SOURCE: The St. Petersburg Times
DATE: Issue #1445 (7), Tuesday, February 3, 2009
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TITLE: Olympic Sponsors Pledge $460M
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — Rostelecom and MegaFon signed a record $460 million sponsorship deal for the 2014 Sochi Olympics as Prime Minister Vladimir Putin reassured visiting Olympic officials that preparations remained on track for the games.
The Olympic Organizing Committee said Saturday that the telecommunication companies would provide $260 million in cash and services and invest another $200 million into local infrastructure under the agreement, which it called the largest of its kind in Olympic history.
The announcement did not say how state-controlled Rostelecom, the country’s main long-distance phone provider, and MegaFon, the third-largest mobile phone provider, would divide the spending between themselves as the games’ first “Tier One” partners. 
The much-needed cash inflow comes as the government is considering revising the games’ budget in view of the global economic crisis, Deputy Prime Minister Dmitry Kozak said Saturday. Before the ruble devaluation started last year, the cost to upgrade the Black Sea resort to host world-class competitions was estimated at $12 billion in state and private money.
Kozak, Russia’s point man on the games, did not say whether the revised budget would grow or shrink, instead listing factors that would influence spending. For example, he suggested that the ruble’s sharp devaluation could make construction more expensive. Many foreign contractors are bidding to do the work, including companies from Austria, Bulgaria, Turkey, Germany, Finland and Sweden, he said.
Russia will also import a “big share” of construction materials, said Dmitry Chernyshenko, head of the Sochi Olympics Organizing Committee.
On the other hand, Kozak said, Russian building materials are getting cheaper and competition is growing for contracts as the construction market shrinks.
Putin, credited with winning Sochi’s bid for the games, met Saturday with Jean-Claude Killy, chairman of the International Olympic Committee’s coordinating commission, to assure him that there would be no delays in the preparations to host the games despite the global economic woes. 
“Everything concerning the Olympic project … is protected by the budget and is guaranteed to be financed,” Putin told Killy after the IOC team completed an inspection of the Sochi sites.
Spending will reach $6 billion, half of the initially planned $12 billion, by the end of this year, Putin said. Russia will set aside 127 billion rubles ($3.6 billion) from this year’s budget to finance Olympic projects, up from 113 billion rubles last year, he said.
Twenty-one facilities for the games are already under construction, and workers will begin building the rest of them this year, Putin said. All Olympic facilities should be ready by the end of 2012 and available for testing with lower-level competitions, he said.
Killy said he approved of the plans and the sites that had been picked for the facilities. “There are no obstacles for holding such Olympic Games that will surprise the world,” he said, according to comments posted in Russian on the Cabinet’s web site.
Killy also said he appreciated the work being carried out on Sochi’s infrastructure. This inspection is his second since Sochi won its bid to host the games. “It is already visible from a plane that the city is really radically changing because you can see the construction of the cargo seaport and construction of access railroads,” he said.
The Olympic Organizing Committee is scheduled to announce corporate sponsors from five more sectors of the economy: banking, oil, gas, metals and sportswear. It remained unclear Sunday how the selection worked in the case of telecommunications companies and who the other bidders were.
The committee said in the statement that Rostelecom and MegaFon had been selected because of the “feasibility of their proposals, defining a clear vision of the potential of our cooperation.”
Calls to the committee, Rostelecom and MegaFon went unanswered Sunday.

TITLE: Wave Of Protests Sweeps Russia
AUTHOR: By Alexandra Odynova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Angered over mounting economic problems, thousands of people took to the streets in Moscow and other cities around Russia over the weekend to denounce President Dmitry Medvedev and Prime Minister Vladimir Putin in the largest display of public discontentment in years.
United Russia, the party that dominates Russian politics and is led by Putin, brought thousands of people to Manezh Square near the Kremlin to rally in support of Putin and Medvedev.
The largest anti-government rally took place Saturday in Vladivostok, where the Communist Party led some 2,500 people in a march against the government and a recent decision to increase tariffs on imported cars. The livelihood of many local residents depends on imported cars. 
Vladivostok protesters carried banners reading, “Kremlin, we are against you,” and some shouted slogans for Putin to resign, news agencies reported.
Vladivostok police kept a close eye on the unauthorized rally but did not intervene. The police violently dispersed a similar protest in December, detaining about 100 people.
In Moscow, about 1,000 Communist demonstrators gathered with signs reading “Putin’s plan — Peril to Russia!” at a sanctioned rally on Triumfalnaya Ploshchad, near the Mayakovskaya metro station. Communist leader Gennady Zyuganov called on the government to abandon Western economic models and nationalize broad swathes of the economy. 
The 90-minute demonstration was cordoned off by hundreds of OMON riot police, and a helicopter patrolled the sky over central Moscow.
Four activists with the banned National Bolshevik Party threw smoke bombs into the crowd, and they were detained quickly by the police. 
National Bolshevik leader Eduard Limonov was detained with several supporters as they approached the venue of the Communist demonstration shortly after the Communists left. He was released Sunday after spending the night in detention, a spokesman for Limonov said.
Several hundred people decried the government at two Moscow demonstrations on Sunday.
Also Saturday, several dozen activists with Garry Kasparov’s United Civil Front opposition group marched on Bolshaya Polyanka, near the Polyanka metro station, shouting “Down with the government!” and “Russia without Putin!” Young people wearing masks and carrying metal rods brutally beat several protesters while police detained others.
A handful of protesters from the anti-Kremlin youth group My, or “We” in English, rallied outside the White House with blank signs and their mouths taped shut. Police detained all the participants.
A Moscow police spokesman said 41 people — comprising National Bolshevik and United Civil Front activists —were detained briefly Saturday for participating in unauthorized rallies. Over 5,000 officers were deployed.
The anti-government rallies were largely ignored by state television, which instead covered United Russia’s pro-government rallies in Moscow and several other cities. About 9,000 people showed up on Manezh Square for about 30 minutes, waving signs with images of Medvedev and Putin and the words “We trust!” Army soldiers served hot tea and cookies to the participants.
St. Petersburg authorities refused to sanction an opposition rally, so United Civil Front staged one-person pickets in which individuals took turns holding an anti-government poster on the street.
About 500 Communist protesters attended an anti-government rally in Novosibirsk, and some 100 rallied in Sochi, Itar-Tass reported.
The Liberal Democratic Party also held a sanctioned protest in Moscow.
The protests pose a challenge for the government, which saw little public discontent over the past eight years as high oil prices fueled higher living standards. But with oil prices crashing back to earth, the government faces the prospect of growing protests, especially if it is forced to cut social spending, said Alexander Tarasov, a sociologist and Soviet-era dissident. “People’s illusions that Russia won’t be affected by the global financial crisis have vanished, and the result could easily be wide public indignation,” Tarasov said.
Alexander Averin, a spokesman for the Other Russia opposition coalition, which includes both National Bolshevik and United Civil Front activists, said the group is planning more protests and expects many more participants by the summer. The opposition, which usually focuses on Moscow and St. Petersburg, will widen its protests to other cities soon, Averin said.
The government is clearly worried about possible unrest. During a meeting with Federal Security Service officers last week, Medvedev stressed that the agency and police force would receive sufficient financial support to keep the situation under control in the country despite the crisis. 
“Of course they have fears about our activities,” Averin said of the government. “If they weren’t afraid, they wouldn’t dispatch so many policemen to prevent protests.” 
Tarasov said he was worried about police violence. “It is also possible that they will try too hard in their attempts to suppress the demonstrators,” he said.

TITLE: Ruble Hits 11-Year Low as Traders Push to Break Target
AUTHOR: By Emma O’Brien
PUBLISHER: Bloomberg
TEXT: The ruble slumped to its weakest level against the dollar in 11 years on Monday as investors speculated Russia will be forced to give up its currency defense after draining reserves.
The ruble lost as much as 1.7 percent to 36.3550 per dollar, nearing the weakest end of a trading range widened by the central bank less than two weeks ago.
Bank Rossii Chairman Sergey Ignatiev pledged on Jan. 22 to use reserves to keep the currency at a level of 41 against a basket of dollars and euros, which translated to 36 per dollar. Based on current euro-dollar rates, the ruble would need to fall to 36.45 per dollar to break the band, according to Merrill Lynch & Co. A central bank spokesman declined to comment.
“The pace of the move to the target is definitely going to be a source of concern to the central bank,” said Martin Blum, head of emerging-market economics and currency strategy at UniCredit SpA in Vienna. “Global risk appetite is continuing to deteriorate so the pressures on the ruble will continue.”
The ruble slumped 35 percent against the dollar since August as a 63 percent drop in Urals crude oil prices and the worst global economic crisis since the Great Depression spurred investors and Russian citizens to withdraw about $290 billion from the country, according to BNP Paribas SA.
Bank Rossii expanded its trading range for the ruble 20 times since mid-November before switching policy to let “market” forces help determine the exchange rate within a widened limit. The new trading band would only be extended should oil, Russia’s biggest export earner, fall to $30 a barrel and stay there “for a long time,” Ignatiev said Jan. 22.
Prime Minister Vladimir Putin said in a Jan. 25 interview with Bloomberg Television that Russia had set itself apart from other countries by using reserves so as not to “crush the national currency overnight,” avoiding a repeat of the crisis a decade ago when the ruble plunged as much as 29 percent in a day as the government defaulted on $40 billion of debt.
The central bank raised its benchmark one-day and seven-day interest rates through loan auctions on Friday to make borrowing money to speculate on the ruble more expensive. Bank Rossii lent 7.7 trillion rubles ($213 billion) to Russian banks in so-called repo auctions last month, aiding the ruble’s depreciation as lenders converted the funds into foreign currency, according to UniCredit and ING Groep NV.
Russia reduced its foreign-currency reserves, the world’s third-largest, by more than a third to $386.5 billion since August as it sold dollars and euros to stem the ruble’s depreciation. The central bank, which was offering foreign currency from Jan. 28 to 30, is yet to be seen making offers on the market today, said Evgeny Nadorshin, senior economist at Trust Investment Bank, citing the Moscow-based lender’s currency traders.
The ruble was 1.3 percent weaker at 36.2073 per dollar and 1.2 percent lower against the basket at 40.7303, which is 0.7 percent away from the target limit of 41, as of 5 p.m. in Moscow. It dropped 1 percent to 46.2471 per euro.
Russia has managed the ruble against a basket made up of about 55 percent dollars and the rest euros since 2005, to limit currency swings that disadvantage Russian exporters. The basket rate is calculated by multiplying the ruble’s rate to the dollar by 0.55, the euro rate by 0.45, then adding them together.
The dollar’s strength accelerated the ruble’s depreciation against the U.S. currency. The dollar gained against all 16 major currencies tracked by Bloomberg on Monday, except for the Mexican peso, Japanese yen and Danish krone, climbing as much as 0.8 percent to 1.2706 per euro.

TITLE: Court Finds OGF Head  Guilty Amid Protests
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: An anti-government protest staged in St. Petersburg by the local branch of Garry Kasparov’s United Civil Front (OGF) passed off peacefully on Saturday with no arrests, although on Monday the group’s leader was found guilty on two public order offences relating to an earlier rally. 
“I’m glad that the law enforcement authorities are sometimes wise enough to follow the law,” Olga Kurnosova, OGF’s local leader, said of Saturday’s event by phone on Monday.
Kurnosova did not take part in Saturday’s protest to avoid being detained. 
“My organization forbade me to take part after my detention on Jan. 8 so as not to risk my freedom,” she said. “Besides, we learned from knowledgeable sources that there has been a command to detain me under any circumstances.”
Kurnosova had been detained during a rally against the rising of imported car tariffs on Jan. 8 and charged with violating regulations on holding public events. She was in court on Jan. 26, but the hearing was postponed until Monday, when an OGF activist showed video footage proving that Kurnosova did not shout slogans before the official start of the meeting, contrary to what the police had claimed.
However, Kurnosova was found guilty by the court on two charges and fined 1,000 rubles ($27). She said she planned to appeal the verdict.
A meeting that had been planned for Saturday at Pionerskaya Ploshchad near the Theater of Young Spectators (TYuZ) was not sanctioned by City Hall, so OGF held a series of consecutive one-person protests at the location instead.
Despite a massive law enforcement presence, including a group of fully equipped OMON special-task policemen complete with helmets and truncheons, the police did not interfere, except for one officer who routinely checked activists’ documents and wrote down information about the protesters in his notebook. 
Four OMON trucks, three buses and a number of smaller vehicles were parked at and near the location, and some top officers were on the scene, including General-Mayor Anatoly Agoshkov, the head of the Public Security Police in St. Petersburg.
Several activists one after another held a banner reading “Put the Authorities Under People’s Control” and an OGF flag. One activist refused to show her identification documents or to give her name to the police officer, but no action was taken. 
Other activists protested against rising prices and increases in the cost of communal services, the imprisonment of dissident former Yukos owner Mikhail Khodorkovsky, and the Jan. 19 killings of human rights lawyer Stanislav Markelov and journalist and anarchist Anastasia Baburova.
Saturday’s rally was not permitted on the grounds that there would be two stage performances at TYuZ and because a nearby skating rink was said to be crowded at weekends. 
However, on Saturday the square was almost empty, while there were only 25 skaters on the skating rink, located 200 meters from the protest’s site.
When Saturday’s rally was denied permission on Wednesday, several members of Eduard Limonov’s outlawed National Bolshevik Party held a surprise protest on Thursday by entering Prime Minister Vladimir Putin’s representative office in St. Petersburg demanding a meeting with Putin, while several others lit flares and unfurled a banner saying, “Putin, Answer for the Crisis!” 
Ravil Bashirov and Yevgeny Markin, who handcuffed themselves to the office, and Sergei Grebnev, who displayed an NBP flag in the window were detained and charged with “disorderly conduct.”
Judge Viktoria Chernikova of Admiralteisky District Court No. 4 declined the detainees’ requests for the hearings to be transferred to their local courts and conducted the hearing during the night. 
Bashirov and Markin were sentenced to five days in custody at 4:30 a.m. and 8 a.m. in the early morning on Friday, respectively. 
Grebnev was returned to the police precinct because of a mistake in a police report and had his case heard on Friday evening. He was also sentenced to five days.
Andrei Dmitriyev, the NBP local leader, said that the unusual nighttime court session and the same sentence handed down to all three activists were the result of a command from the authorities. 
“How else do you explain why the court worked overnight? Besides that’s what the prosecutor told the [detained activists’] lawyer,” Dmitriyev said by phone on Monday.
The activists were due to be released on Tuesday.

TITLE: In Brief
TEXT: <b>Dolphins Held Hostage</b>
ST. PETERSBURG (SPT) — Three dolphins given on loan by the St. Petersburg dolphinarium to a dolphinarium in Sharm Al-Sheikh have not been returned as agreed, Interfax reported Monday, and the Russian Embassy in Egypt is stepping in to resolve the conflict.
“The Russian embassy in Egypt has already had two consultations on the matter.  The problem is to be solved in a week,” a spokesman for the St. Petersburg dolphinarium was quoted as saying.
The Egyptian dolphinarium is continuing to show the dolphins — named Masha, Stesha and Styopa — but Russian representatives have been unable to check on their welfare.
The city dolphinarium said it did not intend to sue the owners of the Egyptian dolphinarium if the animals were returned.

TITLE: 23 Killed in Komi Nursing Home Fire
PUBLISHER: Combined Reports
TEXT: A nursing home fire in the Komi region in northwestern Russia has killed at least 23 people, and officials said local authorities were slow to report the blaze.
President Dmitry Medvedev dispatched the Kremlin’s envoy in northwest Russia to investigate the blaze in the village of Podyelsk, 120 kilometers from the regional capital, Syktyvkar, which was brought under control by firefighters early Sunday.
Konstantin Bobrov, a spokesman for the Komi government, said by telephone that the fire swept quickly through the single-story wooden building in the town.
He said three residents of the home were rescued and 23 died in the fire. Bobrov said the town had a fire station, but it could not cope with the size of the fire and more firefighters had to be called from a nearby town.
Grigory Gorbunov, a spokesman for the Emergency Situations Ministry’s branch for northwestern Russia, said on Vesti-24 television that local authorities had been slow to report the fire. He said firefighters found the building engulfed in flames when they arrived.
Interfax quoted emergency officials in Komi as saying that up to 25 people might have died.
The cause of the latest fire was unknown. Bobrov told Vesti-24 that an unextinguished cigarette could have been to blame.
Russia has experienced frequent fires at hospitals, schools and other state-run facilities. Many have been blamed on official negligence and violations of fire safety rules. 
In November 2007, a fire caused by a short circuit killed 32 patients in a nursing home in the Tula region, south of Moscow.
Emergency officials said the building was not equipped with a fire alarm, and unsafe wiring had not been replaced, despite recommendations that it be done. When the fire erupted, employees did not call for help until half an hour after the blaze broke out and did little to evacuate patients.
In March 2007, 62 people died in a fire in another nursing home in the Krasnodar region. A nearby fire station had been closed, and it took firefighters almost an hour to get to the site from a larger town after a night watchman ignored two fire alarms before reporting the blaze, authorities said.
Another nursing home fire the same year killed 10 people in Siberia. The fire-alarm system functioned properly, but a nurse on duty was away at the time and failed to immediately alert patients and call firefighters.
Komi Governor Vladimir Torlopov said an investigation would begin into the latest fire immediately. “I have ordered the most thorough investigation into the reasons for this tragedy. Now, the most important thing is to provide the injured with everything they need,” Torlopov said in a statement on his administration’s web site, www.rkomi.ru.
The Komi republic, whose northern extremities reach into the Arctic Circle, is sparsely populated and covered mostly by forests and swamps. It holds significant reserves of oil, coal, diamonds and bauxite. 
(AP, Reuters)

TITLE: New Patriarch Kirill Targets Youth, Unity
AUTHOR: By Michael Stott
PUBLISHER: Reuters
TEXT: MOSCOW — Patriarch Kirill, the new leader of the world’s 160 million Russian Orthodox, pledged at his enthronement on Sunday to keep his church united, recruit the young and open up dialogue with “sister churches.”
Hundreds of dignitaries and thousands of ordinary worshipers packed Christ the Savior Cathedral to see Kirill enthroned as the 16th patriarch in an elaborate, three-hour ceremony.
Two metropolitans seated Kirill three times in the patriarch’s green and white throne, chanting “axios,” worthy, along with the clergy and the congregation.
The 62-year-old new patriarch will oversee the world’s second-biggest Christian church, which has grown stronger, wealthier and more influential since the collapse of communism. Most Russians consider themselves Orthodox, and the church may play a key role in molding the population’s response to the economic crisis gripping the country.
Kirill’s predecessor, Alexy II, plunged into politics in 1991, condemning violence as a failed coup crumbled, and again in 1993, trying unsuccessfully to broker a peace deal between former President Boris Yeltsin and his hard-line opponents.
President Dmitry Medvedev and Prime Minister Vladimir Putin looked on at Sunday’s ceremony, crossing themselves repeatedly. Grand Duchess Maria Vladimirovna, a descendant of the last tsar, also attended. Medvedev congratulated Kirill, saying his enthronement was a “huge event” that he hoped would lead to “a full dialogue in solidarity between the Russian Orthodox Church and the state.”
Kirill, a relative liberal in Russia’s highly conservative church, emphasized independence. He said relations with the government should be run on “a constitutional basis.” The Constitution stipulates the separation of church and state.
The new patriarch said his priority was to bring God to young people. The church could not wait “in an age of moral relativism, when the propaganda of violence and depravity kidnaps the soul,” for young people to come to it, he said.
Kirill also hinted that he may play a more active role as pastor of the 30 million Russian Orthodox believers living outside Russia.
Pledging to maintain church unity, Kirill said he would increase dialogue with other former Soviet republics and the churches in them, as well as with “sister churches,” but he did not mention ties with Catholics specifically.
Kirill, formerly a metropolitan who ran the church’s external relations department, has spoken in favor of warming ties with Rome. He is one of a few top Russian Orthodox clergy to have met Pope Benedict XVI.
Sunday’s ceremony was rich in the traditions of the Eastern Orthodox Church, which considers itself the true survivor of original early Christianity. Prince Vladimir of Kiev adopted Byzantine Christianity as the state religion in 988. Priests intoned the sonorous bass tones of the ancient Orthodox liturgy, interspersed with bursts of praise and thanks for the patriarch from choirs on the cathedral’s balconies.

TITLE: Ex-CIA Spy Allegedly Used Son to Collect From the FSB
AUTHOR: By William McCall
PUBLISHER: The Associated Press
TEXT: PORTLAND, Oregon — A disgraced former CIA agent in prison for espionage recruited his son to meet with Russian agents in cities around the world to collect money owed by his former handlers, according to a U.S. indictment.
Court papers say the former CIA agent, Harold Nicholson, sent his 24-year-old son, Nathaniel, to San Francisco and three foreign countries from 2006 to 2008 to meet with agents from the Federal Security Service.
The documents say the son delivered information to the FSB and collected about $47,000. The nature of the information was not disclosed.
David Miller, the FBI’s top agent in Oregon, said he believed that it was the first time in U.S. history that anybody had faced trial twice for spying or espionage.
The father and son pleaded not guilty Thursday to charges of conspiring to act as agents of a foreign government and money laundering. A judge set their trial for March 31.
Their plans were undone by a bank robber at a federal prison in Sheridan, Oregon, who told authorities six years ago that the elder Nicholson was trying to establish contact with his former spymasters, according to the papers.
According to the federal grand jury indictment, FSB agents who met with the son still believed that Harold Nicholson might be able to provide them with valuable information — how he had been discovered and how much the investigators had learned about Russian spying.
Harold Nicholson pleaded guilty in 1997 to conspiring to commit espionage after being paid $300,000 to pass secrets to the Russians.
The indictment says he wanted additional payments for his work and used his son as a go-between.

TITLE: Fear And Mourning At Novaya Gazeta
AUTHOR: By Mike Eckel
PUBLISHER: The Associated Press
TEXT: The dead loom over the morning editorial meeting at leading investigative newspaper Novaya Gazeta. The staff is trying to plan the next issue, and editor-in-chief Dmitry Muratov is in an understandably foul mood.
In a corner hang photos of four reporters he has lost in the past eight years — one beaten to death, one allegedly poisoned, two shot — the most recent on Jan. 19.
It’s not easy to put a paper out these days, Muratov said.
“There’s usually a lot of jokes, laughing, talk about ideas. But our batteries are totally spent,” said Muratov, 47, billows of pipe smoke filling the long pauses. “How can there be any sort of [normal] frame of mind when a journalist is being buried?”
That journalist was Anastasia Baburova, a 25-year-old reporter. She and a human rights lawyer were shot execution-style by a masked man with a silenced pistol as they walked together a few blocks from the Kremlin.
In a country considered one of the most dangerous for journalists, no newspaper has suffered like Novaya Gazeta. Most media have been cowed into submission, and no other newspaper publishes such probing investigative articles and acid commentary about government corruption, police-state politics and war abuses in Chechnya.
“Every two or three years, we lose someone,” said Yelena Kostyuchenko, a 21-year-old investigative writer for the paper. “But you just have to write, write, write and keep writing. You have to.”
Some 16 journalists have died in contract-style slayings or under suspicious circumstances in Russia since 2000. Many more have been assaulted or threatened.
Under Vladimir Putin, who became president in 2000 and now is prime minister, the television networks watched by most Russians were taken over by the state, their news operations highly sanitized. Big-selling newspapers are either sympathetic to the Kremlin or owned by Kremlin-allied business groups.
Of the many free-spirited papers that sprang up when the Soviet Union collapsed, Novaya Gazeta — meaning New Newspaper — is a rare survivor.
Its most high-profile loss was Anna Politkovskaya, a reporter who savaged the Kremlin for its conduct of the war on Chechen separatists. Her shooting outside her Moscow apartment in 2006 provoked worldwide condemnation and major embarrassment for the Kremlin.
Three Chechens — two brothers and a former police officer — are on trial for Politkovskaya’s murder, but the prosecution is not offering a motive or identifying any mastermind, leading Novaya Gazeta and others to claim that the trial is a cover-up. Putin has claimed that the killing was hatched abroad to discredit Russia.
The paper’s first fatality, in 2000, was Igor Domnikov, who wrote about regional corruption. He was attacked with a hammer. Seven members of a criminal gang were convicted of his murder in 2007. The lead defendant claimed a regional governor had Domnikov killed for criticizing him. The governor was not charged.
In 2003, Yury Shchekochikhin died of a severe allergic reaction, but colleagues claimed that he was poisoned. Shchekochikhin, 53, wrote about high-level corruption and investigated the deadly 1999 bombings of apartment blocks.
In the latest killing, it appears that lawyer Stanislav Markelov, who specialized in defending Chechens, environmentalists and human rights activists, was the primary target and Baburova may have been killed after she tried to intervene.
Many at Novaya Gazeta are convinced that nationalist or fascist groups are behind the latest attacks, and the paper’s own blog is full of anonymous postings celebrating the killings. Others suspect the involvement of security agencies, citing past incidents when Novaya Gazeta’s phones were tapped; in 2000, its computer hard drives were stolen.
Novaya Gazeta writers and editors have attended self-defense classes and keep their notes hidden or stored on secure computer servers. Some use pseudonyms. At least one has bodyguards because of death threats. Others take precautions they won’t discuss. Alexander Lebedev, a billionaire former lawmaker who is part-owner of the paper, is demanding that authorities allow its reporters to carry guns.
Not all the paper’s staff support the idea. Muratov, the editor, does.
“Either we defend ourselves or we go write about nature and birds … and all positive things. We become a tabloid,” he said. “And then we don’t write about the security services. We don’t write about corruption. … We don’t write about fascism.”
Yulia Latynina, a radio show host and Novaya Gazeta columnist who is relentlessly critical of Putin, blames fascist gangs for the killings and accuses police agencies and security forces of sympathizing or even cooperating with them.
Like Politkovskaya, her name appears regularly on death lists circulating on the Internet. Is she afraid? Latynina demurs, saying, “The Kremlin doesn’t need another Politkovskaya.”
Vera Chelysheva, who writes for the paper’s web site, said most Russians are indifferent to the murders.
“This is a country that lived through the gulag camps, through Stalin, they know how to kill people. That’s why no one is taking to the streets in protest,” she said. “This is a country that’s forgetting its history.”
Founded in 1993, Novaya Gazeta is published thrice-weekly and its circulation has climbed to 270,000 — less than the state-run or pro-Kremlin newspapers but strong among Russians who seek an independent voice on touchy issues such as government corruption or Chechnya.
A libel judgment nearly shut it down in 2002. Then, three years ago, Lebedev and former President Mikhail Gorbachev bought a 49 percent stake for an undisclosed sum. The journalists hold the remaining shares.
Two days after the latest killings, half the front page was filled with a photo of Markelov lying on the sidewalk, blood pooled by his head, and these words of defiance:
“The killers have no fear. Because they know that they will never be punished. But the victims also have no fear. Because when you defend another person, you stop being frightened.”

TITLE: Georgia Gets New Premier
PUBLISHER: Reuters
TEXT: TBILISI, Georgia — Georgian President Mikheil Saakashvili named the fifth prime minister of his five-year rule on Friday after Grigol Mgaloblishvili resigned, citing ill health after just three months in the job.
Saakashvili named 33-year-old Finance Minister and Deputy Prime Minister Nika Gilauri to the post, which Mgaloblishvili had held since Nov 1.
“We carried out a mechanical reshuffle,” Saakashvili told a televised meeting of the cabinet, appointing Gilauri’s 30-year-old deputy Kakha Baindurashvili as finance minister.
The shuffle marks the latest government upheaval in a country reeling from war with Russia in August, when Moscow’s crushing counterstrike repelled a Georgian assault on South Ossetia. 
“We should be working like a military headquarters,” Saakashvili said. “We should be working day and night to create new jobs and to save our economy.”
The changes need approval by parliament, where Saakashvili’s United National Movement holds a strong majority. Mgaloblishvili, a 35-year-old career diplomat, blamed his poor health for his resignation. He has been receiving treatment in Germany for a kidney condition.
Kakha Kukava, a leader of the opposition Conservative Party, complained about Saakashvili’s administrative style.
“We have our fifth prime minister of the last five years — such things rarely happen even in Latin America,” Kukava said. “Georgia’s main problem is not the prime minister or the government, it’s the president.”

TITLE: In Brief
TEXT: <b>Nashi Observes Vote</b>
MOSCOW (Bloomberg) — The pro-Kremlin Nashi youth group sent a delegation to Iraq to monitor weekend provincial elections, citing concerns that the United States had failed to impose democracy in the run-up to the contest.
“We have strong grounds to doubt that America has built a democratic government in Iraq in the past six months,” Konstantin Goloskokov, the head of Nashi’s delegation, said in a statement. “We want to see for ourselves whether Iraq can pass this test.”
Elections were held Saturday in 14 of Iraq’s 18 provinces.

<b>Czechs Protest Shield</b>
PRAGUE, Czech Republic (AP) — Hundreds of communists have marched through Prague to protest plans to deploy parts of a U.S. missile-defense installation in the country.
Communist Party chairman Vojtech Filip said his party wanted a referendum on building a radar base, which would be part of a U.S. missile shield. Russia has threatened to deploy missiles in Kaliningrad if the plans go forward.

<b>Latvian Protests</b>
RIGA, Latvia (Reuters) — The biggest party in Latvia’s ruling coalition demanded a government shakeup Saturday ahead of a confidence vote called over discontent with the impact of the global economic crisis and corruption allegations.
The popularity of the current four-party coalition has plummeted since Latvia last year became the second EU nation after Hungary to need an IMF-led financial rescue.

<b>2 FSB Dead in Nazran</b>
ROSTOV-ON-DON (AP) — Security is being stepped up for government forces and police in Ingushetia after violence that left two Federal Security Service officers dead, the Interior Ministry said. 
The officers were killed in separate attacks by gunmen Friday in Nazran, the main city in Ingushetia, said the Interior Ministry branch in southern Russia.
It said a police officer and a bystander were wounded when one of the attacks erupted into a gunfight near Nazran’s train station. The ministry gave no details about the increased security measures. 

<b>U.S. Envoy on Base</b>
BRUSSELS — Russia must refrain from opening a naval base in Georgia’s breakaway region of Abkhazia and should agree to extend the mandate of UN monitors in the region, a senior U.S. envoy said. 
“The possible deployment of a naval base in Abkhazia, an air base in Abkhazia and a military base in South Ossetia  seems to be moving in the wrong direction,” Deputy Assistant Secretary of State Matthew Bryza said.

TITLE: Power Vertical Takes a Hike in the Krasnodar Woods
AUTHOR: By Maria Antonova
PUBLISHER: Staff Writer
TEXT: BOLSHOI UTRISH, Krasnodar Region — Construction in a pristine reserve on the Black Sea has come to an uneasy halt after picketing environmentalists forced police to intervene, but the firm doing the work says it can restart any time, even after federal authorities ordered a criminal investigation. 
The logging in the Bolshoi Utrish nature reserve came to light last month, sparking protests and a petition drive to halt work on an access road that environmentalists say will open the coast for development of an elite resort. The ensuing dispute has pitted powerful interests behind the project against federal authorities, leaving even the local police unsure of who is calling the shots. 
The case also highlights the increasingly frequent practice of using complicated ownership structures and contract arrangements to mask who is behind development projects. Commercial pressure to develop the tourism industry often takes precedence over regional and federal environmental protections, not to mention locals’ concerns. 
Earlier this month, the Natural Resources and Environment Ministry ordered the Prosecutor General’s Office to open a criminal investigation into the logging by Krasnodar-based builder Glavpromstroi, ministry spokesman Nikolai Gudkov said. Last week, Minister Yury Trutnev personally criticized the project and regional authorities for allowing it to proceed, and he ordered the Krasnodar branch of his ministry’s watchdog to make sure that the destruction stops. 
The regional watchdog, in turn, fined Glavpromstroi 2 million rubles ($60,000) on Monday for logging in a federally protected area and destroying endangered plant species. The local environmental prosecutor has also called the construction illegal and opened a case in an Anapa municipal court, but no date has been set for a hearing. 
The company, however, says it has appealed the administrative penalty and that there is nothing preventing it from proceeding. 
“Only a court decision can stop the work, and so far we haven’t received any documents about a court hearing,” Yelena Yegorkina, a lawyer for Glavpromstroi, said Wednesday by phone. “We’re just a subcontractor, and we were assured that the construction is legal,” she said, adding that the logging had been approved by the -regional branch of the Federal Forestry Agency. 
Alexander Byuller, deputy head of the local forestry department, told The Moscow Times last month that the logging was for a legal, fire-safety road. And just before New Year’s, the project received the blessing of Krasnodar Governor Alexander Tkachyov, who ordered the forestry agency to make sure the road — already well under way — was completed. 

New Year’s Resolution
Seeing that the logging, which violates at least three federal conservation laws, was continuing despite their appeals, a group of activists decided to brave the cold and camp out at the site to physically block construction during the 10-day New Year’s break. 
“Otherwise, there would have been nothing to protect once the holidays were over,” said Andrei Rudomakha, coordinator of North Caucasus Environmental Watch, the main organizer of the blockade. 
Rudomakha wrote dozens of letters in December to regional authorities and the Natural Resources and Environment Ministry drawing attention to the clear cutting to no apparent affect. Only 1 kilometer of forest remains before the road reaches the coast. 
A group of as many as 20 activists camped out near the construction site, interfering with the work and facing threats from Glavpromstroi workers. The tensions boiled over on Jan. 3, when Glavpromstroi deputy director Yevgeny Yemelin arrived and began threatening activists and reporters. He refused to answer questions regarding the work, while his employees attacked reporters who were taking pictures. 
The next day, some 30 police officers arrived in nine cars and began checking activists’ documents and belongings as part of what they said was an anti-terrorism operation. When the search yielded nothing suspicious, police chief Alexander Belostotsky unexpectedly voiced support for the protesters. 
“It wasn’t us, and it wasn’t you who allowed the work to go ahead,” Belostotsky told the activists. He said Glavpromstroi had failed to present documents proving that the work was legal and assured the protesters that he would prevent it from continuing. 
But when the activists said they would continue to guard the site despite the assurances, Belostotsky hesitated. 
“Would you go against the government and the president?” he asked. 
He declined to clarify his remarks. 

Sending Mixed Signals
The multitude of orders, accusations and legal challenges over Bolshoi Utrish has made it easier for government officials to pass around blame for a project that no public figure wants to be associated with anymore. 
The situation is further complicated by overlapping regional and federal oversight of the land. Yegorkina, the lawyer for Glavpromstroi, said the area was protected both as a “regional reserve” and as “part of the Anapa Federal Resort.” 
“Government agencies cannot agree who is responsible, and we are being blamed in the process,” she said. 
The nontransparent nature of the companies and organizations involved in the work has also clouded the dispute. For example, the project includes separate agreements for the logging work — ordered by the forestry department — and the road, which happens to pass through the cleared space. 
The road, originally supposed to be 8 meters wide, is now more than three times that in some spots, presumably so that construction materials can be brought in to develop a prime, 120-hectare lot along the coast. 

A Property Fire Sale
The site in question was rented for 49 years by a Moscow-based organization called Foundation for Regional Noncommercial Projects, “Dar,” according to an agreement signed by Dar and the forestry department. A copy of the document was obtained by The Moscow Times. 
Dar pays just over 14 million rubles ($400,000) per year in rent to the federal and regional budgets, which figures to roughly $300 per hectare per month for the secluded seafront property. In return, Dar has agreed to take on forestry duties, including extinguishing fires and creating “fire-safety infrastructure” that would include helicopter pads, fuel storage and construction of more roads. 
Environmentalists who inspected the past year of land-use archives found no record of a public auction for the right to rent the plot. And the infrastructure clauses, they say, are merely to hide the real purpose of the work. 
The forest has little of the undergrowth that tends to fuel forest fires, and “there has never been a serious one in the reserve,” said Mikhail Kreindlin, an expert with Greenpeace. 
Utrish visitors who have seen construction plans say the project would entail a large-scale complex of 18 structures. Among them are a five-story building, a health complex, a house for “servants” and two roads with checkpoints, said Muscovite Andrei Pavlov, who was shown the design by surveyors taking soil samples last month. 

A Familiar Structure
The contractor for the road is construction company Harvinter, which has worked with the Office of Presidential Affairs on past projects and received an official thank you from then-President Vladimir Putin in 2006 for organizing a Russia-EU meeting in Sochi in May of that year. 
The Office of Presidential Affairs “organizes and carries out the logistical support” for the president, government and legislature, according to its web site. 
Harvinter could not be reached for comment. 
A receptionist at Dar’s Moscow office requested that questions about the project be faxed to the “foundation’s management,” although she declined to say to whom the request should be addressed. The foundation has not responded to questions sent Tuesday. 
According to registry records, Dar was founded in 2006 by Levit, which is majority owned by Leonid Mikhelson, chairman of Russia’s second-largest gas producer, Novatek. He is also a major shareholder in Novatek, including through Levit. 
Neither Levit nor Mikhelson could be reached for comment. A spokesman for Mikhelson at Novatek said he could not comment on anything pertaining to Mikhelson’s other assets. 
Using an obscure organization to covertly develop prime land into elite resorts is typical in the region, environmentalists said. 
“This project is characteristic of others on the coast that are developed secretly as private residences,” said Rudomakha, of North Caucasus Environmental Watch. As the only place in Russia with access to the Black Sea and a vast untouched mountain reserve area, the region has seen its share of such projects. 
Glavpromstroi, the subcontractor, was previously involved in road construction for one such resort built for the Office of Presidential Affairs near Gelendzhik, Rudomakha said. The project was presented as a children’s sanatorium, but the secrecy surrounding the project — including fences and barbed wire — suggests the presence of more serious visitors. 

Authority in the Regions
The scandal puts Tkachyov, governor of Krasnodar since 2000, in an awkward position. Despite the rebuke from the Natural Resources and Environment Ministry, Tkachyov has not retracted his order demanding that the road through Bolshoi Utrish be completed. 
Calls to the Krasnodar administration press office went unanswered Thursday. 
Regional leaders have been quick to heed censure from the federal government, which actively strengthened its control over the regions during Putin’s two terms as president. Direct gubernatorial elections were eliminated in 2003 in favor of a system where presidential nominees are approved by local lawmakers. More recently, many new governors have been tapped from outside the regions they are to lead, presumably to keep them more dependent on support from Moscow. 
But Tkachyov, who was born in Krasnodar and first elected with more than 80 percent of the vote, appears to have the full confidence of Putin and President Dmitry Medvedev, as his region will host the 2014 Winter Olympics in Sochi. 
Oleg Mitvol, a deputy head of the federal environmental watchdog, said local prosecutors were responsible for failing to act. The investigation ordered by Trutnev, he said, had been “passed off” to the regional prosecutor, who has shown little interest in the case. 
“The regional watchdog is not doing everything in its power to stop the work, but the law enforcement agencies that have proof of criminal activities are not taking action,” he said. 
“If the regional prosecutor wanted to stop the illegal construction, he would do it, and the problem would resolve itself as soon as people start getting arrested.”

TITLE: Matryoshkas, Bilan Jr. and Glam at Euro Draw
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: In an arcane ceremony, leggy models fished rosy-cheeked matryoshka dolls out of plastic bowls to decide the crucial question of which countries will perform —?and be able to vote for each other — in each of the semifinals of the Eurovision Song Contest in May.
While the four founding countries and Russia, as the host, have automatic places in the final on May 16th, 38 smaller countries from Malta to Azerbaijan need to make the top 10 of the semifinals for a chance to win. 
Each country can only vote for countries in the same semifinal, so a lineup containing plenty of friendly allies can make all the difference between no points and a place in the final. 
Models in long, red dresses pulled matryoshka dolls dotted with strawberries containing the names of the countries out of six bowls Friday and handed them to television host Yana Churikova, in a black cocktail dress and sparkly bolero, who unscrewed them and announced the names in careful, schoolgirl English.
Observers from Eurovision’s headquarters watched the matryoshkas like hawks in order to ensure that fair play was maintained and there was no skullduggery involving false bottoms or an unusual number of strawberries.
“Everyone in Europe can be assured that everything is absolutely clear,” Churikova promised.
To make things more complex, though, the four founding countries — Britain, France, Spain and Germany — and Russia are also able to vote in one of the semifinals, although their singers won’t perform. 
These countries were also divided up between the two semifinals, using more matryoshkas and several sealed envelopes. 
“Does it always take so long?” Churikova asked a Eurovision official kittenishly at one point. He responded by describing one of the sealed envelopes as “a love letter from me to you.” 
The voting rules have been changed for this year’s contest after criticism of partisan voting — a long-standing tradition in the Eurovision — and the public will only get 50 percent of votes, with the rest to be decided by professional juries. 
The draw for the semis means that Russians won’t be able to vote on the Georgian or Belarussian performances, while the Baltic states are all cozily lumped together in the other semifinal and thus look likely to try and vote each other through.
After the ceremony, a children’s choir called Neposedy took the floor to deliver a frighteningly accurate version of last year’s contest-winning song “Believe.” The lead singer had a slightly higher voice than Dima Bilan, but the mullet and white shirt were spot on.
At a news conference afterward, city sports and events official Alexander Polinsky dashed foreigners’ hopes of travelling to Moscow visa-free for the contest. 
The visa regime will, however, be simplified to allow people with Eurovision tickets to get visas quickly from the end of February, Polinsky said. A letter explaining the procedure will be sent around to all the embassies by the Foreign Ministry.
In 2005, Ukraine cancelled visas for citizens of the European Union so that they could attend the contest in Kiev. It never reintroduced the visa regime.
Russia allowed ticket holders for the UEFA Champions League Final in Moscow in 2008 to show tickets in place of visas. This was done because football fans had only three weeks’ warning, Polinsky said, while Eurovision fans have time to get visas.
Twenty-five hotels in Moscow have been reserved for Eurovision delegations, but it’s unclear how many fans will travel to the city, Polinsky said.
Tickets for Eurovision go on sale in the second half of February and will cost from 1,000 rubles to 30,000 rubles, Yury Aksyuta, the director of musical programming at Channel One, said.
Channel One head Konstantin Ernst promised that the ruble’s meteoric fall in value will not affect the ceremony, even though the budget on the Russian side was drawn up in rubles. Channel One will make up any shortfall, he said, and the show will be “grandiose.”
Beyond that, organizers were revealing few details.  
Plans include a “Eurovision Legends” concert, featuring Ukrainian winner Ruslana and the transsexual Israeli winner Dana International.
The Russian contestant will be decided in a live television show in March after more than 1,000 applications via Channel One’s web site. 
Aksyuta admitted that Russia isn’t aiming to win again this year. “We need a quality singer who will represent the country worthily,” he said. “We aren’t striving for first place.”

TITLE: The Simachyov Show Goes On Despite the Crisis
AUTHOR: By Finn Cohen
PUBLISHER: The St. Petersburg Times
TEXT: With champagne flowing, a fleet of 25 disco balls and flesh-colored pantsuits, the scene at Denis Simachyov’s Fall/Winter 2009-10 collection Moscow opening almost threatened to overshadow the clothing itself on Saturday night. Almost. 
With his outlandish style of men’s and women’s clothing, as well as his love for long-mustachioed models, Simachyov has made his brand one of the hippest in Russia, with expensive T-shirts featuring the visage of Prime Minister Vladimir Putin, baggy Cossack pants and eclectic combinations of leather and fur.
Known for mixing traditional Russian aesthetics with satirical pop-culture references, Simachyov is also one of the few Russian designers to have made a real name for himself around the world.
This year’s collection, like most of the designer’s creations, again draws heavily on ironic juxtapositions and odd combinations of materials. Invites to the event featured Sylvester Stallone as Rambo, riding a horse and spearing a golden dragon a la Saint George, and this image appeared on the back of a leather jacket in the show. 
“His ideas are very Russian, but very funny, with a lot of irony,” said Ferdinando Baldini, an Italian at the show who owns a gallery in Moscow.
Kung Fu master Bruce Lee also features prominently; his visage adorns a number of sweaters and T-shirts. There was a heavy 1980s feel, with brightly colored headbands in abundance complemented by intricate kaleidoscope patterns on tops and dresses. One model strode down the runway in a full-length, stonewashed denim kimono and was promptly followed by a turquoise leather miniskirt on another.
The biggest cheer of the night, apart from when Simachyov came out at the end and flashed a peace sign to the audience, was when It-Girl and television host Kseniya Sobchak walked down the runway clad in a black leather jacket and a rainbow headband.
The show’s audience in Simachyov’s studio were greeted at the entrance by a Porsche 911 emblazoned with the designer’s signature paisley pattern — slightly more modest than a similar car he covered in kilos of gold last year — and a group of dark-suited, stern security guards.
But inside, amid cloying clouds of expensive-smelling perfume, an army of beautiful people posing for photographers and Simachyov entrenched behind velvet ropes in the VIP section, the event seemed to be trying to shut out the harsher financial reality outside through sheer willpower and gaudy dress sense, although not everyone was fooled.
“The crisis in fashion is making it harder and harder,” explained Corrado Manaresi, the head of Simachyov’s Italian office. Prices may have to come down, he hinted.
Others, though, were more interested in picking at the collection from the side.
“He used the same thing two years ago,” said Zhenya Korshakov, standing at the free bar, referring to a large fur hat on a model.
He was not concerned about how the crisis affected this type of fashion.
“This collection is not at all related to the crisis ... I mean, the people in the metro are not going to be wearing these kinds of clothes.”

TITLE: Bookstores Renegotiate Rent Amid Stagnating Sales
AUTHOR: By Irina Titova
PUBLISHER: Special to The St. Petersburg Times
TEXT: St. Petersburg’s leading bookstore chains may reduce the number of their stores in the city, since stagnating sales are making it difficult for companies to pay the full lease.  
The city’s biggest book chains — Snark, Bukva and Bukvoyed — are trying to negotiate a rent cut of 20-30 percent, Kommersant daily reported last week.  
Alexei Bochkov, marketing and advertising manager at Snark, said the company’s management had appealed to all of the shop’s landlords to reduce the rent charged for the premises.
“We are experiencing stagnation in sales in our stores,” Bochkov said on Monday.
“Usually in December we see a rise in sales. For instance, in 2007 the volume of sales rose threefold in December. However, last December it increased only twice. This situation results in a reduced income from every square meter and makes the lease expensive,” he said.
Bochkov said that if landlords do not agree to lower rental rates, the company will have to close up to 15 percent of its stores in St. Petersburg.
Bochkov said the company was asking landlords to reduce the lease by 30 percent, but that the landlords would not agree to a discount of more than 20 percent.
“In some cases we are reducing the amount of space we rent out for our stores while keeping the same rate for the lease,” he said.
Denis Kotov, general director of Bukvoyed bookstore chain, said that they hadn’t registered any decrease in book sales at the company, but that they were experiencing stagnation in some of its older stores.
However, Kotov said the company had still agreed with most of its landlords on a “frozen rent rate for a year.”
“We fixed our rent in rubles and limited the upper level of the rate,” said Kotov.
“If we still have a decrease in sales we’ll be asking our landlords to lower the rent proportionally,” he said.
Kotov said the economic crisis could on the contrary prompt people to visit bookstores to search for special literature on how to survive a downturn, how to change their qualifications or how to set up and run a business.
“We have already put books that are topical for the moment in the best places in stores,” he said.
Kotov said that despite the crisis, Bukvoyed plans to open new stores in the northwest of Russia, and a TV studio in St. Petersburg.
Experts say that the global financial crisis will make Russians read more, but that people will still buy fewer books.  Analysts also say that society’s literary tastes may change.
Experts at the Globalization and Social Movement Institute (GSMI) said due to the crisis people would read fewer entertainment books and more serious literature that would help them to understand the current situation and decide what to do in the future, Novye Izvestia reported. People will read more social, philosophical and political literature, experts said.
Boris Kagarlitsky, director of GSMI, said that the book trade may see dramatic changes in 2009, and that a number of booksellers may go bankrupt.
“Book sales are getting worse and worse, and there is no reason to expect change for the better in future. The crisis is only beginning to affect the population, who can’t spend money like they used to,” said Kagarlitsky.
Kagarlitsky said even a 30 percent decrease in rents will not significantly improve the situation of booksellers. He said that companies will need to change their strategy to meet the new demands of consumers. Those who retain a conservative position will suffer most, he said.
Vasily Koltashov, head of GSMI’s economic research center, said about 30-45 percent of the country’s bookstores are under threat of closing.  Koltashov said that although booksellers have not lowered prices for books yet, it will be impossible to avoid clearance sales in 2009-2010.
In 2008 the book market grew significantly. In 2007 it was evaluated at 2 billion dollars, and in 2008 it increased to 2.5-3 billion dollars.  However, by fall last year experts had already observed the first signs of stagnation, followed by significant decrease, according to GSMI.

TITLE: Printed Media Sees Less Advertizing
AUTHOR: By Yelena Dombrova and Anatoly Tyomkin
PUBLISHER: Vedomosti
TEXT: During the past five years, the St. Petersburg advertizing market grew by 30-40 percent per year, outpacing the Russian market as a whole, which grew by 20-25 percent per year, according to Mikhail Poponov, deputy director of the media research company TNS St. Petersburg. Last year the proportion of TV advertizing increased by a few percent due to higher prices.
The researchers have overestimated the market share of television, said Nikolai Grishkov, general director of Alkasar SPB. According to Poponov, discounts could reach up to 80 percent off current prices. The growth in TV advertizing is due to federal advertisers, said Grishkov. Usually federal companies advertize on nationwide channels, but regional companies advertize on local channels and in allocated slots on federal channels, said Ivan Zolochevsky, MTS’ director for the northwest region.
The volume of advertizing in printed media decreased by 1.3 percent last year, while revenues from advertizing increased by 5.7 percent, analysts at TNS calculated. The biggest revenue-earners are daily newspapers and promotional publications.  Before the crisis, printed media occupied about 20-23 percent of the market, but in the last few months volumes have decreased dramatically, said Alexandra Skachkova, marketing director at Moi Rayon newspaper. The usual seasonal decline is 20-30 percent worse than usual, and some advertisers have stopped advertizing altogether, she added.
According to data from Espar Analitik, the number of advertizing surfaces grew 7.6 percent last year, but about 200 billboards in the center of St. Petersburg were taken down. An employee at one local bank said that his bank increased its advertizing budget by 70 percent last year compared to the year before, stopped almost all outdoor advertizing and focused on free newspapers and advertizing in the metro, as well as launching TV ads. 
MTS northwest mainly spends on outdoor advertizing and radio ads, as well as on below the line campaigns. According to Zolochevsky, in 2008 the regional advertizing budget grew by about 10 percent. In 2009 it will increase by 11 percent, but for this money the company expects to receive twice as much advertizing space and airtime than last year.
If the crisis lasts until 2010, the market will stagnate, predicted Poponov. Budgets will be reviewed to the advantage of the media, whose effectiveness it is easier to assess, and in this situation Internet advertisers are in the strongest position, he said.  The Internet is attractive because it is cheaper to advertize on it, but yields similar results, agreed Olga Petrova, commercial director at Traffic Internet agency.  She estimated a medium-sized campaign on the web would cost from 350,000 rubles ($9,600) to 500,000 rubles ($13,800), while a TV campaign would be several times more expensive.
According to Petrova, in January advertisers did not spend anything, but in February they will make up for the decline. Advertizing in January and February is noticeably lower than a year ago, as many advertisers have adopted a “wait and see” attitude, said Grishkov.

TITLE: Economy Grows at Slowest Rate Since 2002 As Consumer Demand Slumps
PUBLISHER: Bloomberg
TEXT: Russia’s economy expanded last year at the slowest pace since 2002 as the ruble’s decline hurt consumer demand and the global slowdown dented the country’s commodity exports.
Gross domestic product grew 5.6 percent, according to the Economy Ministry’s spokeswoman, who spoke on customary condition of anonymity.
 She cited a preliminary estimate and declined to provide any explanation. The figure was below the 6 percent median forecast of 10 economists surveyed by Bloomberg.
The Federal Statistics Service was scheduled to release the official figure Monday or Tuesday. 
The economy expanded 8.1 percent in 2007.

TITLE: VEB Asked for $3 Bln in Subordinated Loans
PUBLISHER: Reuters
TEXT: DAVOS, Switzerland — Vneshekonombank has received requests from 60 banks for about 100 billion rubles ($3 billion) in subordinated loans, VEB chief Vladimir Dmitriyev said.
The state corporation has been entrusted with distributing 450 billion rubles of subordinated loans to banks.
“We have received requests from about 60 banks for a total of about 100 billion rubles,” Dmitriyev said on the sidelines of the World Economic Forum.
“We already have a decision for three banks for a total of 17 billion rubles, and the financing must start very soon,” he said late Thursday.
“The management of the bank will also recommend to the supervisory board that a decision be made for another four banks on a total of 19 billion rubles,” he said. He did not name the banks.
Russian lenders are facing growing numbers of bad loans as the economy heads for its first annual contraction in a decade.

TITLE: In Brief
TEXT: <b>New Editor for Standard</b>
LONDON (Bloomberg) — London’s Evening Standard newspaper, which Daily Mail and General Trust agreed to sell to Russian oligarch Alexander Lebedev, said Geordie Greig will become the new editor once the deal is completed.
The sale will probably be closed in the second half of February, Lebedev and Daily Mail and General Trust said in a joint e-mail on Monday. Greig, 48, is the editor of Tatler magazine.
Lebedev, a former KGB officer who made his fortune in banking, is the founder of Moscow news magazine Korrespondent and owns a stake in the Novaya Gazeta newspaper. He is part of a wave of Russians who have snapped up U.K. assets in the past few years.

<b>AvtoVAZ Resumes Work</b>
ST. PETERSBURG (Bloomberg) — AvtoVAZ, Russia’s biggest carmaker, restarted its conveyor after a stoppage that lasted more than a month.
The company plans to produce 32,000 vehicles in February, Togliatti, Russia-based AvtoVAZ said in an e-mailed statement on Monday. It idled the plant on Dec. 29 because of slumping demand. 
Chief Executive Officer Boris Alyoshin said last week that he expects the carmaker’s sales to fall by about 28 percent in February, Interfax reported.
AvtoVAZ workers involved in the car assembly and production of components will shift to a four-day week this month, while the rest of the staff will remain on partially paid leave through the rest of February, the statement said.

<b>Lukoil Recommended</b>
MOSCOW (Bloomberg) — Investors should buy Lukoil, Russia’s second-biggest oil producer, and Sberbank, the country’s largest bank, as a market plunge reduces the companies’ stock prices to less than half the value of their assets, Troika Dialog said.
The companies’ net asset value on their balance sheets, or book value, is a more effective gauge of a company’s worth than price-to-earnings ratios because profits for Russian companies, especially commodities producers, vary widely between economic cycles, Troika said.
Troika also recommended shares of GMK Norilsk Nickel, Russia’s biggest mining company, and Uralkali, its second-biggest potash producer, on the basis of their price-to-book ratios.

<b>TNK-BP Deal on Rocks</b>
MOSCOW (Bloomberg) — TNK-BP, half owned by BP Plc, may not be allowed to buy an additional 5.5 percent of its eastern Siberian oil venture Verkhnechonsk under Russia’s strategic industries law, Vedomosti reported.
Rosneft, TNK-BP’s partner at the field, must agree to buy new shares in Verkhnechonsk, which would keep the British-Russian oil producer from boosting its stake to 75 percent, in order for a commission run by Prime Minister Vladimir Putin to approve TNK-BP’s application, the newspaper said, citing two unidentified people close to TNK-BP. The commission meets on Wednesday, Vedomosti said.

<b>State Eyes RusAl Stake</b>
MOSCOW (Bloomberg) — Russian billionaire Oleg Deripaska said the government is considering taking a minority stake in United Co Rusal, the world’s largest aluminum producer, the Wall Street Journal reported, citing an interview.
Deripaska, the company’s biggest shareholder and its chief executive, said it would be much clearer in February; Rusal took a $4.5 billion government loan to refinance debt incurred when it acquired a 25 percent stake in Norilsk Nickel, the Journal reported.

TITLE: State Set to Spend Large Part of Stabilization Fund
AUTHOR: By Jessica Bachman
PUBLISHER: Staff Writer
TEXT: MOSCOW — A significant portion of the government’s $215 billion stabilization fund will be spent to cover a budget deficit this year, Finance Minister Alexei Kudrin told the State Duma on Friday.
“This year is the peak of the crisis, and we’re starting from the idea that a significant part of the Reserve Fund will be spent, but not all,” he said during a meeting with deputies.
The country is facing a budget shortfall of 4.4 trillion rubles ($124.6 billion), or 5.4 percent of gross domestic product, and if the budget is not revised, the deficit could reach as much as 6.1 percent of GDP, Kudrin said. Real budget revenues for this year will be 6.5 trillion rubles, or 40.3 percent less than the 10.9 trillion rubles stated in the unrevised budget.
With oil prices down 70 percent since July, the government’s exports revenues — largely dependant on oil and gas — will drop by more than 50 percent this year, to $269 billion from last year’s $469 billion, Kudrin said. On a weakening ruble, imports will retreat from $292 billion to $245 billion and tax revenues may drop by $28 billion, he said.
On Jan. 22, Prime Minister Vladimir Putin ordered the Finance Ministry to revise its 2009 budget based on a new average oil price of $41 per barrel, down from the previously assumed $95.
Urals blend crude, Russia’s main oil export, was trading at $43 a barrel on Friday, down from a July high of $143. 
Last year the stabilization fund, supplied since 2004 by windfall oil and gas revenues, was divided into the National Welfare Fund and the Reserve Fund, which stand at 2.8 trillion rubles and 4.5 trillion rubles, respectively. 
In December, the welfare fund loaned 340 billion rubles ($9.5 billion) to Vneshekonombank as part of a $200 billion bailout package aimed at revitalizing the financial sector.
Cabinet spokesman Dmitry Peskov confirmed that the budget was already in the process of revision and said the amendments could be adopted by the end of February. He said it was too early to talk about any specific changes, including cuts to social spending.
Oleg Smolin, a Duma deputy with the Communist Party, said, however, that social expenditures, including a 15 percent cut in education spending, were being discussed for the revised budget.
“First and foremost, the government should put money toward its citizens and domestic industry, but unfortunately it does everything the other way around,” Smolin told The St. Petersburg Times.
“They put the bailout money toward banks and large corporations, and the teachers, doctors and social workers in the regions aren’t seeing one ruble,” he said by telephone.
First Deputy Prime Minister Igor Shuvalov, speaking to the Duma on Friday, said the government would “most likely” have to cut back on expenditures this year, Interfax reported.
Shuvalov did not elaborate on what exactly the government intends to economize on when it goes to revise the federal budget, but he said it was prepared to “expand” its anti-crisis plan.
Already in the works is a new $1.3 billion employment-stimulus package designed to help the regions combat the national 7 percent unemployment rate. The Agency for Housing Mortgage Lending has been charged with helping individuals who have difficulties making payments. Kremlin officials also announced Friday that they would consider cutting the value-added tax and carrying out other tax reforms. 
Yulia Tseplyayeva, chief economist at Merrill Lynch, voiced doubt that the government would risk social instability by cutting back on social expenditures.
“But they will have to economize on everything else,” she said. 
She said it would be “advisable” for the government to make significant revisions to funding earmarked for financial-sector bailout. 
“They spent all this money to help the banking sector, gave them ruble injections, and the banks took the money and bought foreign currency,” she said. “In my opinion, the ruble would be in a much better position had the government not given the banks ruble liquidity.”
Stanislav Belkovsky, head of the National Strategy Institute, said the government should stop bailing out big companies. “Let the banks and companies face their margin calls, and let their ownership change,” he said. “Let others become the owners of Russian assets rather than letting Russian oligarchs continue to act totally irresponsibly.”
Shuvalov earlier warned companies seeking government funding not to depend solely on state support for help out of the crisis. “They have to use their own resources in order to clean up the debt they created,” Shuvalov said at the World Economic Forum in Davos, Switzerland, on Thursday. 
Industry and Trade Minister Viktor Khristenko told Duma deputies on Friday that exporters would receive $6 billion in subsidized loans in the coming year to reinvigorate domestic producers and that he had authorized 50 billion rubles for direct subsidies to the defense industry.

TITLE: Happy Times Over for Aluminum Industry
AUTHOR: By Maher Chmaytelli and Lyubov Pronina
PUBLISHER: Bloomberg
TEXT: DAVOS, Switzerland — Oleg Deripaska, United Company RusAl’s chief executive and biggest shareholder, said Saturday that he expected “no more happy times” in the aluminum industry as a sluggish global economy saps demand. 
Aluminum will average $1,600 per ton in the next seven years, Deripaska predicted, compared with a current level of $1,350. That contradicts a forecast by RusAl chairman Viktor Vekselberg, who said he was “100 percent sure” that the price would reach $2,000 per ton this year. 
“What’s important at the moment for the metals and mining industry is to really stop hoping and prepare for the worst,” Deripaska told reporters in Davos, where he was attending the World Economic Forum. 
Russia has pledged more than $200 billion to battle its worst financial crisis since 1998, including $50 billion for companies that have debts with lenders abroad, among them RusAl. The company used its 25 percent stake in Norilsk Nickel, the world’s biggest nickel and palladium producer, as collateral for a $4.5 billion loan from state development bank Vneshekonombank. 
Deripaska, who Forbes ranked as the wealthiest Russian in April 2008, predicted an aluminum industry shakeup as demand slumps. 
Smelters will be shut or will have their capacity lowered, and there will be fewer metal-producing nations as a result, Deripaska said. More metals will be sold under long-term contracts and less on the spot market. 
Deripaska and billionaire investors Vladimir Potanin and Alisher Usmanov last month proposed that the government prepare plans to create a consolidated mining company. The merged entity would get access to state funds to repay debt. Deripaska and Usmanov urged the government to become a shareholder in the new company, which would be formed around Norilsk. Deripaska did not include RusAl in his merger proposal. 
“There is just an exchange of ideas,” he said, referring to the merger. “It should be a real company, not a mass grave.” 
He reiterated that RusAl would not take part in the holding because it needs to restructure its debt, which Vekselberg puts at $16.3 billion. 
“I cannot see the synergy,” Deripaska said. “It is as if you cross-breed a chicken and a duck. What do you expect it will do? Fly, or perhaps swim?” 
Deripaska also said an initial public offering of RusAl shares was still “on the agenda.” He did not comment on the possibility of a private placement of shares in RusAl.

TITLE: Capital Outflows Linked To Oil Price, Ruble Rate
AUTHOR: By Courtney Weaver
PUBLISHER: Staff Writer
TEXT: MOSCOW — Capital outflows look likely to continue in 2009, particularly in the first quarter, as Russian companies make payments on their hefty foreign debt and people convert their ruble savings into foreign currencies.
Finance Minister Alexei Kudrin predicted on Friday that capital outflows could reach $110 billion this year. 
Ultimately, the figure will depend on the oil price, the global credit market and the ruble’s exchange rate, analysts said. Russian companies have about $120 billion in foreign debt due in 2009, and individuals will likely continue converting their savings from rubles to dollars and euros. 
The conversion of rubles into foreign currencies is the primary reason why liquidity is so tight right now, said Tatyana Orlova, an economist at ING. While major firms may still gain access to the syndicated loan market this year, some of Russia’s short-term debt will have to be repaid, she said.
Last year saw $129.9 billion in capital outflows, brought on by a plummeting fourth quarter, when $130.5 billion left Russia, according to Central Bank data. At least a portion of the assets acquired in this period will be used to pay back external debt this year, analysts said.
“The rise in foreign currency assets in the past four months is comparable to the total amount of short-term debt that is due this year,” Orlova said.
Companies that are not scheduled to pay back foreign debt until September or October are expected to still try to convert their money into dollars in the first quarter before the ruble declines further, economists said.
Plummeting oil prices in the second half of 2008 contributed to last year’s capital flight, and as long is the price remains low the country will have a hard time attracting the same level of foreign investment. Russia’s Urals blend crude fell from its high of $142.50 in July to a low of $32.34 in December. It traded at $43.72 on Friday.
Net capital outflow could be as low as $30 billion if oil reaches $50 per barrel, said Yevgeny Nadorshin, chief economist at Trust National Bank. An average oil price of $30 per barrel would put net capital outflow at about $70 billion.
The flight to foreign currencies this year may depend on the credibility of the Central Bank’s defense of the ruble’s trading corridor. Currency speculators are likely to contest the lower limits of the trading band and, if weakness is found, will channel more and more capital into dollars and euros.
Citibank chief economist Yelena Rybakova, who estimated that net capital outflow would reach $110 billion, said she believed that currency speculation would continue throughout 2009.
Nadorshin, however, said Russians were downplaying the forex game and that while international investors might shy away for a while individuals would return to the ruble. “In the fourth quarter, Russians themselves created net private capital outflow, and if the [private capital outflow] trend reverses they will be the first to bring their capital back to Russia,” he said.

TITLE: Putin Promises to Speed Up Delivery of Loan to Belarus
PUBLISHER: Combined Reports
TEXT: MOSCOW — Prime Minister Vladimir Putin said Friday that Moscow would speed up delivery of the second half of a $2 billion loan to Belarus after denying a request for additional funds.
The countries agreed on the $2 billion stabilization loan last year, and Friday’s announcement on the second tranche came after Putin and Belarussian Prime Minster Sergei Sidorsky signed a joint strategy for dealing with the economic crisis.
“The plan sets out measures that will support our economies and will not let them fall below 2008 levels,” Putin said, adding that the second tranche of the 15-year loan, originally planned for Feb. 28, would be issued sooner, according to a transcript of the comments on the Russian government web site.
Putin also said he and Sidorsky discussed “achieving the stated goal of using the ruble as a regional currency.”
Negotiations between Moscow and Minsk have previously linked loans to expanded use of the Russian ruble. The Belarussian currency is also called the ruble.
In December, Minsk asked Moscow to lend it 100 billion rubles ($2.8 billion) as a precondition to using the Russian currency in bilateral trade. Deputy Finance Minister Dmitry Pankin said Thursday that Russia was not interested in providing the new loan. 
At Friday’s signing ceremony in Moscow, Putin said that creating a united economic zone was the top priority in relations between the countries.
“I am convinced that to minimize the negative effects of the global crisis on our economies ... we must fully use the advantages of integration,” he said.
Trade between the countries reached $32 billion in 2008, Sidorsky said, according to the transcript. Putin put the figure at $34 billion. 

(Reuters, SPT)

TITLE: Businessman Promotes Bartering as Crisis Solution
AUTHOR: By Alfred Kueppers
PUBLISHER: Reuters
TEXT: MOSCOW — A maverick Russian businessman who blew his fortune on a failed presidential bid is convinced barter is back in vogue.
German Sterligov says his scheme to trade products online, unveiled as Russia faces its first recession in a decade, has already grabbed the interest of Uzbek cotton merchants, St. Petersburg car dealers and leading truck maker Kamaz.
“The worse it gets, the better it is for us,” Sterligov, 41, told Reuters in an interview in his offices on the 26th floor of a skyscraper in the Moscow City business complex.
“We are the experts when it comes to crises.”
Russia’s commodity-focused economy has been hit hard by the global economic crisis. The ruble has lost over a fifth of its value since November, and some heavy industrial producers claim to be owed hundreds of millions of dollars as debts go unpaid.
That’s where Sterligov, with his flowing beard and closely cropped hair, comes in.
He says his Anti-Crisis Settlement and Accounting Centre (ASAC) is more advanced than the rudimentary barter trades so common in post-Soviet markets. Then, timber firms traded lumber for logging equipment and farm workers swapped meat for fuel.
“It is totally different now, because of these things,” he said. A Sony laptop sits on his desk and he holds up a Nokia mobile phone, revealing the dirt beneath his fingernails.
“We have a global computer network.”
Sterligov founded Moscow’s first commodity exchange in the 1990s and expanded into a range of businesses controlled by his Alisa holding company.
A failed 2004 presidential bid put him at odds with the Kremlin, leading to more than four years of self-imposed exile on a farm 80 kilometers from Moscow.
He has rented the Moscow City office space since November, commuting home to his wife and five children every evening.
Though he claims to have lost his fortune as a result of his failed foray into politics, Sterligov was able to salvage the few million euros necessary to set up ASAC.
“I got the money from under an oak tree,” he said. “When I understood there was a financial crisis, I dug it out.”
Sterligov doesn’t like the word “barter.” He sees his network, http://en.artc-alisa.ru, as a bourse where interested parties can exchange goods through his database. ASAC collects 1 percent in cash based on the value of completed transactions.
Customers can search the database for products they require, and trade their own production in return.
“In times of crisis ... barter offers a means by which to avoid the usually time-consuming and often fruitless search for bank and other forms of financing,” his web site says.
Sterligov said he expects to have a fully operational network in place within two to three months, with offices in London, New York and other international business centers, as well as Russia.
“We have had 2,000 to 3,000 applications (from potential participants), but we need hundreds of millions,” he said.
Sterligov turned away the Uzbek cotton merchants because he felt they overvalued their goods, but he said ASAC had signed contracts with Kamaz and combine harvester maker RostSelMash.
Kamaz, which halted its main assembly line for the third time on Jan. 29 as it clears a stockpile of unsold trucks, declined to comment.
Three used car dealers from St. Petersburg, meanwhile, waited outside Sterligov’s office. They have gotten pummeled by the crisis, as well as new legislation raising auto import duties.
Barter, said one, could be an effective way to manage their inventory.
“There is still demand, but customers no longer have any possibilities. We used to sell on credit and now customers can’t get any money from the banks,” Maksim Tolmachev, the 36-year old owner of Auction-Auto, said.

TITLE: Moving Away From Distrust
AUTHOR: By Sergei Guriev and Aleh Tsyvinski
TEXT: The relationship between Russia and the West has been rocky in 2008 in terms of diplomatic relations and foreign investment. The Russia-Georgia war, disagreement over deploying elements of an anti-missile system in Poland and the Czech Republic, the TNK-BP oil company dispute and the freefall of Russia’s stock market have all created mutual resentment and frayed relations. Yet there are reasons to believe that the situation will change in the near future, and Prime Minister Vladimir Putin’s speech in Davos on Wednesday may just be the first step.
Just six months ago, many felt that Russia was economically invincible. Riding on a decade of 7 percent average annual growth, almost $600 billion in foreign currency reserves (about 40 percent of gross domestic product) and what then appeared an endless boom in commodity prices, Russia seemed to be an island of prosperity, despite the oncoming waves of the global financial crisis. 
This economic muscle fueled the often-arrogant stance of Russian officials toward the rest of the world, and investors flocked to the booming economy regardless of the harsh political rhetoric coming out of Moscow. The West wanted Russia, but the Kremlin was convinced that Russia did not need the West.
That confidence has now been shaken. Before the crisis hit, Russia had underestimated how financially and economically integrated it had become with the rest of the world. First, it came as a surprise that such a large part of its stock market was owned by foreigners. When foreigners started dumping Russian stocks, the market collapsed. 
The second surprise came after Russian companies and their owners took on huge debt from Western creditors. During the boom years, these companies had borrowed aggressively to fund acquisitions, using skyrocketing stock prices as collateral. When the stock market collapsed, margin calls followed, and shareholders scrambled for cash. Finally, oil and metals prices — the catalyst of the country’s growth — are being hit hard by the worldwide recession and growth slowdown. 
Such a dramatic reversal of economic fortunes will undoubtedly threaten political stability in Russia. To sustain growth and avoid social unrest, the Kremlin must undertake internal economic reforms, attract foreign investment and improve relations with the West. And it must do so now.
Fortunately, the crisis offers an opportunity for Russia to play a significant role in reforming the global financial system and to strengthen its reputation and relationship with the West. The Kremlin can achieve these goals by capitalizing on several strong points of its economy. First, Russia still has substantial financial reserves, and its economy remains very large.
Second, in the midterm the ruble may emerge as a key regional reserve currency — a goal that is very dear to the Kremlin. If Russia finally floats its currency and finally brings inflation down, the ruble will undoubtedly become an important instrument for hedging oil prices — at least for neighboring countries — once the commodity prices begin to recover. 
If Moscow is able to play a larger role in reforming international economic institutions, this will help Moscow improve its relationship with the West. True, the bitterness that has accrued over the past several years will not disappear overnight. The average Russian perceives the United States as an enemy, and this feeling is widespread. The polls administered in the wake of the Georgian war showed that 75 percent of Russians believe that the United States is hostile rather than friendly to Russia. The Russian public also believes that the United States is largely to blame for the current economic troubles, and this negative baggage will be difficult to dispel. 
The expected change in U.S. foreign policy from the administration of President Barack Obama offers a lot of hope that U.S.-Russian relations will improve significantly. But better times also require change within Russia itself. The Kremlin must switch from confrontation to cooperation and from belligerence to assistance. 
By recognizing that Russian economic power depends not only on internal reform but also improved collaboration with international partners, relations with the West can evolve from distrustful solitude to mutual strength.

Sergei Guriev is Morgan Stanley professor of economics and rector at the New Economic School. Aleh Tsyvinski is professor of economics at Yale University and the New Economic School.

TITLE: A Nation of Inhabitants, Not Citizens
AUTHOR: By Alexei Bayer
TEXT: With the rest of the world worried about the economic crisis, the news of yet another politically tinged crime in Moscow gets little more than a shrug. It draws the same response in Russia, even though the killing of human rights lawyer Stanislav Markelov and journalist Anastasia Baburova last month provided a glimpse into a murky, Byzantine abyss lying just beyond the country’s facade. It’s a frightening sight in normal times but especially so in a worsening economic climate.
The crimes themselves — and the usual ho-hum reaction to them — testify to the absence of even a rudimentary civil society. Russia is a country of inhabitants, not citizens. Citizens have a stake in their political entity, and murders like these target the very foundations of a nation. This is an occasion on which citizens of all political persuasions would have found a way to make their voices heard. Instead, Russia’s inhabitants go down into the streets to protest higher duties on foreign cars.
On www.Vedomosti.ru or www.gazeta.ru, for example, any article criticizing the Kremlin or showing a pro-Western or liberal bias is certain to trigger comments accusing its author of being on the payroll of some foreign power or disgraced oligarch. It seems that the Russian public has become so polarized that those who hold one set of views simply can’t imagine someone else expressing different views without being paid to do so.
The Russian government seems to realize that what it presides over is not a nation in a traditional sense but an assemblage of interest groups who happen to share geography and language but otherwise have so little in common that they don’t even understand each another. Why else would the government be persistently silent on these and other political murders?
After the 2006 murders of journalist Anna Politkovskaya and former security service officer Alexander Litvinenko, the West’s capacity for outrage against Russia has been nearly exhausted. 
Since then, Moscow’s anti-Western posturing, its invasion of Georgia in August and its gas wars with Ukraine have placed Russia among the world’s most malevolent irritants — located somewhere between Nigeria and Venezuela. Since Russia’s petrodollars have dried up, even Western businessmen who earlier sang self-serving praises to Prime Minister Vladimir Putin have fallen silent.
After the traumatic experience of communism, Russians began to come together as a nation in the early 1990s, when they prevented a hard-line coup in August 1991. But economic hardship and half-cocked reforms derailed this process. During the fat years of the oil boom, special-interest groups began to emerge and diverge from one another even as the Kremlin’s efforts to eradicate even loyal opposition killed the last hope for creating a Russian nation.
Fragmentation is the reason why no side in the case of Colonel Yury Budanov — the most likely cause of Markelov’s murder — has been willing to accept any court decision. Russians no longer look to their state for justice. This is why the killer apparently took matters into his own hands. This is why the government will always be suspected of bailing out cronies at the expense of everyone else, regardless of what it does to address the economic crisis. 
The great upheavals of the 1990s — from the fall of communism to the 1998 default — passed without social turmoil or large-scale civil conflicts. But back then, Russia was more of a nation than it is today.

Alexei Bayer, a native Muscovite, is a New York-based economist.

TITLE: Gaza Truce Rattled By Israeli Strike on Rafah
PUBLISHER: The Associated Press
TEXT: GAZA CITY, Gaza Strip — A missile from an Israeli aircraft struck a car traveling in the southern Gaza Strip on Monday, killing a Palestinian militant and further straining a truce with the territory’s Hamas rulers.
The strike came as the Islamic militant group sent a delegation to Egypt in hopes of wrapping up a long-term cease-fire to Israel’s three-week military offensive that killed nearly 1,300 Palestinians in Gaza.
A day earlier, Israel’s prime minister threatened “harsh and disproportionate” retaliation for continued violations of the informal Jan. 18 cease-fire, which has been tested by sporadic Palestinian shelling attacks and Israeli airstrikes.
In Monday’s airstrike, the military said it targeted a group of militants who had fired mortar shells at Israel. Palestinian medical officials said a militant in the vehicle was killed, while a second occupant and two bystanders were wounded. The identities of the wounded were not immediately known.
The airstrike took place in Rafah, a town located along Gaza’s southern border with Egypt. With Gaza’s borders sealed by Israel and Egypt, Rafah has a bustling smuggling trade and Israel frequently targets the area to prevent the flow of weapons into Gaza.
The fate of the border is a key sticking point in the Egyptian-mediated cease-fire talks. Israel wants an end to rocket attacks and arms smuggling. Hamas wants Gaza’s border crossings to reopen. The crossings, Gaza’s main economic lifeline, have largely been closed since Hamas violently seized control of the Gaza Strip in June 2007.
In Syria, a member of Hamas’ exiled leadership said the group is ready for a one-year truce with Israel in exchange for reopening the borders and lifting the economic blockade.
The official, Mohammed Nasr, said he would travel to Cairo later Monday for the truce talks. A senior Hamas delegation from Gaza was also expected to join the talks.
Sami Abu Zuhri, a Hamas spokesman from Gaza, said the delegation would listen to “the summary of the Egyptian contacts and talks that have been conducted with the Israelis or other concerned parties.”
Hamas’ “final stance or decision will shape up according to what we will be hearing from the Egyptian officials in Cairo today or tomorrow,” he told the al-Jazeera satellite channel.
Abu Zuhri said the issue of Sergeant Gilad Schalit, a captured Israeli soldier held by Hamas, would not be part of the deal. Israel has tried to link Schalit’s release to reopening Gaza’s borders. Hamas says Israel must free hundreds of Palestinian prisoners, including convicted murders, to win the soldier’s freedom.
Despite the truce efforts, violence has been rising in recent days. Gaza militants fired at least 10 rockets and mortar shells into southern Israel on Sunday, wounding three people. Israel struck back with a series of attacks along the border area and in northern Gaza.
The tensions have raised the risk of fresh violence days ahead of Israel’s national election. Continued fighting could work against the outgoing government and bolster hardline opposition leader Benjamin Netanyahu, the current front-runner, in the Feb. 10 vote.
Israel, along with the U.S. and Europe, considers Hamas a terrorist group, and says it spread its radical ideology throughout the region. Netanyahu has made the Iranian threat, along with what he says is its pursuit of nuclear weapons, a centerpiece of his campaign.
Hamas’ exiled leader, Khaled Mashaal, met with Iran’s president in Tehran on Monday and thanked the country for its support. Iran’s state TV quoted Mashaal as saying Iran played a role in “the victory of Gaza’s people.”
Israel accuses Iran of supplying weapons to Hamas. Iran denies the charge, saying it supplies only money to the radical Islamic group.

TITLE: Record-Breaking Steelers Win Super Bowl
AUTHOR: By Steve Ginsburg
PUBLISHER: Reuters
TEXT: TAMPA, Florida — The Pittsburgh Steelers captured their record sixth Super Bowl by defeating the upset-minded Arizona Cardinals 27-23 on Sunday on a dramatic touchdown pass to Santonio Holmes with 35 seconds left.
Quarterback Ben Roethlisberger drove the Steelers 78 yards in eight plays and found Holmes on a six-yard scoring strike in the far corner of the end zone to provide the winning margin.
Holmes, the game’s most valuable player, caught nine passes, including four in the final drive.
“I want the ball in my hands no matter what, no matter where it is,” Holmes said he told Roethlisberger before the final drive.
“I wanted to be the one to make the play.”
Pittsburgh was cruising 20-7 in the final quarter before the Cardinals made a late charge under the guidance of gritty veteran quarterback Kurt Warner.
Larry Fitzgerald caught a one-yard pass from Warner to trim the lead to 20-14 with less than seven minutes remaining. A safety with three minutes left then pulled the Cardinals to within four points on a chilly night at Raymond James Stadium.
Warner then hit Fitzgerald on a short post pattern, the All-Pro speedster finding the end zone virtually untouched to give Arizona a stunning 23-20 lead with 2:37 left.
Roethlisberger then took over, guiding the Steelers to the game-winning drive. For the game, he completed 21 of 30 passes for 256 yards, one touchdown and an interception.
Prior to the Steelers’ final drive, Roethlisberger said he told his team mates: “It’s now or never. You’ll be remembered forever if you do this.”
The loss was bitter for the Cardinals, who were making their first Super Bowl appearance.
“It is always disappointing when you are leading late in the game,” said Warner, a 37-year-old veteran and a former Super Bowl MVP with the St. Louis Rams.
The Cardinals were 9-7 this season before breezing through the playoffs with upset wins over Atlanta, Carolina and Philadelphia.
“We made it to a place that no one thought we would be,” added Warner. “No one expected us to be here.
“Obviously you want to win but we took the best in the league down to the wire. They had to make great plays to win. I am proud we gave ourselves a chance to win.”
The late drama came in stark contrast to Pittsburgh’s early dominance that culminated in a stunning play at the end of the first half when linebacker James Harrison returned an interception a Super Bowl record 100 yards for a 17-7 lead.
With Arizona on the Steelers’ one-yard line and looking to take a lead into the locker room, Harrison stepped in front of Cardinals receiver Anquan Boldin and intercepted Warner’s pass on the goal line.
The NFL’s Defensive Player of the Year rumbled down the sideline, breaking several tackles along the way, and stumbled into the end zone as time expired to close the opening half.
“It was very tiring but it was worth it,” Harrison said of his touchdown, the longest in a Super Bowl.
“I was just thinking that I had to do whatever I could to get to the other end zone and get seven.”
After the game Pittsburgh head coach Mike Tomlin received a congratulatory call from U.S. President Barack Obama.
“That’s been our story all year,” said Tomlin, at 36 the youngest coach to win a Super Bowl.
“We’ve got a team that doesn’t blink in the face of adversity.
“They’ve got a great deal of resolve and it was put on display. We simply do not care about style points.”
The triumph marked Pittsburgh’s second title in four years and gave the Steelers one more Super Bowl victory than the San Francisco 49ers and Dallas Cowboys.

TITLE: Britain Crippled By ‘Severe Weather’
PUBLISHER: Reuters
TEXT: LONDON — Heavy snow disrupted air and rail travel in Europe on Monday, halting flights at Heathrow airport entirely and bringing traffic in London almost to a standstill.
Tens of thousands of commuters were advised not to attempt the journey into work in London, experiencing some of its worst snow in almost 20 years. Buses were cancelled altogether and hundreds of schools were closed across the country, leaving children to play and build snowmen in parks and gardens.
“I’d rather be sledging than at school,” said 7-year-old Georgie Cunliffe, who was playing in a London park.
Conditions familiar to eastern Europe and other northerly countries notoriously pitch Britain into chaos, its infrastructure ill prepared for the cold.
In northern France as well, snow blanketed Paris and surrounding countryside and brought major air, rail and road systems to a halt.
London business leaders said the estimated cost to the British capital alone could be as much as 48 million pounds in lost productivity.
All flights in and out of Heathrow, a major international hub, were cancelled.
London’s three other commercial airports reported severe delays and flight cancellations. Highway authorities warned of hazardous driving conditions in southern and central England.
Dublin, Cork and Belfast airports were also forced to cancel some flights and Gatwick, Stansted and Luton close to London, and London City Airport were badly hit. A Cyprus Airways jet at Heathrow slipped off a taxiway after arriving from Larnaca but came to a safe halt. No one was hurt.
The Met Office said some parts of the country, including London and other parts of south east England, could be covered by up to 15 centimeters of snow by midday on Monday.
It issued a “severe weather” warning for large parts of the country, with weather experts saying south east England was experiencing some of its worst snow since the early 1990s.
The international rail operator Eurostar also reported delays due to snow in Britain, France and Belgium.
Many workers attempted to walk to their offices, trudging through thick snow, but London’s Chamber of Commerce business organization said lost productivity could cost the capital dear at a time when the economy is already in recession.
“We know that a one-day closure of the Tube alone can cost the capital up to 48 million pounds ...so with most of London’s transport infrastructure down, the costs could be similarly high,” spokeswoman Helen Hill said in a statement.
“Hopefully things will not grind to a halt completely however, as local staff may be able to get into the office and many others can now work remotely and conduct business online.”
In France, traffic jams were recorded on roads leading into the capital during the rush hour and the Paris transport authority said many buses had to be cancelled.
So far, this winter has been Britain’s coldest in more than a decade and forecasters expect the cold weather to continue for several more days with freezing winds blowing in from Russia.

TITLE: Serena Back To Top Spot
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia — Serena Williams returned to No. 1 in the world rankings for the third time in her career following her Australian Open win, and Fernando Verdasco broke into the men’s top 10 for the first time after advancing to the semifinals.
Williams spent four weeks atop the rankings after winning last year’s U.S. Open. Her first stint at No. 1 started in July 2002 and lasted 57 weeks.
Verdasco moved to ninth in the projected rankings issued by the ATP after the tournament. If he had received extra points for court time, he might have improved even more from his 12th ranking two weeks ago.
Verdasco lost a 5-hour, 14-minute five-set marathon to fellow Spanish left-hander Rafael Nadal, breaking the previous longest-match record by three minutes.
No. 1 Nadal increased his lead over second-ranked Roger Federer after a five-set win over the Swiss star in the final on Sunday (see story this page).
Nadal, who took over the No. 1 ranking from Federer in August 2008, will begin his 25th week at the top on Monday. With his Australian Open win, Nadal extended his lead over Federer to more than 3,000 points in the ATP rankings.
Novak Djokovic, who won last year’s Australian Open final but lost in the quarterfinals to Andy Roddick this year, remains at No. 3. Britain’s Andy Murray, who lost to Verdasco in the fourth round, stays at No. 4.
Nikolay Davydenko of Russia, who did not play the Australian Open due to a heel injury, held his place at 5.
Roddick, who lost to Federer in the Australian Open semifinals, jumped up three spots from 9 to 6, with Juan Martin del Potro, Gilles Simon, Verdasco and David Nalbandian rounding out the top 10.
Williams’ 6-0, 6-3 win over Dinara Safina gave her the top women’s ranking.
The 27-year-old American said No. 1 wasn’t foremost on her mind.
“I actually forgot until the end when I was saying ‘Hi’ to my (players’) box,” Williams said. “They said ‘Hey, you’re No. 1.’ I was like, ‘Oh, yeah.”
Safina’s run to the final earned her the No. 2 spot. Jelena Jankovic dropped from No. 1 to No. 3, followed by Russians Elena Dementieva and Vera Zvonareva.
Serena’s sister, Venus, is 6, followed by former U.S. Open winner Svetlana Kuznetsova of Russia and Ana Ivanovic of Serbia.
Agnieszka Radwanska of Poland and Nadia Petrova of Russia round out the top 10, each having moved up one spot.

TITLE: Iceland Names New Government
AUTHOR: By Patrick Lannin
PUBLISHER: Reuters
TEXT: REYKJAVIK — Iceland named its prime minister and finance minister on Sunday in a new centre-left coalition that vowed to overhaul the central bank and look at membership of the European Union to ease a financial crisis.
Johanna Sigurdardottir, from the Social Democratic Alliance, will become prime minister to be joined by Finance Minister Steingrimur Sigfusson, leader of coalition partner the Left-Green Party, the parties said.
The credit crunch hit Iceland hard. Its rapidly expanding banks buckled under a weight of debt, the currency collapsed and the country was forced to take a $10 billion International Monetary Fund-led rescue package, causing widespread anger.
The new coalition said it would follow the economic program it negotiated with the fund.
“The economic policy of the government will be based on the program already established by the authorities and the IMF,” it said in a statement.

TITLE: Brave Nadal Thwarts Federer to Win Australian Open
PUBLISHER: Reuters
TEXT: MELBOURNE, Australia — Rafael Nadal feared his hopes of winning his first Australian Open title were slipping when he felt a sudden pain in his hamstring during Sunday’s final with Roger Federer.
Nadal won the match 7-5 3-6 7-6 3-6 6-2 but not before a mighty scare from his Swiss opponent and his own weary body.
The Spanish world number one was already worried about his fitness after spending more than five hours on court during his semi-final win over fellow Spaniard Fernando Verdasco on Friday night.
But his concerns increased when his leg started to hurt during the third set and he called for a trainer to help him out.
“I ended the match against Verdasco with the right leg, the quadriceps and hamstring very tight,” Nadal said.
“In the third set it started to (hurt)… I wasn’t cramping but it was scary.”
Nadal asked the trainer to massage his leg during the change of ends but was reluctant to call for a medical timeout incase he needed it later in the match.
The powerful lefthander said the pain never went away but he was able to fight through it to seal an epic victory.
“I was a little bit tired. I was little bit worried about my physical performance because (when) I trained, it was tough to keep up the concentration.
“I spoke with my coach before the match and he told me to go out there and fight all the time and believe in the victory.”
Nadal’s win earned him a sixth grand slam title after his four consecutive wins at the French Open and his 2008 success at Wimbledon.
He became the first man since Andre Agassi to win grand slam titles on three different surfaces and at 22, he still has plenty of time left to win the only major that has eluded him, the U.S. Open.
“This is very special, it’s a dream to win here, a grand slam on hard court,” Nadal said.
“I have worked very hard… all my life to improve my tennis outside of clay.
“I have six right now, I’m happy with my six.
“Every title is tough to win. I don’t know if I’m gonna win more, but for sure I’m gonna continue trying.
“When I won my first one I didn’t know if I would win any more. You never know when that will stop so you have to be cautious and be humble.”
While Federer was reduced to tears after the match, Nadal said he was also overcome with emotion after receiving the winner’s trophy.

TITLE: Wen Positive About Crisis
PUBLISHER: Reuters
TEXT: LONDON — Chinese Premier Wen Jiabao said on Monday there was “light at the end of the tunnel” but called for strong and effective stimulus plans to boost economies hit by the global financial crisis.
“In some places people are disappointed, people are frustrated and people are pessimistic. They are quickly unsettled by the current situation,” Wen told a business conference during a visit to London.
“There is light at the end of the tunnel ... I am calling for confidence, cooperation and responsibility, I’ve been calling for that all along because if we do that we can save the world.”
The conference was also attended by British Prime Minister Gordon Brown, who is preparing to host a summit of world leaders in April at which new measures to tackle the effects of the global credit crisis will be outlined.
About 20 million Chinese rural migrants have lost their jobs as growth falters, fuelling fears of social unrest.
China’s economic growth slowed to an annual rate of 6.8 percent in the last quarter of 2008, dragging down the pace for the year as a whole to 9.0 percent — the lowest in seven years.
The Chinese government has already pledged 4 trillion yuan ($585 billion) over the next two years to help boost domestic demand. Work is under way on projects including rebuilding earthquake-hit southwestern China and improving road and rail links.
Wen told the Financial Times that more might be needed.
“We may take further new, timely and decisive measures. All these measures have to be taken pre-emptively before an economic retreat,” he said in an interview published late on Sunday.
Speaking at a dinner on Sunday evening, Wen said he had seen signs of a revival in the Chinese economy in the last 10 days of 2008.
Tensions have flared between China and the United States in recent days after the new U.S. administration accused China of manipulating its exchange rate to boost exports.
Asked about the origins of the financial crisis, Wen signaled that he believed the U.S. had to take a large share of the blame.

TITLE: Japanese Volcano Blows its Top
PUBLISHER: Reuters
TEXT: TOKYO – A volcano near Tokyo erupted Monday, shooting up billowing smoke and showering parts of the capital with a fine ash that sent some city residents to the car wash and left others puzzled over the white powder they initially mistook for snow.
Mount Asama erupted in the early hours of Monday, belching out a plume that rose about a 1.6 kilometers high, Japan’s Meteorological Agency said.
There were no reports of injuries or damage from the eruption of the volcano, 145 kilometers northwest of Tokyo. It last erupted in August 2008, causing no major damage.
Chunks of rock from the explosion were found about 1,000 meters away from the volcano. Ash was detected over a wide area, including central Tokyo and as far as eastern Chiba.
In Tokyo’s western district of Fussa, the local government office was flooded with calls from residents asking about “the mysterious white powder” falling from the sky and fire departments fielded calls from people afraid the ash was from a nearby blaze.
In the town of Karuizawa, southeast of the volcano, the ash was thick enough to obscure road markings in some areas, town official Noboru Yanagishi said.
“Some people said they heard a strange noise in the morning when the eruption occurred,” he said.
The eruption was not big enough to disrupt daily life near the volcano, though many people awoke to find their cars covered in a fine layer of powder. National broadcaster NHK showed people in Tokyo lining up to get their cars washed or wiping the ash from their windows, with some drivers saying they first thought it was snow.
In Tachikawa, a district in northwestern Tokyo, some farming areas were coated with ash.
“Because it’s February and not harvesting season, there was no real damage to any crops,” said Shoichi Matsumoto, a local official.
In Tsumagoi, a small town on the volcano with ski resorts and hot spring baths, residents went about their business as usual. Travelers planning vacations to the area had called to inquire, but no one canceled, said Masaru Yoshida, a spokesman for the local tourist association.