in his international debut.
The United States, having already secured a berth in next year’s regional finals, lost 2-1 at Trinidad and Tobago. Mexico rallied twice for a 2-2 tie at Canada as goals from Matias Vuoso and Carlos Salcido offset go-ahead strikes from Ali Gerba and Tomasz Radzinski.
Having also won at Andorra and Croatia, England (4-0) is off to its best start in World Cup qualifying and leads Ukraine and Croatia by five points in Group Six going into a six-month break.
“It’s good but still there is much to improve,” England defender Rio Ferdinand said.
David Beckham entered in the 88th minute and made his 107th appearance for England, moving past Bobby Charlton into sole possession of third place, trailing only goalkeeper Peter Shilton (125) and Bobby Moore (108).
Helped by two goals from Ivan Rakitic, Croatia outplayed last-place Andorra 4-0 to pulled even at seven points with Ukraine, which was idle and next plays at England on April 1.
European champion Spain also improved to 4-0 as David Villa scored in the 88th minute. After Wesley Sonk put the Belgians ahead in the seventh minute, Andres Iniesta tied it in the 36th minute for Spain, which stretched its unbeaten streak to 27 games.
The Spaniards have has a four-point lead in Group Five over Turkey, which jumped above Belgium into second place after a 0-0 tie in Estonia.
The Netherlands won 1-0 at Norway behind Mark van Bommel’s goal in the 64th minute and holds a five-point advantage in Group Nine over Scotland and Iceland.
“We knew it was going to be a very tough game,” Netherlands captain Giovanni van Bronckhorst said. “We are very happy with the three points. It gives us a lot of trust and confidence going into the future.”
Portugal played a 0-0 tie at home against Albania, which played a man short for the final 50 minutes after Admir Teli hit Cristiano Ronaldo in the face with a forearm and received a second yellow card. Denmark, which was idle, and Hungary top Group One with seven points, two more than Portugal, Albania and Sweden.
Alberto Aquilani’s first two international goals helped Italy defeat Montenegro and maintain a three-point-lead in Group Eight. Ireland, which beat visiting Cyprus 1-0 on Robbie Keane’s fifth-minute goal, is second.
Germany defeated Wales 1-0 on a 72nd-minute goal by Piotr Trochowski to open a four-point advantage over Russia and the Welsh in Group Four. Helped by two own-goals and a late score by Andrei Arshavin, Russia won 3-0 at home against Finland 3-0.
In Asia, Australia defeated Qatar 4-0 and Japan tied Uzbekistan 1-1 in Group A, and Iran beat North Korea 2-1 and South Korea romped over the United Arab Emirates 4-1 in Group B.

TITLE: Syria Recognizes Lebanon, Embassies Planned
PUBLISHER: The Associated Press
TEXT: DAMASCUS, Syria — Syria recognized Lebanon’s sovereignty for the first time on Tuesday, with President Bashar Assad issuing a decree establishing diplomatic relations and plans for an embassy in Beirut.
The U.S. and Lebanese anti-Syrian politicians have long demanded Syria establish official relations with Lebanon. The two countries have not had formal diplomatic ties since they gained independence from France in the 1940s.
Lebanon and Syria agreed in August to establish ties and demarcate their contentious border. That landmark agreement, which came during an official visit by the Lebanese president to Damascus, and Tuesday’s formal decree reflect Syria’s efforts to break with past isolationist policies, resolve tensions with its neighbors and create a more open image for the country.
The development may also help Syrian aspirations to build trust with the West as Damascus pursues indirect talks with Israel, mediated through Turkey.
Assad’s decree, carried by the official Syrian news agency SANA, said that a “diplomatic mission for the Syrian Arab Republic at the embassy level will be established in the Lebanese capital.” It did not provide details or say when the embassy would open.
But a Syrian Foreign Ministry official said it will happen before the end of the year.
“There will be a Syrian embassy and an ambassador in Lebanon soon and before the end of the year,” the official told The Associated Press, speaking on condition of anonymity in line with regulations.
Relations between the two Arab nations have been lopsided in Syria’s favor since the 1970s, when Syria sent its army into Lebanon and retained control there for nearly 30 years. Ties unraveled when former Lebanese Prime Minister Rafik Hariri was killed in a 2005 car bombing that many Lebanese blame on Syria — a charge Syria denies.

TITLE: Sochi Olympic Games Get Helping Hand
AUTHOR: By Catrina Stewart
PUBLISHER: The Associated Press
TEXT: MOSCOW — A politician with a track record for crisis management was appointed Tuesday to take over preparations for the 2014 Winter Olympics in Sochi at a time when the project could be threatened by the global credit squeeze.
Dmitry Kozak, currently regional development minister, will be promoted to the post of deputy prime minister.
“He’s considered to be one of the best crisis managers in (Prime Minister Vladimir) Putin’s team,” said Nikolai Petrov, an analyst with the Carnegie Moscow Center. “Not only are there very serious problems faced by the whole project now, which needs a very effective manager with good connections, but the region where Sochi is located is familiar to Kozak and he is well respected by the political elite there.”
The Sochi Organizing Committee, headed by Dmitry Chernyshenko, and the state corporation responsible for building the sports facilities are expected to fall under Kozak’s authority.
“We are about to start the biggest construction site in Europe,” Chernyshenko told The Associated Press by telephone. “And it really deserves to have a dedicated deputy prime minister.”
President Dmitry Medvedev announced the decision after meeting with Putin, who said he proposed creating the job following discussions with the International Olympic Committee.
“The work is generally proceeding to schedule,” Putin said, according to a transcript of the meeting on the Kremlin web site.
Kozak’s appointment comes days after he warned that the financial crisis could harm the Sochi Olympics if investors pull out and force the state to pay more.
Russia’s leadership has enormous prestige riding on the Olympics. While he was president, Putin lobbied to bring the Winter Games to Russia for the first time. Most of the Olympic facilities at the Black Sea resort are to be built from scratch.
The global financial crisis has sent the country’s stock markets into their worst slump since Russia’s 1998 financial collapse. Several Moscow construction companies hit hard by the crisis have put new projects on hold. No investors have yet pulled out of Olympic construction projects, Chernyshenko said.
The IOC has downplayed the impact of the global financial crisis on the Olympics, including Sochi and other host cities.
“What we hear from the other organizing committees is that there is no panic and they can cope with the situation,” IOC president Jacques Rogge told the Around the Rings Web site last weekend in Acapulco, Mexico.
Some of Russia’s biggest corporations are involved in the Sochi construction, including Oleg Deripaska’s Basic Element and Vladimir Potanin’s Interros. State-controlled gas monopoly Gazprom is building part of the ski area.

TITLE: EU Leaders Divided By Environmental Program
PUBLISHER: The Associated Press
TEXT: BRUSSELS, Belgium — European Union leaders were deeply divided Thursday over calls by Poland, Italy and other countries to dilute and delay an ambitious program to fight global warming to take account of the looming economic downturn.
On the second and final day of the bloc’s summit in Brussels, the leaders were expected to confirm their approval of a 1.7 trillion euro ($2.3 trillion) emergency bailout for the banking sector and call for a concerted global approach to revamp the world’s financial system to prevent a repeat of the crisis that devastated money markets in recent weeks.
As the financial turmoil spills over into the real economy with signs that a prolonged global recession is looming, the leaders indicated support to the banking sector could be extended to other sectors.
Poland and six other Eastern European nations infuriated other EU nations with a surprise demand that the bloc drop a December target for adopting plans to reduce greenhouse gas emissions by 20 percent by 2020.
They say the financial crisis has made it too difficult for European industry to take on the burden of adapting to a clean economy. Italy also threatened to veto the climate change plan unless its industries are given more protection.
“Our companies are in no state to take on costs like those we thought about last year,” Italian Prime Minister Silvio Berlusconi told reporters Wednesday.
French President Nicolas Sarkozy — who currently heads the EU — was adamant that the economic crisis should not derail the climate change targets adopted last year. He said the bloc’s credibility was at stake.
“We cannot go back on our objectives,” he told a news conference. “We must stick to the calendar.”
Poland, Hungary, Bulgaria, Latvia, Lithuania, Romania and Slovakia however urged that the bloc drop the December deadline for drawing up the plan explaining how the cuts will be made. The poorer Eastern European nations fear their coal-based energy sectors will suffer unfairly.
The plan would cost governments and business billions of dollars to implement new cleaner technologies, renewable energy sources, and reduce emissions from cars and factories. Berlusconi said that would put Europe at a disadvantage to competitors in China and the United States.
Sarkozy countered that taking a world lead in switching to green energy would bring economic advantages to Europe.

TITLE: Young Hockey Player Buried After Collapsing During Game
AUTHOR: By Anna Malpas
PUBLISHER: Staff Writer
TEXT: MOSCOW — Alexei Cherepanov was buried in Omsk on Wednesday, after the 19-year-old hockey player collapsed while playing for Avangard Omsk in a Monday night game in Chekhov, in the Moscow region.
Thousands of people filed past Cherepanov’s coffin to pay their respects in the city’s hockey arena prior to the burial service, Interfax reported.
The official coroner’s report listed the cause of death as acute heart failure, said Vladimir Shalayev, vice president of the Continental Hockey League, RIA-Novosti reported. Shalayev said the autopsy revealed that Cherepanov had an enlarged heart, weighing 495 grams, where the norm is 290 grams.
The Prosecutor General’s Office’s Investigative Committee has opened an investigation into the player’s death. A statement on its web site said it would look at the actions of the league and officials at the arena in Chekhov, as well as the team’s medical staff.
State Duma deputies also asked the legislature’s Public Health committee to investigate the possibility of inadequate medical facilities and care at the game, Interfax reported. Reports on Tuesday had said that, contrary to league regulations, there had been no ambulance present at the arena.
Avangard Omsk general manager Anatoly Bardin, meanwhile, said the team would sue Moscow region Health Minister Vladimir Semyonov over comments he made Tuesday that Cherepanov had a serious heart condition and shouldn’t have been allowed to play, Interfax reported. Bardin called Semyonov’s statement “complete nonsense.”

TITLE: 22 Sailors Released by Pirates off Coast of Somalia
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea — Pirates who seized a cargo ship off the coast of Somalia more than a month ago on Thursday freed the 22 sailors and the vessel, a South Korean official said. 
The crew members — eight South Koreans and 14 citizens from Myanmar — were heading toward a U.S. Navy vessel in the area after being set free earlier in the day, Foreign Ministry spokesman Moon Tae-young told reporters.
Moon said the sailors were all safe but declined to comment whether a ransom was paid.
The South Korean cargo vessel was hijacked by Somalian pirates on Sept. 10 in the Gulf of Aden — one of 29 ships hijacked this year off the African coast. The latest is a Philippine bulk carrier seized in the Gulf of Aden on Wednesday with a crew of 21.
Also being held off the coast is the MV Faina, a Ukrainian ship carrying weapons and tanks. U.S. warships have surrounded the Faina as the pirates who seized it demand millions of dollars in ransom.
Officials say 10 hijacked ships remain in the hands of pirates, along with about 200 crew members. With no effective government, Somalia cannot protect its coastline. It is located along the Gulf of Aden, which connects the Red Sea and the Indian Ocean and is one of the world’s busiest waterways with some 20,000 ships passing through it each year.
But international pressure on the pirates is growing.
A NATO flotilla of seven ships is en route to the area, and the Indian government on Thursday said it would send warships to the Gulf of Aden as well.