SOURCE: The St. Petersburg Times
DATE: Issue #1427 (91), Friday, November 21, 2008
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TITLE: Suspected Crime Lord Trial Faces Delays
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Preliminary hearings in the case against local businessman Vladimir Barsukov (a.k.a. Kumarin), reportedly one of the former leaders of the Tambov criminal group, that were due to start in the Kuibyshevsky District Court on Thursday have been postponed until Wednesday, Nov. 26.
Barsukov’s lawyer Sergei Afanasiev told reporters the hearings were rescheduled after the Investigative Board of the Investigative Committee of the Prosecutor General’s Office refused to authorize Barsukov’s transfer to St. Petersburg from Moscow’s Lefortovo prison, where he is being held.
“It is impossible to hold the hearings without the defendant being present,” Afanasiev said, adding that he has not yet received any explanation for the refusal to organize Barsukov’s transfer to the trial this week.
According to a statement posted on the General Prosecutor’s Office web site, the case involves “a string of illegal raids on St. Petersburg enterprises and properties between 2004 and 2006 committed by an organized gang formed by Vladimir Barsukov (Kumarin).”
Barsukov, who changed his last name from Kumarin in the 1990s, was arrested on Aug. 22, 2007, during a special raid carried out by a joint team of law enforcement officers from Moscow and St. Petersburg. The businessman was then transferred to Lefortovo prison.
In the 1990s, Barsukov was alleged to be the head of the Tambov gang, one of the most feared criminal syndicates in St. Petersburg at the time. 
In October 1999, Viktor Novosyolov, the controversial then-vice-speaker of the St. Petersburg Legislative Assembly, who was believed to be the Tambov group’s lobbyist in parliament and known to maintain close ties to Barsukov, was murdered, and the powerful Tambov group was suspected in a series of killings of local businessmen. 
Vladimir Markin, an official representative of the Investigative Committee of the General Prosecutor’s Office, told reporters that an investigation continues into Barsukov’s possible involvement in a series of other crimes, including forming a criminal gang, murder and attempted execution-style contract killings.
The prosecutors are probing Barsukov’s possible links to, in particular, an attempt to organize a contract killing with the goal of eventually seizing ownership of the St. Petersburg oil terminal.
The Prosecutor’s Office website said that Barsukov has been charged with forming a criminal gang, money laundering and fraud. 
The investigators believe the gang illegally seized a total of 13 local commercial enterprises. The cost of these properties amounts to 5 billion rubles ($213 million).
“The Committee established over the course of the investigation that in 2005-2006, Barsukov, with the assistance of seven other individuals — who have been detained and are currently under  arrest — formed a criminal gang, seized ownership of the Peterburgsky Ugolok restaurant and the Magazin Smolninsky store, and then sold these illegally acquired properties to a third party,” Markin said. 
According to the investigation, Barsukov and his accomplices bribed officials at the St. Petersburg branch of the Federal Tax Service to alter the unified state database where the properties were listed, and to withdraw several sets of key documents related to the properties’ original ownership.
“In order to deprive the original owners of the opportunity of getting their properties back, the gang created a chain of fictitious sales of properties until they were purchased by businessmen under the gang’s full control,” reads the prosecution’s conclusion.
The Tambov Gang case has prompted a series of corruption investigations into the neglect of professional duties by certain members of law enforcement agencies and high-ranking civil servants. 
Earlier this year, Prosecutor General Yury Chaika said the Tambov Gang investigation exposed powerful corrupt networks involving law enforcement officers as well as state executives and the prosecutor’s own staff. 
Barsukov, who has continually denied being a leader in the criminal community, has won several cases against Russian journalists who directly accused him of criminal connections in their publications.
However, Chaika has repeatedly stated that the Tambov criminal syndicate “has been exposed” following the launching of an investigation into a series of thefts that the prosecutors believe the gang to have committed. 
Chaika said that more than 40 people had been charged in connection with the Tambov gang investigation prior to Barsukov’s arrest.
The Barsukov case is one of eight criminal cases concerning serious crimes committed by St. Petersburg-based criminal gangs currently being investigated or supervised by the Prosecutor General’s Office.
Over the past decade, a string of Western media outlets, including Le Monde and Newsweek, have linked Barsukov to Prime Minister Vladimir Putin through Vladimir Smirnov, the former head of the St. Petersburg operations of SPAG, an agency that had been set up to invest in the city’s real estate, and an old associate of Putin.
In 1994, as a deputy mayor of St. Petersburg, Putin awarded the St. Petersburg Fuel Company, or PTK, the monopoly for supplying gasoline to the city.
At the time, Smirnov was a major shareholder in the Petersburg Fuel Company and local media reported that the company was controlled by the Tambov criminal group. In 1998, Smirnov took over PTK and appointed Barsukov as his deputy.
In the mid-1990s, high-profile contract killings of major players in the fuel market rocked the city, contributing to its reputation as Russia’s criminal capital, or “Banditsky Petersburg” as the city was nicknamed.

TITLE: Putin Pledges To Halt Collapse
AUTHOR: By Henry Meyer and Lyubov Pronina
PUBLISHER: Bloomberg
TEXT: MOSCOW — Prime Minister Vladimir Putin vowed to do “everything” to prevent the kind of financial crises that shook the country after the collapse of the Soviet Union.
Putin unveiled new measures to counter the effects of the global economic crunch, including corporate tax cuts and higher welfare payments, and promised to defend the ruble.
“We’ll do everything we can to prevent a repeat in our country of the problems of past years, the collapse of past years,” Putin told the annual congress in Moscow on Thursday of the ruling United Russia party which he heads, broadcast live on state television. “We have amassed sizable financial reserves which will give us the freedom to maneuver, allow us to maintain macroeconomic stability.”
Putin, 56, is bolstering his public role in response to a global slowdown that has punctured Russia’s 10-year oil-fueled boom, amid growing speculation that he may seek to return to the Kremlin as president next year.
Putin remains at the center of power after handing the presidency in May to his chosen successor, Dmitry Medvedev, 43. He may persuade Medvedev to step down, triggering snap elections that would enable Putin to reclaim the No. 1 post for as many as 12 years under a new six-year presidential term, analysts say.
“Medvedev can announce that he isn’t coping and it’s better if an experienced political leader takes the reins again,” said Leonid Sedov, a political analyst at the Levada Center research group in Moscow.

Oil, Gas Exports
As the U.S., Europe and Japan slip into recession, the price of oil has fallen below $50 a barrel in New York from a July high of almost $150, hurting Russia, the world’s largest energy exporter, which relies on oil and gas for two-thirds of its export earnings.
Russia’s economic growth will slow to 3 percent next year after average expansion of 7 percent a year since 1999, the year after the 1998 financial default, the World Bank estimates.
Russia in August 1998 defaulted on $40 billion of debt and devalued the ruble, wiping out the life savings of millions of people overnight and pushing the government to the edge of bankruptcy.
Russia “won’t allow a spike in inflation or sharp changes in the ruble’s exchange rate,” Putin said. Bank deposits are safe in Russia because 98.5 percent of all retail deposits are fully covered by a state guarantee, he said.
Tax Cuts
Putin announced that the government will cut the tax rate on corporate profits by 4 percentage points in January, reduce taxes for small businesses and speed refunds of value-added tax. Unemployment benefits will rise next year to 4,900 rubles ($178) a month as “structural” labor-market changes loom, he said.
Plans to inject funds into health and education and increase social spending under a long-term strategy until 2020 will not be abandoned, Putin said. Pensions will rise 50 percent by 2010, he added.
With Urals crude already $20 below the $70 average required to balance Russia’s budget next year, the government is depleting its reserves, the world’s third-largest.
Already Russia has spent 24 percent, or $144.6 billion, of its central-bank stockpile since early August, mostly on a failed attempt to defend the ruble, which has lost more than 17 percent of its value against the dollar during that period.
The ruble snapped a four-day drop after Putin’s speech, rising 0.2 percent to 27.5657 per dollar by 2:40 p.m. in Moscow, from 27.6196 late yesterday.
The tax cuts announced amount to 550 billion rubles, Finance Minister Alexei Kudrin said. Putin also pledged 50 billion rubles ($1.82 billion) for the defense industry and 83 billion rubles ($3.02 billion) for new housing.

Boosting Liquidity
The government has already pledged more than $200 billion in loans, tax cuts, delayed tax payments and other measures to boost liquidity in the financial system during the credit crunch.
Russia’s budget may have a 1 percent deficit next year, which will be the “peak” of the global crisis, and Russia will use its oil reserve fund to cover the shortfall, Kudrin said.
Putin accused certain politicians of complacency inherited from the years of high prices, which he criticized as “absolutely unacceptable” in today’s crisis. He didn’t name any of the politicians he attacked.
“This will inevitably lead to mistakes that will cost us the trust of the Russian people,” he said in his speech. “In difficult circumstances, the real capabilities of public institutions become clear.”

Putin Call-in Show
Putin will again take center stage next month by holding a live call-in show on national television.
Putin has held a nationwide call-in every year since 2001, broadcast live and lasting several hours, with questions on a wide range of issues submitted by TV link-up, phone and Internet. The event dominated TV news coverage on the days it aired.
Russia’s lower house of parliament is close to approving a constitutional amendment that would extend the president’s term to six years from four.
The measure will probably secure final legislative approval by mid-December. It would allow Putin, who stepped down after serving two consecutive terms, the constitutional limit, to serve at least another 12 years if he again becomes president.

TITLE: Court Rules Politkovskaya Trial to Be Closed to the Public
AUTHOR: By Nabi Abdullaev and Alexandra Odynova
PUBLISHER: Staff Writers
TEXT: MOSCOW — Reversing his Monday decision, the judge ordered the court closed to the media and the public Wednesday in the trial of three men accused of killing journalist Anna Politkovskaya, citing concerns for the safety of the jury.
The decision was criticized severely by lawyers for the defense, Politkovskaya’s family and rights groups, who hoped that the trial would uncover further information about the killing.
Politkovskaya, who upset the Kremlin with her reporting of human rights abuses in Chechnya, was shot to death in her apartment building in 2006, rekindling fears about the safety of journalists working in the country.
Shortly after the first hearing in the trial opened Wednesday, Judge Yevgeny Zubov read a note given to him by the jury saying they would not enter the courtroom as long as cameras and journalists remained inside. He then announced the ban on the public and media.
The decision outraged attorneys for the defendants and Politkovskaya’s family, as well as the editor of Novaya Gazeta, the newspaper where Politkovskaya worked.
“I believe this is shameful,” Novaya Gazeta editor-in-chief Dmitry Muratov told reporters.
Zubov’s announcement Monday that the trial would be open surprised the lawyers taking part, although he warned that any complaints of pressure from jurors selected Tuesday would lead him to reverse the decision.
Charged with the murder are two ethnic Chechens, brothers Ibragim and Dzhabrail Makhmudov, and a former officer with the Moscow police anti-organized crime unit, Sergei Khadzhikurbanov. 
A fourth defendant, Federal Security Service officer Pavel Ryaguzov, is charged in an unrelated extortion case in which he allegedly acted together with Khadzhikurbanov.
Lawyers for the defendants said Wednesday that they believed the court had planned to close the hearings all along.
“The jury was selected Tuesday, and they all knew that journalists would be inside the courtroom,” said Ibragim Makhmudov’s lawyer, Said Arsamirzayev. “The judge could have just banned cameras from the room.”
Murad Musayev, the lawyer for Dzhabrail Makhmudov, agreed, calling the sequence of events a “PR trick by the court.”
Prosecutors had called from the beginning for the hearings to be closed, saying documents related to the charges against Ryaguzov were classified. 
The defense has answered by arguing that this evidence could be considered behind doors in a separate hearing.
The military prosecutors, who are handling the case because Ryaguzov is a member of a state security organization, appeared in court Wednesday in plain clothes and refused to comment in front of cameras, saying they were afraid of possible reprimands because they were not in uniform. 
Speaking off-camera, they said they were also puzzled by the decision to try Ryaguzov’s case along with that of Politkovskaya’s murder.
The parents of the Makhmudov brothers came to Moscow from their village of Achkhan-Martan, in Chechnya, but were also banned from the courtroom on Wednesday.
A third Makhmudov brother, Rustam, is suspected of actually pulling the trigger in the killing but has not been apprehended. An international warrant has been issued for his arrest.
“We don’t know where my son is now,” the mother, Zalpa Makhmudova, said outside the courthouse. “I expected the police to tell me.”
Besides the judge’s decision, Karina Moskalenko, the lawyer for Politkovskaya’s son, Ilya, criticized the investigation into the crime as incomplete, particularly in that it had not established who had ordered the murder of the award-winning reporter.
The trial is to resume Thursday.

TITLE: ‘Couch-Killer’ Gets Off  With One-Year Suspended Sentence
PUBLISHER: The St. Petersburg Times
TEXT: A woman who killed her husband by shutting him inside a folding couch has been given a one-year suspended sentence, prosecutors said Monday.
In response to an insulting comment from her husband in July, Vera Lukyanova, 55, closed the folding couch her spouse was lying on, St. Petersburg city prosecutors said in a statement. 
Lukyanova was drunk at the time, they said.
Her husband was crushed as the couch folded up, and he suffocated after he was unable to free himself, the statement said.
In July, St. Petersburg’s Channel Five television showed rescue workers sawing through the folding sofa in order to reach the man, who was wearing his underwear and was trapped between the mattress and the back of the couch. 
The rescue workers told Channel Five that Lukyanova had left her husband for three hours before checking on him and finding him dead.
Lukyanova had been facing up to two years in prison on manslaughter charges.
However, the Vyborgsky District Court handed her a one-year suspended sentence.

TITLE: Rogozin Calls For Attacks on Pirates
PUBLISHER: Reuters
TEXT: BRUSSELS — NATO, the EU and others should launch land operations against bases of Somali pirates in coordination with Russia, the Russian ambassador to NATO said Wednesday.
Dmitry Rogozin said the view of Russian experts was that naval action alone, even involving a large fleet of a powerful nation, would not be enough to defeat the pirates, given Somalia’s geostrategic position.
“So it is up to NATO, the EU and other major stakeholders to conduct not a sea operation, but in fact a land coastal operation to eradicate the bases of pirates on the ground,” he said.
“Because we all know ... they have their bases on the ground, and of course those actions should be coordinated with Russia,” Rogozin said, without making clear whether he foresaw Russia being involved in any such operation.

TITLE: Migrants Flee Moscow District After Sex Killing
AUTHOR: By Svetlana Osadchuk
PUBLISHER: Staff Writer
TEXT: MOSCOW — Almost daily, street cleaners paint over racist graffiti on apartment buildings on Ulitsa Kubinka, where a teenage girl was raped and strangled last month purportedly by an Uzbek immigrant. 
The horrifying attack in western Moscow has galvanized ultranationalists, and most of the graffiti is directed at the many migrant workers from former Soviet republics hired by the city to keep the streets tidy. 
“Every night, new racist slogans appear on the walls of buildings,” said Olga Labuticheva, a building maintenance official in Moscow’s Mozhaisky district, where 15-year-old Anna Beshnova was murdered on Oct. 1. “We paint over them, but people are afraid for their lives.” 
Beshnova’s murder has sparked angry demonstrations on Ulitsa Kubinka by anti-immigration groups, and a Turkmen national was knifed to death in the area earlier this month. Fearing for their lives, many migrant workers in the district have quit their city maintenance jobs. 
Labuticheva said 10 of her workers from former Soviet republics in Central Asia have resigned. Another maintenance official in the district, Tatyana Gushchina, said she has lost 20 migrants working as street cleaners. 
“These aren’t just Uzbek nationals,” Gushchina said in reference to the nationality of Beshnova’s suspected killer. “They are also from Moldova and even from Ukraine. They say skinheads do not distinguish between them.” 
Beshnova’s murder is the latest of several crimes — purportedly committed by dark-skinned migrants or natives of the North Caucasus — that have caused simmering racial tensions across the country to boil over in recent years. 
The most prominent of these was an August 2006 fight at an Azeri-run restaurant in the Karelian town of Kondopoga that left two local Russians dead. The fight ignited riots in Kondopoga, where tensions between ethnic Russians and traders from the Caucasus had simmered for years. 
On Oct. 1, Beshnova was returning home from her boyfriend’s apartment at about midnight on Ulitsa Kubinka, near the Kuntsevskaya metro station, when she was attacked by a man described by witnesses as “non-Slavic” and wearing a jacket commonly worn by city maintenance workers. The assailant raped her, strangled her and left her body in the bushes near an apartment building, investigators say. 
Several local residents have told the media that they watched the rape and did nothing because they believed that it was consensual sex. The assailant slept next to Beshnova’s body for several hours before fleeing, according to media reports. 
 Two weeks later, some 200 activists from the ultranationalist Movement Against Illegal Immigration, or DPNI, and several other nationalist groups staged an unsanctioned protest at the crime scene, demanding that authorities “cleanse” Moscow of migrant workers. 
DPNI was the leading organizer in the 2006 Kondopoga protests that metastasized into full-scale riots. 
Police arrested Farkhod Tursunov, 31, a city maintenance worker from Uzbekistan, on Oct. 23 and have charged him with raping and murdering Beshnova, said Viktoria Tsyplenkova, a spokeswoman for the Moscow branch of the Investigative Committee. 
On Nov. 4, the national People’s Unity Day holiday, a Turkmen national was stabbed to death and another dark-skinned man assaulted in the area. It was unclear if the attacks were linked to the nationalist outrage over Beshnova’s murder, Tsyplenkova said. 
Police have stepped up patrols in the Mozhaisky district to head off any ethnic unrest, said Anatoly Laushkin, head of the Moscow city police’s western district precinct. 
Laushkin said he had given television interviews in order to persuade citizens not to give in to racial animosity. “I told them that criminality is international,” Laushkin said. “Both victims and attackers can be of any nationality.” 
The nationalist backlash following Beshnova’s murder has coincided with a recent upswing in anti-immigration sentiment, including from unexpected political corners. 
Earlier this month, the pro-Kremlin youth group Young Guard picketed the Federal Migration Service offices, calling for Russia’s borders to be closed to migrant laborers to provide more jobs for Russians during the global financial crisis. 
Young Guard is the youth wing of the United Russia party, which has a constitutional majority in the State Duma and is chaired by Prime Minister Vladimir Putin. 
The government has made no secret that it is in need of foreign labor. Anatoly Kuznetsov, deputy head of the Federal Migration Service, told a news conference earlier this month that migrant workers from other former Soviet republics are responsible for 6 percent to 8 percent of Russia’s gross domestic product. 
Furthermore, forecasts estimate that the country’s workforce will fall by 8 million over the next seven years and by up to 19 million by 2025, Russian demographers said in a UN-sponsored report released earlier this year. From 2010 to 2014, the workforce will decrease by 1.3 million per year, the report said. 
Moscow maintenance officials say there are simply not enough local workers willing to do the menial work for meager salaries. 
Gushchina, who manages a team of 65 street cleaners in the Mozhaisky district, said not one of her employees was from Moscow. “There are only Moldovans, Ukrainians and Asians,” she said. “It’s hard to imagine Muscovites working the whole day for 5,000 to 15,000 rubles” per month. 
Gushchina, who has worked in city maintenance for 20 years, said it is difficult to find local workers as diligent as the migrant laborers. 
“Muscovites who worked as street cleaners in the Soviet era showed up only in the morning, while the migrant laborers work a full day,” Gushchina said, pointing to the neat piles of leaves on a lawn freshly raked by her team. 
Gushchina’s male employees declined to be interviewed, citing fears for their safety. 
Following the Oct. 12 ultranationalist protest on Ulitsa Kubinka, Gushchina said she made her employees stay home from work for two days for their own protection. 
“After two days without maintenance workers, it took us about one week to clean up the streets,” she said.

TITLE: Prisoner in Yukos Case Moved
AUTHOR: By David Nowak
PUBLISHER: The Associated Press
TEXT: MOSCOW — A former lawyer for the Yukos oil company who has been serving a seven-year sentence on embezzlement charges has been moved to a Moscow region clinic to give birth, prison officials said Thursday.
Svetlana Bakhmina, 39, has been in custody about 370 miles (600 kilometers) east of Moscow since her December 2004 arrest and is due to have her third child within weeks.
Human rights groups and more than 86,000 Internet users have signed an online petition demanding that President Dmitry Medvedev pardon Bakhmina, who has twice been denied parole after becoming pregnant following a prison visit by her husband.
Advocates for Bakhmina say most pregnant women who have served more than half their term and did not commit violent crimes are typically granted parole and Bakhmina is a victim of selective justice.
Some critics believe she was punished for the actions of some of her bosses, who managed to flee the country as authorities probed Yukos in connection with the case against its founder, Mikhail Khodorkovsky.
Khodorkovsky, once Russia’s richest man, is in prison and has served more than half of an eight-year term after being convicted of embezzlement. Many view his arrest as Kremlin punishment for his political ambitions.
Bakhmina’s lawyer, Ruslan Golovkin, has been denied access to her since last month, and said Thursday he only knew that “she is in the Moscow region somewhere.”
“She has been moved to a clinic near Moscow with the same facilities,” said Alexander Zaitsev, a spokesman for Russia’s Federal Prisons Service. He refused to name the clinic or say when Bakhmina was moved.
Bakhmina was detained in connection with an asset-stripping investigation that focused on Yukos’ Tomskneft subsidiary. She originally pleaded innocent on the grounds that actions she took were at the behest of superiors.
Bakhmina has admitted her guilt, Golovkin said, and on Oct. 20 filed a request to be pardoned on the grounds of good behavior and because she had served more than half her sentence.
Bakhmina has two sons, aged 7 and 11. Golovkin said neither knows his mother is in prison.
“The television is turned off whenever there is a news bulletin about her,” Golovkin said. “They are under a lot of stress already without a mother.”

TITLE: EU Promises to Smooth Russia’s Path to WTO
AUTHOR: By Anna Malpas
PUBLISHER: Staff Writer
TEXT: MOSCOW — European Union officials called last week’s Nice summit between Russia and the European Union constructive and said talks would resume to draw up a “road map” to help Russia join the World Trade Organization. 
President Dmitry Medvedev met President Nicolas Sarkozy of France, which currently holds the EU presidency, and other EU officials for talks in the south of France on Friday. 
Talks between the two sides on a new partnership and cooperation agreement will resume in early December, probably on Dec. 2, Marc Franco, head of the EU delegation to Russia, said at a news conference Tuesday. 
“We decided to create a kind of road map listing the measures that need to be taken quickly before Russia joins the WTO,” Franco said. 
Georgia and Ukraine are unlikely to veto Russia’s ascension to the WTO, although theoretically the vote of only one member could block its entry, Franco said. 
“I don’t think it’s a real danger. In the history of the European Union, it has never happened,” Franco said. “I’m sure that if the United States and Europe and other countries sincerely support such a major commercial and trading nation as Russia joining the WTO, then neither Ukraine nor Georgia will be able to prevent the entry.” 
Medvedev “emphasized that joining the WTO is still a very important priority in Russian politics,” Franco said. 
European Commission officials will visit Russia in January and plan to have a meeting with Medvedev, he added. 
In Brussels, the EU’s trade chief said plans by Russia to increase import duties could harm its bid to join the WTO. “Such a move would be contrary to the spirit of the G20 declaration, and it would not help the WTO accession process, which has just gained momentum following the recent EU-Russia summit,” Peter Power, spokesman for EU Trade Commissioner Catherine Ashton, said on her behalf, Reuters reported.

TITLE: Overdue Salaries Leap 33% Amid Crisis
AUTHOR: By Maria Levina
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — Overdue wages soared 33 percent in October, reaching more than 4 billion rubles ($146 million), as the cash-strapped manufacturing, transportation, construction and agriculture sectors have begun delaying payments, the State Statistics Service said Wednesday. 
The data, compiled through Nov. 1, are among the first signs that the financial crisis may be creeping into real sectors of the economy, as companies are having trouble financing their day-to-day operations. 
The news comes a day after President Dmitry Medvedev said for the first time that the crisis — which has until recently caused casualties mainly in the financial sector — was spreading into the heart of the economy. 
“Salary delays are related primarily to the financial crisis, as the sectors dependent on bank financing are now facing a shortage of capital and it affects their ability to pay counterparties,” said Yekaterina Malofeyeva, chief economist at Renaissance Capital. 
Since September, the government has allocated billions of dollars in loans through state-owned banking giants Sberbank and VTB to revitalize the country’s finance sector. 
In response to a growing number of complaints that the money has not reached its intended targets, the state has undertaken a campaign to ensure that the allocated funds are being used to finance production rather than bolster banks’ balance sheets, going as far as appointing Central Bank “commissars” to oversee the loans. 
Although the total amount of overdue wages was less than 1 percent of all wages, data shows a 33 percent increase in overdue payments from Oct. 1, nearly all of it driven by firms’ lack of working capital. 
“Companies that have a long production cycle or sell products to the construction sector are especially sensitive. They are facing real issues with working capital and are therefore forced to delay salary expenses,” Malofeyeva said. 
Wage arrears in the construction sector, which have increased 240 percent from the month before, are likely caused by widespread halts in building projects because of a lack of financing, Malofeyeva said. 
The manufacturing sector saw the highest level of wage delays — over 1.5 billion rubles — which was caused in part by metals producers, who are facing payment delays from their clients, she said. 
On Nov. 10, Magnitogorsk Iron & Steel Works stopped deliveries to GAZ Group, the country’s second-biggest carmaker, after it delayed payments. 
Retailers have faced a similar problem, with large chains having problems meeting their obligations to producers. 
Razgulyai Group, an agro-industrial holding that produces grain, sugar, corn and other agriculture products, has seen its accounts receivable growing, while revenues are slumping, the firm’s spokesman Alexander Ushar said, adding that Razgulyai itself has not been forced to delay wages. 
“It is a problem now everywhere in the country — companies are negotiating extensions of payment contracts because counterparties cannot meet their obligations,” said Alexander Ushar. “While renegotiations are in process, payments are delayed.” 
Razgulyai announced Friday that it was cutting 2,200 of its 18,000 employees and reducing salaries of top and middle managers by 15 percent, with other employees seeing salary cuts of 5 percent to 10 percent.

TITLE: Investors Spooked By Trade Halts
AUTHOR: By Courtney Weaver
PUBLISHER: Staff Writer
TEXT: MOSCOW — Since early September, Russia’s MICEX exchange has experienced multiple one-day percentage drops in the double digits and lost almost 60 percent of its value. What MICEX chief financial officer Alexei Rybnikov said is really scaring investors, however, is the erratic halts to trading. 
“Trade has been halted 29 times between the start of crisis and Nov. 14,” Rybnikov said at Russia’s annual National Investment Forum on Tuesday. “Trade was halted another three times this Monday.” 
Rybnikov also used a graph to illustrate a substantial increase in the trading of Russian equities on the London Stock Exchange in recent weeks. 
“If you look at London, London has experienced a bit of growth in the quantity of shares,” he said. 
“The reason people chose London, I think, is clear to everyone,” he added. 
Since its historical peak last December, the ruble-denominated MICEX has lost 74 percent of its value — more than any other emerging market exchange. But it is the frequent halts that have both peeved traders and showcased the problems in infrastructure that have plagued the index all along. 
Rybnikov outlined the host of problems with a graphic aptly titled, “A New View on Old Deterrents,” listing issues ranging from the disappearance of liquidity to the poor development of the MICEX-controlled National Clearing Center and the lack of domestic investors. 
The combination has essentially left the Russian financial sector in shambles, Rybnikov said. 
“In short, everything has fallen: shares, bonds, volumes. Everything has suffered from the financial crisis,” he said. 
While Rybnikov and other forum participants talked about Moscow’s goal to become a global financial center, they acknowledged that the country’s infrastructure would present a problem in reaching that goal. 
The crisis is illuminating structural weaknesses that had been overshadowed by Russia’s economic growth, Chris Weafer, chief strategist at UralSib, said Wednesday. 
“We’ve had a massive growth of the building without paying enough attention to the foundations underground,” he said. “It’s now become extremely obvious during the crisis that many of the basic pieces of infrastructure are missing or have been inadequately built. And that’s not just obvious to Russia — it’s obvious to global investors.” 
Since the beginning of August, an estimated $50 billion of foreign capital has left the country. While margin calls have pushed investors out of emerging markets, it is the trading halts that leave traders especially uneasy. 
“What [the halting] does is just threaten to make people trade on other exchanges,” said one trader at a Moscow brokerage, who asked not to be named. “When you close the market and it’s not clear how long it’s going to be closed, it really does result in people getting stuck in unfair positions.” 
“The halting of the indexes makes trading much more complicated, unfortunately,” said Yevgeny Kogan, general director of Antanta Pioglobal. “Western investors try to invest money and sometimes sell shares at any price, which is really terrible for the market. It’s a really bad situation.”

TITLE: Inflation Estimated at 13%
PUBLISHER: Reuters
TEXT: MOSCOW — Russian consumer prices rose 0.2 percent in the week to Monday, at the same pace as in the preceding period, which took inflation for the year to date to 12 percent, the State Statistics Service said Wednesday.
The global financial crisis has prompted the government to switch focus from controlling inflation to supporting the economy and financial markets.
As a result, the Central Bank has raised its full-year inflation forecast to 13 percent from less than 11 percent, while analysts expect it to come in even higher, about 14 percent.

TITLE: $57 Bln Spent on Ruble in 2 Months
AUTHOR: By Ethan Wilensky-Lanford
PUBLISHER: Staff Writer
TEXT: MOSCOW — The government offered the State Duma a breakdown Wednesday of how it is coping with the financial crisis, a report that was welcomed by investors even though not much of the news was positive. 
Central Bank Chairman Sergei Ignatyev said the bank had spent $57.5 billion in the currency market to shore up the ruble in September and October. 
The bank also spent $14 billion as part of the government’s program to assist banks. The reserves fell another $30.1 billion because the ruble has followed the euro closer than the dollar but is pegged to a multicurrency basket. 
Finance Minister Alexei Kudrin told the Duma during the same session that he had supported the Central Bank’s easing of the ruble. 
“We paid for stability,” Kudrin told lawmakers, Reuters reported. 
“The Central Bank is carrying out a mild widening of the ruble corridor. This is normal, this will allow us to keep the exchange rate stable and to spend less reserves.” 
Kudrin also told the parliament that the government had already spent $3.28 billion of the National Welfare Fund to support domestic stock and bond prices. This represented 18 percent of the fund, he said. 
The state maintains two rainy-day funds: the National Welfare Fund, a sovereign oil fund for discretionary expenditures, and the Reserve Fund, established to safeguard the federal budget in the event of an energy price drop. 
The funds were created with tax revenues on windfall oil profits as world energy prices had soared in recent years. 
The purchases on the securities markets have been made through Vneshekonombank, also known as the Development Bank, which took a deposit of 170 billion rubles ($6.2 billion) from the National Welfare Fund to be spent on a national bailout two weeks ago, Reuters reported.

TITLE: The Kremlin Pretends the Heat Is Off
AUTHOR:  By Marc Schleifer and Aleksandr Shkolnikov
TEXT: Television shows in Russia and Ukraine are worlds apart when it comes to covering the financial crisis. Watching Russian television over the past month, it might be easy to miss that the country is mired in the same twin crises gripping the world — the ongoing credit crunch and the emerging downturn in the real economy. 
Instead, television news usually focuses on the financial woes in the United States and the U.S. responsibility for the global crisis. Stressing Russia’s emergence as the world’s new economic superpower is high on the agenda for the state-run media. For the average viewer just tuning in, the outlook might seem rosy in Russia, especially compared to other countries.
One can also frequently find reports of new credit being extended to troubled banks and Kremlin-friendly corporations, as well as segments on economic directives being issued down the political chain of command. Coverage of Russia’s collapsing stock exchanges — which have fallen much more than their counterparts in other countries — has been scant.
One would have to dig much deeper to find other worrisome stories, like when some Russian banks refused to give out cash to depositors wishing to make early withdrawals on their fixed-term savings accounts. These issues are not mentioned in the mainstream media, but they are on peoples’ lips. Moreover, there is hardly any debate about the structure of the planned bailout, which some are now calling the reversal of the loans-for-shares scheme of the mid-1990s.
It is interesting to compare this picture to the one in Ukraine. They could hardly be more different. On daily talk shows and live broadcasts from Ukraine’s parliament one can watch bickering politicians debate the conditions of the International Monetary Fund loan to Ukraine. And around Kiev, the rumor mill is grinding out stories of imminent hyrvnia devaluation. 
News reports do not shy away from discussing which firms are having trouble paying off their debts. And speculation is rife about which political forces benefit most from avoiding a solution to the crisis.
Russia is arguably better positioned than Ukraine to deal with the effects of a prolonged crisis. First, Moscow’s foreign currency reserves are much larger than Ukraine’s. Second, Russia’s inflation rate is much lower. Third, Ukraine is heavily dependent on Russia’s supply of gas, and if Moscow raises its prices, this will be an additional blow to Ukraine’s economy.
But the key element that differentiates Ukraine from Russia is the simple acknowledgement by the state and the media that the financial situation is a mess. Obfuscation, finger-pointing, blame-shifting and denial have been the Russian government’s standard responses to the first signs of the country’s crisis. Ukraine, however, seems to have learned a key lesson of an open society — that sweeping your problems under the carpet does not get them solved. There is a benefit in engaging in political and economic discussion and debate. Keeping such debates out in the open does not guarantee that the best solutions will be found and implemented, but the chances for such solutions are much higher.
It is difficult to predict what direction economic and financial recovery will take in the coming months and years. Yet, one thing is certain: Ukraine is not Russia. Access to information, press scrutiny and open debate on available policy options and the ramifications of bailout plans will speed Ukraine’s rebound. But in Russia, the absence of conflicting opinions and debate and selective media coverage will undermine that country’s path out of the crisis.
It has been said that if a frog is thrown into boiling water, it will jump out to save itself, while a frog in cold water will boil to death if the heat were slowly turned up. The theory isn’t particularly scientific, but it, nonetheless, provides a useful framework for observing Russia and Ukraine during these times. 
Like the frog in cold water, people have a tendency to avoid gradual changes. If the problems are ignored, they can escalate in severity. By extension, it may be easier for outside observers to notice important developments that seem insignificant to those on the inside who have grown accustomed to them. 
Ukraine is trying to jump out of the pot while the temperature hasn’t yet reached the boiling point. And it is doing this in the public view. But in Russia, the state continues to pretend that the heat is not even turned on. In a matter of months, however, Russia will not be able to escape the heat. At that point, the crisis will have become so severe that it could have catastrophic consequences for the country.

Marc Schleifer is program officer for Eurasia and Aleksandr Shkolnikov is senior program officer for global programs at the Center for International Private Enterprise in Washington.

TITLE: Doomed From the Start
AUTHOR: By Boris Kagarlitsky
TEXT: We can say three things with certainty regarding reforms to international financial structures: They are necessary, inevitable and doomed to fail.
The Group of 20 summit held in Washington was destined to fail from the start because the participants held such widely divergent interpretations of the problem. It was also doomed because nobody had a solution plan that was clear or concrete enough. 
The only thing that the G20 members could agree upon was the date of their next summit. Ideally, the participants would have become acquainted with each other’s positions as a first step toward unified action. But even that would not have been enough because, even if the participants had agreed on all of the issues and even if a coordinated solution had been developed, nothing useful would have come of it. 
The old financial system is falling apart before our eyes, and it is impossible to build a new one in its place. But no matter how hard the politicians and experts might try, a new and effective international financial model can be built only after the world’s most developed countries institute radical social and economic reforms. 
That new system would institutionalize on a global level the new principles guiding the lives of its member states. But none of today’s world leaders are proposing any fundamental changes to their societies. What’s more, politicians never address such questions at summits and conferences. 
At the end of World War II, the Bretton Woods agreement reflected the economic conditions in Europe and the United States at the time. The unbridled free market economy was subjected to new government regulation and the domination of the bourgeoisie was replaced by a historical compromise between labor and capital. It was no coincidence that the chief architect of the Bretton Woods agreement was the eminent British economist John Maynard Keynes, whose name is connected with the era of mixed economy and the welfare state.
By the end of the 1980s, however, neoliberalism had replaced Keynesianism as the dominant economic model in Western countries. This paradigm was also adopted at leading international institutions, such as the International Monetary Fund and the World Bank, whose origins date back to the Bretton Woods era. If their initial task had been to regulate markets, stop reckless financial speculation and promote socially responsible government policies, by the end of the 20th century the IMF and the World Bank had largely become libertarian tools for deregulation and privatization. 
At the same time, these institutions underwent a radical and seemingly irreversible transformation. Although, in a formal sense, they remain a part of the public sector and exist on funds from their founding member states, in reality they are becoming instruments of the global financial oligarchy. Most central banks have become independent of their respective governments. And they have shown more loyalty to the directors of private banks. 
Therefore, until each country reforms its own central bank, it will be pointless to even discuss the emergence of a new international financial architecture. Over the past 20 years, the public sector has been destroyed and privatized. If that situation does not undergo radical changes, trying to reform the global financial system is a useless endeavor.
It is not the world’s financial structures that needs to be reformed but society. However, if this were to ever happen, it would remove the need of having most of today’s international institutions. In addition, the leaders who gather at the G20 and other global summits would become irrelevant as well.

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

TITLE: DJ with a guitar
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Turn on the radio in Russia, and the songs of Yoav, the Israeli-born, South African-raised singer/guitarist with a unique playing style, are in heavy rotation. Yoav got his first taste of success in Denmark earlier this year when a radio DJ picked up his song “Club Thing” from his MySpace page.
“Someone discovered it, put it on the radio in Denmark, and it became a big hit,” said Yoav, speaking by phone from a New York studio.
“I think something similar happened in Russia, actually,” he recalled. “Someone at a radio station in Russia found my song and started playing it. Something like that happened in Germany, so I had a lot of luck. But it feels like it was meant to happen.”
Yoav was in New York to “do a little bit” of studio work and several shows together with the Ting Tings from the U.K.
The 28-year-old musician, whose full name is Yoav Sadan, was born in Israel into the family of a Romanian-born architect father and Israeli opera singer mother, but was taken to South Africa at a very early age.
“I moved when I was very young, so I don’t remember that much about Israel,” he said.
“I seem to have moved a lot in my life and I’m quite comfortable moving. Yeah, both countries have had a lot of troubles, but I think that it’s been quite a unique experience for me to grow up in all those different countries and it really helped me to have a really different point of view when I write songs.”
Yoav went to school in Cape Town during South Africa’s apartheid, cultural boycott era. It was here that he started listening to popular music —though he was banned from listening to anything but classical music by his parents, who wanted him to become a classical musician.
He said he began to play the piano when he was three or four and sang in choirs when he was 11, adding that he was good at both.
“When I was 10 or 11 years old, I discovered all this pop music, and it was very exciting for me because it wasn’t allowed,” he said. “So it was my little secret.
“I became obsessed with pop music and wanted to hear it and wanted to write it, because it wasn’t allowed.”
Speaking about it now, Yoav recalled that the very first pop music he laid his hands on was The Beatles.
“I think the first thing for me was The Beatles, when I was really young, and then, later on, pop music from the end of the ’80s, like Tears for Fears and O.M.D. and Depeche Mode, and then later on I discovered rock music, things like Police and U2, and then there was the grunge thing, and then it was hip-hop, then it was a lot of electronic music, dance music, techno, so it’s been a journey.”
Yoav left South Africa as soon as he graduated from high school or, according to his official biography, after his first year at university.
“My school years were all in Cape Town, and then I left home as soon as school was done, and then I was in London and then I went to America and Canada,” he said.
According to Yoav, he first went to New York due to pure chance, having had no luck in London.
“I had a very lucky occurrence, when a member of my family — my cousin — who lived in New York had my songs on a CD, and she was at a party sitting next to a record executive from Columbia Records in America, and he heard my songs,” he said.
“I was very young, 18, and I got called over to New York City, and that was where it all started. It was a long time ago, but that was where I started and learned how to play live, how to record and did all these things. So it was very lucky.”
Apart from complicated geography, the guitarist is famous for his playing style, which consists of producing dance beats on his acoustic instrument that are then accompanied by live sampling and sequencing.
“On the one hand, I use the guitar as a percussion instrument and drum on it, something really influenced by Indian and African music, where there’s a lot of percussion,” he explained. “But on the other hand, I would describe myself as a DJ on the guitar. I create beats on the guitar and sample the beats live and play over the top of them.”
He said he developed this playing style through a series of spontaneous discoveries.
“There were a few breakthroughs over the years,” he said.
“I mean there were a few spontaneous discoveries, the first was realizing I could write songs just using the guitar, using it as a beat instrument, and then I wanted to find a way of being able to perform it live, because I made this whole record just on the guitar, and all the beats and everything were done on the guitar, so I had to figure out a way of making it work as a live performance. So I had to learn to use samplers and learn to use all the stuff that allowed me to do that.”
For the photo session for his debut album, “Charmed And Strange,” which was released in January, Yoav wore a Bob Dylan T-shirt, and said he sees Dylan as a major influence.
“I think most writers from the past 40 years were influenced by Bob Dylan,” he said.
“I think we are going to see more and more people in pop music and rock music having something to say. You know, Bob Dylan is absolutely amazing. You can read books of his lyrics and it’s like reading poetry; yeah he was definitely an influence.”
As a songwriter, Yoav deals with a broad range of issues, and does not shy away from touching social and political subjects, as demonstrated on “Charmed and Strange.” 
“On this particular record there’s a lot about the world around me,” he said.
“A song like ‘Wake Up’ is certainly about living in America and feeling like you’re being watched a lot, and the people are under control and people would be controlled by the media, by advertizing. And a song like ‘Adore Adore’ is similar, it’s about celebrity and fame, but… 
“I guess I like to look under the surface of society and comment about what’s going on in the world — I think that’s what this record was about. And the next record that I am already starting to write… There are a lot of songs that are more personal, but there’s also a lot of looking at the world. I’m just looking beneath the surface of things.”
Yoav, who supported Tori Amos on her U.S. tour late last year, was reported to have had a song commissioned by Sinead O’Connor, but now doubts whether it will be used on her upcoming album, as previously expected.
“There was a song of mine that she wanted to use on her next record, but I don’t know if it’s actually going to happen,” he said.
“So I am quite pleased because I kind of want to keep this song for myself now, for my next record. But I actually haven’t heard anything about that since then.”
Although currently based in London, while frequently visiting New York and Canada, Yoav said he would live on the road for the time being.
“I’ve been in London for about two years, I have an apartment there, but I’m actually getting rid of my apartment in a month,” he said.
“I’m going to live out of a suitcase, because I have a lot of touring ahead of me and I don’t really need an apartment, then in the meantime I’m going to decide where I’m going to move to next, because I want a change.”
He described Canada as his second home.
“I spend a lot of time in Canada, part of my management is there, and whenever we do artwork and music videos and that kind of thing, we do it in Canada. So it comes like a second home. I guess I go there every two weeks, so I kind of live in a few different places.”
Yoav pays homage to his early years in Cape Town with a Pixies cover on his debut album.
“When I was growing up in South Africa and I was discovering pop music and rock music and alternative music, we only had one radio station that played pop music and there was no way that you would hear a band like The Cure, or the Pixies, or Radiohead or any of that, they wouldn’t play it on the radio,” he said.
“But there was one cool club where they played all this sort of music. I was too young to get in there, I had to sneak in, make friends with people to get me into this club, and it was the first place I heard all this music that inspired me to do what I’m doing. So ‘Where Is My Mind?’ by the Pixies is just one of those songs, it’s like the soundtrack to me growing up and discovering all this new music, so it’s a tribute to that time in my life.”
Although Yoav admitted having a band in his early days in New York, he said he was considering using some guest musicians on his next album, due out in April, while remaining largely a solo artist.
“I think it will end up being myself playing everything,” he said.
“If I need a cello on a song, or something like that, I’ll get someone. And I’m not going to be bound to just using the guitar. If I need to play the piano on a song, I’ll play the piano. If I need to use some computerized drums, I’ll do that. The live show will still be me solo, but the record is going to be much more sounds.”
<i>Yoav performs at A2 on Saturday. A2 is located at 12 Razyezzhaya Ulitsa, Metro: Vladimirskaya/Dostoevskaya. Tel.: 922-4510. Yoav’s official website is: www.yoavmusic.com</i>

TITLE: Style icon
AUTHOR: By Tobin Auber
PUBLISHER: Staff Writer
TEXT: Freshly renovated and with a new program of live music, one of the city’s old favorites on the dining scene looks set to weather the storm of the current economic crisis and the slow winter season. The Davydov certainly isn’t the cheapest option around, but by virtue of its great location, the rich history of both the restaurant and the hotel and the very high quality of the food itself, it continues to occupy a distinct and well-deserved niche. 
The renovation is understated. For the most part it has been restricted to the lighting, with the subdued but warm golden tones and dark woods having been kent. The large dining room has retained its spacious elegance and high ceilings, perfectly matching the exterior of the hotel building itself, an Art Nouveau classic dating back to 1911-1912 and designed by the godfather of Style Moderne architecture, Fyodor Lidval. 
We started with a truffle risotto (900 rubles, $32.50), a rich concoction that was packed with taste and could easily have served as a meal in its own right, and an excellent mushroom julienne (560 rubles, $20), accompanied by some cracking, freshly-baked bread. 
My dining partner followed this with standard Russian dining fare, Pozharsky cutlets (805 rubles, $29). Legend has it that they were invented when Tsar Nicholas I made an impromptu visit to a tavern and ordered veal cutlets. The innkeeper, a certain Pozharsky, having run out of veal, used chicken instead. The dish proved such a hit that the Tsar included it in the court menu. Davydov’s take on the local culinary staple was a very filling, breadcrumbed affair, crunchy on the outside, succulent and juicy on the inside. 
The venison loin with celeriac puree and cranberry sauce (1,450 rubles, $52.50) perhaps best sums up the restaurant’s approach – very high quality ingredients prepared very simply, allowing the natural flavors to shine.
In fairness, however, a word of warning about the prices would perhaps be appropriate. St. Petersburg’s five-star hotels are notorious for some of their wallet-crunching price-tags. The above-mentioned plate of venison for 1,450 rubles is hardly cheap, but in view of the size of the portion, the extraordinary quality of the meat and the excellent preparation, it’s excellent value for money. Similarly, the truffle risotto – a $32.50 starter – is hardly a giveaway, but bearing in mind the ingredients, it’s by no means a rip-off. The same can’t be said of a straightforward black coffee which will set you back ten dollars (no, that’s not a misprint). A freshly squeezed orange juice will cost you 420 rubles ($15), which actually seems very reasonable when you learn that a glass of orange juice from a carton will cost you 245 rubles ($9).
However, tis is not to single out the Astoria or the Davydov, as menus at the city’s other leading hotels contain similar, er, flights of fancy in their pricing. Few, however, can boast the elegance of Davydov’s interior, its relaxed atmosphere and that unrivalled view onto St. Isaac’s Square.

TITLE: Face of Russia
AUTHOR: By Daniel Beer
PUBLISHER: Special to The St. Petersburg Times
TEXT: Looking at Vladimir Putin in Platon Antoniou’s 2007 portrait is like looking down the barrel of a loaded gun. Enthroned at the heart of the new Taylor Wessing Photographic Prize exhibition at the National Portrait Gallery in London which runs until mid-February, 2009, the Prime Minister and former President of Russia looks more lethal in his composure than anything the Bond franchise could dream up. He is the very incarnation of pitiless authority. The portrait feeds off and fuels Western fears of a Russia resurgent since Boris Yeltsin shuffled off the political coil in 2000. Putin’s elevated position, slightly reclined head, impassive, dominating gaze and arms casually resting on the arms of the chair all breathe menace. His figure exudes a kind of physicality and self-confidence which paradoxically, given the static pose, smolders with the energy of a man known for martial arts expertise, hunting expeditions, taking out Siberian tigers, and bare-chested fly-fishing.
This version of Russian masculinity is a far cry from the tottering gerontocracy of the Brezhnev years, the economic and political meltdown presided over by the hapless Gorbachev and Yeltsin’s vodka-fuelled eccentricities. To Western eyes, the Putin who peers down as if at a guilty subordinate in Antoniou’s portrait is the tireless, inscrutable and ruthless Slav who staged the October Revolution, who built a modern industrial state in a few short five-year plans, who ruthlessly dispatched millions of enemies real and imagined and who vanquished the Wehrmacht in WWII. Putin’s poise and steely self-discipline seem the embodiment of a system of energy, order and control.
Its artistic merits apart, why do we find this particular image of the Russian Prime Minister out of the millions available so arresting? Could it be that Putin’s apparently unashamed projection of virility disconcerts us even as we struggle to find it humorous? Why are we obsessed with Putin the warrior or Putin the Mafia-boss?
Antoniou’s portrait is reassuring even as it is unsettling. It appears to explain Russia’s ruthless suppression of Chechen independence; it whispers the reasons for the alleged Kremlin-orchestrated cyber-punishment of Estonia for the relocation of a monument of a Red Army soldier; it seems to account for the crushing humiliation inflicted on Georgia’s President Mikheil Saakashvili this August. It offers an abbreviated and seductive explanation for all the Kremlin’s foreign policy engagements over the last decade. The portrait seems to reveal why Putin’s Russia (and it still appears to be very much Putin’s) has pursued its interests in the “near abroad” with a ruthless determination to instill in its neighbors a groveling respect based on fear.
Some of Putin’s own public statements, endlessly cited in the media loop, have tended to confirm that image even as they fill us with anxious fascination. His declaration in 1999 at the outset of the second Chechen War that Russian forces would “find and whack Chechen terrorists in the outhouse” may be crude, but we also find it thrilling in its casual disregard for the euphemisms of modern diplomacy. Putin’s recent justification for Russia’s overwhelming use of force in South Ossetia was characteristically pithy: “Georgia deserved a punch in the face”, otherwise Russia would have had to “hang its head.” Whilst these sentiments might not be so far from the actual calculations of British, German, French or American statesmen, few would care to utter them so confidently in public. Earthiness and directness in political discourse are not, however, proof that Russia is simply a bully in the geo-political playground, a bully to be feared, contained and evaded.
Russia is a vast and complex country experiencing a period of rapid change. Its involvement in the affairs of its neighbors is as much conditioned by insecurity and weakness as it is by dark and unscrupulous ambitions. To allow this portrait of Putin to become the iconic image of the Russian government would be to succumb to the delights and confirmations of caricature. It is not Vladimir Putin staring down at us in the portrait but rather the mirror of our own fears and prejudices.
Daniel Beer is a Lecturer in Modern European History at the Royal Holloway College, University of London.
For more information on the exhibition: http://www.npg.org.uk/photoprize/site/index.php

TITLE: England Confident After Victory in Berlin
AUTHOR: By Mitch Phillips
PUBLISHER: Reuters
TEXT: LONDON — A superb series of results, a massive lift in confidence and the development of fringe players into worthy front-line internationals is not a bad return for Fabio Capello’s first year as England manager.
When the Italian was appointed last December, England’s team was in the doldrums.
Their failure to qualify for Euro 2008 led to the departure of Steve McClaren and the public was widely disenchanted at the attitude and performance of the supposed “world class” players who seemed to give their all only for their clubs.
Now, with Wednesday’s 2-1 friendly victory in Germany capping a fizzing start to their 2010 World Cup qualifying campaign, it is all very different.
“When I started my job I said we have to recover our confidence,” Capello said. “The players understand this and we saw it during the game and before that during training.
“The players know what I want from them during games and what they have to do.”
It sounds like a simple requirement, but under McClaren’s hapless reign it was seemingly a task too far for the millionaires of the Premier League.
McClaren, promoted to the top job after assisting Sven-Goran Eriksson, was never able to convince the players or public that he knew best. But there is no doubt now about who is in charge.
Capello oozes a quiet self-confidence built on a career of achievement at the top level and it seems England’s players have responded.
After a steady but unspectacular start, Capello was starting to attract the usual British media vitriol after a disappointing friendly draw with the Czech Republic and then a laboured 2-0 win over Andorra in the World Cup.
But the stunning 4-1 win in Croatia, followed by further success against Kazakhstan and Belarus to put England in command of their group, quickly silenced the doubters.
Alongside those results and the headline-grabbling exploits of Theo Walcott and Wayne Rooney, Capello has quietly developed England’s “B team” and, as was shown to great effect in Berlin, there is now, for the first time in a long time, some sort of strength in depth.
Rooney, Walcott, Steven Gerrard, Frank Lampard, Joe Cole, Ashley Cole, Rio Ferdinand and Emile Heskey were all absent. But, while in the past that would immediately reduce England to also-rans, Capello used the situation to his advantage and reaped a handsome dividend.
Michael Carrick, Stewart Downing and Shaun Wright-Phillips, who have trod the international boards before without ever really looking the part, suddenly strode around as if they had star billing, while Gareth Barry also played with renewed confidence.
Up front Gabriel Agbonlahor grabbed his chance with a pacey debut to give a much-needed option in the case of Rooney’s regular injury absences.
By calling up the likes of Micah Richards and Michael Mancienne, the Chelsea defender currently on-loan to the Wolverhampton Wanderers and yet to play in the Premier League, and by again overlooking the rusty Michael Owen, Capello also underlined his stated commitment to form over reputation.
There will be no talk of winning tournaments under the Italian’s control but, slowly and surely, he is rebuilding England into a team that might just find a way to overcome its quarter-final phobia.

TITLE: Obama Lines Up Cabinet
PUBLISHER: The Associated Press
TEXT: WASHINGTON — U.S. President-elect Barack Obama promised the voters change, but he has started his Cabinet selection process by naming several Washington insiders to top posts.
Obama is enlisting former Senate leader Tom Daschle as his health secretary. Hillary Rodham Clinton seems more likely than ever to be his secretary of state. Clinton is deciding whether to take the post as America’s top diplomat, her associates said Wednesday.
Obama is ready to announce that his attorney general will be Eric Holder, the Justice Department’s No. 2 when Clinton’s husband was president. Rahm Emanuel, Obama’s chief of staff, is another veteran of the Clinton White House.
A few names that have bubbled up for Cabinet posts don’t have strong Clinton connections. Several news organizations reported Thursday that Arizona Gov. Janet Napolitano is Obama’s primary choice to be secretary of the Homeland Security Department. The New York Times, citing Democrats with knowledge of the process, said Napolitano is about to be offered the job. The Washington Post and The Politico Web site also reported that she is Obama’s choice.
Chicago businesswoman Penny Pritzker, who was national finance chairperson for Obama’s presidential campaign, is his leading choice for commerce secretary, the Times reported. The newspaper said Pritzker is in the final stages of vetting by Obama’s transition team.
Daschle’s appointment as head of the Health and Human Services Department — confirmed Wednesday but not yet announced — isn’t at the same level of Cabinet prestige as the top spots at the State and Justice departments. But the health post could be more important in an Obama administration than in previous administrations, making Daschle a key player in helping steer the president-elect’s promised health care reforms.
Daschle could push Obama for quick action on health care reform next year, if he follows his own advice.
Daschle said efforts during the Clinton administration, led by Hillary Clinton, took too long and went into too much detail, giving every interest group an opportunity to find something they didn’t like about the plan.
“The next president should act immediately to capitalize on the goodwill that greets any incoming administration. If that means attaching a health-care plan to the federal budget, so be it,” Daschle wrote in "Critical: What We Can Do About the Health-Care Crisis," a book he released this year, that: “This issue is too important to be stalled by Senate protocol.”
Daschle’s appointment was not formally announced but Democratic officials said the job was his barring an unforeseen problem as Obama’s team reviews his background. One area of review will include the lobbying connections of his wife, Linda Hall Daschle, who has worked mostly on behalf of airline-related companies over the years. The officials spoke on condition of anonymity because they weren’t authorized to discuss the matter publicly.
Republicans sniped at what they saw as an unwelcome trend. Alex Conant, spokesman for the Republican National Committee, said: “Barack Obama is filling his administration with longtime Washington insiders.”

TITLE: Sochi  Security Scrutinized
PUBLISHER: Reuters
TEXT: ATHENS — Ensuring security at the 2014 Winter Olympics in Sochi is up to Russian organizers, the International Olympic Committee (IOC) said on Thursday amid concerns from the Games hosts’ Georgian neighbors.
Earlier this week Georgia asked the IOC for the 2014 Games to be moved from Russia’s Sochi for security reasons following a brief war between the two countries.
Sochi, a popular Russian Black Sea resort, lies only about 50 kilometers from the Georgian border.
“Security is a top priority for the IOC and organizers at every Olympic Games,” IOC spokeswoman Emmanuelle Moreau said.
“Security arrangements fall under the responsibility of the local authorities of the host cities, which ensure that everything that is humanly possible is done to protect the athletes, the spectators and all people involved in the staging of the Games,” she said.
The IOC received a letter from the Georgian Olympic Committee days ago on the matter.
Russian troops poured into Georgia in August and pushed government troops back after they tried to retake the pro-Moscow rebel region of South Ossetia.
Russia and Georgia have accused each other of starting the five-day war in which Russian forces took control of large swathes of Georgian territory for some time.
Sochi, the first Russian city to be awarded the winter edition of the Olympics, was picked last year over Austria’s Salzburg and South Korea’s Pyeongchang.
With the majority of venues still needing to be built from scratch, there have also been concerns about the credit crunch’s impact on preparations.

TITLE: Ambassador Summoned Over Air Strikes
PUBLISHER: Reuters
TEXT: ISLAMABAD — Pakistan summoned U.S. ambassador Anne Patterson on Thursday to protest over missile strikes launched by pilotless drone aircraft against militant targets in Pakistan.
The protest came a day after a suspected U.S. missile strike on Pakistani soil killed five militants, possibly including an Arab al Qaeda operative.
There have been at least 20 strikes in the last three months, reflecting U.S. impatience over militants from Pakistan fueling the Taliban insurgency in Afghanistan and fears that al Qaeda fighters in northwest Pakistan could plan attacks in the West.
Pakistan says the attacks violate its sovereignty, undermine efforts to win public support for the fight against militancy and make it harder to justify the U.S. alliance.
Wednesday’s attack on Bannu district was unusual in that it took place deeper in Pakistani territory, in an area outside the semi-autonomous tribal lands bordering Afghanistan where most other attacks have been focused.
Foreign Secretary Salman Bashir lodged “a strong protest” over the “two missiles fired by U.S. drones on a residential compound in Bannu district,” a foreign ministry statement said.
Bashir “stressed that these attacks must be stopped.”
An embassy spokeswoman confirmed the ambassador had been summoned and said any message from the Pakistani government would be conveyed to Washington. She did not elaborate further.
Speaking in the National Assembly, Prime Minister Yousaf Raza Gilani called the missile attacks “intolerable” and voiced hope President-elect Barack Obama’s government would show more restraint.
“These kinds of acts are counter-productive ... It adds to our problems,” Gilani said, adding he is sure that when “Obama’s government is formed, these attacks will be controlled.”
A diplomatic storm blew up in September after a U.S. commando raid and there has been no incursion by ground troops since.
Addressing NATO’s military committee in Brussels on Wednesday, Army Chief General Ashfaq Kayani also urged a halt to the use of unmanned “combat aerial vehicles within Pakistani territory.”
Kayani met NATO Secretary-General Jaap de Hoop Scheffer and held meetings with Admiral Michael Mullen, U.S. chairman of the joint chiefs of staff, and a French defense chief.
Earlier this week, the Foreign Ministry denied Pakistan had a secret agreement with Washington to publicly protest the attacks while privately acquiescing.
Missile-armed drones are primarily used by U.S. forces in the region. The United States seldom confirms drone attacks. Pakistan does not have any combat drones.
The Arab killed in the attack in Bannu was identified by a Pakistani intelligence officer as Abdullah Azam al-Saudi. Bannu district in the North West Frontier Province lies at the gateway to North Waziristan, a hotbed of Taliban and al Qaeda support.
The officer, based in the neighboring Dera Ismail Khan district, described al-Saudi as a coordinator between al Qaeda and the Taliban in Pakistan.
The officer requested anonymity due to the sensitivity of the subject. There was no other corroboration of al-Saudi’s death.
Taliban fighters cordoned off the area around the destroyed house. But photographers took pictures of young boys holding pieces of the missile that  had destroyed it.
The Pakistani Taliban, in a statement issued after a meeting of commanders in North Waziristan, threatened revenge attacks outside the tribal lands if missile attacks continue.
While the row over missile strikes simmered, NATO’s spokesman in Kabul, Brigadier General Richard Blanchette, said coordination with Pakistan has been improving.
Pakistani forces are battling Islamist fighters in other parts of northwest Pakistan — notably Bajaur, a region at the opposite end of the tribal belt from Waziristan, and Swat Valley.
A spokesman for Pakistan’s paramilitary forces said on Thursday that 24 al Qaeda-linked militants, including 11 foreigners, had been killed as the military used artillery and jet fighters in support of ground troops.
The military says more than 1,500 militants have been killed in Bajaur since August while 73 soldiers have also died. However, independent casualty estimates are unavailable.
Western forces in Afghanistan have launched Operation Lionheart to put pressure on the border with Bajaur, to bottle up insurgents where they can be attacked, Blanchette said.

TITLE: India Takes 3-0 Lead Over England at Home
PUBLISHER: Reuters
TEXT: KANPUR, India — India claimed a 16-run win over England under the Duckworth-Lewis method in a weather-hit third one-dayer on Thursday, taking a 3-0 lead in the seven-match series.
India, chasing England’s 240 all out, were 198 for five after 40 overs when poor light forced the players off the field and abruptly ended what was developing into a keen finish.
The hosts were 16 runs ahead under the Duckworth-Lewis method for weather-interrupted games and were declared winners in hazy conditions.
Poor light had forced a 45-minute delay in the morning, reducing the game to 49 overs per side.
Opener Virender Sehwag top-scored with 68 to lead the chase against England, who put up a vastly improved display after losing the first two games by 158 runs and 54 runs respectively.
All rounder Andrew Flintoff, who scored 26, grabbed the key wickets of openers Gautam Gambhir (14), Sehwag and the in-form Yuvraj Singh (38), who hit back-to-back match-winning hundreds in the first two games.
However, skipper Mahendra Singh Dhoni (29 not out) and Yusuf Pathan (12) hung on to make sure India held wickets in hand, which kept them ahead when bad light intervened.
All rounder Ravi Bopara top-scored with 60 as makeshift opener and added 79 runs with Ian Bell (46) to lift a shaky England before they were all out with two balls left. Bopara struck eight fours until he was fourth out, stumped against Yuvraj’s occasional left-arm spin.
However, England’s batting reshuffle largely failed to work and off spinner Harbhajan Singh grabbed three wickets as slow bowlers once again kept a tight leash on the scoring.
The spinner removed skipper Kevin Pietersen (13) and out-of-form Paul Collingwood (1) from successive overs, returning three for 31.
He reached a career tally of 200 one-day wickets when he had Owais Shah (40) caught on the boundary.
“We put a lot of pressure on them, the aggression was there in the bowlers, they were fantastic today,” England skipper Kevin Pietersen told reporters.
“Unfortunately, playing in India, you need to score big runs. You got to get hundreds. Hopefully in the next four games it will happen.”
Flintoff and fellow paceman Stuart Broad bowled superbly in tandem to reduce India to 34 for two in their reply.
The all rounder had Gautam Gambhir (14) caught at long on by Broad, who forced Suresh Raina (1) to play onto the stumps.
Sehwag reached his 31st one-day fifty before Flintoff had him caught by a leaping Collingwood at point, finishing with 3-31.
Dhoni and Yuvraj added 52 runs but struggled to break free as off spinner Graeme Swann impressed in his first game of the series, returning one for 47.
However, England new ball bowler James Anderson conceded 11 runs in one crucial over before India scored freely in the final five-over period of field restrictions.
The fourth one-dayer will be played in Bangalore on Sunday.

TITLE: Thai Protester Killed in Bomb Attack
PUBLISHER: The Associated Press
TEXT: BANGKOK, Thailand — A grenade attack on protesters occupying the Thai prime minister’s office killed one person and wounded 29 on Thursday, raising fears of a return to a cycle of political violence after a respite for a royal funeral.
Immediately after the attack, a leader of the People’s Alliance for Democracy called for the protest group’s followers to stage a mass gathering on Sunday at their Government House rally site followed by a march to Parliament.
The last time the group marched on Parliament in their efforts to force a change of government, street battles with police left two dead and hundreds wounded. The Oct. 7 clashes were the country’s worst political violence in more than a decade.
Thursday’s pre-dawn attack was the first fatal one at the compound since it was seized by the alliance activists three months ago.
It came just hours after the end of a six-day mourning period for the elder sister of Thailand’s revered King Bhumibol Adulyadej. Political protests were suspended during the period, but the temporary peace and unity around near-universal respect for the monarchy failed to hold.
The protesters have vowed not to leave the grounds of Government House until the allies of former Prime Minister Thaksin Shinawatra, who they accuse of corruption, are removed from power.
Thaksin’s critics fear he plans to stage a comeback, despite being ousted by a September 2006 military coup.
Though he is in self-imposed exile to avoid jail on a conflict of interest conviction, he has recently been rallying his supporters from afar. His associates in Thailand have said he will give a speech by phone on Dec. 13 in which he may announce plans to become more active in politics again.
Bangkok police chief General Jongrak Jutanond said he did not know who was behind the blast.
Several other explosions had been reported at the compound in recent weeks, but the protest group had refused entrance to police wanting to investigate.
The protest alliance has profited politically from violence in the past, leading critics to suggest they seek out confrontations.
But some Thaksin supporters, who oppose the protesters, have also publicly expressed their intention to launch attacks.
Thursday’s explosion occurred shortly after 3 a.m. while a band performed on a lawn outside the prime minister’s office, said Amorn Amornratamanon, a protest leader. The grenade landed on a giant nearby tent that was sheltering dozens of people, he said.

TITLE: CAS Halves Punishment Meted Out To Atletico Following Crowd Trouble
PUBLISHER: Reuters
TEXT: MADRID — Atletico Madrid will have to play Wednesday’s Champions League match against PSV Eindhoven behind closed doors after sport’s court of arbitration (CAS) partially upheld a punishment handed down by UEFA for crowd trouble.
CAS ruled that the sanction should stand because of “serious security breaches” during a Champions League match against Olympique Marseille in Madrid on Oct. 1.
However, it overturned a suspended sanction of a second match behind closed doors and cut a UEFA fine of 150,000 euros ($187,900) by half because it said there was not enough evidence to support allegations that Atletico fans made racist chants.
In its original ruling, UEFA said failures in Atletico’s organisation had prompted confrontations between Marseille fans and police and ordered them to play their following two European fixtures at least 300km outside Madrid, with a home stadium ban for a third game if there was further trouble.
Atletico appealed and the sanction was cut to one match played behind closed doors, suspending the sentence of a second game played without fans. The fine was confirmed.
The club protested its innocence of all charges and took its case to CAS, which ruled after a hearing on Wednesday.
“Having examined the arguments and evidence submitted by the parties, the CAS Panel, in line with UEFA, concluded that Atletico Madrid committed several serious security breaches during the match against Olympique Marseille, which allowed the incidents to occur,” the court said in a statement.
CAS said the fine had been reduced by half “in light of the fact that the racist acts alleged by UEFA could not be established with certainty.”
Atletico noted in a statement on Thursday that CAS had backed its assertion “100 percent” that there had not been any racist chanting.

TITLE: Indian Warship Praised For Sinking Possible Pirate Ship
PUBLISHER: The Associated Press
TEXT: KUALA LUMPUR, Malaysia — An anti-piracy watchdog group on Thursday welcomed an Indian warship’s destruction of a suspected pirate vessel in waters off Somalia, where hijackings have become increasingly violent and the hijackers increasingly bold.
In a rare victory in the sea war against Somali pirates, the Indian navy’s INS Tabar sank a suspected pirate “mother ship” in the Gulf of Aden and chased two attack boats on Tuesday.
Noel Choong, who heads the International Maritime Bureau’s piracy reporting center in Kuala Lumpur said he was heartened by the Tabar’s success.
“It’s about time that such a forceful action is taken. It’s an action that everybody is waiting for,” Choong said.
“If all warships do this, it will be a strong deterrent. But if it’s just a rare case, then it won’t work” to control the unprecedented level of piracy in the Gulf of Aden, he said.
The pirates have stunned the maritime community with their brazen attacks, highlighted by last week’s hijacking of a Saudi-owned supertanker loaded with $100 million worth of crude oil.
A spokesman for Vela International Marine Ltd., the tanker’s owner, said the company “took the decision to maintain no comment” on issues concerning the tanker, including the ransom demanded for release of the vessel and the 25-member crew.
Spokesman Mihir Sapru said he could neither “deny nor confirm” that negotiations between the pirates and the oil tanker’s owners are under way.
The Indian navy said the Tabar, operating off the coast of Oman, stopped the ship because it appeared similar to a pirate vessel mentioned in numerous piracy bulletins. It said the pirates fired at the Tabar after the officers asked it to stop so they could search it.
Indian forces fired back, sparking fires and a series of onboard blasts — possibly caused by exploding ammunition — which destroyed the ship.
Since the beginning of the year,  95 ships have been attacked in the Gulf of Aden. Of those, 39 were successfully hijacked. Eight were hijacked in the last two weeks.
Besides India, other countries including the U.S. and NATO have warships patrolling the area. But attacks have continued off Somalia, which is caught up in an Islamic insurgency and has had no functioning government since 1991.