SOURCE: The St. Petersburg Times
DATE: Issue #1451 (13), Tuesday, February 24, 2009
**************************************************************************


TITLE: Russia Keeps Eye On Arctic
PUBLISHER: Reuters
TEXT: MOSCOW — Russia said on Monday it was watching the extent of militarization in the Arctic as global warming makes potentially valuable resources in the polar region more accessible and would plan its strategy accordingly.
Russia has already staked its claim to a majority of the Arctic waters, which it shares with four NATO countries, and planted a Russian flag on the seabed under the North Pole 18 months ago to reinforce its position.
“Overall, we are looking at how far the region will be militarized. Depending on that, we’ll then decide what to do,” Interfax news agency quoted General Nikolai Makarov, the head of Russia’s General Staff, as saying during a visit to Abu Dhabi.
Makarov was in the United Arab Emirates for an international arms fair.
NATO Secretary-General Jaap De Hoop Scheffer last month asked whether the Western military alliance should increase its focus on the region, saying that it was necessary to build confidence and trust among the five Arctic states — four NATO members and rival power Russia.
Private explorers in a Russian mini-submarine dived 4,200 meters to the North Pole’s seabed, to symbolically plant their national flag in August 2007, to the annoyance of other Arctic claimants, such as Canada.
Russia air and naval power in the region has also become more visible. Long-range strategic bombers fly over the Arctic and are frequently shadowed by NATO aircraft. Russia’s Northern fleet based in Murmansk has expanded patrols, after a period of relative inactivity after the 1991 collapse of the Soviet Union.
Moscow is counting on the United Nations to grant it access not just to the seas of the Arctic, but the right to exploit its seabed for valuable fossil fuels and mineral reserves.
NATO members with Arctic Sea coastlines — and in some cases competing claims — are Canada, the United States, Norway and Greenland, an autonomous island within the kingdom of Denmark.
The U.S. Geological Survey has estimated that about 13 percent of the world’s undiscovered oil and 30 percent of its undiscovered gas lie under the Arctic seabed.
New sea routes could also be opened up if, as expected because of climate change, ice continues to retreat from Arctic waters, shortening voyages between Europe and the Pacific.
Makarov also said in Abu Dhabi that Russia had not yet received any official proposals from Washington on significant cuts in strategic nuclear forces.
The Times of London reported earlier this month that President Barack Obama would convene ambitious arms reduction talks with Moscow, aiming to slash the number of intercontinental nuclear missiles on both sides by 80 percent.
“When there is a proposal, there will be a discussion,” Interfax quoted Makarov as saying. “It is much too early to speak about that now.”

TITLE: Russia Defends Shooting of Chinese Ship
PUBLISHER: Combined Reports
TEXT: Russia on Saturday sought to defend its firing on a Chinese- and Indonesian-crewed cargo ship in the Sea of Japan, after Beijing strongly denounced the chain of events that left eight sailors dead.
Russian coast guards had fired on the Sierra Leone-flagged New Star last week after pursuing the vessel for 18 hours without the ship responding to their orders, the Russian foreign ministry said in a statement.
The ship, with 10 Chinese sailors and six Indonesians on board, finally turned back and headed for the Russian Far Eastern port of Nakhodka, where authorities had earlier sequestered it for smuggling, the ministry said.
En route, a storm and a mechanical failure on board prompted the ship’s Indonesian captain to evacuate, but eight members of the crew died due to faulty equipment, the statement said.
Bad weather impeded rescue efforts, it said.
The Chinese government summoned Russia’s ambassador to Beijing Friday to express its “strong displeasure” at the incident and called for further investigation.
Deputy Foreign Minister Li Hui also told Russian Ambassador Sergey Razov that China “cannot accept the incident and expresses strong dissatisfaction,” according to a statement posted on the Foreign Ministry’s web site.
Li called on Russia to do its best to search for eight crew members who went missing after the sinking in waters near Vladivostok.
“China was shocked by this incident,” he said.
Russian news agencies reported earlier that Russian border guards opened fire last weekend on the Chinese cargo ship as it sailed off the Russian far eastern port city, and that it later sank in a storm.
Russia’s Interfax news agency said the New Star, carrying a crew of 16 sailors from China and Indonesia, was fleeing border guards in the Sea of Japan when the shooting occurred. The guards were pursuing the ship because it had left the port of Nakhodka without notifying authorities, it said.
On Friday, Interfax quoted Russia’s Foreign Ministry as saying that the captain of the ship was to blame because he violated border laws and refused to stop his ship when warning shots were fired.
“We regret the tragic consequences of these events. However, we lay the whole responsibility for what happened on the New Star captain, who acted extremely irresponsibly,” Interfax quoted ministry spokesman Andrei Nesterenko as saying.
Interfax earlier said the New Star had turned around after being shot at but started sinking as a storm struck.
The sailors jumped into two lifeboats but strong waves overturned one of them and border guards were only able to rescue eight crew members, it said.
Chinese Foreign Ministry spokeswoman Jiang Yu said Thursday that 10 members of the crew were Chinese and only three had been rescued.
Interfax said rescuers had searched the freezing waters for the bodies of the missing sailors.
(AP, AFP)

TITLE: Claims Of Rights Watchdog Contested
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: A lawyer and a rights activist have contested the claims of the city’s ombudsman that the police acted within the law when they detained, searched, photographed and fingerprinted fans during a Feb. 6 raid on Arctica music club. 
Speaking at a roundtable at Rosbalt news agency on Friday, rights activist Yuly Rybakov dismissed the claims of St. Petersburg’s ombudsman, Igor Mikhailov, as “shameless lies,” while lawyer Yelena Topilskaya listed a number of laws allegedly violated by the law enforcement body (whose identity remains unknown) during the raid, and said that condoning human rights’ abuses contradicted the St. Petersburg law on ombudsmen.
On Feb. 6, the police stopped a concert by the Moscow folk-metal band Arkona 40 minutes after it had started, ordered 400 fans to stand against the club’s walls and then searched, photographed and fingerprinted them. Beatings and the confiscation of photo and video camera memory cards were also reported. 
Several fans complained that the raiders took their cell phones and checked phone numbers and text messages in the phone memories. The operation lasted until around 2.30 a.m., seven hours after the gig’s official starting time.
A week later, Mikhailov, a member of the Kremlin-backed United Russia party who was elected as the city’s ombudsman by the United Russia-dominated city parliament last year, told journalists at a 45-minute briefing at Rosbalt that the police had the right to act as they did at Arctica.
“I hope everybody remembers that law-enforcement agencies have the right to check people’s passports,” Mikhailov said at the time.
“We watch with pleasure when the police check the ID or other documents of migrant workers in the street, because we understand that it is a problem for us. And we like it! But when our IDs are being checked, we don’t like it,” he said.
Rybakov, who said he had watched a video recording of the briefing, said he was astonished by Mikhailov’s statements and manner.
“Mr. Mikhailov […] was pulling the wool over your eyes blatantly, shamelessly, trying to prove that everything was within the law, and, secondly, he acted — obviously and demonstratively — as if he wanted to say, ‘No matter what I tell you, no matter what you hear, you can’t do anything to me anyway,’” Rybakov said.
Rybakov then cited the law on state fingerprint registration, which says that only those charged with or suspected of committing a crime can have their fingerprints taken forcibly.
“[But] no crime had been committed in Arctica, and this is the main circumstance,” he said.
According to Rybakov, the raid on Arctica is one of many cases of unlawful action on the part of the St. Petersburg authorities.
“This case of breaking up a concert is another link in the chain of utter lawlessness that has reigned in our city for a long time — toward any social movement that doesn’t sit well with the existing regime, or is used by this regime, by these authorities to redirect popular interest or popular tension [from them] to some other [targets], to divert people’s attention,” Rybakov said.
Lawyer Topilskaya, who pointed to the possible violation of a number of laws by the police during the raid, said that without any investigation she could say that Article 5 of the law on the police was violated by the raiders, who did not state their identity as required. No law-enforcement agency has yet taken responsibility for the raid, which took place more than two weeks ago.
“In the event of restricting a citizen’s rights and freedoms, policemen are obliged to state the grounds and reason for such a restriction, as well as the citizen’s rights and obligations arising in connection with that,” she quoted from the law.
“A lot of time has passed, and until now no police officer has explained the grounds and reason for restricting people’s rights and freedoms in such a manner. This is a violation that, given a proper procedure, could be taken to the attention of the European Court.”
Confronting Mikhailov’s earlier claims, Topilskaya said that the police can check citizens’ IDs only if they have “sufficient grounds” to suspect a citizen of committing a crime, being wanted by the police or if there are grounds to launch an administrative violation case against them. Similar restrictions apply to searches and other police actions, she said.
Topilskaya pointed out that the St. Petersburg law on ombudsmen states that an ombudsman should defend fundamental civil and political human rights defined in the Universal Declaration of Human Rights, as well as other human rights in the event of their systematic or mass violation on the territory of St. Petersburg.
“An ombudsman shouldn’t say that the authorities are a priori right, while citizens, even if they belong to a youth subculture, are a priori guilty — indiscriminately, without investigation,” she said.
“You and I — civil society — need a human rights advocate; the authorities don’t need an advocate, because the powers-that-be can defend themselves, they have enough tools. The task of the human rights advocate is to draw attention to the defense of rights and freedoms of citizens.”
Describing the role of an ombudsman as “the people’s conscience,” Topilskaya said that to have any influence in society, he or she should be chosen carefully, while Rybakov said that Mikhailov was not fit to be the St. Petersburg ombudsman.
“Mikhailov’s position in this situation is actually the position of the authorities, this is not the position of Mikhailov as a person,” Rybakov said.
“Honestly, I feel sorry for this man, because he has found himself in a position for which he is not qualified. 
“People can be divided into potential aggressors and potential defenders. This man isn’t a potential defender. He could perform his social function remarkably well at some other job — as a prosecutor, not as an advocate,” he said.

TITLE: New Hearing Date Set for Khodorkovsky
PUBLISHER: Bloomberg
TEXT: MOSCOW — A preliminary hearing in the new theft and money-laundering trial of Mikhail Khodorkovsky, the former chief executive officer of Yukos Oil Co., is scheduled for March 3 in Moscow, a court official said.
Moscow’s Khamovniki District Court on Thursday ordered the transfer of Khodorkovsky and his former business partner Platon Lebedev from the Siberian city of Chita, where they’re incarcerated in a pre-trial detention center, to Moscow for trial, a Moscow City Court spokeswoman said by telephone on Thursday.
 “Bringing Khodorkovsky to Moscow is a very important step in the process, because he has been illegally held in Siberia,” defense lawyer Robert Amsterdam said by telephone from Miami. “Having him personally present in the courtroom at least allows him to stand and face those who have mounted this campaign against him.”
Prosecutors accuse Khodorkovsky and Lebedev of embezzling oil worth more than 892.4 billion rubles ($25 billion) from Yukos production units and laundering a portion of the profits, 487.4 billion rubles and $7.5 billion.

TITLE: In Brief
TEXT: <b>Zenit Candy Launched</b>
ST. PETERSBURG (SPT) Local soccer club Zenit and the Krupskaya Confectionary Factory have teamed up to produce a line of chocolates featuring Zenit’s iconic blue-and-white logo.
The historic local candymaker and popular soccer club decided at the end of last year to produce a specialty series of chocolates in honor of the team’s 2008 UEFA Cup victory. This month, the two parties agreed to put out another line of chocolates under the Zenit brand name, citing the series’ warm reception among Zenit players and their fans, announced the Krupskaya Confectionary Factory’s press service. 
The Krupskaya Confectionary Factory was founded in 1938 and continued operating through World War II and the breakup of the Soviet Union. 

<b>Wolf Pack Kills Woman</b>
TBILISI (Bloomberg) — A pack of wolves killed a woman in the Kakheti region of eastern Georgia in the third attack in a month, leading authorities to hand out weapons to locals for self-defense.
“We are putting Kakheti on high alert,” Governor Gia Chalatashvili said Friday in televised comments. “Residents will be given guns and ammunition to defend themselves. Police will also be involved.”
The woman’s remains were discovered Friday in the village of Giorgitsminda, about 40 kilometers (24 miles) from the capital Tbilisi, the Imedi television station reported. The woman had been missing for several days.
Several villages in Kakheti have reported wolf attacks on livestock and humans in the last month, Chalatashvili said. About two weeks ago, the animals savaged a woman in the village of Pirosmani, seriously injuring her throat.

<b>Bomb Hidden in Toy</b>
MOSCOW (Bloomberg) An explosive device hidden in a remote-controlled toy car was found at the site of a blast that killed one person Sunday in the southern Russian town of Sochi, Interfax reported, citing an unidentified official.
Investigators discovered the device in a trailer at a building site where the explosion took place, the news service reported Monday. One person died and one was injured as a result of the blast in the vicinity of a tunnel under construction, Interfax said.
Prime Minister Vladimir Putin is staking his personal reputation on the success of the 2014 Winter Olympics in Sochi. An explosion on a Sochi beach in August killed two people and injured 13.

<b>2 Killed in Coal Mine </b>
Reuters (MOSCOW) — Two coal miners were killed and a third injured on Monday in Russia’s Kemerovo region in western Siberia when the roof above them collapsed, Russian news agencies reported.
“A rock slid onto the roof and shattered it,” Interfax reported, quoting local law enforcement officers.
The Dzerzhinsky mine is in the town of Prokopyevsk, some 3,000 km east of Moscow.
The accident comes after the same mine’s previous roof collapsed with 220 people inside in February 2007, killing one person.
Years of post-Soviet neglect and lax safety rules have made Russia’s mines, which employ a quarter of a million people, among the world’s most dangerous.

TITLE: $1.2 Mln in Cash Stolen
PUBLISHER: The Associated Press
TEXT: MOSCOW — Police in central Russia were searching Sunday for suspects accused of stealing more than $1 million in cash in a highway robbery — one of the country’s biggest armed robberies in years.
Two bank employees told authorities that assailants with automatic rifles blocked their car Saturday on a highway in Tula province south of Moscow and stole about 43 million rubles ($1.2 million) in cash at gunpoint, police said.
The alleged victims said two of the seven attackers had posed as traffic police, provincial police spokesman Sergei Yelinsky told the state-run Vesti-24 television.
Police were searching six Russian provinces including the one surrounding Moscow, it said.
Police said the money from First Processing Bank was allegedly being taken to Moscow from the southern city of Rostov-on-Don, the RIA-Novosti news agency reported.
Still, the report raised many questions.
The bank employees — a cashier and a driver — were traveling in a Toyota with no armed escort despite the large amount of cash, Vesti-24 reported. It said investigators were considering whether the employees themselves could have been behind the robbery.
An operator who answered the phone at the Moscow-based commercial bank said officials were not available to comment.
Russian media said it was the biggest armed robbery involving a Russian bank since May 2007, when attackers stole about 40 million rubles as well as gold and silver ingots from state bank Sberbank in the Siberian city of Chita. Two guards were killed in that robbery.

TITLE: Man Arrested Over Murder Of Kadyrov's Former Guard
PUBLISHER: The Associated Press
TEXT: WARSAW, Poland — Polish police have arrested a man suspected of killing a refugee from Chechnya who was gunned down in Austria last month after filing a criminal complaint against the president of the Russian region, officials said Sunday.
A 31-year-old man identified only as Turpal Ali J. was arrested Thursday in a hotel near Warsaw, police spokesman Mariusz Sokolowski said. The man is a Russian citizen of Chechen origin, Sokolowski said.
Sokolowski said the arrest was carried out by an anti-terrorist squad, because the man was believed to be armed and determined to flee “at any price.”
Austrian Interior Ministry spokesman Rudolf Gollia confirmed the arrest, calling the joint investigation with Polish authorities a success. He said Austria has asked for the man’s extradition.
The man is suspected in the killing of 27-year-old Umar Israilov, who was shot dead in Vienna on Jan. 13. Israilov was a former bodyguard of Chechen President Ramzan Kadyrov.
Israilov filed a criminal complaint against Kadyrov in Austria in June, accusing him of torture and other abuses in Chechnya. Austrian prosecutors have said they investigated Kadyrov for alleged human rights violations based on the Chechen dissident’s complaint.
Vienna prosecutors said earlier this month that their investigation of Kadyrov was completed in October and the results would be released within the next few weeks.
Israilov was fatally shot as he walked out of a grocery store in Vienna, and human rights activists have said the killing was connected to his opposition to Kadyrov.
Israilov had been detained in Chechnya as a separatist rebel, then was given amnesty, and briefly became a bodyguard to Kadyrov in Chechnya. Israilov ultimately fled Chechnya for Europe.
Chechnya, part of Russia, is an autonomous republic that lies along Russia’s restive south.
Kadyrov often has been accused of human rights abuses and of ruling Chechnya with an iron fist — claims he denies.

TITLE: Solidarity Marches in Moscow
PUBLISHER: The Associated Press
TEXT: MOSCOW — A few hundred Russian opposition sympathizers on Saturday held an anti-Kremlin rally in central Moscow demanding the resignation of the government.
Former chess champion Garry Kasparov and former Prime Minister Mikhail Kasyanov addressed the crowd from a truck, calling for the government to take the blame for Russia’s troubles as the global meltdown takes hold.
“I don’t see any way for our country to get out of the crisis unless we implement political reforms,” said Kasparov after the gathering.
Kasparov, a fierce Kremlin critic, said only the resignation of Prime Minister Vladimir Putin and his government will allow Russia to overcome the financial crisis.
He started crowd chants of “Russia without Putin.”
Participants held aloft banners with that slogan and others — such as “Be proud, Russia, these two guys have cheated you” next to pictures of Putin and President Dmitry Medvedev.
City Hall sanctioned the tightly-policed rally. One pro-Kremlin youth activist was detained as he tried to intervene.
The protest was conducted under the auspices of the newly formed Solidarity movement, which aims to forge a single force out of Russia’s fragmented opposition.

TITLE: Russia Says 64 Killed in Georgian War
PUBLISHER: Reuters
TEXT: MOSCOW — A total of 64 Russian servicemen were killed during last year’s war with Georgia and in the immediate aftermath, while another 283 were wounded and three are missing, the deputy defense minister said on Saturday.
General Nikolai Pankov said in an interview with Ekho Moskvy radio that the figures were recorded from August 8 to August 24.
Russia and Georgia fought a five-day war in August when Russian troops repelled a Georgian assault on the region of South Ossetia, which threw off Georgian rule in the early 1990s.
Georgia says 228 Georgian civilians and 169 servicemen were killed.
The Investigative Committee of the Russian Prosecutor General’s Office says it has so far documented the deaths of 165 South Ossetians. During the war, Russia cited a South Ossetian death toll of 2,000.
Russia and former Soviet Georgia both deny using excessive force or targeting civilians.

TITLE: State Guarantees Loans to Defense Companies
PUBLISHER: Reuters
TEXT: MOSCOW — Russia will guarantee loans worth a total of 15 billion rubles ($415.6 million) to nine defense industry firms, the finance ministry said on Saturday, showing determination to support the military-industrial complex.
A total of 100 billion rubles of the federal budget has been earmarked to guarantee loans to Russian defense companies, Deputy Finance Minister Anton Siluanov told reporters, citing an inter-agency commission set up to address the issue.
Russian President Dmitry Medvedev pledged last year not to let the global financial crisis frustrate Moscow’s goal of modernizing the armed forces.
Medvedev’s predecessor Vladimir Putin made the revival of the military, neglected in the first post-Soviet decade, a symbol of Russia’s resurgence and an additional argument in Moscow’s assertive foreign policy.
Siluanov did not name the nine firms to benefit from the state guarantees, but said that the commission had considered a total of 60 companies.
The financial crisis has cut off access to affordable loans for many Russian firms, forcing them to turn to the government for credit, cash or a loan guarantee.

TITLE: Local Project Biggest Risk For Finland’s Technopolis
PUBLISHER: Bloomberg
TEXT: Technopolis of Finland said its 150 million-euro ($189 million) St. Petersburg project poses the “biggest risk” to the real estate company in 2010 as the Russian economy faces the worst slump in a decade.
The Pulkovo Technopark, located near St. Petersburg’s international airport, is the biggest venture in Technopolis’s investment pipeline, Chief Executive Officer Keith Silverang said in an interview in St. Petersburg on Wednesday.
“It would represent a heavy hit financially if it launches with weak occupancy rate,” Silverang said. The company has already spent 50 million euros on the development.
The project’s first stage of more than 23,000 square meters (247,572 square feet) is scheduled to open in the first quarter of 2010. It will be Technopolis’s first technology office park outside Finland. Technopolis, Finland’s largest real estate and service company catering to high-tech industries, sought to tap demand by expanding operations to neighboring Russia.
Russia’s tumbling ruble and falling prices for its commodity exports have dented consumer demand and deterred investors. The country’s economy may contract 2.2 percent this year, the Economy Ministry said last week.

TITLE: Deripaska Seeks Bank Support
AUTHOR: By Torrey Clark
PUBLISHER: Bloomberg
TEXT: MOSCOW — Oleg Deripaska, the billionaire whose debts unseated him as Russia’s richest man, said he hopes banks will agree to a moratorium on loans coming due for his aluminum producer, United Co. RusAl, within a month.
“Banks understand the value of our debt today is less than four percent, so they hope to increase it a little,” Deripaska said in an interview with state television channel Vesti on Sunday.
“There’s the issue of balance. I hope by the end of February or beginning of March we’ll reach an agreement with them.”
Moscow-based United Co. RusAl owes about $7 billion to foreign banks, out of a total $16.3 billion of debt, minority shareholder Viktor Vekselberg said Jan. 30. Aluminum prices have continued to slide after a 36 percent drop in 2008, while stockpiles in warehouses monitored by the London Metal Exchange rose to a record high. Deripaska estimated global stockpiles have reached five million tons, more than RusAl produced last year.
Restructuring talks may take three to four months after banks agree to a “standstill,” Deripaska said. RusAl will have to rely on domestic banks and sales for funding, as international lenders and export revenues remain out of reach, he said.
“For the next seven years, we can forget about those sources,” Deripaska said. Russia’s government won’t provide much additional financial aid to companies, including his automaker GAZ, as it focuses on social issues, he said. “There won’t be much money.”
Deripaska called for the government to help stimulate demand and help producers compete on price. Deripaska said he doesn’t need state financing, Interfax reported.
RusAl has received “unprecedented support,” Interfax cited Deputy Prime Minister Igor Sechin as saying on Friday. “There is shareholder responsibility — let them show their savvy, ingenuity, commitment.”
Deripaska, 41, tumbled from first to eighth richest with a fortune of $4.9 billion after losing more than $35 billion, Finans magazine said last week. He was the first of Russia’s billionaires to cede assets to banks last year as credit markets seized up and the country was pushed to the brink of recession after a decade of uninterrupted growth.
RusAl held on to a 25 percent stake in Norilsk Nickel after a $4.5 billion bailout loan from state development bank VEB. The stake’s market value has fallen to about $2.1 billion, based on the nickel producer’s share price, from $13 billion when RusAl bought the stock in April.
President Dmitry Medvedev on Friday threw his support behind Deripaska, saying he agreed with the billionaire’s complaints about rivals using the crisis to “settle scores.”
“We shouldn’t allow problems to reach the point when, as a result of competition, whole groups of companies could collapse,” Medvedev said in Irkutsk, the capital of the region where RusAl’s Bratsk aluminum smelter is located.
Deripaska said Sunday that RusAl may consider selling convertible bonds once a moratorium is reached with banks. RusAl isn’t planning to sell shares, he said.
Deripaska and rival Norilsk shareholder Vladimir Potanin have proposed various plans to merge the nickel producer with other metals companies, possibly including RusAl and state-held metal assets, and giving the government a stake as a way to reduce their debt burden.

TITLE: President Urges Faster Action
AUTHOR: By Lyubov Pronina and Paul Abelsky
PUBLISHER: Bloomberg
TEXT: Russian President Dmitry Medvedev criticized the government on Friday for its slow response to the country’s worst economic crisis in a decade, and proposed broader state loan guarantees for companies to ease their access to credit.
“We are working very slowly, which is unacceptable in a period of crisis,” Medvedev said Friday during a government meeting in the Siberian city of Irkutsk.
Medvedev said the signing of some state contracts with domestic producers will be delayed to the second quarter, meaning that companies will only receive their money in the third quarter. The state may guarantee half of any loan taken out by Russian companies in order to help solve their cash-flow problems, he said.
“This isn’t a macroeconomic problem or a consequence of the difficulties faced by the world financial system. This is simply our inability to work swiftly and efficiently,” Medvedev said.
Medvedev has previously criticized the government’s handling of the crisis, saying on Jan. 11 that only 30 percent of approved measures had been implemented. The government has earmarked more than $200 billion in emergency funding to help the economy weather the crisis.
Russia’s economy contracted a seasonally adjusted 2.4 percent in January after a 1.8 percent decline the previous month, Economy Minister Elvira Nabiullina said in Irkutsk. The ministry last week revised its estimate of Russia’s 2009 economic contraction to 2.2 percent.
The economy’s performance in January was better than expected, said Vladimir Osakovsky, a Moscow-based economist for UniCredit SpA, Italy’s largest bank. “The volume of imports slowed, which improved Russia’s trade balance,” he said by phone.
The government may suspend sections of bankruptcy laws if they are applied to destroy companies saddled with debt, Medvedev said Friday.
 “If we see now that this or that law can be used to crush somebody, and that is not difficult to do, then we have to quickly change this law,” Medvedev said.
A selective moratorium may be introduced on bankruptcy regulations. “Otherwise the system will simply break down,” he said.
The economic contingency may also provide an opportunity to winnow the ranks of business leaders, Medvedev said. “A crisis is the best moment to eliminate inefficient managers, including state officials,” he said.

TITLE: In Brief
TEXT: <b>Nanotech Aims High</b>
FRANKFURT (Bloomberg) — Russian Nanotechnology Corp. aims for sales of 20 billion euros ($25.2 billion) by 2015 compared with 100 million euros currently, Die Welt said, citing an interview with Chief Executive Officer Anatoly Chubais.
The Russian state-controlled company has invested in projects suggested by the private sector, including a light-emitting diode factory and medical technologies, the newspaper reported.
Moscow-based Russian Nanotechnology is also discussing further investment in the industry with oligarchs including Mikhail Prokhorov and Alexei Mordashov, Chubais said in the interview.

<b>Incomes May Fall 8.3%</b>
MOSCOW (Bloomberg) — Russian real disposable incomes may fall 8.3 percent this year, the first drop since 1999, after sliding 6.7 percent last month, Vedomosti said, citing Economy Ministry estimates presented to United Russia leaders.
Real wages may fall 4.1 percent this year, compared with an earlier estimate of 2.7 percent, the newspaper said.
Moscow-based analysts surveyed by the newspaper said the ministry’s forecast for disposable incomes may be too severe, Vedomosti reported.

<b>Irkut Intent on Growth</b>
MOSCOW (Bloomberg) — Irkut Corp., which sells Sukhoi Su-30 fighter jets to countries such as India and Malaysia, plans to boost sales 22 percent this year.
Sales last year reached 31.2 billion rubles ($870 million) and net income was 350 million rubles, under Russian accounting standards, Irkut said in a statement distributed at the Irkutsk Aviation Plant in Irkutsk, Siberia, before a visit by President Dmitry Medvedev on Friday. The aircraft manufacturer didn’t provide year-earlier comparisons.
Investments will rise to 5.5 billion rubles this year from 3.2 billion rubles last year, Irkutsk said in the statement.

<b>LDV Seeks $44 Million</b>
LONDON (Bloomberg) — LDV Group, the van maker owned by Russian billionaire Oleg Deripaska’s GAZ Group, said it needs as much as 30 million pounds ($44 million) to stave off collapse.
“The company is quite literally running out of cash as we speak,” GAZ Group Chief Executive Officer Erik Eberhardson said on BBC Radio 4’s Today program. “It’s fairly small but it’s necessary to keep the company alive and restart manufacturing.”
Birmingham, England-based LDV, which is also applying for a loan from the European Investment Bank, needs the cash to help safeguard more than 5,000 jobs, Eberhardson said. The van maker wants to restructure and produce greener vehicles.

<b>Finland Still Popular</b>
MOSCOW (AP) — Russian tourists continued to flock to Finland last year, spending a record 1 million nights in the Nordic country, tourism officials said Thursday.
The number of Russian overnights, at 1.03 million, was more than 20 percent higher than in 2007, the government statistics office said. 

<b>Commission for Metals</b>
MOSCOW (Bloomberg) — Russian Prime Minister Vladimir Putin signed a decree to create a government commission overseeing the development of the metals industry.
A deputy prime minister will head the commission, the government said in a statement on its web site Friday.

TITLE: Troika Expert Positive on Ruble Rate
AUTHOR: By Agnes Lovasz and Emma O’Brien
PUBLISHER: Bloomberg
TEXT: Russia’s ruble will hold above 41 against its dollar-euro basket should oil remain at more than $40 a barrel, said Ruben Vardanian, chairman of Troika Dialog, Russia’s oldest investment bank.
Should oil stabilize, the current ruble level is “good enough to restart the economy,” he said Friday during Russian Business Week at the London School of Economics. “It is the right strategy in the current situation.”
Investors and bankers are worried about how long the central bank will be able to hold 41, the level it pledged on Jan. 22 to defend after ending the ruble’s gradual devaluation, Vardanian said. “The rate needs to be softly managed,” he said.
Russia’s ruble has slumped almost 40 percent against the dollar-euro basket since August as crude-oil prices fell and the global economic crisis spurred investors and Russian citizens to withdraw $290 billion from the country, according to BNP Paribas. The $1.7 trillion economy is sliding into a recession as the global credit squeeze restricts access to loans and erodes demand for energy and metals. The country is facing its worst financial crisis since its debt default a decade ago.
The crisis forced Russia to redraft its budget, which will now have a deficit — the first in a decade — that may reach eight percent of gross domestic product, according to the government. Finance Minister Alexei Kudrin said the shortfall will be financed from Russia’s two sovereign wealth funds, which together hold 7.9 trillion rubles ($220 billion).
While the reserves will be sufficient to cover the deficit this year, Russia may need to borrow money to finance the shortfall next year in local or international markets, Vardanian said. Portfolio investors will avoid Russia as long as the U.S. and Japan remain in a recession, he said.
“Emerging markets will be closed for portfolio investors this year,” he said. Still, this may be “an interesting time to enter the market” for investors seeking to buy “Russian assets.” Investors may begin to return in the second half if “Russia shows good results,” he said.
Troika has posted “small but positive” results in the first four months of its fiscal year that started in October as it advised on mergers and bankruptcies, Vardanian said. He declined to comment on a possible sale of the brokerage.

TITLE: Unemployment Hits  6-Year High of 8.1%
AUTHOR: By Jessica Bachman
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — Russia’s unemployment rate climbed to 8.1 percent in January, its highest in more than six years, the State Statistics Service announced Thursday. 
Employers shed 300,000 jobs last month, causing the number of jobless to reach 6.1 million, an increase of 23 percent from the same period last year. 
Last month’s job loss figures are an improvement from December, when 500,000 jobs were shed, according to data from the statistics service, which calculates the figures according to the International Labor Organization’s methodology. 
But employers are continuing to cut jobs in February. As of Feb. 11, 470,000 people faced imminent layoffs and another 920,000 worked part-time, Deputy Health and Social Development Minister Maxim Topilin said Thursday. 
More than 1.8 million people are officially registered as unemployed, and the number could reach 2.2 million by the end of the year, said Topilin, speaking at a Federal Migration Service meeting. 
“We haven’t seen this kind of trend in many years ... and this disturbing tendency forces us to re-examine our current labor-market policies and our regulatory quota policies for foreign workers,” he said, Prime-Tass reported. 
Many regional administrations have cut or are preparing to cut their 2009 migrant worker quotas — in some cases by as much as 70 percent — in an effort to open up more jobs for Russians. The city of Moscow will only allow 250,000 migrant workers this year, half of the number permitted by the 2008 quota. 
At the same time, the Federal Migration Service will legalize migrant workers employed by private citizens, the service’s head, Konstantin Romodanovsky, said Thursday. 
An increasingly large number of migrant workers, mostly from other former Soviet republics, work as maids, groundskeepers, nannies and repairmen in private homes in Moscow and other large cities, Romodanovsky said. 
“The majority of this category of migrant workers still remains outside of the legal framework. And to solve this problem, we are preparing a bill that will allow the migrant worker to pay a monthly fee for a special license that will legalize his employment status in private homes,” he said, Prime-Tass reported. 
The legislation will help legalize hundreds of thousands of migrant workers, he said. 
The country’s work force stood at 75.7 million, or 53 percent of the population, at the end of January, the State Statistics Service said. 
Speaking to the State Duma on Wednesday, Health and Social Development Minister Tatyana Golikova said the unemployment rate exceeded the government’s forecast of 1.6 million people by 200,000. 
“This unemployment level was typical for 2003 and 2004,” she said in remarks posted on her ministry’s web site. 
Regions with the largest increases in unemployment rates are Chelyabinsk, Nizhny Novgorod, Tver, Volgograd, Sverdlovsk and Vladimir, Golikova said.

TITLE: Steel Deficit Not Expected to Prompt Real Recovery
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: Faced with dwindling stockpiles, Russia’s steel traders recently found themselves in the unfamiliar position of struggling to keep their warehouses full. Steelmakers were exporting more to profit from the weaker ruble, leaving domestic consumers to scramble for what remained of the country’s stunted output. 
Steel prices even started creeping back from a fourth-quarter plunge as traders urged producers to restart facilities they began idling late last year. But with construction firms and carmakers — some of the industry’s two largest consumers — still struggling to survive a production slump to levels unseen since the early 1990s, steelmakers say the party won’t last long. 
The short-lived revival was scant consolation for Russia’s enormous steel industry, which accounts for about 8 percent of the economy. Prices for the metal fell a staggering 65 percent from September through December on plummeting demand at home and abroad, leaving most steelmakers with no profit in the fourth quarter and dim prospects for the months ahead. 
Companies responded by slashing production, investment plans and jobs. Banks that lend generously to Russia’s big five steel firms grew reticent to extend new cash to mid-sized and small metals producers and traders. Some producers say they are working to boost output, but few expect the brief supply deficit to spur a real recovery. 
Magnitogorsk Iron & Steel Works, or MMK, the country’s No. 3 steelmaker, has restarted one of the blast furnaces it shut down late last year and plans to relaunch another in March. An MMK executive told The St. Petersburg Times that the company planned to boost its production level to as much as 90 percent in March, or 800,000 tons of steel per month, up from 420,000 tons in December. 
On Thursday, however, the company said it planned to scale back to 60 percent of capacity, from 70 percent currently. 
Novolipetsk Steel, or NLMK, Russia’s fourth-largest steelmaker, said it has restarted two blast furnaces in the past two weeks, but one remains idle. Production of slabs and hot-rolled coil, two of its main products, stands at 78 percent of capacity, NLMK spokesman Anton Bazulev said. The figure should rise to 85 percent next month as orders grow, he said. 
A spokesperson at Mechel, the fifth-largest steel producer, said the company’s smelters were operating at 80 percent of capacity and that the company had restarted a steelmaking workshop and was planning to relaunch a blast furnace in April. 
But with automakers and builders showing no signs of recovery and a 16 percent year-on-year drop in industrial output last month — the deepest contraction since 1994 — steelmakers say they aren’t holding out hope for a quick return to growth. 

‘It Is All Temporary’ 
“We are feeling an insignificant revival of the demand on the home market, but connect it only to the destocking. We feel no real demand,” Dmitry Gorshkov, sales director at the Cherepovetsky Metallurgical Plant, wrote in an e-mailed response to questions. The plant is the main facility of Severstal, Russia’s biggest steel producer. 
NLMK shared the assessment. “We understand that the current surge in demand is temporary and based on metal traders and steel consumers running out of steel as well as their desire to hedge against the instability of the ruble,” company spokesman Anton Bazulev said. “We don’t actually call it demand now, as there are no fundamental reasons for consumption to resume.” 
MMK vice president Alexander Mastruyev told Vesti-24 this week that the company might suspend its blast furnaces again because of unstable demand. 
“I think it is all temporary. Car plants are stopped, railcar plants are stopped, pipe makers aren’t working at full capacity and the construction industry is at a standstill,” Mastruyev said. “We’re not hoping to return to the previous levels of production tomorrow or the day after tomorrow. We don’t think it will happen.” 
Viktor Kovshevny, the head of metals market analytical center Rusmet, said things had already begun to worsen. “We see a drop in demand of 10 to 15 percent in February compared with January,” he said. 
Metal traders’ brief shopping spree in January was one of the reasons steel prices grew 10 percent to 50 percent, depending on the product. But the main reason, said UniCredit analyst George Buzhenitsa, was that metals companies were trying to balance their domestic and export prices. 
“The metals producers set the prices too high, frightening buyers,” Kovshevny said. 
The question can be a touchy one for Russian metals companies. Last year, Mechel was blasted by Prime Minister Vladimir Putin for selling coking coal, a key ingredient in steelmaking, for more in Russia than abroad, criticism that halved the company’s market capitalization in a matter of days. 

The Ruble’s Retreat 
The Central Bank’s gradual devaluation of the ruble, which lost a third of its value from Nov. 11 to Jan. 22, proved a boon to commodities exporters, whose costs are in rubles but who are paid in dollars. As a result, steelmakers redirected their sales to the hungry markets of Europe and Asia. 
Rusmet says Russian steelmakers sell 19 percent of their export volumes to Asia, 40 percent to Europe and another 20 percent to the Middle East. 
Alfa Bank metals and mining analyst Maxim Semenovykh said steelmakers exported 68 percent of their products in January. Before the crisis hit Russia in September, just 45 percent of Russian steelmakers’ output was sold outside the country. 
“The devaluation was the main factor of the rebalancing, which was further encouraged by export prices that were significantly higher than the production costs in Russia,” Semenovykh said. 

Falling Stocks 
The sudden preference for exports left some domestic consumers and traders unsatisfied as they woke in January from a three-month hibernation to buy steel. 
Russian steelmakers had lowered their production by an average 40 percent in November and December and did not have supplies to meet traders’ demand while still exporting in full swing. As a result, steelmakers brushed off domestic consumers with unreasonably high prices, the MMK executive said, speaking on condition of anonymity to discuss the market freely. 
“We are only a third full and ready to buy the metal now, as demand has somewhat revived,” Oleg Tyurpenko, chief executive of the MetallServis, the country’s biggest metals trader, said in a recent interview. 
The trader had seen its stockpiles fall threefold, to 90,000 tons, from September to November. “At that time, to have stockpiles at your warehouse was equal to death because demand had stalled and prices were sinking in the blink of an eye,” Tyurpenko said at his office, located in the company’s warehouse complex in southeast Moscow. 
A ton of rebar — the main steel product for the construction industry — cost 36,800 ($1,023) rubles in August. By September, it had fallen to 27,990 rubles and in December dropped as low as 12,500 rubles, according to MetallServis. A ton of rebar currently costs about 20,000 rubles. 
“Production costs here are among the world’s lowest because of vertical integration,” Kovshevny said. “Steelmakers can sell at a lower price abroad than their foreign competitors.” 
When asked about the current import-export ratios, most of Russia’s Big Five steelmakers kept mum. MMK said it was now selling 48 percent at home in February, down from 60 percent to 65 percent in the fourth quarter of 2008. 

Bringing Back Supply 
The government has allocated more than $200 billion since September in rescue measures for the economy, which is heading into its worst year in a decade. The Economic Development Ministry last week cut its economic outlook for 2009, estimating a 2.2 percent contraction from the previous forecast of a 0.2 percent fall. 
If the government doesn’t support the construction sector, the percentage of exports may grow, said Kovshevny, of Rusmet. 
“The export figures may rise to as much as 75 percent of production as metals producers see miserable demand at home in the short term,” he said. “Helping the construction sector is the best way the government can help metals producers.” 
Even the high profits from steel exports could weaken by the second quarter. 
“Foreign producers of steel and raw materials will set lower prices in April, when their yearlong contracts expire,” Semenovykh said. “So, Russia will lose some of its raw-materials pricing advantages.” 

The Liquidity Problem 
The sudden attention to the export market was also rooted in foreign clients’ better payment discipline. In a poll of 113 metals producers and traders conducted by Rusmet from late January through Feb. 11, nonpayment was ranked as a “major concern.” 
Half of all respondents said they expected further growth of nonpayments this year. Kovshevny estimated the overall industry receivables at “dozens of billions of rubles.” 
The lack of financial liquidity after the banking sector seized up left the entire industry struggling to meet obligations. Builders fell behind on payments to traders, who along with pipe makers, had debts to steel producers. As a result, the steelmakers were racking up major debt with their suppliers of coal and iron ore. 
Earlier this month, MMK asked Mechel whether it could repay an 801 million ruble ($22.3 million) debt through a barter arrangement. An MMK executive said it had offered to send steel to Uralvagonzavod, which supplies train cars to Russian Railways, and that Russian Railways would in turn provide transportation services to Mechel. The offer was declined, however. 
Tyurpenko said MetallServis receivables stood at 70 million to 80 million rubles, mostly owed by big construction companies. 
“The construction companies don’t pay us because if we go to court they will have to give us the money back in only a year,” Tyurpenko said. 
The problem is aggravated by the tightened access to the bank loans. While Russia’s steel majors were able to get billions of rubles from state-run Sberbank, VTB and state-influenced Gazprombank, midsized and small producers and traders couldn’t find a kopek. 
Kovshevny, of Rusmet, said banks had a “blacklist” of borrowers, which included metals industry producers and distributors. Fifty-nine percent of those polled by Rusmet said they saw a decrease in banks’ willingness to credit the industry, even compared with October and November. 
Sberbank and VTB, the country’s biggest lenders, denied having “blacklists.” 
Another problem with banks was their desire to “over-hedge” risks, as some metals traders put it. 
“The board of MetallServis had to sign papers saying we would offer everything we have as collateral,” Tyurpenko said, showing a thick stack of papers containing a report prepared for Sberbank on his company’s anti-crisis measures. “They just wanted it to make sure we will still be able to make payments on the loans they have already given,” he said.
 
Return to ‘08 Unlikely 
“We expect the prices to go down in spring, then to slightly go up in summer and then drop in autumn again,” Tyurpenko said. “We just took the usual forecasts, including the seasonal factor, and turned it upside down. 
“There are no rules working in terms of prices now,” he sighed. 
Rusmet expects rebar to cost 15,450 rubles ($430) per ton in March, down from the current 20,000 rubles. 
“In our base-case scenario, we expect average sales volumes to be down 20 percent year on year in 2009 and average prices to be down 50 percent year on year,” UralSib metals analysts Dmitry Smolin and Michael Kavanagh wrote in a note earlier this month. 
Semenovykh, of Alfa Bank, said the steel market won’t revive until at least next year. “It is highly unlikely that we will in the next three to four years come back to the sky-high steel prices that we had in 2008,” he said. 
The steel market participants polled by Rusmet, however, showed no signs of giving up. Only 13 percent of those asked said they were ready to sell their businesses. Nonetheless, some of them were looking to diversify. 
“You can’t put all your bets in one sector, especially one so volatile as the metals industry,” said Tyurpenko, of MetallServis. “If you work in metals, you should diversify.”

TITLE: Roddick Boycotts Dubai After Victory in Memphis
PUBLISHER: The Associated Press
TEXT: MEMPHIS, Tennessee — Andy Roddick wants to clear up any misconceptions about why he’s not going to Dubai. It has nothing to do with his health, and he proved that Sunday on the court.
Roddick won his first title of 2009 and the 27th of his career, beating Czech Radek Stepanek 7-5, 7-5 in the finals of the Regions Morgan Keegan Championships.
Only Roger Federer (57) and Rafael Nadal (32) have won more titles among active players. Roddick confirmed Friday that he wouldn’t defend his title at Dubai. He said he wasn’t happy about the denial of a visa to Israeli player Shahar Peer by the United Arab Emirates for the women’s event this week.
But Roddick read a report that a hernia was his reason for withdrawing.
“There’s no other reason. Obviously, I don’t have a hernia. I probably wouldn’t have played too well today. I would ask you guys to check but that might be inappropriate. I’m 100 percent healthy,” Roddick said.
Now Roddick plans to work on his conditioning with his week off and may arrive in Birmingham, Alabama, a little early for Davis Cup first-round play with Switzerland.
“I love the tournament in Dubai. The actual event that’s put on, they do a great job with this. I know a lot of this was out of their hands, but it is what it is. You have a week off as opposed to traveling there,” Roddick said.
Being healthy is what Roddick worked so hard for during the offseason with new coach Larry Stefanki. He lost 15 pounds.
On Sunday, Roddick got a bit of revenge for losing to Stepanek in the semifinals in San Jose last week and improved to 5-1 all-time against the man trying to become the first Czech to win in Memphis since Ivan Lendl in 1991. He called it satisfying to win a tight match with lots of long rallies. Roddick won the key points by breaking Stepanek in the 12th game of each set.
“Obviously, he’s been playing his best tennis of his career probably this year and especially the past couple weeks. I knew what it was going to take, and I was able to get there,” Roddick said.
Roddick extended his streak of years with at least one title to nine, the longest current streak on tour, though Federer could match him with a victory this year.
“We have a long year ahead of us,” Roddick said. “We always do, but this is the best start I’ve had in a long time. Possibly ever, actually, if you just look at the first two months of the year.”
The world’s sixth-ranked player took home the $300,000 winner’s check and 500 ranking points for the ATP World Tour. He improved to 17-3 in match play this year. Of his 27 titles, 19 have come in North America. This is Roddick’s second at Memphis.
The American, with his fiancee, model Brooklyn Decker, cheering him on at courtside, was coming into the final off the longest match of the tournament. He needed two hours, 11 minutes to beat Lleyton Hewitt compared to the 57 minutes Stepanek breezed past qualifier Dudi Sela.

TITLE: ‘Slumdog Millionaire’ Sweeps Board At Oscar Night
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — Hollywood has met Bollywood at the Academy Awards, and the makers of Oscar champ “Slumdog Millionaire” hope it’s a sign of future melding between the U.S. dream factory with its counterparts in India and elsewhere in the world.
A tale of hope amid adversity and squalor in Mumbai, “Slumdog Millionaire” came away with eight Oscars, including best picture and director for Danny Boyle.
The low-budget production was a merger of India’s brisk Bollywood movie industry, which provided most of the cast and crew, and the global marketing reach of Hollywood, which turned the film into a commercial smash, said British director Boyle.
“We’re Brits, really, trapped in the middle, but it’s a lovely trapped thing,” Boyle said backstage. “You can see it’s going to happen more and more. There’s all sorts of people going to work there. The world’s shrinking a little bit.”
It was a theme Oscar voters embraced through the evening with other key awards honoring films fostering broader understanding and compassion.
Sean Penn won his second best-actor Oscar, this one for playing slain gay-rights pioneer Harvey Milk in “Milk,” while Kate Winslet took best actress for “The Reader,” in which she plays a former concentration camp guard coming to terms with the ignorance that let her heedlessly participate in Nazi atrocities.
Penn had harsh words for protesters outside the Oscars holding anti-gay signs.
“I’d tell them to turn in their hate card and find their better self,” Penn said. “I think that these are largely taught limitations and ignorances, this kind of thing. It’s really sad in a way, because it’s a demonstration of such cowardice, emotional cowardice, to be so afraid of extending the same rights to your fellow man as you’d want for yourself.”
As expected, Heath Ledger became just the second performer to win an Oscar posthumously, receiving the supporting-actor award for the menace and mayhem he wreaks as Batman villain the Joker in “The Dark Knight.” Penelope Cruz was the first Spanish actress to win an Oscar with her supporting prize as a volatile artist in a three-way romance in Woody Allen’s “Vicky Cristina Barcelona.”
Ledger’s award was accepted by his parents and sister on behalf of the 3-year-old daughter he had with actress Michelle Williams. The win came 13 months after Ledger died of an accidental overdose of prescription drugs on Oscar nominations day last year.
His sister, Kate Ledger, said backstage that her brother sensed he was creating something special with “The Dark Knight.”
“When he came home Christmas a year ago, he had been sending me shots and bits and pieces of the film,” Kate Ledger said. “He hadn’t seen it, but he knew. I said, ‘I have a feeling, this is it for you,’ and I said, ‘You’re going to get a nomination from the academy.’ He just looked at me and smiled. He knew.”
“Slumdog Millionaire” started as an unlikely candidate for the sort of industry and audience recognition it has garnered, presenting a cast of unknowns and a Dickensian tale of an Indian orphan rising above his street-urchin roots.
Boyle earned the directing prize with his first Oscar nomination in a career of hip movies that include the drug romp “Trainspotting” and the zombie horror tale “28 Days Later.”
“Slumdog Millionaire” follows the travails and triumphs of Jamal, who artfully dodges a criminal gang that mutilates children to make them more pitiable beggars. Jamal’s story unfolds through flashbacks as he recalls how he came to know the answers that made him a champion on India’s version of “Who Wants to Be a Millionaire.”

TITLE: Honda’s CEO Resigns Amid Search for F1 Buyer
PUBLISHER: The Associated Press
TEXT: TOKYO — Japanese automaker Honda says it has no serious buyers for its Formula One racing team.
“Various people are making offers but none of them are serious,” Honda Chief Executive Takeo Fukui said at a news conference Monday, when he also announced he was stepping down and being replaced by research expert Takanobu Ito.
Honda has been trying to find a buyer for its team after it announced in December it was quitting F1 to focus on its core business of making and selling cars. Like other Japanese automakers, Honda has been battered by the plunge in global auto demand after the U.S. financial crisis struck last year.
The Honda team, with an operational budget of around $294 million, finished next-to-last in ninth place in the F1 constructors’ standings last season. Honda, which originally entered F1 as a constructor for a stint in the 1960s before returning as an engine supplier in the 1980s, bought out BAR Racing in 2005.
The company reportedly spurned a buyout offer from F1 boss Bernie Ecclestone that would have allowed the team to race this season, according to Sunday’s edition of British newspaper The News of the World.
British businessman Richard Branson said over the weekend that his company Virgin may be ready to take over the team, but only if the sport is ready to make major changes.
Fukui said negotiations were difficult, although a deal “was not totally impossible.”
Incoming president Ito was hopeful Honda may some day recover enough to again tackle F1, although he did not elaborate.

TITLE: Sports Watch
TEXT: <b>Davis Match May Move</b>
STOCKHOLM (AP) — Stockholm may replace Malmo as host of the Davis Cup match between Sweden and Israel after the original venue said it would ban spectators due to security reasons.
The secretary general of the Swedish Tennis Association, Henrik Kallen, said Monday that Stockholm had offered to step in as an alternative venue for the March 6-8 World Group match.
Several anti-Israeli demonstrations were planned in Malmo during the best-of-five series.

<b>Beckham Optimistic</b>
ROME (AFP) — David Beckham has revealed that something could happen next week with his proposed transfer from Los Angeles Galaxy to AC Milan.
Galaxy is holding out for four-times the reported three million dollars Milan has offered for the 33-year-old.
“I honestly don’t know but I know that next week will be important,” Beckham said Sunday.
“I want to stay at Milan, I’ve not heard anything from Galaxy but when it’s like that you could say it could be good news.”

TITLE: Unified Exam Results in Stress
AUTHOR: By Olga Kalashnikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: February has been a stressful month for Russian high-school students. The final list of exams they have to pass to enter higher educational institutions was only announced on Feb. 1, leaving students with just one month to choose where they would like to study after school, and three months to prepare for the exams.
In 2007 it was announced that the Unified State Exam (YGE), a standard nationwide exam for school-leavers that would replace individual university entrance exams, would be compulsory from the start of 2009. But as late as the beginning of the school year last fall, nothing was certain about the introduction of the exam. Various stories circulated in the media, many of which turned out to be little more than rumor.
Until this year, the YGE was an experimental exam and high school students could choose whether or not to take it for all subjects except Russian language, for which the experimental YGE was compulsory.
“Students could not get worse than two out of five for this exam,” said Tatyana Kalashnikova, deputy director of school ¹327 in St. Petersburg. “Even if they were originally given a two, they gained an extra mark on their high school diploma to upgrade it to a three. A two was prohibited under the conditions of the experiment,” she said. 
Russian high school and university students are graded using a system of one to five, of which five is the best result. In reality, grades of one and two are rarely awarded.
In 2008 the YGE experiment was expanded to include five subjects. Three were compulsory — Russian, math and literature — and pupils could choose the other two subjects. 
“Every year in St. Petersburg the number of subjects that could be taken in the form of the YGE has grown, and students have got used to the new format,” said Kalashnikova.
Exams in Russian schools and universities have traditionally been in the format of oral exams, except for certain subjects such as math and literature. The new YGE consists of three parts: A multiple choice section, a section of questions with no multiple choice answers and a short writing task.
An end was finally put to the rumors circulating about the various projects for a compulsory YGE in November last year. A list of 14 YGE subjects was announced: Russian language, math, English, German, French, Spanish, geography, biology, IT, history, literature, social studies, physics and chemistry. Russian and math are compulsory, while students can choose others from the list that will be necessary for their chosen degree and university.

CONFUSION AMONG 
STUDENTS
The compulsory YGE has drastically changed the Russian education system. Final school exams have now become entrance exams for higher education institutions. Previously, students had to pass school exams to obtain their high school diploma, and then pass individual university entrance exams. Now students will be assessed by universities on the results of their YGE. 
The Education Ministry ruled that all institutes and universities now have to accept YGE certificates, but the list of exams necessary for each university course was announced only on Feb. 1.  
Final-year high school students complain that they have not been able to start preparing for their exams because they did not know which subjects to study. There is a difference between preparing for the usual oral exams and preparing for written exams. Some subjects that appeared in the written exam list were not expected by students, and now they and their parents are confused.
“We attended lessons in particular subjects and only in February learnt that there would be new exams,” said Yevgeny, a high school student. 
“We are not against the YGE, but I wish it had been introduced from next year,” said Kristina.
“We’re not lucky. I think it is a good thing and will be alright eventually, but it will take time, maybe five years, for students to adjust,” said Dasha. 
 “The YGE is an easier format for students,” said Natalia, whose son will finish school this year. “There are fewer exams and less stress, but we learnt about the list of exams too late. A new exam has emerged, so we need a tutor, and it is quite difficult to find a good one, because not all teachers know how to prepare for the YGE. In time, there will be a good system. The YGE presents more opportunities for pupils to enter university,” she said.

CHANGE AFOOT
All high school students must choose a university, college or institute before the end of the month and cannot change their minds after March 1. In previous years, after passing their final school exams, school-leavers could sit exams for as many universities as they wanted and were able to, regardless of the subjects they had chosen at school.
In previous years, students were given marks for the YGE, which were then transformed into the usual fives and fours and entered on the high school diploma. Now the number of points does not play as large a role at school.
“If the pupil obtains a minimal number of marks for both compulsory exams, they will leave school with a special document that differs from a diploma. If the student gets a bad mark in only one exam, they are allowed to take it again in July,” said Kalashnikova.
 “The marks on the high school diploma will be the average annual marks for the last two years of high school”.
INTERNATIONAL 
EXPERIENCE
The YGE format is not unusual around the world. Most countries such as the U.K., Germany, Spain, Italy, Norway, the U.S., France, Finland and Sweden have similar education systems. 
“Many countries now use standard exams for checking schoolchildren’s knowledge,” said Irina Sledyeva, director of AcademConsult, which specializes in arranging study abroad programs for Russian school and university students. 
“Such exams are not aimed at measuring the level of education and teaching quality, as they cannot provide an in-depth analysis of the studied material. The main aim is to establish and compare the average levels of students’ knowledge.” 
There are various reasons for introducing the Unified State Exam. First of all, it should provide equal conditions for students from all over Russia who want to enter a university or institute. A standard exam and marking system makes it possible to compare students’ abilities.
“The format of the YGE gives students from towns or places remote from the universities an opportunity to demonstrate their skills and allows them to take part in the competition under equal conditions with other school-leavers, and does not limit them in their choice of institute,” said Sledyeva.
“Such a system is economically profitable for students, because they no longer have to travel across half the country to take exams. The system is expanding the choice of higher education institutions.”
In addition, the YGE is checked by computer and independent experts, so the results will be more reliable. This should help to reduce the problem of corruption and bribery in entrance procedures. 
“Such exams almost eliminate the chance of false marks and the personal interest of members of the Admissions Committee in making decisions, and removes the question of bribery,” said Sledyeva.
The exam is also designed to reduce the number of exams students have to pass.
“Because of the advantages of such a system, many countries have changed to standard exams and abolished individual admission exams. The main goal of the Admissions Committee is to choose those school-leavers who correspond to the demands of higher educational institutions, and the unified exam allows this,” said Sledyeva.

PLAYING BY THE RULES
The YGE rules are specific and nonflexible, and should be followed carefully.
“Children should be taught to complete the exam, and it is better to start training as soon as possible,” said Kalashnikova.
“Students should get used to filling in the exam papers, they should understand the time limit of the exam, and learn to allocate enough time.”
The format of the test is new for Russian students. 
“If the pupil crosses an answer out in the wrong way, the computer that checks the test can interpret it as a wrong answer, likewise if an answer is written carelessly. The letters should be carefully copied from the example given. Children should be prepared, if they read the instructions only once, they might not understand the rules,” said Kalashnikova.
“Preparation methods for the YGE are specific. The teacher should be first taught how to prepare students via special courses, and only then prepare children for the exam,” said Kalashnikova.
Students can try take a mock YGE in preparation for the real exam, but must pay 700 rubles ($20) to do so.
Grading the YGE also demands special skills, such as part C which is checked by independent experts.
“Different experts can give various marks for the same task. The discrepancy can be two points. Experts in various cities and regions have differing demands, and they should all be brought into line,” said Kalashnikova.
“St. Petersburg invigilators are more demanding than provincial ones, and mark more harshly. And even half a point can be decisive when applying to higher education institutions,” she said.

TITLE: Languages Still Popular Despite Economic Crisis
AUTHOR: By Irina Titova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Despite the difficult financial situation, many of St. Petersburg’s residents have not given up learning foreign languages, though the number of foreign students studying Russian in the city has significantly dropped, according to the directors of some of the city’s language schools. 
Yelena Mikhalyova, director of the city’s International Language Academy (ILA), said the crisis has so far had a minimal impact on her school.
“We haven’t seen an outflow of our current students, but we have observed a decrease in new students by about 10-15 percent,” she said.
Mikhalyova said the decrease of new students was most noticeable in January, when people seemed to be seriously worried by media reports about the crisis. However, the situation has already begun to improve this month, she said.
Mikhalyova said the crisis had hardly had any effect on the interest in learning foreign languages among corporate clients.
“For instance, bank employees and computer programmers, who are our usual corporate clients, continue their studies at our school as actively as before,” she said.
Mikhalyova said that adults who come to study foreign languages at the school, which offers English, German, French, Italian, Spanish and Russian as a foreign language, usually do so for a specific purpose. They may need a foreign language to improve their professional skills or to raise their career status. Some need the language because they are planning on moving abroad to get married.
“For example, recently we have noticed an increased interest in the Italian language,” she said. “Previously it was people who just like to travel to Italy, but now we’re observing more Russian women getting married to Italian men, and therefore they want to study the language.” 
At the same time, English remains the most popular foreign language, since more and more people need it for work purposes. French and German, which used to be quite popular some years ago, now see less interest among students, Mikhalyova said.
Another tendency observed was a decrease in interest in the Russian language among foreign students. The interest in Russian dropped by 50 percent in the last few years, she said.
“In the early 1990s we observed much higher interest in Russian.  I think it was connected to the general interest in the country when the iron curtain finally fell, and everything in Russia seemed very new and unusual to foreigners,” Mikhalyova said. “Today Russia does not seem that unique, and it has become more understandable.”
However, foreign employees of the city’s international companies are still showing an interest in Russian. ILA has Japanese students from Japan Tobacco Inc. (JTI) who work in St. Petersburg.
Beside the language school for adults, ILA has a popular branch — ILA Aspect — which consists of a nursery school, primary school and secondary school based on bilingual teaching. Mikhalyova said that Aspect is still enjoying high demand in St. Petersburg.
Alexander Mokhov, director of the Derzhavin Institute in St. Petersburg, said his school had also recently seen a decrease in the number of foreign corporate clients studying Russian.
“It had to do with the fact that many foreign companies have temporarily stopped their investment projects in the city,” Mokhov said.
“The number of students from Eastern European countries such as Poland has also decreased due to the strong euro rate, while our prices for teaching foreign students are fixed in euros,” he said.
Mokhov said that the economic crisis had not affected the number of Russian students willing to study foreign languages.
“We have even had an increase in Russian corporate clients, since many managers now have more free time,” he said.
Language Studio said it had noticed a decrease in student enquiries in January and February.
“The decrease was particularly obvious among middle-class clients and in the individual lesson segment,” said Samuel Arriaga Flore, director of Language Studio. “It reached about 20 percent due to the financial crisis,” he said.
Flore said that Language Studio is the market leader in the premium market, and that this particular market had seen no significant decrease, though payments by credit card have increased. 
“Russian as a foreign language does not contribute significantly to our bottom line and has seen a decrease in overall sales by 80 percent: almost no European students are coming to Russia, just a few Canadians and Americans,” he said.
Flore said it was still unclear how the crisis would impact the low-cost and student segments. 
“For the moment demand is stable, but knowledge of European languages could be a good way of finding a better job or motivation to find work or study outside Russia for a lot of employees and motivated students. Demand could be even higher during the next few months, as people traditionally choose to study in order to improve their employability,” he said.
Flore said Language Studio is seeing this trend with some of its corporate clients who, while reducing the number of their employees, do not reduce the number of lessons.
“Most of the companies have even increased their number of groups and regularity.  ‘Fewer employees, but better trained’ could possibly be what some HR managers are thinking,” he said.
Flore said Language Studio’s experience had shown that the middle-class segment of Russian society is looking to improve its language skills in order to find a better job or increase the prospects of promotion within a current one. 
“Of course, there is a huge demand from employees that simply need to learn because they use a foreign language routinely in their daily job,” he said. “Usually, big companies have a free internal educational program for their employees. Companies abroad are usually interested in employees who can attend international meetings and negotiations, especially but not only within the construction and IT industries,” Flore said.
“The premium market is more ‘a la mode’ demand. Studying is a question of desire, not necessity. These students are looking for a second language experience before a trip to a foreign country; they want to learn French or Italian to understand food, drink and cooking, etc. They demand Spanish or French because they have properties in these countries and they need to understand some basic administrative vocabulary, as well as how to communicate with a worker repairing their house,” he said.
Yelena Yarovaya, director of EgoRound educational center which also specializes in teaching foreign languages, said her company had also felt the impact of the global financial crisis.
“Many companies have temporarily stopped their education projects, and most of our programs are aimed at corporate teaching. However, we were prepared for such a situation since we work under the classical scheme, whose main idea is financial order and the absence of credit obligations,” she said.
Yarovaya said the crisis had become “an excellent opportunity” for EgoRound to attract new specialists.
“On the wave of the crisis hysteria, many high quality specialists lost their jobs. We took advantage of the moment and added some people with great potential to our team,” Yarovaya said.
At the same time, EgoRound has not lose any of its current students, she said.
“The demand for foreign language studies is stable, and now it has even been stimulated by the situation on the labor market. People who have lost their jobs have to think about the quality of their education,” Yarovaya said.
EgoRound’s corporate clients are keen to have training in business aspects of English such as phone negotiations, job interviews and teleconferences, she said.
Yarovaya confirmed that knowledge of a foreign language seriously increases the value and competence of an employee.
The main fields in which our graduates work are production, service and telecommunication, she said.

TITLE: MBA Student Profile Changes
AUTHOR: By Larisa Pogonina
PUBLISHER: Vedomosti
TEXT: This year will be a difficult one for the Russian business education market. Business schools are preparing for a decrease in students of up to 50 percent, and are being forced to reconsider their programs.
According to research conducted by Begin Group in fall 2008 into the influence of the economic crisis on change in demand for business education, only 10.6 percent of those interested in an MBA or EMBA had already obtained one or were studying for one at the time of the survey.  52.5 percent planned to start studying in 2009, 15 percent in 2010, about 26 percent planned to start later than 2010, and another six percent had not yet decided. The survey was conducted among 500 specialists and mid-range and senior managers who had chosen business education programs.
Enrolment in fall 2008 was in general successful for Russian business schools, though the impending crisis could be felt even then. Sergei Mordovin, rector of the International Management Institute St. Petersburg (IMISP) said that although prices had increased by 30 percent, 45 people had preliminarily registered. Ten of them had dropped out at the last stage of enrolment, citing either financial difficulties or the desire to wait and see “what will be happening in the country in March.”
At the Institute of Business and Business Administration (IBDA), about 1,000 people enrolled, said Sergei Myasoyedov, the school’s rector. “Of those, 15 asked for payment deadlines to be extended, and four dropped out, saying they couldn’t pay for the course — and that was the extent of the effect of the crisis,” he said.
Some candidates working in the financial, property, development and retail sectors also dropped out of the part-time EMBA program at Vlerick business school’s Russian campus at the last minute, said Anastasiya Korshunova, a representative of the school. The majority of them were due to have their courses paid for by their firms, she added. 
About five percent of candidates for the EMBA program at the Stockholm School of Economics also changed their minds, said Anna Izmailova, a representative of the school. She said that those who dropped out had also been relying on their companies to fund them. 
The European University in St. Petersburg (EUSPB) also noted this trend.
“Due to the economic crisis, the corporate sector has significantly cut back on the cost of educating employees,” said Alla Samoletova, who coordinates the university’s Executive Master of Philosophy program that was introduced in April last year. “As a result, the main target audience for the EMPhil program is individual candidates.”
According to data from Begin Group, about a third of the 5,000 students who enroll on MBA programs in Russia every year are sponsored by their employers. At the height of the crisis, according to the latest study by PricewaterhouseCoopers, about 62 percent of companies plan to reduce spending on the education and development of personnel. Business schools accordingly expect a fall in demand among corporate clients.   
Korshunova said she expected that the majority of those starting MBA programs in 2009 would be self-financed, as companies will cut their educational budgets. “This will also result in a drop in interest in short-term executive programs, which are usually financed by employers,” she said.
Mordovin said he expected demand to fall by 50 percent for all kinds of programs, and predicted the market would be transformed. “The crisis will change the market — medium cost programs  (costing up to 15,000 euros) will disappear, and only expensive, highly-rated programs and the cheapest options (up to 5,000 euros) will remain. 
Results for January appear to confirm these predictions: At the end of the month, two of the most expensive MBA programs in Russia began — a joint EMBA offered by HEC Paris together with the Graduate School of Management of St. Petersburg State University (38,000 euros for an 18-month course) which attracted 23 students, and an EMBA diploma at Skolkovo in Moscow (90,000 euros for 18 months) which attracted 24 students. Valery Katkalo, rector of the Graduate School of Management, said that increased interest in the most highly-rated programs is traditional in times of crisis, since people pay more attention to what they spend their money on and on the quality of the program.
To survive, business schools will have to make their programs more client-oriented, said Alla Zhavoronkova, director of operations with foreign clients at Begin Group. Some analysts also believe the surge in students who are not sponsored by their company will lead to a demand for lower prices. The cost of obtaining a Russian MBA diploma has increased every year by 10 to 20 percent, and stood at 400,000 to 550,000 rubles ($11,000 to $16,000) by fall 2008. Western diplomas range from one to two million rubles ($28,000 to $57,000) in cost. 
In crisis conditions, the winners will be schools that cooperate with major state companies, since these are virtually the only clients left on the market, said PwC’s Mordovin. For example, the Gazprom dobycha Yamburg group of companies has asked IMISP to take on an additional group of 25 students for a corporate MBA program on crisis management. Sberbank and Russian Railways (RZD) have ordered short programs for managers at the Graduate School of Management, said its rector Katkalo. He said that other major state corporations were also demonstrating an interest in such programs, opening new potential for the market as a whole and necessitating a more flexible approach from business schools to their work with clients.

TITLE: Only for Those With a Calling: A Career in Teaching
AUTHOR: By Olga Kalashnikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: The importance of teachers was summed up in the classic Russian film “The Irony of Fate:”
“Doctors’ mistakes cost people dearly.” 
“Teachers’ mistakes are less noticeable, but ultimately cost people as dearly as those of doctors.”
“Children look at the world through the eyes of their teacher – all their knowledge about life comes from school,” said Natalia Moroz, head of the Swiss Center international school. “It is teachers who influence them and reveal the talent in each pupil and student. Parents do not possess the skills and professional knowledge that teachers do.”
Yet in contemporary Russia the prestige of this occupation is miserably low. 
“For a long period of time, the image of the teacher was laughed at in the mass media and in movies. Everywhere the role of the teacher was a comic one,” said Tatyana Kalashnikova, deputy director of school No. 327 in St. Petersburg. 
“In Soviet films, teachers were always portrayed as good people. But this tradition changed with the breakup of the Soviet Union, and contemporary public portrayals have harmed the image of schools,” she said.
Respect and admiration in Russian society for teachers has gradually decreased. The funding for teaching has been reduced, and schools now face the problem of finding qualified staff.
“The occupations of school and university teacher suffered at least as much as any others from the crisis that followed the breakup of the Soviet Union,” said Mikhail Sokolov, associate professor in the political sciences and sociology department at the European University in St. Petersburg. “For two decades, this profession has attracted those who did not find a place anywhere else.”
In the period following the breakup of the Soviet Union, some teachers left their jobs due to the low salaries. This resulted in a lack of qualified specialists, but somebody had to teach the children, and schools frequently accepted trained specialists who had lost their jobs.
“Educational institutions offering meager salaries and a heavy workload had to welcome everyone who appeared at their doors,” said Sokolov.
The current financial crisis may result in a similar situation, schools predict. People who have been laid off may find work in schools, but these specialists have no pedagogical education. At higher educational institutes, this may matter less, but at junior and high schools, a professional pedagogical education plays an important role. Knowledge of their subject is not the only quality a teacher should possess.
Schoolchildren have their own idiosyncrasies, and it can be difficult to work with them.
“The generation of children at school now differs to previous ones. Their parents are in their thirties, and these are people who grew up in the ’90s, in years that were difficult for the country. So their children have specific psychological and world perceptions. They are emotional and lively,” said Kalashnikova.
“There are also children of other nationalities. Although they live in Russia, they have another culture, and for some of them Russian is not their native language,” she said.
The government is currently trying to boost the prestige of the teaching profession. A national project entitled “Education” has been established with the aim of supporting teachers, educational institutes and projects and of promoting the state educational policy.
Teachers’ salaries have been raised recently, but are still unlikely to attract those dreaming of a lucrative career. The salary of a young, newly-qualified teacher is about 10,000 rubles ($280) per month, while those with more than 20 years of experience earn about 15,000 rubles ($420) per month. 
Changes are introduced to the Russian education system every year. New books are written, and new methods and standards are introduced, such as the latest innovation — the Unified State Exam (see article, page 8). Consequently, schools and teachers must adapt to revisions and innovations.
“Teachers should be flexible,” said Kalashnikova. “There are different educational programs, and specialists should choose an appropriate one. Teachers of an advanced age often find it difficult to adapt to such rapid changes.”
This ability to adapt to circumstances and open–mindedness are qualities specific to Russian teachers, said Moroz.
“Russian teachers can explain everything, while their foreign counterparts have a narrow specialization,” said Moroz.
“Western teachers usually prepare lesson plans and mostly show various pictures and diagrams, using additional materials. But if something happens, e.g. if the power is turned off, the teacher won’t know what to do,” she said. “But just give this pause to a Russian teacher. They will fill it with themselves, with speeches and stories. Russian teachers have more influence on their students.”
In view of the low salary and the demands of the job, some might marvel at the fact that young people still choose teaching as a career in today’s Russia, which so far lacks the incentive programs other countries such as Britain have devised to attract graduates to teaching. 
“Not for money, not for prestige, without even moral support, teachers do their work and resist everything emanating from the mass media. People become teachers because of the call of their heart and soul,” said Kalashnikova.

TITLE: A New Resource for English Students
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: The city’s English-speaking business community will have another helping  hand available from this week with the launch of Business English magazine. Created by the team responsible for Cool English Magazine, the monthly publication will contain material aimed at helping Russian students of English to improve their knowledge of “business English.”
“The magazine is aimed at 24-36 year-old professionals, final year business and economics students, and their teachers, though to a lesser degree,” said William Hackett-Jones, the editorial director of Eclectic Publishing, which produces the magazine. “It’s for people who feel they have outgrown our other magazine, Cool English.”
As well as a language section featuring business-themed idioms, phrasal verbs, slang, jokes and dialogues, Business English will also include news, interviews, career development tips and reviews of business products such as books and training courses.
Cool English, an educational magazine launched in St. Petersburg by Hackett-Jones in 2005, is aimed at young students of English. It has an informal style and focuses on humor and entertainment. 
“Business English addresses more serious topics, with more focus, than Cool English,” said Hackett-Jones. “It is aimed not just at learners of English, but people who need English for their jobs, or for their future careers – our slogan is: Business English Magazine – your career is our business,” he said.
Hackett-Jones said the idea for Business English grew out of feedback he received about Cool English. 
“From the very beginning, I have met business people who say they love the idea [of Cool English], but want something more ‘serious,’” he said. “So we’ve designed it to look formal and business-like, as well as actually being so.”
With the economic crisis making its effects felt in publishing through a decrease in advertising revenues for printed publications and other media, now might seem like a risky time to open a new venture, but Hackett-Jones said that the current financial climate was exactly what prompted the timing of the launch.
“We decided to launch it now, when we got talking to our business-school partners, who told us how their business was decreasing because people and especially companies had less cash to spend on their studies,” he said. “We figured that a good way to help people out would be to produce a magazine to which they can subscribe for a fraction of the cost of a language course. So while they take a break from their studies, they can maintain their level of English – and improve it – using our magazine.”
Hackett-Jones said the time was ripe for such a magazine, since there are fewer job vacancies on the market, and the better qualified candidates – such as those with a good knowledge of English – are more likely to get the jobs available.
Like Cool English, Business English will include a CD with each issue to enable people to practice their listening skills.
The mission of the magazine and its publisher is not limited to helping Russian businesspeople to improve their English. Inspired by his own experience of setting up a business in Russia, Hackett-Jones would also like to see the improvement of conditions for small- and medium-sized enterprises (SMEs) in Russia. 
Local and national organizations representing SMEs frequently complain about the difficulty of setting up and running a private enterprise in Russia. Red tape and corruption among officials are the problems most often cited. Economists and campaigners regularly call for more government support. In response, President Dmitry Medvedev called on his government soon after his election to step up efforts to help SMEs, which currently produce less than 20 percent of Russia’s GDP. Medvedev wants to see that figure increased to at least 50 percent. 
“The Russian economy as it is now is destined for disaster,” said Hackett-Jones. “There must be diversification away from natural resources, there must be a freeing up of regulations for small businesses, and there must be government support…for SMEs, because only then can a stable economy develop. 
“At the moment the country has all its golden eggs in one basket, and that basket has just slumped in value,” he said, adding that he hoped Business English magazine would encourage young people who have started a professional career to learn and gain the confidence to start their own businesses.

TITLE: Employers Seek MBA Grads From Diverse Schools
AUTHOR: By Nunzio Quacquarelli and Zoya Zaitseva
PUBLISHER: Special to The St. Petersburg Times
TEXT: The QS Global 200 Business Schools 2009: The Employers’ Choice annual MBA employer survey published on on Jan. 22 by QS Quacquarelli Symonds, the independent MBA experts, demonstrates that MBA employers around the world are increasingly targeting a broader selection of regionally strong business schools from which to hire MBA graduates. This trend may be accelerated by the recessionary environment, even as overall MBA hiring numbers fall. 
A record 604 employers from 42 countries around the world voted during 2008 for the business schools from which they prefer to recruit MBAs. Forty percent of employer respondents were based in North America, 30 percent in Western Europe, 17 percent in Asia-Pacific, 5 percent in Latin America, 8 percent in Eastern Europe and 1 percent in Africa and the Middle East. 
European economies are also suffering in the aftermath of the credit crunch and though this is having a negative effect on MBA demand, the number of employers in Europe responding to our survey was at record levels in 2008. 
Europe now hosts an array of top MBA programs and is challenging the hegemony of US schools with a different teaching style and, generally, one-year programs. Europe’s oldest business school, INSEAD, opened its doors to the first intake of students in 1957 and was followed by the establishment of London Business School and Manchester Business School in 1964. After a relatively slow adoption of MBA studies in Europe for the first 40 years post-Second World War, the last 20 years have seen an explosion in the number of schools and the continent now hosts MBA programs in practically all of its countries.
The key, according to the continent’s professional recruitment companies, seems to be the production of graduates who have solid pre-school experience and who can hit the ground running with their new employer. “As markets in Europe get tougher, organizations are looking for immediate results,” says Graeme Read, Group Managing Director at global recruiter, Antal International. “That requires candidates who have a track record of achievement in their field. An MBA is highly valued, but not if it’s all an individual has to offer.”
In 2008 INSEAD and London Business School remain the first choice business schools amongst international employers and receive as much or more interest than their leading U.S. counterparts. Spanish schools also feature very prominently with ESADE, IESE and IE Business School all appearing within the cluster of 11 European schools achieving more than 40 employer votes in 2008. They are joined by Oxford, IMD, HEC Paris, SDA Bocconi, RSM and Cranfield. 
The next cluster of European schools all exceeding 20 employer votes includes: Cambridge, Warwick, Manchester, ESSEC, ESCP-EAP, Athens University of Economics and Business (a big riser in 2008), Imperial, Cass, and MIP Politecnico di Milano. These schools have all established a strong franchise with European-based recruiters, though have achieved less recognition in Asia or North America, compared to the schools above them.
The next cluster of European schools achieve between 11 and 20 employer votes and includes: ALBA (another big riser in 2008), EM Lyon, HEC Lausanne, St Gallen, Sciences Po, Edinburgh Business School, Copenhagen, Ashridge, Stockholm School of Economics (dropping down the table since it ceased offering an international full-time MBA), Vlerick Leuven Gent, Edhec, Amsterdam Business School, Lancaster, Mannheim, Warsaw, Henley, WHU, CEU and ESMT.
Many of those schools, including Duke, IE, Manchester Business School, RSM, Vlerick and ESMT will be visiting St. Petersburg with the QS World MBA Tour on March 25. 
British business schools always feature prominently amongst employer choices and 2008 was no exception. Within the top-200 schools are featured no less than 21 UK schools: LBS, Oxford, Cranfield, Warwick, Cambridge, Manchester, Imperial, Cass, Edinburgh Business School, Henley, Ashridge, LSBF, Lancaster, Bradford, Bath, Aston, Strathclyde, Durham, Nottingham, Glasgow and University of Edinburgh.
French schools are well represented amongst the top European schools with INSEAD, HEC Paris, ESCP-EAP, ESSEC doing particularly well, followed by EM Lyon, Edhec, Grenoble, Audencia, Aerospace Toulouse also featuring within the Top 200. 
German and Swiss business schools are also increasingly popular with employers. In Switzerland, IMD always features amongst the top 10 European schools, while University of St Gallen has been rising steadily and is joined by HEC Lausanne in scoring over 10 employer votes, whilst business schools in Lausanne and Geneva also make the Top 200. The German schools which featured in the Top 200 this year include ESMT, EBS, Mannheim, WHU, Leipzig and GISMA.

Nunzio Quacquarelli is founder & general director of QS and Zoya Zaitseva is its Global Operations Manager.

TITLE: Early Education: Finding the Best Childcare Option
AUTHOR: By Olga Kalashnikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Former president Vladimir Putin’s appeal and financial incentives to young Russians to have more children and reverse the country’s population decrease has resulted in a baby boom in St. Petersburg during the past couple of years, highlighting the problem of finding reliable and affordable childcare for working parents. Today’s young families can rarely afford not to send their child to kindergarten. If both parents work, someone must be found to look after the child – a grandmother, nanny or kindergarten. Every family finds their own solution depending on their circumstances, but psychologists recommend that young children should attend kindergarten even if other childcare options are available.
“Even if they are intelligent and well-educated, parents cannot give children all the skills that a kindergarten provides; they cannot provide the necessary education program,” said Natalia Odrobinskaya, head of Aspect nursery school.
Finding and choosing a preschool can in itself being a daunting task for parents, who have complained for several years of long waiting lists and the necessity of paying bribes to even register their child at a nursery school.
“The problems I have faced in kindergartens are the negative attitude of teachers, the lack of educational programs, poor preparation for school and waiting lists to start nursery school,” said Nina, the mother of a three-year-old child. “I’ve heard that mothers put their children’s names on waiting lists as soon as the child is born,” she said. 
New rules have recently been introduced to combat the widespread problem of waiting lists for kindergartens. Parents now have to visit a special commission and explain the particular requirements of their child and show a medical certificate. The commission then suggests a suitable nursery school, and the parents are registered at the preschool or put on the waiting list. 
“Parents should choose a nursery school in advance, at least a year before the child is due to start attending nursery school,” said Olga, the mother of a five-year-old child. “But we have no choice — if we want our child to attend a state preschool, we have to go to the one to which we are sent. Of course it will be in our district, but districts in St. Petersburg are huge,” she said.
According to data from the city’s Education Committee, the waiting lists are now smaller and remain in only one district — the Primorsky. Here there are 135 children waiting for a kindergarten place. 
“Some mothers stand in line with babies; they are afraid there will be no room for their child, but there is no need for this,” said Tatyana Golyadkina, the leading specialist at the department of educational institutions of St. Petersburg’s Education Committee. 
But parents remain nervous, and prefer to have a place reserved in advance.
Another problem is overcrowding in kindergartens. The average local preschool is 112.6 percent full.  
Some nursery schools, especially private ones, tackle the problem by dividing the children into sub-groups for lessons. 
A city program is also underway to build more kindergartens, as a result of which 67 early education institutes should be opened before 2011.
Experts say that early education is just as important as school and university, and recommend preparing children for the transition to nursery school as thoroughly as possible.
“Families should present kindergarten as a positive and interesting event,” said Golyadkina. “This mood will be detected by the child and transferred to them, and as a result it will be easier for the child. A family with a positive mindset is already halfway to success,” she said. 
Parents are also advised to prepare the child for the kindergarten routine. The daily schedule at home should be similar to that of nursery school for a period of time, if only for the last month before the child starts nursery school.
“The child should wake up at the time they will have to when attending kindergarten,” said Golyadkina. “That is usually 7.30 a.m., so they will be in time for breakfast and morning exercises,” she said.
Meals should also be similar to those at kindergarten. According to Education Committee specialists, children are given healthy food at nursery school and their parents can help them get used to it by cooking porridge, natural vegetable puree and other healthy dishes at home.
Trust is of course a key issue in choosing childcare.
“The family should trust the people in whose hands they are leaving their child. The child will also trust them and have a positive mood, and there will be less risk in the adaptation period of psychosomatic diseases,” said Golyadkina. 
Childcare workers say it is a good indicator if the child already knows how to use a spoon and cup and is potty-trained. All of this can of course be taught at kindergarten, but it will be an additional stress for a small child.
Kindergartens accept children of all ages. In some preschools, there are children of about one year old. 
“The younger the child is, the better the process of adaptation,” said Odrobinskaya.
“It all depends on the parents’ abilities and the emotional and physical state of the child,” said Golyadkina. “But the best thing for small children is to be with their mothers. It is no accident that the law allows mothers to stay at home with their children until the age of three. It is all done in the interests of the children,” she said.
Parents who have a choice of kindergartens, for example between state and private schools, are advised to visit places they are interested in, speak to the teachers and look at the kindergarten’s facilities.
“I paid attention to the appearance of the kindergarten, to my own impressions,” said Olga. “When everything is gray and dirty, I don’t want to bring my child to this place,” she said.  
“Parents should also pay attention to the attitude of the teacher to children and to relations between other teachers,” said Odribinskaya. “The emotional mood of the teacher is passed on to the child. There should also always be a doctor and a nurse in the kindergarten,” she said.
“The best indicator and most reliable solution is to listen to friends’ opinions. Thirty percent of parents search for a kindergarten on the Internet,” Odribinskaya said.
Every early education institute has a special program, and parents can choose what they would like to offer their offspring. There are 18 categories devoted to children’s physical and mental development in state kindergartens, while private nursery schools offer a vast range of activities, including bilingual kindergartens such as Aspect where children can be taught English from an early age. 
“I want my child to study English,” said Ksenia, whose five-year-old child attends Apect nursery school. “All other knowledge, I can give him,” she said.
There are also many small private kindergartens around the city, not all of which have a license. Typically, they rent a two- or three-roomed apartment, and do not operate officially because setting up a kindergarten requires certificates and licenses. 
Parents are advised to be wary of such preschools, since no one can be held legally responsible. Asking to see the preschool’s license is one way of ensuring the quality of the childcare on offer.

TITLE: Russian Language Tests for Foreigners
AUTHOR: By Elmira Alieva
PUBLISHER: Special to The St. Petersburg Times
TEXT: The Test of Russian as a Foreign Language (TORFL) is the first challenge faced by many foreigners seeking to study or work in Russia. To enroll at a Russian university, be eligible for a job in Russia or teach Russian, a certificate verifying the candidate’s knowledge of the Russian language is essential, and the only official document which verifies Russian language skills is the TORFL certificate.
The history of the TORFL testing system dates back to 1992, when it was developed by the Russian government as an internationally accredited method of comparing the level and quality of proficiency in Russian. 
Today there are several testing centers in Russia and abroad. The Russian Language Testing Center for foreigners of St. Petersburg State University is authorized to administer the Russian language testing system in St. Petersburg.
“Exams take place every week on Wednesday and Thursday,” said Tatyana Nesterova, deputy director of the testing center administration in St. Petersburg. “To register, the applicant should come to the center with their passport and fill in a form at least one week before the exam. The cost for testing varies from 3,650 rubles ($102) for the elementary level up to 4,750 rubles ($132) for TORFL level 4,” she said.
There are six levels of language proficiency, from elementary to TORFL-4. The minimum level required to enter Russian higher educational institutions is TORFL-1, but to obtain a bachelor’s or master’s degree candidates must have at least TORFL-2. If the candidate intends to conduct language-related professional activity in Russia as a philologist, interpreter or journalist, it may be necessary for them to pass TORFL-3. The final level is TORFL-4, which is close to the level of a native speaker, and gives the candidate the right to teach Russian and conduct research.
“Each test consists of five parts: reading, writing, listening, speaking, and structural competence, or grammar. All the components are of equal value — 20 percent each. The duration and difficulty of the test depend on the level, but usually it takes about three hours on the first day, and one-and-a-half hours for listening and speaking on the following day,” said Nesterova.
The exam papers are checked by teachers at the testing center, and results are available within two to three days after the exam. Certificates are given to successful candidates one week after the exam. 
“Every year more than 1,000 people take the TORFL test, and only about 30 percent of them are unsuccessful,” said Nesterova. “To get a certificate candidates must be awarded an A, B or C — in other words, they must answer more than 66 percent of the test’s questions correctly,” she said.
Those who fail the exam have the opportunity to retake the test or some parts of it. Depending on their results, candidates are given recommendations regarding the period of time in which they should retake their exam. “Usually the interval between the exams must not be less than one month,” said Nesterova.
The Special Department of Philology at St. Petersburg State University offers Russian language courses for candidates who want to prepare for testing. Courses vary in levels, duration, intensity and professional specialization. Information on testing and courses can be found at www.russian4foreigners.spb.ru