SOURCE: The St. Petersburg Times
DATE: Issue #1441 (3), Tuesday, January 20, 2009
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TITLE: Verdict Delayed In Memorial Court Case
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: After a draining three-hour session Monday, the Dzerzhinsky District Court failed to deliver a much-awaited verdict on a complaint from the St. Petersburg Memorial human rights group about a raid on their offices carried out as part of an investigation of a criminal case on Dec. 4 last year.
The group insists the raid was both illegitimate and unnecessarily crude.
In an interview with The St. Petersburg Times on Monday, human rights lawyer Ivan Pavlov who represents Memorial said most of the session was consumed by watching videos of the raid.
“It was reminiscent of a spy movie come to life,” Pavlov said. “Our video showed me hopelessly trying to get in and talk to my clients, banging the door and ringing the bell. The investigators’ video — which was taken without the knowledge of Memorial staff — showed the raid from within, in order to illustrate that the investigators never heard me. The truth is, everyone could hear the doorbell ringing, and the judges can either believe it or pretend they are deaf.”
A verdict is expected on Tuesday.
On Dec. 4, a group of armed and masked men who claimed to have been sent by the local Prosecutor’s office raided the local headquarters of Memorial, confiscating eleven hard drives from the group’s computers.
Several masked men armed with sticks stormed the office on 23 Ulitsa Rubinsteina at around 1 p.m. and began searching the premises. Staff were forced to remain seated and ordered not to make or receive telephone calls.
According to the Investigative Committee of the Russian General Prosecutor’s Office, the search was part of an investigation of a criminal case involving the publication of an article by Konstantin Chernyayev in Novy Peterburg newspaper in June 2007.
The prosecutors allege that the article incited social and ethnic hatred.
On Sunday, Anvar Azimov, Russia’s representative to the OSCE, claimed that Russian authorities had sufficient reason to believe that Memorial was linked to funding allegedly extremist content published in Novy Peterburg.
Investigator Mikhail Kalganov explained to the court during hearings on Friday that he had reason to suspect that editors at Novy Peterburg might have used Memorial’s office to hide sensitive documents related to the case.
Kalganov referred to the results of a surveillance operation that allegedly reported a man frequenting both Memorial’s office and the home of Alexei Andreyev, chief editor of Novy Peterburg. Kalganov also said the man was Andreyev.
Earlier this month the hearings were postponed twice, both times at Kalganov’s request. The investigator said he needed more time to prepare the case.
Memorial staff suggest the evidence collected during the surveillance operation cited by Kalganov was either concocted on request to intimidate the organization, or unreliable.
“Significantly, no recording exists of the alleged trip,” Pavlov said. “Rather, it was a written report, and we very much doubt its authenticity.”
The raid on Memorial’s office and the allegations about a possible extremist connection sent shockwaves through the international human rights community.
Ulrika Sundberg, an aide to Thomas Hammarberg, the Commissioner for Human Rights for the Council of Europe’s Parliamentary Assembly (PACE), attended the hearings on Friday.
She also requested a meeting with city prosecutor Sergei Zaitsev. He refused to meet with Sundberg citing a busy schedule.
Arseny Roginsky, chairman of the board of the Moscow-based international organization Memorial, said he was bewildered by the very thought that a non-governmental organization that works to research and expose crimes committed by the state against citizens could possibly be involved in producing or funding extremist literature.
“The extremist ideology contradicts the mission of Memorial,” Roginsky said. “The whole history of the organization convincingly testifies against such insulting and utterly absurd allegations. And besides, Memorial, is in such a very poor state financially that funding any outside projects would be impossible.”
Irina Flige, head of Memorial’s historical wing, which researches political repression in the Soviet era, thinks the raid was an attempt to intimidate the organization, and may pressage its closure.
“The Novy Peterburg link is so far-fetched none of us finds it in the slightest bit believable,” Flige said last month. “We do not know what the article was about, let alone have any personal involvement with it. This is just an excuse for the authorities to bare their teeth.”
Flige said the investigators seized the organization?s research material from the past 20 years.
“The files contain our research into the Red Terror [during the Russian Civil War in 1918-1922] and the history of Russia’s Gulag [labor camps],” she said. “Clearly, the authorities have had enough of us and are sending warning signals.”
TITLE: Russia, Ukraine Sign 10-Year Supply Deal
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russia and Ukraine have signed a deal that restores natural gas shipments to Ukraine and paves the way for an end to the nearly two-week cutoff of most Russian gas to a freezing Europe.
The agreement was signed Monday by the heads of the Russian state-run natural gas monopoly Gazprom and its Ukrainian counterpart Naftogaz. The signing was witnessed by Russian Prime Minister Vladimir Putin and Ukrainian counterpart Yulia Tymoshenko.
Putin says that Gazprom had received orders to resume shipments bound for Europe, which had been cut since Jan. 7 as Moscow and Kiev argued over price and allegations that Ukraine was stealing gas destined for Europe.
Officials say the restored gas shipments could take up to 36 hours to cross Ukraine and reach European customers.
Yulia Tymoshenko and Vladimir Putin reached a preliminary agreement over the weekend to restore gas supplies to Europe and Ukraine. Naftogaz said it would take up to one and a half days to pump gas to its western border once Russia restarts deliveries.
Russia stopped shipping gas to Ukraine for domestic use on Jan. 1 in a dispute over prices. It then halted all gas shipments to Europe via Ukraine on Jan. 7, alleging that Ukraine was siphoning off Europe-bound gas. Ukraine disputed this, claiming that Russia was not sending enough “technical gas” to push the rest further west.
The confrontation has deeply shaken Europeans’ trust in both Russia and Ukraine as reliable energy suppliers, as more than 15 nations have been forced to scramble for alternative sources of energy. The dispute was further complicated by geopolitical struggles over Ukraine’s future and over lucrative export routes for the energy riches of the former Soviet Union.
After weeks of frustration and dashed hopes, the European Union responded cautiously to the news.
“So far, they have been unable to do it and of course this raises serious concerns about their credibility as our partners,” European Commission President Jose Manuel Barroso said Monday prior to the signing.
“The proof of the pudding is in the eating, and the proof of the gas is in the flowing,” EU spokesman Johannes Laitenberger said.
Tymoshenko and Putin negotiated a preliminary deal for Ukraine to get gas with a 20 percent discount from this year’s average European price, which Russia says is $450 per 1,000 cubic meters. That would double the price Ukraine paid in 2008.
However, natural gas prices for Europe are expected to fall sharply later this year, due to the fall in oil prices. By midsummer, Ukraine could be paying as little as $150 for 1,000 cubic meters, said Ronald Smith, a strategist at Moscow’s Alfa Bank.
Ukrainian Parliament Speaker Volodymyr Lytvyn said Monday, citing Naftogaz and Russian officials, that the average price Ukraine will pay this year will be around $240 to $250. He did not elaborate.
Russia won a key principle, however, that Ukraine must pay more for its energy supplies. Russia also won’t have to pay higher transit prices to Ukraine to use its pipelines.
Putin said in 2010, Ukraine will have to pay full price for Russian gas, and Russia will pay market prices for transit.
In the long term, it is not clear how Ukraine will pay for the huge amount of Russian gas needed to run its outdated factories and heating systems.
Opposition leader Viktor Yanukovych said any gas price higher than $250 would be mean a “collapse” of the economy, which is already coping with a collapse of the national currency, a drastic fall in exports and a shaken banking sector.
TITLE: Novice Painter Putin Fetches $1.1 Million for First Work
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: A painting by Russian Prime Minister Vladimir Putin was sold for 37 million rubles ($1.1 million) at a charity auction in St. Petersburg on Saturday.
Natalya Kurnikova, owner of Moscow’s Our Artists art gallery, who bought the picture, said she was determined to buy it because “it’s a unique picture.”
“This picture shows an interesting side of a prominent personality. Maybe it will be the first and the last picture of its kind,” Kurnikova said.
The picture shows a crudely-rendered window with Putin’s signature above it and the word “Uzor” (“Pattern”) below it.
St. Petersburg native Putin made his artistic debut for an auction of paintings by 29 celebrities including St. Petersburg opera diva Anna Netrebko, city governor Valentina Matviyenko, ballerina Ulyana Lopatkina, rock singer Sergei Shnurov and others.
The auction, held at the city’s Grand Hotel Europe, was held to raise money for the local Mary Magdalene children’s hospital, the restoration of the St. Catherine church in Tsarskoye Selo, and for a cancer unit in the city.
More than $2 million was raised by the sale, which will be divided equally between the three causes.
The starting price for all the pictures was 20,000 rubles ($600). All the works were sold for amounts that far exceeded this figure.
After Putin, the artists whose paintings sold for the most money were Matviyenko, Netrebko and speaker of St. Petersburg Legislative Assembly Vadim Tyulpanov.
Matviyenko’s picture “Metel” (“Blizzard”) was sold for 11.5 million rubles ($348,000). Maria Yevnevich, daughter of Alexander Yevnevich — chairman of the board of the Maxidom home furnishings chain store — bought it “at the request of her father.”
“We bought it because of the charitable aim of the project, and because of who painted it,” Yevnevich said.
Maxidom already owns Matviyenko’s picture, “Hedgehog under the Pine Tree,” which was sold at a similar auction two years ago.
Lyubov Yefimova, a private bidder who bought Netrebko’s picture of 19th-century Ukrainian author Nikolai Gogol for 1.1 million rubles ($33,000), said she did so “to support artistic people who bring fame to St. Petersburg around the world.”
A picture by Mariinsky ballet prima Diana Vishnyova was sold for 800,000 rubles ($24,000).
All of the paintings — one for each letter of the Russian alphabet — were based on “The Night Before Christmas,” a story written by Gogol.
The Gogol story was chosen to mark the 200th anniversary of the author’s birth. All the works are painted on overcoat cloth in another reference to Gogol’s short story “The Overcoat” about a bureaucrat and the cat fur-lined overcoat he buys.
The price fetched for Putin’s picture makes him one of the highest-valued Russian artists of all time.
Compositionally similar, “Uzor” sold for more than Kazemir Malevich’s famed “Black Square” which was sold for $1 million in 2002 to Russian businessman Vladimir Potanin.
TITLE: Wave of Layoffs Gathers Pace in City
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Pessimistic experts predict that Russians will remember 2009 as a year of massive layoffs and soaring unemployment. The Health and Social Development Ministry has forecast that the number of unemployed people in Russia will top 2.2 million this year.
Yelena Brusilovskaya, a St. Petersburg economist, said that the gloomy economic outlook has affected about 25 of her acquaintances.
“Some of them have had their salaries cut, others are not getting paid, and others are being forced to leave their jobs. And they work in different fields — finance, car sales and services, and sales,” Brusilovskaya said.
City Hall statistics show that about 11,000 city residents have been fired since the beginning of the economic crisis in October and November. However, independent experts say that this figure is in reality several times larger, Fontanka.ru reported.
In Moscow, the number of unemployed people doubled during the New Year vacation, information agency RBC reported.
In St. Petersburg the first victims of unemployment were property developers who shut down a number of projects because of the financial crisis.
Construction company St. Petersburg LEK fired as many as 400 people in November, Fontanka.ru said. Stroimontazh followed by laying off about half of its office employees. Commercial real estate developer UKTheorema has halved its workforce.
Banks are also downsizing. Renaissance Group has announced that it has fired six percent of its employees, while Uralsib Bank also confirmed extra layoffs and plans to reduce staff by 20 percent. VTB Capital and Troika Dialog have reportedly stopped hiring, while Alfa Bank has reducing hiring targets by 70 percent, Fontanka.ru reported.
Producers of construction materials such as KNAUF are laying off workers, and Ilim Timber Industry has let go 20 percent of its employees.
Media outlets have begun to suffer from lack of advertising.
In December, the regional bureau of NTV avoided layoffs in order to save its creative team by cutting the number of its news shows to two: at 6:30 pm and 10:40 pm.
Leningrad Oblast media outlets, printers and publishers will receive bailouts from the regional government, Interfax reported.
Dmitry, a computer designer who didn’t want to give his last name, said the publishing house he works for fired him after New Year.
“In early November about one third of my colleagues were fired, too. Some others were sent on unpaid vacation. I’m a calm man but this is stressful, especially because I’ve got a mortgage,” Dmitry said.
Dmitry said his company also asked him to quit of his “own free will” (to avoid the firm having to make a redundancy payout) at the beginning of November, but he demanded a more honest arrangement.
Internet sites that place vacancies are booming. Before the crisis vacancies attracted between 10-15 resumes, but today this figure is between 20-50 resumes. Recruiting agencies also say the number of vacancies is decreasing.
Roman Mogilevsky, head of the city’s Social Information Agency, said that layoffs are most likely in the industrial, construction and transport sectors, while state institutions will see the least number of layoffs.
TITLE: Human Rights Lawyer Murdered in Moscow
AUTHOR: By Mansur Mirovalev
PUBLISHER: The Associated Press
TEXT: MOSCOW — A human-rights lawyer who unsuccessfully fought the early release of a Russian colonel convicted of murdering a Chechen woman was shot dead on a Moscow street Monday, law enforcement authorities said.
A journalist, Anastasia Baburova, was also killed in the attack, according to the deputy editor of a Moscow newspaper.
The daylight slaying of Stanislav Markelov sparked anger and grief among Russia’s beleaguered rights activists and Chechens already upset by the release last week of Col. Yuri Budanov.
“This is a horrible, frightening crime,” said Tatyana Lokshina of Human Rights Watch. She compared it to the 2006 slaying of investigative journalist Anna Politkovskaya — a client of Markelov’s who also fought rights abuses in Chechnya and around Russia.
Markelov, 34, was gunned down in central Moscow near a building where he had just held a news conference, about a kilometer (a half-mile) from the Kremlin, said Viktoria Tsyplenkova, a spokeswoman for the Investigative Committee of the Moscow prosecutor’s office.
Markelov had told reporters he was considering file an international court appeal against the early release of Budanov, who was convicted in 2003 and sentenced to 10 years — including time served — for strangling 18-year-old Heda Kungayeva in 2000. He admitted to killing her, saying he believed she was a Chechen insurgent sniper. Markelov represented her family.
A deputy editor of the Novaya Gazeta newspaper, Andrei Lipsky, said freelancer Anastasia Baburova, who had written for the paper, was shot when she tried to intervene after Markelov was hit. She was taken to a hospital where she later died from her wounds.
Budanov was freed last week with more than a year left on his murder sentence. His case was closely watched as a test of the authorities’ determination to punish rights abuses in Chechnya.
The release drew criticism from rights activists and lawyers, who pointed out that inmates convicted of nonviolent crimes but considered Kremlin foes — such as former oil tycoon Mikhail Khodorkovsky — have been refused early release.
Markelov also had represented activists who have battled abuses by Russia’s military, and a Chechen woman who was a victim in a 2002 hostage-taking attack on a Moscow theater.
“He was always on the front line,” said Alexander Cherkasov of the human rights organization Memorial.
Cherkasov said Markelov was instrumental in another case involving alleged atrocities by the Russian military in Chechnya — the 2005 conviction of a police officer, Sergei Lapin, who was sentenced to 11 years in prison for the torture and “disappearance” of a young Chechen man.
Markelov spent months trying to persuade authorities to prosecute Lapin for allegedly threatening Politkovskaya’s life. On April 16, 2004, Markelov was riding home on the Moscow subway when five young men accosted him and beat him unconscious, he told a journalist.
He said one of his attackers shouted “You asked for this!” and “No more speeches for you, then!”
When he regain consciousness, his cell phone and papers relating to the Politkovskaya case were gone, though his wallet and about $50 worth of Russian rubles were not touched. When he tried to report the attack, he said, police accused him of faking his injuries.
A Chechen parliament deputy, Isa Khadzhimuratov, said he believes Markelov’s killing was likely connected to the Budanov case.
“For victims of human rights abuses in Chechnya he was a hero,” Lokshina said.
TITLE: Vox Populi
TEXT: Sergei Lipov, 26, administrator:
I noticed the obvious tendency for people losing jobs at the end of last year. It was mainly among my friends working at construction companies. In that field people are either getting sent on unpaid vacation or just getting fired. Those who lost their jobs are now looking for any other jobs, even if they are not in their professional area.
Yelena Brusilovskaya, 33, economist:
Unemployment has affected most of my acquaintances to a certain degree. In general it’s about 25 people. Some of my acquaintances had their salaries cut, others are not getting paid, and others are being forced to leave their jobs. And they work in different fields – finance, car sales and services, sales.
In addition they can’t find new jobs yet because the conditions they are getting offered are also unprofitable. It’s happening because employers try to solve the problem not by using international anti-crisis measures such as decreasing prices and increasing turnover, but by doing the opposite. So, sales people suffer from that.
Sergei Dunayev, 51, construction businessman:
In construction companies with which I work about 30-40 percent of people have been fired. In some companies 50 percent of employees have been fired. In my firm we also had to layoff some people.
I think, summer will be the worst point for the construction business because now there is still work to complete in that field but there are no new construction sites currently and there’ll be very little work in that field by summer.
Olga Teterina, 30, teacher, looking for a job:
I just came back from my home city of Ioshkar-Ola in Central Russia, and I noticed there that people have begun to lose their jobs. By now it’s by about 25 percent at industrial enterprises. It all began with firing pensioners. For instance, my mother was made redundant. And young specialists, who have worked for a year or two, and don’t have that much work experience yet, were also the first victims of such redundancies.
Vadim Ivantsov, 37, restoration worker:
About five of my acquaintances have recently lost their jobs. Most of them worked in the construction business.
TITLE: Local Transport Fares Up Leading to 'Hare' Protests
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: St. Petersburg anarchists and left-wing activists protested against rising transport fares by stenciling logos, placing leaflets and throwing coins near the entrance to the Transport Committee at 83 Moskovsky Prospekt on Sunday.
Ironically entitled “Hares in Support of Starving Bureaucrats,” the protest’s name referred to the slang use of the word “hare” (zayats in Russian) to describe someone who uses public transport without paying by fare-dodging.
Around 40 protesters, some wearing hare masks, went to the Transport Committee’s offices on Sunday afternoon, formed a line and took it in turns to throw small change that they had brought with them at the doorstep, while the others stenciled anarchist hare skull logos on the wall and put up leaflets near the entrance.
City Hall has raised the metro fare from 17 to 20 rubles (61 U.S. cents) and above-ground transport (buses, trolleybuses and trams) from 16 to 18 rubles (55 U.S. cents) per ride. Privately owned marshrutka minibuses followed by raising their fares as well. The metro fare, which was 14 rubles in January 2008, has been raised twice during the past year.
“The fares have risen,” the leaflet distributed at Sunday’s demonstration read. “That’s why passengers are running out of money and growing long ears. It’s absurd in the face of falling energy prices. Public transport is a means of forcing money from the population today. Transport should be affordable. Don’t pay for it.”
Justifying rising fares, St. Petersburg Governor Valentina Matviyenko said that transport enterprises would need the money to raise salaries and renew vehicles.
“The transportation sector does not have any income other than from fares and the [city] budget,” she was quoted by Fontanka news website as saying in December.
On Sunday, the protesters’ materials also pointed out massive financial violations by the Transport Committee uncovered during a check by St. Petersburg’s Audit Chamber in June and July.
The audit, which was published on Dec. 19, showed, for instance, that 283,900,000 rubles ($8,715,353) of budget funds that the committee did not spend in 2007 had not been returned to the St. Petersburg budget. The committee also failed to produce documentation validating a 317,144,800-ruble ($9,735,924) subsidy for infrastructure repairs and preparations for celebrating the 100th anniversary of the city’s tram service.
“Open the door! We've brought money for you — a lot,” said an activist, speaking to the committee’s police guard via an intercom while standing on the doorstep which was now covered in 5- and 10-kopeck coins. The rally lasted less than 10 minutes.
“You raised fares, so you must be in need of it,” the activist continued.
However, the guard only peeped out when she was sure that the event had ended.
The police, who have stopped any public protests that were not sanctioned by City Hall by detaining activists during the past few years, were unaware of the rally and did not show up.
In late December, the same group conducted a protest in the metro, when around 40 activists jumped over the ticket gates at Sportivnaya metro and traveled underground for 90 minutes singing “The Song About Hares” from the popular Soviet comedy film “The Diamond Arm,” speaking to passengers and distributing leaflets.
Other political and social groups and parties have also protested against the rising fares. The Yabloko Democratic Party sent an activist dressed as Santa Claus to City Hall and the Legislative Assembly to beg bureaucrats and deputies for 3 rubles (the difference between the old and new fare) “for the metro” in late December. Yabloko is also collecting signatures against the fare hike.
The increase in transport costs was also one of the themes of car-owners’ protests against the increase in used car import tariffs earlier this month.
TITLE: Delivery of Lost Bags Banned
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Did your bag go missing en route to Russsia? Don’t expect the airline to deliver it to your doorstep.
Passengers are being told that they have to make the trip back to the airport to claim their baggage after authorities abruptly decided to start enforcing a five-year-old regulation that requires passengers to escort their own bags through customs.
The change is already creating headaches for people traveling to Russia, and an air industry expert could not recall another European country that requires passengers to pick up their own bags.
Travelers with missing luggage have typically signed waivers allowing airlines to take the bags through Russian customs once they are found and then deliver them to the owners.
These waivers, however, do not give the airlines the legal right to carry the luggage through customs, said Alexei Fomin, a customs officer at Domodedovo Airport in Moscow.
“Before, it was just all being done illegally,” Fomin told The St. Petersburg Times in an interview.
The authorities are now enforcing a 2003 government regulation that says passengers must clear lost luggage through customs themselves unless they give power of attorney to another person or legal entity, Federal Customs Service spokeswoman Natalya Semikina said.
Airlines that have been delivering lost baggage without power of attorney have been violating the law, Semikina said.
Neither customs officials nor the airlines interviewed for this report could say exactly when the recent enforcement of the law began, offering estimates ranging from late November to last Wednesday.
The airlines, however, insisted they were not informed of the original 2003 law and placed the blame squarely on the authorities for lack of enforcement.
Delta Air Lines had previously asked passengers to compose a handwritten note giving permission to the airline to clear the lost bags, which were then delivered at its expense, said Leonid Tarasov, head of Delta’s operations in Russian and the CIS.
With the rules now being enforced, however, airlines will be unable to offer such a service because there are no notaries present in the customs control area who could sign off on power of attorney rights, Tarasov said.
“They understand that there is no notary there,” Tarasov said. “That’s how Russian laws work: It’s easier to ban something than to solve a problem.”
If customs officials have not been enforcing the law for several years, “it’s not the fault of the airlines,” said Aage Duenhaupt, Lufthansa’s head of corporate communications in Europe. “We always abide by the law.”
Lufthansa will compensate passengers for taxi expenses to travel to the airport from the Moscow area to collect lost luggage, Duenhaupt said by telephone from London.
Swiss International Air Lines will do the same for its passengers, said spokeswoman Yulia Fyodorova.
British Airways will “apologize to our customers and pay compensation for their unplanned travel” to the airport, said spokeswoman Victoria Mezhenina.
Delta, however, will not be able to compensate passengers for trips due to the cumbersome tax paperwork that would be involved, Tarasov said.
Not all airlines were aware of the ban on delivering lost baggage. Aeroflot spokeswoman Irina Dannenberg said the airline had been delivering lost luggage up until the New Year and that she was unaware of any changes. She said she could not say whether Aeroflot might compensate passengers who have to retrieve their lost bags.
The changes are catching passengers by surprise. Simone, a German citizen who asked that only her first name be used, said she learned about the new rule from a customs official after standing in a long line at the lost luggage desk at Domodedovo Airport on Jan. 12.
Simone said she spent three hours on the telephone with Lufthansa the next day trying to establish her suitcase’s whereabouts and another four hours the following day driving to Domodedovo and back.
“With six years expat experience in Russia … I am able to deal with such situations, but there were many foreigners losing their nerves,” she said by e-mail Friday.
There appear to be ways to skirt the new rule, though not necessarily legally.
A Moscow-based businessman said in an interview Friday that one of his employees flew to Moscow from abroad in mid-December and caught a connecting flight to Siberia. The airline lost the employee’s luggage, and despite the fact that he was already in Siberia, customs officials demanded that he return to Moscow to claim the baggage, said the businessman, who spoke on condition of anonymity.
“Needless to say, the problem was only solved by the exchange of money,” he said.
Ezekiel Pfeifer and Carl Schreck contributed to this report.
TITLE: 15 Injured, 80 Detained in Lithuanian Street Clashes
AUTHOR: By Gary Peach and Liudas Dapkus
PUBLISHER: The Associated Press
TEXT: VILNIUS, Lithuania — Violent political protests sweeping parts of formerly Communist Europe have spread to Lithuania, where police fired rubber bullets and tear gas at a rock-throwing mob attacking the parliament.
Fifteen people were injured and more than 80 detained Friday in several hours of street fighting between angry protesters and helmeted riot police.
The violence followed similar riots earlier in the week in Latvia and Bulgaria amid a wave of discontent over economic woes, difficult reforms and government corruption. In all three countries, peaceful anti-government rallies ended in vandalism and brawls with police.
“There are forces that are interested in destabilization and chaos in Lithuania, and they are using the public’s dismay over painful reforms to achieve their hostile plans,” Prime Minister Andrius Kubilius said in Vilnius.
His center-right coalition, in power for less than two months, has been criticized for tax increases that the government said were needed to shore up state finances. The Finance Ministry announced Friday that it intended to borrow 1 billion euros ($1.3 billion) from the European Investment Bank to plug a yawning budget gap. The country’s economy is expected to enter a recession this year.
“We are here today because this government is mocking us,” said Liucija Mukiene, a 63-year-old protester in Vilnius. “They are taking away our last money and providing nothing. I am fed up with the lies, corruption and those grinning, fat faces behind the windows of the parliament.”
Some 7,000 protesters had gathered outside the parliament on Friday morning to demonstrate against the government’s reforms. The violence started when police pushed away protesters who were demanding to see the parliamentary speaker. The angry mob hurled rocks, eggs and snowballs at officers and the parliament building, shattering about a dozen windows. Police responded by firing tear gas and rubber bullets at the angry mob.
The Interior Ministry said 15 people were injured, including four police officers. One protester lost a finger to a rubber bullet, police said.
On Tuesday, more than 100 people were detained and some 40 injured in Latvia, another former Soviet republic, when anti-government protesters clashed with police. Dozens were injured in Bulgarian clashes Wednesday.
Analysts warned the violence could spread as the economic crisis deepens, especially in former communist countries that had seen spectacular growth in recent years.
“It’s quite dramatic when you’ve had [gross domestic product] growth of 10 percent and fall to minus 5 percent, like Latvia,” said Thorbjorn Becker, director of the Stockholm Institute of Transition Economics, or SITE. “As people become unemployed and watch their income fall this year, you will likely see regular incidents of this kind.”
Latvia has the worst-performing economy in the European Union, and unemployment soared from 6 percent to 7 percent in December.
Many Bulgarians blame their Socialist-led government for the country’s woes, which have been greatly exacerbated by the crisis over Russian natural gas.
In both countries, demands are growing for early parliamentary elections. The senior ruling coalition party in Latvia heeded the call on Friday, calling for a new vote as soon as possible.
Silver Meikar, an Estonian lawmaker, said ill-conceived cuts in social expenditures could trigger protests in his country, too. “If the government decides to, say, cut pensions or decrease teachers’ salaries, we’ll very likely to see demonstrations,” he said.
He said violence was less likely in Estonia because there’s a broader understanding that economic reforms are needed.
Political experts said many former communist countries share a similar political culture. “The political elite does not know how to establish a dialogue with society,” said Raimundas Lopata, director of the International Relations and Political Science Institute in Vilnius.
TITLE: U.S. Intends to Review Plans for Missile Shield
AUTHOR: By Andrew Gray
PUBLISHER: Reuters
TEXT: WASHINGTON — President-elect Barack Obama’s administration will review plans to deploy elements of a U.S. missile shield in Poland and the Czech Republic, Obama’s nominee for a top Pentagon post said.
The plan to base 10 interceptor missiles in Poland and a radar station in the Czech Republic has strained relations between Washington and Moscow, which says the system is a threat to Russian security despite U.S. assurances to the contrary.
U.S. officials say such a small number of missiles could easily be overwhelmed by Russia’s large arsenal and that the system is aimed at protecting the United States and its allies from “rogue states,” particularly Iran.
Michele Flournoy, Obama’s nominee to become undersecretary for policy at the Pentagon, said the plans should be reviewed as part of a regular broad look at policy, known as the quadrennial defense review, or QDR, due to take place this year.
Flournoy was questioned on the missile defense plans for Europe at a hearing of the U.S. Senate Armed Services Committee to consider her nomination late last week.
Committee Chairman Senator Carl Levin asked Flournoy if she believed it would be important to review the plan “in the broader security context of Europe, including our relations with Russia” and other issues.
“Yes, I do, sir,” Flournoy replied. “I think that’s an important candidate issue for the upcoming QDR.”
She did not elaborate, but in a written response to a question from the committee Flournoy said she believed it would be in the United States’ interest if Washington and Moscow could agree to cooperate on missile defense.
“The final contours of such an approach would require close consultations between the administration and Congress,” she said.
The administration of U.S. President George W. Bush offered Russia cooperation on missile defense, but Moscow rejected the offer as insufficient.
U.S. officials say construction at the sites in Poland and the Czech Republic could begin this year and the system could become operational between 2011 and 2013.
Obama has said he supports missile defense in general but that it should be developed pragmatically and cost-effectively and with assurances that the technology works.
Defense Secretary Robert Gates, who will stay in office under Obama, also backs missile defense.
TITLE: City Sees Record Amount of New Housing in 2008
AUTHOR: By Nadezhda Zaitseva and Natalya Chumarova
PUBLISHER: Vedomosti
TEXT: Last year could go down in history as the most successful year for St. Petersburg construction industry. Local developers completed a record 3.2 million square meters of housing in the city in 2008, the construction committee’s press service announced. That is 500,000 square meters more than City Hall planned for 2008 and 600,000 square meters more than in 2007. The trend is not expected to last, however.
New buildings accounted for 2.9 million square meters, 56,456 square meters were reconstructed, and a further 202,336 square meters were built by individuals, according to the construction committee’s report.
The committee itself outperformed all the commercial developers, creating 372,000 square meters. LenspetsSMU built more than 300,000 square meters of housing, according to one of the company’s top managers, though exact results for the company were not available. Stroimontazh completed seven projects with a total area of 286,000 square meters in the last year (the company created the sixth-largest volume of housing in 2007). LEK fell from first place to third, with a total area of 280,000 square meters.
Vozrozhdenie St. Petersburg construction company and Gatchina building complex (GDSK), which are both part of LSR Group, created 170,000 square meters of accommodation according to preliminary data, said Yulia Sokolova, director of corporate communications at LSR. Last year, according to data from the construction committee, GDSK created 34,861 square meters of housing.
Almost 50 percent of the housing created last year was completed in the last month of the year. According to data from Petrostat, from January to November, about 1.8 million square meters were built. It is entirely possible that 1.4 million square meters were completed in December, since during the year the deadlines for many projects had been postponed, said Sergei Sebelev, a real estate expert. Developers always try to complete as many projects as possible before the end of the year, since the annual figure influences the rating of the company and its relationship with potential creditors, so December is the most intensive month, he added.
Other experts cast doubt on the figures. “According to our data, in 2008 commercial developers created 2.3 million square meters, excluding reconstructed housing and individual construction. It is unlikely that companies would have had the resources to create additional housing, since demand fell, and there was not even enough money to complete planned projects,” said Zosya Zakharova, the director of projects, analysis and research at ARIN.
Apartments in buildings that have been completed are generally already sold, and in buildings completed by Stroimontazh, only a few apartments did not find buyers, said Dmitry Bogolyubov, PR director for Stroimontazh.
Results in 2009 are widely expected to be less impressive. “During the next few years, we will complete no more than one project per year, since we have not begun new projects due to the crisis,” said Bogolyubov. He estimated that this year the construction industry would create no more than one million square meters, half of which will be built by the city. In 2010 the situation may be even worse, he added.
Before the crisis, local builders promised to create 2.9 million square meters of housing in 2009, said Zakharova. She believes this forecast will be cut by 10-15 percent. In 2009 no less than 2.5 million square meters of commercial housing will be built, said Sebelev. The volume of offers is decreasing, and developers will not be prepared to make a loss by reducing prices, he said. He believes that prices will only decrease for projects with ill thought out concepts.
Despite the fact that two thirds of the city’s population are in need of housing or improved housing, obtaining space in newly-built projects will not be easy, said Igor Zhigunov, deputy chairman of the city’s mortgage bank. Today buyers are not prepared to buy, and banks are not prepared to lend to them, resources are limited, and the population’s income is decreasing, he added.
TITLE: Izhorskye Works Denies Rumors of Redundancies
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: A conflicting picture is emerging at St. Petersburg’s Izhorskye Zavody (Izhorsky Works), as local media report possible mass staff cuts and other problems at one of Russia’s largest factories, while the plant’s management is putting on a brave face.
The reports that have appeared in the local news wires and printed media, including Rosbalt news agency and Delovoi Peterburg business daily newspaper, claimed that some of the factory’s employees have been forced to take unpaid leave, while others have been assigned to work on a four-day week basis.
The articles also claimed that operations at one of the manufacturing sections of the factory had nearly come to a standstill as a result of not receiving enough orders amid the escalating financial crisis.
“The secton that produces elevators has almost closed its operations because they are not getting contracts,” wrote Delovoi Peterburg, citing Yury Sobolev, an advisor to the director of the Izhorskye Works.
“That has left almost 2,000 people without work.”
Izhorskye Works, which was founded in 1722 by Tsar Peter the Great, making it Russia’s oldest heavy machinery works, produces equipment for the nuclear energy sector as well as oil and gas companies, and employs nearly 8,000 people.
The plant’s management has been vigorous in its dismissal of the reports.
Konstantin Simutin, head of the factory’s external relations department, denied all of the allegations and claimed that some of his earlier statements to the media when he was being interviewed about the possible effects of the rapidly unfolding economic crisis on the Izhorskye Works had apparently been misinterpreted.
“There have not been any staff cuts at the factory,” Simutin told reporters on Monday. “On the contrary, we are recruiting. The Izhorskye Works needs approximately 160 people for various departments at the factory.”
“Yes, some of the sections are not getting enough orders, but we are getting more orders from nuclear power plants and we will simply make those sections busy with these other engagements,” Simutin said.
TITLE: In Brief
TEXT: Jan. Inflation Forecasts
ST. PETERSBURG (Bloomberg) — Russia’s Economy Ministry is expecting a January inflation rate of between 2.1 percent and 2.4 percent, Interfax reported.
Food prices will increase between 1.4 percent and 1.7 percent this month, the Moscow-based news service said.
Russia Sees U.S. Shrink
MOSCOW (Bloomberg) — Russia expects the U.S. economy to shrink 2.6 percent this year, RIA Novosti reported.
Rumors of Chelsea Sale
LONDON (Bloomberg) — Russian billionaire Roman Abramovich is considering selling Chelsea soccer club, the Sunday Times said, citing no one.
A buyout would cost at least 800 million pounds ($1.18 billion), according to the newspaper.
Abramovich’s representatives have traveled to Saudi Arabia and Dubai to discuss a possible sale, and have visited members of the Saudi royal family, according to the newspaper report.
Chelsea’s owner “has no intention” of selling and “neither he nor anyone upon his behalf has been pursuing any such course of action,” the club said in a statement on its web site on Sunday.
Russians, Kazakhs Talk
ALMATY (Bloomberg) — German Gref, chief executive officer of Sberbank, Russia’s biggest bank, and Kazakh Prime Minister Karim Masimov discussed combining the two countries’ resources in a bid to dictate prices on some world markets on Saturday.
“By joining our resources we can have a market presence of as much as 30 percent on some products,” Gref said during the meeting, without specifying which products might be involved. “This means that we could practically determine the global market situation on these products.” His comments were posted on the Kazakh government’s web site.
A Russian delegation took part in a “brainstorming session” on commodities refining and “innovative products” with officials from Kazakhstan’s National Wellbeing Fund, Gref said.
Inflation May Hit 13%
LONDON (Bloomberg) — Russia’s inflation rate may be 13 percent this year because of the ruble’s devaluation, RIA Novosti reported, citing Finance Minister Alexei Kudrin.
The devaluation has increased the price of imports, which has forced the government to reconsider its 11 percent forecast, Kudrin said in Hong Kong, according to the state-run news service.
Ruble Devalued Further
MOSCOW (Bloomberg) — Bank Rossii, Russia’s central bank, devalued the ruble for the fourth straight day on Monday, bringing the total to six in the first seven days of official trading this year, according to an official.
The ruble’s trading band against the target basket of dollars and euros has been expanded, said the central bank official, who wouldn’t be identified on matters of bank policy. The currency was devalued on Jan. 11, 12, 14, 15 and 16 after official trading for 2009 started Jan. 11.
Russia’s ruble, which is controlled against the basket to manage currency swings that harm exporters, dropped 1.3 percent to 37.8017 by 10:20 a.m. in Moscow, from 37.3124 on Jan. 16. The basket is made up of about 55 percent dollars and the rest euros.
Late Salaries Risk Fines
MOSCOW (Bloomberg) — Moscow prosecutors may file lawsuits against companies that delay salary payments as the government seeks to avoid unrest, Rossiiskaya Gazeta reported, citing the city’s Prosecutor General Yury Syomin.
Wage arrears at companies in the Russian capital tripled to 230 million rubles ($7 million) in December, the government’s newspaper of record said. Overdue wages had averaged 70 million to 80 million rubles during 2008, Rossiiskaya Gazeta said.
Prosecutors will also finish investigating reports of mass firings at Moscow-based companies, the newspaper said.
TITLE: Deripaska, Potanin Submit Metals Plan
AUTHOR: By Yuriy Humber
PUBLISHER: Bloomberg
TEXT: MOSCOW — Billionaires Oleg Deripaska and Vladimir Potanin proposed merging GMK Norilsk Nickel with five companies including iron ore producer Metalloinvest and steelmaker Evraz Group to create a Russian metals group.
The plan would also involve state-owned titanium maker VSMPO-Avisma, potash miner Uralkali and steelmakers Mechel, Nina Dementsova, spokeswoman for Potanin’s Interros Holding, said Monday by telephone in Moscow, confirming a report in newspaper Vedomosti.
Russia’s biggest metals companies are considering mergers as a way to survive a plunge in commodity prices and meet debt payments. President Dmitry Medvedev last week asked owners to consider creating a group in which the state may take a blocking stake. The new company would have sales of $60 billion and vie with BHP Billiton as the world’s largest mining company.
“The idea of creating a national champion in mining is opportune both from economic and political standpoints,” Troika Dialog analysts Sergei Donskoy and Mikhail Stiskin wrote in a report. Weakened balance sheets “will now make the companies much more willing to engage in discussions.”
Deripaska and Potanin’s proposal would create a company with a market capitalization of $70 billion to $100 billion and earnings before interest, tax, depreciation and amortization of $23 billion, according to Interros. It would inherit debt of more than $28 billion.
BHP, which is based in Melbourne, had sales of $59.5 billion and Ebitda of $28.1 billion in the year through June.
United Co. RusAl, Russia’s biggest aluminum producer and controlled by Deripaska, won’t initially participate in the merger as its $17 billion in liabilities would overburden the company, Vedomosti said. RusAl spokeswoman Vera Kurochkina declined to comment on the report. Deripaska and Potanin are also shareholders in Norilsk, the nation’s biggest mining company.
“RusAl is under a heavy debt burden, so it’s unlikely that it would be an interesting merger partner for someone right now,” Norilsk Chief Executive Officer Vladimir Strzhalkovsky told reporters in Krasnoyarsk, in comments confirmed by company spokeswoman Erzhena Mintasova on Monday.
A three-way merger between Norilsk, Metalloinvest and Rusal was first proposed last year. In December, state-owned Russian Technologies, a state holding company for assets including VSMPO, the world’s biggest titanium producer, offered to combine some metals assets with Norilsk.
Potanin and Deripaska’s plan hinges on the Kremlin swapping debt owed to state-owned banks and VSMPO shares for a 25 percent stake in the new company. Minority shareholders in Mechel, Norilsk, Evraz and Uralkali would hold as much as 24 percent of the new company’s shares, according to Interros.
Global economic turmoil led Deripaska to take over as RusAl’s CEO from Alexander Bulygin, the Moscow-based company said Sunday. Rusal asked the government for $4.5 billion in October to refinance debt and retain its 25 percent stake in Norilsk.
TITLE: Lebedev Set to Buy London Tabloid
PUBLISHER: The St. Petersburg Times
TEXT: Businessman and former State Duma Deputy Alexander Lebedev is expected to purchase London tabloid Evening Standard for one pound in what could be the first step in an effort to build up his European media assets.
Lebedev “supports free, independent media” and is in talks with several other newspapers in Britain and other European countries, Artyom Artyomov, a spokesman for Lebedev, said Friday, declining to elaborate.
London newspaper The Times reported Friday that Lebedev would likely buy Evening Standard for the newsstand price of two issues without saying where it got the information. The deal was expected to be completed Monday, it said, though no deal had been announced by Monday evening. Evening Standard’s circulation was about 290,000 in December, according to its parent company, Daily Mail and General Trust. British media have suggested that Evening Standard is losing about 10 million pounds per year.
Alexander Lebedev’s National Reserve Corporation is part owner of Novaya Gazeta along with former Soviet leader Mikhail Gorbachev. Lebedev also owned tabloid Moscow Correspondent, which ceased to exist late last year after only one year.
On Thursday, a French court ruled that Alexander Pugachyov, the son of Tyva Senator Sergei Pugachyov and a French citizen, could increase his stake in the tabloid France-Soir from 19.9 percent, RIA-Novosti reported Friday.
TITLE: Fears Persist Ukraine May Default Despite IMF Aid
AUTHOR: By Laura Cochrane
PUBLISHER: Bloomberg
TEXT: LONDON — Four years after Ukraine embraced the West with the election of President Viktor Yushchenko in the Orange Revolution, the former Soviet nation’s economy is collapsing and investors expect the country to default.
Even with the International Monetary Fund’s $16.5 billion bailout, Ukraine’s finances are deteriorating as the country battles with Russia over natural gas prices and the cost of steel, its biggest export, sinks.
Yields on Ukraine’s $105 billion of government and company debt are the highest of any country with dollar-denominated bonds except Ecuador, which defaulted in December. The currency, the hryvnia, weakened 40 percent in the past 12 months against the dollar. The benchmark stock index lost 85 percent, the biggest drop in the world after Iceland, data compiled by Bloomberg show.
“The market is telling us there is a high probability of a default,” said Tom Fallon, head of emerging-markets at La Francaise des Placements in Paris, which manages $11 billion and sold its Ukrainian holdings six months ago. “It’s an advantage that the country is committed to policy measures that the IMF is prepared to back, but that is no guarantee it won’t default.”
The gap in yields between Ukraine’s bonds and Treasuries tripled in the past four months to 25 percentage points. The country’s bonds yield 9.5 percentage points more than debt sold by Argentina, which defaulted in 2001 and has yet to compensate all holders, according to JPMorgan Chase & Co. data.
Ukraine is getting battered after European steel prices plummeted 56 percent since August, according to data from Metal Bulletin. Industrial production fell 48 percent in November, the steepest decline in Europe, as the global economic slowdown cut international demand.
The country’s dispute with Russia over natural gas prices disrupted supplies across Europe and will probably increase fuel costs for Ukraine, slowing industry, analysts led by Vienna-based Martin Blum at UniCredit SpA wrote in a research note this month.
Russian Prime Minister Vladimir Putin and his Ukrainian counterpart, Yulia Timoshenko, signed the terms of an agreement Monday in Moscow in which Ukraine will pay higher European prices for Russian gas from 2010, after a 20 percent discount this year. In return, 2009 transit fees for Russia will remain at last year’s level. The European Union said it will reserve judgment on the deal until the resumption of flows to the 27-nation bloc after a halt of almost two weeks.
“Russia does have a bit of an upper hand, but an excessively weak Ukraine would not be a benefit to Moscow either,” said Ivailo Vesselinov, a senior economist at Dresdner Kleinwort in London. “The Kremlin has to balance keeping Ukraine stable so that does not spill over into a chaotic break-up, and preventing a move away from Russia politically.”
The nation’s 46 million people are 45 percent Russian speakers and 55 percent Ukrainian, according to Dresdner. Ethnic Russians make up 17.3 percent of the population, compared with 77.8 percent ethnic Ukrainians, according to the Central Intelligence Agency web site.
While the U.S. is supporting membership to the North Atlantic Treaty Organization, Russia has warned the move would break the country into two states and prompt Moscow to aim missiles at Ukraine.
A feud between Yushchenko and Timoshenko has made matters worse as the collapse of their coalition government in September hampered policies to reassure investors. The central bank seized Prominvestbank, Ukraine’s sixth-biggest lender by assets, in October.
The crisis led the IMF to provide $4.5 billion of emergency loans in November. Conditions for the credit include moving toward a flexible exchange rate, tackling inflation and running a balanced budget even though Ukraine’s parliament approved a 2009 deficit of 2.96 percent of gross national product. The government will partly cover the shortfall by selling bonds, according to the plan reached last month. Ukraine’s inflation rate is the highest in Europe at 22.3 percent.
An IMF mission is scheduled to visit Kiev this month before it provides a second payment in February.
“Without rapid correction, this could undermine the outlook for the second tranche,” said Ali Al-Eyd, an economist at Citigroup Inc. in London.
Ukraine’s economy, which expanded at an average annual rate of 7 percent since 2000, grew 2.1 percent last year. Gross domestic product may shrink 5 percent this year, Oleksandr Shlapak, the president’s deputy chief of staff said in November.
The slump coupled with the hryvnia’s decline increased concern that the government and companies will default after a fourfold jump in foreign debt since January 2004, according to data on the central bank’s web site.
TITLE: Gorbachev Accuses State Of Bailing Out the Rich
PUBLISHER: Combined Reports
TEXT: Former Soviet leader Mikhail Gorbachev accused the government on Friday of bailing out billionaires at taxpayers’ expense in a letter co-signed by four businessmen and economists.
Gorbachev has until now been supportive of the Kremlin, and by speaking out he has joined a small but growing chorus of influential Russians who say the government’s tight control of the economy and politics is making the slowdown worse.
“The Russian authorities have turned their back on structural reform and instead satisfied themselves with inventing a mythical model of an ‘energy superpower,’” said an open letter whose signatories included Gorbachev.
“Resources are directed not so much at protecting the interests of a majority of citizens as at saving the assets and property of a narrow circle of influential businessmen,” said the letter, which was published in Vedomosti.
The other signatories included Vladimir Ryzhkov, a liberal former member of the State Duma; businessman Alexander Lebedev, also a former deputy; Sergei Aleksashenko, the head of Merrill Lynch’s office in Moscow; and Vladislav Inozemtsev, director of the Moscow-based Center for Post-Industrial Studies.
The letter outlined 15 steps that would ease the burden of the financial crisis for ordinary citizens, but some of the measures would roll back major bailout initiatives for business.
Among the proposed steps, the authors suggested: allowing foreign banks to take Russian assets held as collateral to increase investment down the road; converting companies’ foreign debt into sovereign debt through auctions with the participation of foreign lenders; defending the ruble with foreign reserves to cut inflation; and freezing tariff hikes for the country’s natural monopolies.
The government offered more than $200 billion in rescue measures for the economy last year, including as much as $50 billion to help some of the country’s richest businessman refinance foreign debt through Vneshekonombank.
Though popular in the West, Gorbachev is reviled by many Russians for his role in dismantling the Soviet Union, and he carries little political weight at home.
But his criticism could strike a chord with Russians worried about layoffs and savings that have fallen in value because of the weakening ruble.
The Kremlin is concerned that public anger over the state of the economy could spill over into unrest. Riot police in Vladivostok detained about 100 people last month who were protesting over an increase in duties on imported cars.
Some analysts say President Dmitry Medvedev sees the slowdown as an opportunity to open up the economy and political life and implement long-delayed reforms.
Medvedev has made a public show of unity with Prime Minister Vladimir Putin but last week he scolded the government for reacting too slowly to the crisis.
(Reuters, SPT)
TITLE: Investor Predicts Ruble Will Now Stabilize
AUTHOR: By Laura Cochrane
PUBLISHER: Bloomberg
TEXT: LONDON —Russia’s ruble will begin to stabilize as 18 separate devaluations in two months take the currency toward its fair value, investor Mark Mobius said.
The central bank may slow its pace of depreciations, Mobius, 72, who manages more than $24 billion in emerging-market assets as executive chairman at Templeton Asset Management Ltd., said in an interview on Monday.
The ruble was trading Monday below the weakest level seen during Russia’s 1998 financial crisis that led the government to default on $40 billion of debt. Investors have withdrawn $245 billion from Russia since August as a 63 percent drop in oil, Russia’s war with Georgia and the disruption to gas exports exacerbated the effect of the global financial crisis, according to BNP Paribas SA data.
“It will begin to stabilize,” Mobius said on the phone from Kuala Lumpur, referring to the Russian currency. “On a price-to-parity basis, the ruble was overvalued and now it’s not as overvalued as it was. I know some commentators think further devaluations can be expected, but I’m not too sure about that.”
Russian policy makers devalued the ruble Monday for the sixth time in seven days to protect reserves. The country has reduced its reserves by $171.6 billion to $426.5 billion since August, as the central bank sold currency to stem a 29 percent decline against the dollar.
“On one hand they want to protect the value of the ruble and on the other hand they want to make sure they are boosting their economy with their foreign reserves,” Mobius said.
TITLE: Consumer Confidence Plummets As Ruble Depreciates
PUBLISHER: Reuters
TEXT: MOSCOW — Consumer confidence plunged to an eight-year low in the final quarter of 2008, data showed Friday, as the Health and Social Development Ministry said the number of people claiming jobless benefits rose 15 percent in December.
Consumer sentiment has been dented by a depreciation of the ruble, which has lost more than one-fifth of its value versus a euro-dollar basket since August.
The State Statistics Service said its consumer confidence index fell to minus 20 in the final three months of last year, down sharply from +1 in the previous period. The balance is calculated by summing the percentage of people with a positive outlook and deducting the negative ones. The service also reported a sharp decrease in expectations for the economy in a year’s time.
Wage arrears are on the rise, and some are predicting that unemployment could double over the course of 2009. Companies are also cutting salaries, sending staff on unpaid leave, stopping plants and reducing working weeks.
The number of people claiming unemployment benefits rose to 1.5 million by the end of December, from 1.3 million a month earlier, Health and Social Development Minister Tatyana Golikova said Friday, Interfax reported.
The total number of unemployed is much higher, standing at 5 million in November, according to latest official data.
One-third of Russians feel their personal financial situation worsened during the fourth quarter, the consumer confidence data showed. Going forward, around 40 percent say they think things will not change, while one quarter say they will get worse.
TITLE: Agriculture Minister Urges WTO to Ease Rules on Agriculture Products
PUBLISHER: Combined Reports
TEXT: MOSCOW — Agriculture Minister Alexei Gordeyev on Friday called for “special conditions” for food and agriculture products within the World Trade Organization, saying they would help Russia modernize.
Protecting the world’s food supply is as important as energy security, and agriculture should not be considered just a “traded good,” Gordeyev said in Berlin.
Russia, the world’s third-largest wheat exporter, needs significant investments to modernize farms, including access to funds and credit, he said.
In recent months, many countries have put aside considerations of global trading regulations, including subsidies for industries, to save their economies, Gordeyev said. “Perhaps it’s a bold of me to say, but it seems like most countries have forgotten the WTO rules and are doing what is in their best interests economically,” he said.
Disputes over Russian tariffs — most recently, threatened duties on timber and increased levies on imported cars — have delayed talks between Moscow and the international trade body.
(Bloomberg, SPT)
TITLE: Give Them an Obama I
AUTHOR: By Dmitry Trenin
TEXT: Dear President-elect Obama,
Even though most of your foreign policy will be devoted to issues not directly related to Russia — namely, the global economic crisis, the wars and insurgencies in the Greater Middle East from the Gaza Strip to Pakistan, terrorism and climate change — relations with Moscow need to be high on your agenda from Day One.
Last August, the war in the Caucasus led the U.S.-Russia relationship to the brink of real confrontation, something the world had not seen in a quarter century. Tensions have eased since then — the world economic crisis being a “saving grace” — but the fundamental problem remains. Moscow is unhappy with U.S. policies that are implemented so close to Russia’s borders, and the Kremlin’s sharp responses make its neighbors nervous. Many people talk about a return to the Cold War.
Your predecessor’s failure to “get Russia right” was rooted in the basic neglect of an important country. President George W. Bush’s jovial camaraderie with then-President Vladimir Putin simulated — rather than stimulated — the relationship between the United States and Russia. The promise of a strategic partnership in the wake of Sept. 11 was mindlessly neglected because at the time preparing for the invasion of Iraq became the sole focus of the Bush White House.
Later on, what passed for a U.S. policy on Russia was often reduced to comments on Russia’s domestic developments. The result was mounting frustration on the U.S. side over the inability to change things inside Russia, which was matched by the Kremlin’s growing irritation over U.S. interference in Russia’s internal affairs. More recently, the prospect of awarding NATO’s Membership Action Plan to Ukraine and Georgia and plans to construct elements of a missile-defense system in Central Europe damaged U.S.-Russian relations.
Mr. President-elect, you have a chance, as well as a responsibility, to reverse the tide.
You have vowed that your administration will be made up of pragmatists with values, not ideologues with dogmas. This is a solid foundation for a successful and constructive foreign policy toward Russia.
Strategic arms, both offensive and defensive, should be your main immediate concern. With the 1991 START treaty expiring in December, you will need to move fast on negotiations with Moscow to renew the foundation for the strategic arms relationship.
Missile defense should also demand your early attention. You will need to decide whether a reconfigured missile-defense architecture, which includes interaction and coordination between U.S. and Russian interceptors and radars, is a workable idea. Remember that any U.S. missile-defense system that undermines Russia’s nuclear deterrent will be viewed by the Kremlin as absolutely unacceptable — and rightfully so. U.S. and global stability and security depend on maintaining a nuclear balance between the two countries.
The Euro-Atlantic security architecture is your next priority. In April, you will come to Europe to celebrate NATO’s 60th anniversary. As such events go, there is always a temptation to praise the past successes. You need to move beyond that and recognize that Euro-Atlantic security will remain an unfinished business until Russia and its neighbors, including Ukraine and Georgia, are fully integrated within it. The idea that expanding NATO membership while excluding Russia is obviously not working. Seizing upon President Dmitry Medvedev’s initiative of a European security treaty offers a chance to start discussing the hard issue so far avoided.
This is anything but a philosophical discussion. Anyone who has an interest in keeping Ukraine intact should support its tortuous but realistic efforts toward accession to the European Union, not on a crash course for NATO. But more important, you will be challenged to come up with a formula for a meaningful Euro-Atlantic alliance that includes Russia. The Kremlin muses about a Helsinki II. Give them an Obama I.
Depending on how positive and promising your opening steps will be on strategic arms and Euro-Atlantic security, you can count on Moscow’s cooperation on Iran and Afghanistan. This is more about confidence building than geopolitical swaps. Right now, the trust level between Moscow and Washington is at a record low. Yet the United States and Russia share the fundamental goal of an Iran without nuclear weapons. Regarding your proposal to start negotiating with Tehran, you will want the Russians playing alongside with you to make sure these efforts bear fruit.
Afghanistan may well define your foreign policy legacy the way Iraq defined Bush’s. You will need all the support you can muster, including from Iran. You will also need Russia’s support. Moscow understands that the stability of its southern flank will hugely depend on what happens on the Hindu Kush mountain range in eastern Afghanistan and northwestern Pakistan. But Moscow is torn between giving support to the West and preparing for the West’s withdrawal from Afghanistan. The latter would mean cutting deals with the Taliban locally and relying on China strategically. You can help Russia make the right choice.
There are many issues in the relationship, going well beyond global arms control and regional security. If Russia’s principal goal is to modernize and integrate, the United States has enormous capacity to help it. According to a Chinese proverb, it is the sun that makes people open up, while cold winds force them to hunker down. In the next four years, Russia will continue to change; its transformation, more than two decades old, is still in progress. Sometimes it will hit a particularly rough patch, sometimes it will disappoint, but it will not stop.
One final thought. You will not need to aim for a close working relationship with your Russian counterpart. All too often, these attempts are treated suspiciously by the public and not adequately supported by the bureaucracy. You would do wise, however, to appoint an informal “Russia tsar” to direct U.S. relations with Russia.
As you take the presidential oath on Tuesday, please also make another oath to yourself — to put U.S.-Russia relations at the top of your busy agenda.
Respectfully, Dmitry Trenin
Dmitry Trenin is director of Carnegie Moscow Center.
TITLE: A Monopoly on Blame
AUTHOR: By Alexei Bayer
TEXT: It’s an ironic parallel. For eight years, Presidents Vladimir Putin and George W. Bush have moved in tandem. Russia enjoyed two terms of Putin, whereas the United States had the pleasure of two terms of Bush.
But on Tuesday, the United States will move on. Bush will leave the nation depressed and dispirited, its economy stuck in the worst slump in nearly 80 years. Whether he will be judged by posterity as harshly as he has been by contemporaries or whether history will somehow exonerate him, he will be gone and his team in Washington will be replaced with new faces.
Not so in Russia. The country has had a new president for nearly a year, but Putin unquestionably remains the country’s most powerful man. If he were to abdicate completely and become, as it has been rumored, the head of Gazprom, supreme power in Russia would likely migrate to the corner office of the state-controlled gas monopoly.
Since summer, Putin’s legacy has begun to look as tarnished as Bush’s in the United States. Putin offered a bargain to the Russian people: They would enjoy stability and growing prosperity but stay out of politics and away from big business in which Putin’s friends, supporters and former siloviki colleagues were growing immensely rich. Now that the global crisis has undermined Russia’s prosperity, the political model of the past decade is starting to strain. Even Putin’s approval ratings are slumping.
Still, there is little chance that the political establishment will loosen its grip on power. On the contrary, President Dmitry Medvedev on Dec. 30 signed off on the first major changes to the Constitution since it was adopted in 1993, extending the presidential term from four years to six and parliamentary terms from four to five.
It may not be Medvedev who serves the new six-year term, but it will likely be someone from the same cast of characters. There is simply no one else in the country to take on the job. It is a tragedy for all of Russia, but it is also a major problem for the ruling clique.
In the United States, the Democrats have been out of power for eight years and were criticized during their time in opposition for caving in to the Bush administration. But when President-elect Barack Obama’s transition team began filling vacancies in his government, they were presented with a vast reservoir of not only ideologues but competent and experienced advisers from Bill Clinton’s administration.
In Russia, there is never any alternative to the existing ruler and his entourage. When communism collapsed in 1991, it became painfully clear that the new country had no one to govern except some ambitious young functionaries from the lower ranks of the Gorbachev team. Dissidents were a tiny protest movement consisting of disparate groups with neither a unifying ideology nor practical experience in government. During the 1990s, little political pluralism emerged, allowing the one organized structure from the Soviet era — the KGB and other siloviki — to stage a spectacular comeback during Putin’s presidency. Putin’s policies of strengthening the power vertical by eliminating opposition and abolishing gubernatorial elections helped perpetuate the political vacuum.
In this respect, Russia is in a worse position than Ukraine, where despite deep problems and political instability a representative democracy has taken root. As the current crisis worsens, the Kremlin is starting to realize that a monopoly on power also entails a monopoly on taking the blame when things go wrong.
Alexei Bayer, a native Muscovite, is a New York-based economist.
TITLE: ‘Hudson River Miracle’ is Story of Luck, Heroism
PUBLISHER: The Associated Press
TEXT: NEW YORK — Before it became an unforgettable story of luck and heroism, US Airways Flight 1549 was on course to be a catastrophe. In five minutes of flight, the stricken jetliner sprinted past one nightmare scenario after another.
The plane skirted skyscrapers and threaded through crowded airspace, horrifying spectators on the streets below. With no working engines, it had to clear the heavily traveled George Washington Bridge. Its landing strip was a stretch of the Hudson River full of commuter ferries. Had it not splash-landed in the river, the plane could have gone down in densely packed neighborhoods in New York City or northern New Jersey.
The abundance of possible catastrophic scenarios was clearly on the mind of the pilot, who told controllers that the jet was “too low, too slow” and near too many tall buildings to reach any airport.
“It was an amazing confluence,” said Karlene Roberts, co-director of the Center for Catastrophic Risk Management at the University of California, Berkeley. “So many things could have gone wrong that didn’t.”
The run of good luck on the flight will be examined further by investigators as they inspect the jet wreckage for more clues about how a flock of birds managed to disable both engines and send the jet on its frightening obstacle course over a city of 8 million people.
The airliner was hoisted late Saturday from the ice-laden current and placed on a barge, its two “black box” data recorders sent to investigators in Washington.
Investigators interviewed the pilots on Saturday, and what emerged was a harrowing account of the split-second decisions they made in avoiding a crash.
It started with a wild stroke of misfortune minutes after the plane left LaGuardia Airport on Thursday for Charlotte, N.C. While bird strikes are common, commercial jet engines are fortified against them. They seldom disable an engine, let alone two. Archie Dickey, who teaches aviation environmental science at Embry-Riddle Aeronautical University, says bird strikes that cripple both engines are “extremely rare.”
While the pilot quickly leveled the plane off after the bird strike to keep it from stalling and thought about where to land, the co-pilot kept trying to restart the engines. He also began working through a three-page list of procedures for an emergency landing. Normally, those procedures begin at 35,000 feet.
This time, he started at 3,000 — somewhere over the Bronx, a borough of more than 1 million people.
The pilot, Chesley B. “Sully” Sullenberger, could hardly have been better prepared. The 58-year-old former fighter pilot was named best aviator in his class at the Air Force Academy, had flown for US Airways for 29 years and mastered glider flying. He also has investigated air disasters, even studying how airline crews behave in a crisis.
His plane was crippled over a city still haunted by the devastation wrought by the hijacked planes that brought down the World Trade Center towers on Sept. 11, 2001. And two months after that, American Airlines Flight 587 had crashed into a Queens neighborhood, killing 260 people on board and five on the ground.
Sullenberger headed for the river, warning passengers to brace for impact and telling air traffic controllers simply: “We’re gonna be in the Hudson.”
Ahead was the George Washington Bridge — the graceful span that carries roughly 108 million vehicles a year between Manhattan and New Jersey. Though quickly losing altitude, the plane made it over the bridge, which rises as much as 600 feet above the water.
“When you saw the bridge, and the bridge was right underneath you, you knew something was wrong,” recalled passenger Dave Sanderson, 47, of Charlotte. “The skyline of New York City was right in front of you.”
The aircraft’s plight was chillingly clear from the ground, too.
“I’m witnessing an airplane. It’s going down. It’s on fire. Oh, my God!” a 911 caller gasped from a Bronx street.
While a water landing seemed the safest bet, it also carried particular risks.
The goal would have been to set the plane down gently, to keep it from breaking apart and sinking rapidly. Pilots aim to slow a plane without stalling, so it doesn’t drop abruptly, and to keep the wings level.
Drag a wing tip into a wave, and the plane may overturn, said Michele Summers Halleran, a former Hawaiian Airlines and seaplane pilot and associate professor of aeronautics science at Embry-Riddle.
If the landing gear is left down, the wheels will catch in the water and likely flip the aircraft. Pilots also need to try to avoid plowing headlong into waves that could tear up the fuselage, she said. Luckily for Flight 1549, the Hudson was fairly calm.
Sullenberger pulled off the landing in textbook fashion, though experts say many factors, including communication among the pilots and flight attendants, were as important as sheer skill.
“The raw piloting is commendable, but what’s truly extraordinary is the rapid and professional way the crew went about making these decisions. You’ve only got seconds in order to sort these things out — it’s not like you have time to go through denial,” said William Voss, the president of the Flight Safety Foundation and a former Federal Aviation Administration official.
Safety features played a silent role, including steps taken over the years to strengthen airplane seats and keep plane windshields from shattering when hit by birds, Voss said.
None of it might have mattered had the plane hit one of the ferries — or ended up too far away for them to swoop in and help authorities rescue passengers swiftly from exposure to the nearly freezing water and 20-degree air. Sullenberger told investigators he made a point of landing near Manhattan’s ferry terminals, to increase the chance of rescue.
In the end, most passengers emerged with bruises; one flight attendant suffered a severe cut on her leg.
“This is a story of heroes, something straight out of a movie script,” Mayor Michael Bloomberg said as he honored rescuers Friday. “But if it had been a movie, people probably wouldn’t have believed it. It was too good to be true.”
TITLE: Federer Advances at Australian Open
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia — Roger Federer took the first step toward his record-tying 14th Grand Slam title with a 6-1, 7-6 (4), 7-5 victory Monday over Andreas Seppi at the Australian Open.
Federer, seeking to match Pete Sampras’ mark, was at his best on the big points on the opening day when most favorites avoided upsets. However, it wasn’t easy for even the top players.
“He is a very tough customer, he played really well,” Federer said of the 35th-ranked Seppi. “I think I played well, too. I had to.”
Serbia’s Ana Ivanovic, the women’s runner-up last year, had 10 mistakes in the first five games but managed to advance with a 7-5, 6-3 victory over 107th-ranked Julia Goerges, who was even more erratic.
Top-seeded Jelena Jankovic, short on practice after illness hampered preparations for her pursuit of a first Grand Slam title, had 27 winners to four for No. 104 Yvonne Meusburger in winning 6-1, 6-3.
The other Serbian star, defending men’s champion Novak Djokovic, started strong then had to rally from service breaks in the last two sets — he was down 4-0 in the third — to oust Andrea Stoppini 6-2, 6-3, 7-5.
Seventh-seeded Andy Roddick opened with a straight sets win over Bjorn Rehnquist, with fellow American Mary Fish also winning against Samuel Gorth. Six other Americans made first-round exits: Robby Ginepri, John Isner, Robert Kendrick, Bobby Reynolds, Taylor Dent and Sam Querry.
Top-ranked Rafael Nadal has his first match Tuesday, when both Serena and Venus Williams also will be in action.
Second-ranked Federer is a huge fan favorite here, and Rod Laver Arena was still packed when he went on court at 10 p.m. under perfect conditions. Camera flashes went off every time he hit a shot.
“Whose house? Roger’s house!” one fan roared.
Federer, who has won three titles here, was clearly focused on proving that fan right.
The Swiss star fended off all 10 of Seppi’s break points. He had one stretch in the first set that had the fans gasping and left Seppi with a look that said: “What can I do?”
Federer ran off the last five games of the set, dropping only six points, and the ones that Seppi did win usually took at least two good shots. Twice on one point, Seppi sent up lobs that landed on the line. Federer backtracked to get the first back with a quick flick of the wrist, then got to the second, spun around and whipped a wicked forehand winner.
Things got tighter the rest of the way.
Seppi had a set point as Federer served at 5-6, 30-40 but missed the sideline with a backhand that the replay system showed was maybe a millimeter out. Federer went on to hold, then ran away from a 3-3 tie in the tiebreaker.
Another tiebreaker appeared to be looming in the final set.
Seppi fended off three match points while serving at 5-6.
Federer set up another with a backhand volley winner, and Seppi sent a forehand long to end the match in 2 hours, 21 minutes.
Ivanovic lost the 2008 Australian final to Maria Sharapova, who is out with an injured shoulder, then won the French Open to take the top ranking midway through the year.
She had her share of glitches while facing Goerges for the first time, with the midday sun playing havoc with every serve toss at one end of the court. It didn’t help that the German player was going for winners.
“I don’t expect myself to step on the court and play perfect tennis from very first moment,” said Ivanovic, who was ousted in the third round at Wimbledon and in the second at the U.S. Open. “You just want to give yourself the best possible chance and give time to work yourself into the tournament.”
Jankovic had more trouble with the broiling daytime sun — temperatures reached 97 degrees — than Meusburger. The surface was so hot that Jankovic iced the soles of her shoes during changeovers.
“My feet were burning,” said Jankovic, who didn’t know what to expect after her recent illness-enforced layoff.
TITLE: Last Safe Water Landing Was on Neva
AUTHOR: By Matt Brown
PUBLISHER: The St. Petersburg Times
TEXT: The last time a commercial airliner was successfully ditched and everyone on board survived was in 1963, when a Tupolev 124 ditched into the River Neva in St. Petersburg, the Associated Press reported Friday.
Picking up the story, Russia Today, an English-language television channel aimed at burnishing Russia’s image abroad, reported that, like Chelsey B. Sullenberger III, the Tupolev pilot Victor Mostovoi was “hailed as a hero” and later given a state award. The plane was carrying 45 passengers and seven crew members.
According to the Aviation Safety Network website, which logs air traffic accidents, the Tupolev crash landed in Leningrad, as St. Petersburg was then known, en route from Tallinn, Estonia, to Moscow.
“The Tupolev took off from Tallinn at 08:55 and it appeared the undercarriage didn’t retract,” the account at http://aviation-safety.net reads.
“The flight diverted to Leningrad (because of fog at Tallinn) at low altitude. At 11:00 the aircraft started to circle the city at 1,650 feet. The eighth and last [circle] was started at 12:10 when, at 13 miles from the airport, the no. 1 engine quit. The remaining engine quit shortly thereafter and a ditch was carried out in the … River Neva. All passengers remained on aboard as the floating aircraft was towed ashore.”
Pictures posted on the Russia Today website showed the Tupolev being towed to the Neva embankment by a tug-boat, which, it said, dated from the 19th century.
According to the Wikipedia online encyclopedia, the Tupolev incident is one of only nine documented intentional water ditchings of commercial passenger planes.
Twenty-seven years ago this week, the Associated Press reported, an Air Florida plane bound for Tampa crashed into the Potomac River after hitting a bridge just after takeoff from Washington National Airport. The crash on Jan. 13, 1982, killed 78 people including four people in their cars on the bridge. Five people on the plane survived.
TITLE: Arsenal In Town For Arshavin
PUBLISHER: The St. Petersburg Times
TEXT: Club officials from English Premier League side Arsenal have been invited to St. Petersburg to discuss the possibility of Andrei Arshavin signing for the team, Russia’s Sport Express said on Friday according to RIA Novosti news agency.
British media reports on Monday said that Arsenal and Zenit would like to conclude the transfer deal this week.
Zenit St. Petersburg recently turned down a $15 million bid, plus a possible $5 million at a later date, for Arshavin from Arsenal, RIA Novosti reported.
Sport Express said that the Arsenal officials had been invited to visit St. Petersburg and were due to visit the city on Tuesday to further discuss the deal, which has been in the works for some weeks.
Arshavin has frequently signaled his wish to leave Russian club football after he raised his profile by taking Russia to the semifinals of Euro 2008.
The playmaker, Russia’s most popular sportsman, said last year that if he was not allowed to leave in the January transfer window he would become a Zenit player “on paper only.”
Arsenal manager Arsene Wenger said on Thursday that he was still “hopeful” that Arshavin would sign for his club, currently in fifth place in the English Premier League, RIA Novosti reported.
“I’m very hopeful, in days, yes,” Wenger was quoted by the BBC on Thursday as saying. “We are not close to signing today [but] we know what we want to do.”
TITLE: U.S. Sports Stars Gather to Hail Obama’s Historic Ascent to Presidency
PUBLISHER: The Associated Press
TEXT: WASHINGTON — Hall of Fame coach John Thompson calls it “the greatest thing to happen to African-Americans since the Emancipation Proclamation,” and there’s no way he’s going to miss it.
“It hasn’t been able to seep in,” the longtime Georgetown college basketball coach told The Associated Press. “I will have tears in my eyes when that boy raises his hand.”
From Tiger Woods to Muhammad Ali, Dave Winfield to Dikembe Mutombo, a sports world that has paid more attention to politics than usual the last few months wants to be part of the party when Barack Obama is inaugurated as the nation’s first black president on Tuesday.
“The Emancipation Proclamation freed our bodies,” said Thompson, referring to Abraham Lincoln’s landmark document that sought to free slaves in the rebellious South in 1863. “This emancipation frees our minds to know there’s no limits as to what you can accomplish. Sometimes the mental incarceration is worse than the physical.”
Thompson, who has a ticket to the swearing-in ceremony, endured racial taunts when he first fielded a predominantly black team at Georgetown. He later became the first African American coach to win the NCAA title and boycotted two games in 1989 to protest an NCAA rule he felt would hinder minority athletes.
By contrast, Woods has been as apolitical as they come, keeping his views firmly to himself during his rise to become the world’s top golfer. It was only after Obama’s election in November that Woods expressed his excitement over “a person of color in the White House.” On Sunday, however, he was part of the celebration, speaking in front of the Lincoln Memorial as part of the inauguration festivities.
Woods’ two-minute speech during the “We Are One” concert paid tribute to the military and referenced his father, Earl Woods, who did two tours during the Vietnam War with the U.S. Army Special Forces.
“I am the son of a man who dedicated his life to his country, family and the military, and I’m a better person for it,” Woods said.
Woods told the many thousands gathered on the National Mall to “always stand by and support the men and women in uniform and their families.”
During the fall, professional athletes in locker rooms across the country said they were paying more attention to the presidential race than usual, in part because of the nature of Obama’s candidacy and in part because of eight polarizing years under outgoing President George W. Bush.
“I watched all the debates. I went from in-between to Obama’s side,” said Washington Redskins defensive end Phillip Daniels, who put himself on three waiting lists in November before eventually paying $500 for two tickets to the inauguration for himself and his wife. “You think about all the people who came before him, you think about Martin Luther King, all the people who fought for us.
“At the same time, I didn’t feel like I was going to vote for him because he was black. I felt we were eventually going to have a black president one of these years, but it was perfect how things unfolded. He just came along at the right time.”
Houston Rockets center Mutombo, who’s been politically active in African causes for more than a decade, will attend the inauguration with wife Rose, oldest son Reagan, and his father Samuel, who is flying to Washington from the Democratic Republic of Congo, where Mutombo was born.
Mutombo will squeeze in the trip by flying straight from a game in Denver on Monday and will return to Houston immediately after the ceremony.
“We have the son of an African man, not from a second or third generation, from the first generation. That brings so much joy and so much pride for me,” said Mutombo, who had breakfast with Obama in Washington just before the then-Illinois senator officially announced a run for the presidency.
“Now I can tell my son, ‘You cannot tell me you can’t be the next Bill Gates or the next senator.’ I’m feeling good about my children,” Mutombo said. “I know I’m going to cry a lot, but I want to be there.”
Boxing legend Ali, who turned 67 Saturday, is scheduled to be an honored guest at Monday’s Bluegrass Ball, a celebration sponsored by the Kentucky Society of Washington. That same night, Hall of Fame baseball player Winfield is narrating a documentary on the Negro Leagues that will air on the MLB Network, coinciding with the King holiday.
Winfield also plans to be at the swearing-in — or perhaps the parade, depending on the tickets he was expecting to receive.
“It’s just a unique time and place,” Winfield said. “My wife and I felt we should be a part of this one.”
One sports figure doesn’t have to fret at all about tickets or invitations. Oregon State men’s basketball coach Craig Robinson is Michelle Obama’s brother, so he’ll have a prime spot at the Capitol to witness the historic moment.
Of course, it’s easier for retired sports figures and those whose sports are out of season to make the inauguration than those who have a packed schedule of games to work around. New York Knicks and former Chicago Bulls guard Chris Duhon, who used to play pickup games with Obama in the Second City, is one of many basketball players frustrated that his day job won’t allow him to attend the ceremony in person.
“It was something I was looking forward to,” Duhon said. “If I had the time, I would have gone. But again, my obligations are to this Knicks team. I’m just going to sit on my couch to watch it.”
Viewing parties and ad-hoc get-togethers are planned for teams and fans wherever they happen to be Tuesday at noon. The Chicago White Sox even sent out a release proudly announcing that their mascot, Southpaw, has a spot on the Illinois float in the inauguration parade.
For the truly bizarre, there is Philadelphia 76ers guard Andre Miller, who couldn’t be bothered to vote and has a “whatever” view of politics. Yet, because some friends of his ended up with tickets, he said he is planning to skip practice Tuesday — risking a probable fine from his team — to attend the inauguration and one of the balls later in the day.
“I’m conservative. I’m whatever, basically,” Miller said. “Yeah, I would have voted for Obama. But I keep my views to myself. I’m still excited.”
TITLE: Black Box Data Supports Pilot’s Account of Crash
PUBLISHER: The Associated Press
TEXT: NEW YORK – The black boxes recovered from the US Airways jetliner that safely splashed down in the Hudson River last week captured thumping sounds, the sudden loss of engine power and the pilot’s calm mayday request, evidence that seems to back up the crew’s account of hitting a flock of birds shortly after take off.
The pilot, Chesley “Sully” Sullenberger, credited with helping save the lives of all 155 people aboard, reports that the plane has hit birds and lost both engines shortly after investigators heard “the sound of thumps and a rapid decrease in engine sounds,” National Transportation Safety Board member Kitty Higgins said.
Sullenberger then discussed alternate landings at New Jersey airports before deciding to attempt a river landing, she said. Ninety seconds before ditching the plane, he told passengers to “brace for impact” and informs controllers “they will be in the Hudson River,” Higgins said.
The dispatches on the cockpit voice recorder were described as “a very calm, collected exercise,” Robert Benzon, a veteran safety board investigator, said Sunday.
Said Higgins: “It was very matter of fact.”
In Washington, D.C., safety board spokesman Peter Knudson said preliminary indications from radar data of the plane’s take off Thursday from LaGuardia Airport “did not show any targets” that might be birds. But investigators will keep looking, he said.
“We are going to go and get all the electronic data necessary to get a complete picture of what was on his screen. It’s possible there was more being displayed than we initially understood. We just don’t know definitively at this point — we don’t know exactly what was shown on that radar screen,” Knudson said.
Sullenberger, who has so far not publicly talked about the crash, has been invited to attend President-elect Barack Obama’s inauguration on Tuesday, according to the mayor of his hometown, Danville, California.
Stephen Bradford, president of the U.S. Airline Pilots Association, said he asked Sullenberger not to engage in any media activities because the pilots association has “interested party” status with the NTSB, which allows it to participate in the investigation.
Higgins heaped praises on Sullenberger and the flight crew, noting they all had 20 or more years experience and were trained to do their jobs.
“Miracles happen because a lot of everyday things happen for years and years and years,” she said. “These people knew what they were supposed to do and they did it and as a result, nobody lost their life.”
TITLE: Celebration, Solemnity as Obama Takes Presidency
PUBLISHER: Combined Reports
TEXT: WASHINGTON — Barack Obama approached his inauguration as the 44th U.S. president with a mix of solemnity and celebration on Sunday, laying a wreath at a military grave and then swaying along at a concert featuring Bruce Springsteen and Beyonce.
The events reflected popular excitement about his choice as the first black U.S. president tempered by anxiety about the fact that United States is fighting wars in Afghanistan and Iraq and faces its worst economic crisis since the Depression.
Walking side by side, Obama and Vice President-elect Joe Biden placed a wreath at Arlington National Cemetery’s Tomb of the Unknowns before braving a cold winter’s day to take in a concert on the steps of the Lincoln Memorial, the neoclassical temple that honors the 16th U.S. president.
The president-elect, an Illinois Democrat, often echoes Republican Abraham Lincoln, who led the country during the Civil War, ended slavery in the United States and who, Obama said on Sunday, “in so many ways made this day possible.”
The run-up to Obama’s inauguration on Tuesday has, like his election itself, been defined by enormous public enthusiasm, carefully choreographed events and a lofty spirit of unity.
Accompanied by his wife, Michelle, and their daughters Malia and Sasha, Obama nodded, clapped and rocked along to the music at the concert, which included Stevie Wonder singing “Higher Ground” and U2 paying tribute to Dr. Martin Luther King Jr with “Pride (In the Name of Love).”
Obama sang along as folk singer Pete Seeger led the crowd in Woody Guthrie’s patriotic anthem “This Land is Your Land.”
Spliced between the songs, actors Denzel Washington, Laura Linney and Tom Hanks gave speeches that evoked past crises in U.S. history, including the Civil War, the Depression and the Cold War.
As Obama prepared to be sworn in he stressed the depth of the challenges that he faces, including the recession and the unfinished wars in Iraq and Afghanistan, but said he was optimistic about the country’s ability to face them.
“There is no doubt that our road will be long, that our climb will be steep. But never forget that the true character of our nation is revealed not during times of comfort and ease, but by the right we do when the moment is hard,” he said.
“Despite the enormity of the task that lies ahead, I stand here today as hopeful as ever that the United States of America will endure, that it will prevail, that the dream of our founders will live on.”
The U.S. unemployment rate rose to 7.2 percent in December, its highest level in nearly 16 years, and 2.6 million people in the United States have lost their jobs in the last year, the largest employment slump since 1945.
Obama has vowed to spend hundreds of billions of dollars to jolt the country out of a deepening recession. A New York Times/CBS News poll published on Saturday showed Americans were confident he could turn the economy around and were prepared to give him years to deal with the crush of problems he faces.
Obama has said he wants to bring U.S. combat forces out of Iraq within 16 months of taking office, but his ability to do so hinges on violence in the country continuing to decline and on the capabilities of Iraqi security forces.
He has also has committed to sending more U.S. forces to Afghanistan to tackle insurgent violence that has risen in recent years.
Becky Kusar, 29, a Democrat who voted for Obama and was visiting Washington with her husband and 3-year-old daughter, expressed both enthusiasm about Obama’s election as well as anxiety about the economy and the war in Iraq.
“It’s been scary,” she said of the economic downturn as she stood in Lafayette Park across the street from the White House. “I am really hoping that he has the actions to back up what he is saying.”
Her husband, Carl, a Republican who did not vote for Obama was grudgingly willing to give him the benefit of the doubt. “You’ve got to give everybody a chance, is what I say.”
(AP, Reuters)
TITLE: Australian Man Jailed For Insulting Thai Monarchy
PUBLISHER: Agence France Presse
TEXT: BANGKOK — A Thai court on Monday jailed an Australian writer for three years for insulting the royal family in a novel, the latest case to highlight the strict laws protecting the country’s revered monarchy.
Harry Nicolaides, 41, arrived in a Bangkok court wearing a dark orange prison jumpsuit with his feet shackled and pleaded guilty to the charges related to a passage in a book he self-published in 2005.
“He has written a book that slandered the king, the crown prince of Thailand and the monarchy,” the judge told the court.
“He was found guilty under criminal law article 112 and the court has sentenced him to six years, but due to his confession, which is beneficial to the case, the sentence is reduced to three years,” the judge said.
A gaunt-looking Nicolaides — who has already been in custody for nearly five months — told reporters as he left the court after sentencing that he felt “dreadful,” adding: “I wish my family the best.”
His lawyer and relatives said he will seek a royal pardon for the sentence, with Nicolaides’ brother, Forde, describing the family as devastated.
“It is not Harry’s intention to appeal, but he is considering a pardon application, which can occur through a mechanism directly with the palace,” Forde Nicolaides told the Australian Associated Press from Melbourne.
“We’re devastated. You might be able to hear my mother crying in the background,” he said.
“It’s quite devastating for us. The whole case has been a massive emotional ordeal that has consumed our entire family. It’s beyond belief.”
Nicolaides earlier told the judge he was guilty of slandering 81-year-old King Bhumibol Adulyadej — who is revered with an almost religious devotion in Thailand — and his son Crown Prince Maha Vajiralongkorn.
“I respect the king of Thailand,” he told reporters in a tearful voice before the hearing began. “I was aware there were obscure laws [about the monarchy] but I didn’t think they would apply to me.”
The Australian had previously worked as a university lecturer in northern Thailand, and was detained at Bangkok’s Suvarnabhumi Airport departure lounge on August 31 on an arrest warrant issued two-and-a-half years earlier.
The charge relates to a passage in a self-published novel in 2005 called “Verisimilitude,” of which his family say only a handful of copies were sold.
Nicolaides’ Melbourne-based lawyer Mark Dean said his client’s health had deteriorated as a result of five months in prison.
“His physical health has deteriorated,” Dean said.
“He has lost weight, he has been continually unwell for extended periods of time and obviously psychologically he has found the experience of being in prison in Thailand very challenging.”
Dean said earlier Nicolaides would immediately appeal for a royal pardon.
“Once that sentence is passed, if it’s not a suspended sentence, then an application will be made for a royal pardon and we’re hoping that that will be processed as quickly as possible,” he added.
Nicolaides is not the first foreigner to fall foul of the so-called “lese majeste” laws, some of the harshest in the world protecting a royal family.
In 2007 a Swiss man, Oliver Jufer, was sentenced to 10 years in jail for defacing pictures of the king but he was later given a royal pardon and deported from the country.
Successive Thai governments have in recent months intensified the policing of laws against insulting the royal family.
Thai authorities have banned nearly 4,000 websites in recent months for allegedly insulting the monarchy. Police said last week that more than 17 criminal cases of insulting the royal family are currently active.
TITLE: Israeli Army Pulls Out of Gaza
PUBLISHER: The Associated Press
TEXT: JERUSALEM — Israel plans to pull all of its troops out of the Gaza Strip by the time President-elect Barack Obama is inaugurated Tuesday, but only if Hamas militants hold their fire, Israeli officials said.
Thousands of troops have left Gaza since Israel declared Saturday its intention to unilaterally halt fire after a devastating, three-week Israeli onslaught. Gaza’s Hamas rulers ceased fire 12 hours later. Large contingents of Israeli soldiers have kept close to the border, prepared to re-enter the territory if violence re-ignites.
A swift troop withdrawal would reduce the likelihood of clashes between militants and Israeli forces that could rupture the truce.
By getting its soldiers out before the Obama inauguration, Israel hopes to pave the way for a smooth beginning with the Obama administration and spare the incoming president the trouble of having to deal with a burning problem in Gaza from his first day, the Israeli officials said.
They spoke on condition of anonymity because they were not authorized to speak publicly about the plan.
Israel has been quietly concerned about possible policy changes by the incoming administration after eight years of staunch support from President George W. Bush. Obama has said Mideast peace will be a priority even as he grapples with a global economic crisis and wars in Iraq and Afghanistan.
Israel made its troop withdrawal plan known at a dinner Sunday with European leaders who came to the region in an effort to consolidate the fragile cease-fire, the Israeli officials said.
Prime Minister Ehud Olmert told his guests that his country had no desire to stay in Gaza, a Mediterranean strip of 1.4 million people that Israel vacated in 2005, while retaining control of its airspace, coastal waters and border crossings.
“We didn’t set out to conquer Gaza. We didn’t set out to control Gaza. We don’t want to remain in Gaza and we intend on leaving Gaza as fast as possible,” Olmert told the leaders of Britain, France, Germany, Spain, Italy and the Czech Republic, according to the officials.
Israel also holds elections next month, and polls show Israel’s wartime leaders have been strengthened by the offensive that drew overwhelming support at home even as it attracted widespread condemnation across the globe because of the high Palestinian casualties.
At least 1,259 Palestinians were killed in Israel’s air and ground onslaught, more than half of them civilians, according to the United Nations, Gaza health officials and rights groups. Thirteen Israelis died, including four soldiers killed inadvertently by their own forces’ fire.
In Hamas’ first statement on losses it suffered during the offensive, spokesman Abu Obeida said Monday that the militant group lost 48 fighters. It was impossible to verify the figure, which is far below the hundreds of militants that Israel claims it killed.
Neither side has reported a violation of the truce since Hamas halted its fire. But the quiet remains tenuous because neither side achieved its long-term goals.
Israel won a decisive battlefield victory but did not end Hamas’ rocket fire into the southern part of the country or solve the problem of smuggled arms reaching Gaza militants.
Hamas remains firmly in power in Gaza, but Palestinian casualties were steep and large swaths of the tiny seaside territory were devastated by the Israeli air and ground assault. Gaza municipal officials said an initial assessment showed some 20,000 residential and government buildings were severely damaged and another 4,000 destroyed. Some 50 of the UN’s 220 schools, clinics and warehouses were battered in shelling and crossfire.
Before arriving in Jerusalem, the European officials met with Arab leaders in Egypt to discuss ways to cement the truce. Delivering humanitarian aid to rebuild Gaza and opening borders blockaded by Israel emerged as key goals.
Gaza’s border crossings have been sealed since Hamas violently took over the territory in 2007, deepening the already grinding poverty there and trapping the residents inside.
The gathering failed to deliver a specific plan to stanch the flow of arms into Gaza by sea and through tunnels built under the 8-mile border Gaza and Egypt share. Israel wants international monitors, but Egypt has refused to have them on its side of the border.
The truce brought relief to Gaza’s citizens, who took stock of the devastation in relative safety for the first time since Israel launched the offensive on Dec. 27. And it brought more trauma, as rescue workers in surgical masks ventured into what were once no-go areas and pulled 100 bodies from buildings pulverized by bombs.
“We’ve pulled out my nephew, but I don’t know how many are still under there,” Zayed Hadar said as he sifted through the rubble of his flattened home in the northern town of Jebaliya.
Despite losses suffered, Hamas Prime Minister Ismail Haniyeh claimed “a heavenly victory” in remarks broadcast on Al-Jazeera Arabic news channel.
Tension eased in southern Israel, even though Hamas launched nearly 20 rockets in a final salvo before announcing a cease-fire. Three Israelis were lightly wounded, while two Palestinians were killed in last-minute fighting, medics said.
In the rocket-battered Israeli town of Sderot, residents went back to their routines, after sitting out the war locked inside their homes or in safer parts of the country. One man sat on a sidewalk in the sunshine, eating a chicken sandwich.
“We want it quiet here,” said 65-year-old Yoav Peled. “And if it isn’t, our army is ready to continue.”
TITLE: EU Economy Set To Shrink
PUBLISHER: Agence France Presse
TEXT: BRUSSELS — The EU economy will shrink nearly 2.0 percent this year as a severe recession drives unemployment and government deficits to levels not seen for years, the European Commission forecast Monday.
After growing 1.0 percent in 2008, the 27-nation economy of the European Union is poised to contract by 1.8 percent this year, the EU’s executive arm said in a dramatic downward revision of its forecasts.
Predicting that the roots of recovery will only take hold in the middle of the year, the commission forecast that the EU would achieve economic growth of only 0.5 percent in 2010.
The outlook was marginally worse for the 16 countries sharing the euro, which the commission forecast would see their combined economy shrink by 1.9 percent this year after growing 0.9 percent in 2008.
The forecast marked a severe downward revision from the commission’s last estimate in November, when it predicted that eurozone economy would eke out growth of 0.1 percent.
With the eurozone economy suffering from a 9.2 percent drop in business investment this year, it too would only begin picking up in the middle of the year before managing to grow 0.4 percent in 2010.
At the same time, unemployment will climb to levels not seen in Europe for over a decade as joblessness becomes once again a major headache for workers and politicians.
The commission forecast that the eurozone jobless rate would rise from 7.5 percent in 2008 to 9.3 percent this year and hit 10.2 percent in 2010 — over the 10 percent mark for the first time since 1998.
With their economies in a tailspin, European governments pledged in December to pump a combined 200 billion euros into a Europe-wide economic stimulus package.
However, some governments, including that of economic powerhouse Germany, have already come out with plans since then for even more stimulus or are considering doing so.
“The measures to stabilize the financial market, the easing of monetary policies and the economic recovery plans will enable us to put a floor under the deterioration of the economy this year,” said EU Economic and Monetary Affairs Commissioner Joaquin Almunia.
As governments commit billions to trying to revive their economies and bail out their banks, public deficits will swell, ballooning in the eurozone from 1.7 percent of output in 2008 to 4.0 percent in 2009 and 4.4 percent in 2010.
TITLE: Former British Finance Minister Ken Clarke Returns To Frontline Politics
PUBLISHER: The Associated Press
TEXT: LONDON — Former U.K. finance minister Kenneth Clarke made a surprising return to the front lines of British politics Monday as shadow business and enterprise secretary for Britain’s main opposition party.
Clarke said he is “delighted” with his new role in the Conservative Party, which will allow him to square off against Business Secretary Peter Mandelson, of the governing Labour Party, over economic policy.
Clarke said the country faces the gravest economic crisis of his lifetime.
The Tory stalwart, who has served as health secretary, education secretary and home secretary in various British administrations, is set to have a prominent position in the next general election — which must be held by the middle of next year.
“It is going to be a historically important election, and I don’t want to sit on the sidelines — I want to be out on the pitch fighting for the change Britain needs,” said Clarke.
Clarke, 68, is a rare pro-European politician in a party filled with so-called euroskeptics. This break with party orthodoxy has hurt him in the past, and Clarke indicated he would not try to change party leader David Cameron’s views.