SOURCE: The St. Petersburg Times
DATE: Issue #1466 (28), Friday, April 17, 2009
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TITLE: Medvedev Attempts To Back Up Liberal Tag
AUTHOR: By David Nowak
PUBLISHER: Associated Press Writer
TEXT: MOSCOW — President Dmitry Medvedev lent credence to his image as a cautious liberal on Wednesday when a publication critical of the Kremlin ran his first Russian newspaper interview.
Although Medvedev’s interview with Novaya Gazeta did not break new ground, it was symbolic. The newspaper has consistently challenged the Kremlin on matters including human rights, freedom of speech and Russia’s alleged backsliding on democracy.
Medvedev also acknowledged separately Wednesday that officials unfairly hinder rights activists’ work.
Medvedev, who took office in May, has not diverged significantly from the policies of his predecessor and mentor Vladimir Putin. Putin oversaw the consolidation of political power under the pro-Kremlin United Russia party, the growing state control of major industries and the state takeover of formerly independent television networks.
But Medvedev appears to be positioning himself as the more conciliatory leader — Putin has never given an interview to Novaya Gazeta.
Four Novaya Gazeta journalists have been killed or died in suspicious circumstances over the past decade, including Anna Politkovskaya whose 2006 murder stoked international outrage. Medvedev met privately with the newspaper’s editors after the latest killing, when reporter Anastasia Barburova was shot dead on a Moscow street in January as she walked with an activist lawyer who also was killed.
Critics fault Russian leaders for not vigorously denouncing such killings. The murders were not discussed in the interview conducted Monday, but Medvedev’s spokeswoman Natalya Timakova said that he had wanted to show support for a newspaper that had suffered so many losses.
Medvedev told rights activists in a meeting at the Kremlin Wednesday that the work of nongovernment organizations had been unfairly restricted. The statement was in marked contrast with the policy of Putin who oversaw the toughening of registration rules for NGOs during his presidency.
“There is a mass of cases when the activity of NGOs is restricted without sufficient reason,” Medvedev said. The legislation was “clearly not ideal,” said Medvedev. “Some changes are possible, and even essential,” he added.
In the newspaper interview, Medvedev said many Russians appear to be uneasy with democracy, which they associate with the upheaval of the early post-Soviet years.
“For many of our citizens, the difficult political — and most importantly economic — processes of the 1990s were linked with the advent of the main institutions of democracy in our country, and this was a very difficult period for them. This affixed an impression on their understanding of the term,” he said.
He appeared to be cautioning that any progress toward greater democracy would be gradual. Russia’s commitment to democracy has come under question recently before this month’s mayoral election in the city of Sochi — an important election for Russia’s international image because Sochi will host the 2014 Winter Olympics.
Several candidates have been removed from the ballot, including tycoon Alexander Lebedev, who co-owns a 49-percent share in Novaya Gazeta along with former reformist Soviet president Mikhail Gorbachev.
Another candidate, prominent Kremlin critic Boris Nemtsov, has blamed the government for an attack on him last month when he was doused with ammonia. But Medvedev brushed off a Novaya Gazeta interviewer’s suggestion that it might be better to cancel the election than to hold one that is not democratic.
“In elections there always will be candidates who lose, candidates who are disqualified — it’s that way in the whole world. But in general I consider that for democracy such vivid campaigns are good,” he said.

TITLE: Russia Calls Time on Chechen Operation
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russia on Thursday ordered an end to its counterterrorism operation in Chechnya, a move that could lead to the withdrawal of tens of thousands of troops from the southern republic battered by two separatist wars in the past 15 years.
The counterterrorism operation led to curfews, limitations on access for journalists and limitations on civilian airline flights, among other measures.
Its cancellation was ordered by President Dmitry Medvedev and took effect Thursday morning, according to the National Anti-Terrorist Committee, which did not provide further details.
Chechen President Ramzan Kadyrov is a former rebel who has close ties with the Kremlin. He often comes under criticism from human rights groups for running the region with brutality and harsh repression of dissenting views. His corps of security agents is widely alleged to have kidnapped and killed opponents and suspected rebels.
“Today, the Chechen Republic is, as recognized by thousands of guests including politicians, businessmen, journalists and cultural figures, a peaceful and redeveloping region,” Kadyrov was quoted as saying by the Interfax news agency. “Ending the anti-terrorist operation will only help the republic’s economic growth.”
Interior Ministry spokesman Colonel Vasily Panchenkov said last month that ending the regime could lead to the withdrawal of about 20,000 ministry troops from Chechnya. Panchenkov said at least one Interior Ministry brigade and a division of military troops would remain in the republic.
The total number of troops currently in Chechnya could not immediately be determined.
Sporadic clashes between militants and troops persist in Chechnya, but major fighting died down several years ago. Russia has poured millions of dollars into restoring the Chechen capital Grozny, which artillery assaults and aerial bombing had turned into a near-wasteland.
The anti-terrorist committee statement said ending the operation was aimed at “guaranteeing terms for the further normalization of the situation in the republic, the restoration and development of its social-economic spheres.”
The first Chechen war began in 1994 as separatists led by the late Chechen President Dzokhar Dudayev pressed to split off from Russia. The rebels fought Russian forces to a standstill and the Russian troops withdrew from Chechnya in 1996 under an agreement that left Chechnya de-facto independent.
One of Kadyrov’s most vehement enemies, Sulim Yamadayev, was shot to death in an attack in Dubai last month, Dubai police said Kadyrov’s right-hand man, Adam Delimkhanov, was suspected of ordering the killing.
Yamadayev’s brother Ruslan was killed in Moscow last year and reports said Delimkhanov was also suspected in that attack. The deaths of the Yamadayev brothers eliminated two of Kadyrov’s most powerful opponents.
After the withdrawal, Chechnya was plagued by lawlessness and Islamic fundamentalists became increasingly influential. Chechen fighters invaded neighboring Dagestan in the summer of 1999, aiming to form an Islamic caliphate in a sector of that republic. Russian troops swept back into Chechnya about a month later.
Although fighting in Chechnya is now limited to occasional small clashes, violence believed to be a spin-off of the Chechen separatist movement is strong in Dagestan and in Ingushetia, which borders Chechnya to the west.
Reducing the troop presence in Chechnya could allow them to be redeployed in those increasingly troubled republics.

TITLE: State Duma Moves to Put Strict Cap on Executive Salaries
AUTHOR: By Courtney Weaver
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A bill submitted to the State Duma on Wednesday would cap annual executive compensation at 4 million rubles ($120,000) for all state companies and at private companies that receive government aid. 
The bill takes a tougher line than the one promoted by President Dmitry Medvedev and Finance Minister Alexei Kudrin in recent weeks and raises questions about how the companies would be able to attract and keep top talent. 
The bill’s author, Deputy Anatoly Ivanov of United Russia, acknowledged that the legislation faced an uphill battle being passed into law. 
“The government here is influenced by the power that oligarchs and executives have,” he told The Moscow Times in a telephone interview. 
Among the companies that have accepted state assistance are Oleg Deripaska’s United Company RusAl and Mikhail Fridman’s Alfa Group. 
Ivanov said the bill was needed to prevent possible social unrest, noting that the gap between the salary of an executive and an ordinary employee is three times larger in Russia than in the United States. 
“The difference between the two incomes leaves room for tension to arise in society,” he said. 
Russia, however, has not experienced an outcry like that seen in the United States last month when AIG executives collected million-dollar bonuses even after their near-bankrupt company was rescued by the U.S. government. 
Kudrin has suggested that companies that receive state aid should limit their bonuses for 2008 and 2009, but Ivanov said such a regulation would not be enough. His bill would impose a 100 percent tax on executive earnings that exceed 4 million rubles for a two-year period. 
“Curbing bonuses and perks will not limit earnings. Executives would just be able to find income in other forms,” Ivanov said. 
The bill has not yet been scheduled for a first reading in the Duma. 
Ivanov’s proposal is significantly stricter than the 90 percent bonus tax that the U.S Senate is now considering. The U.S. tax would only target executives whose bonuses exceed $250,000 and only at firms that have received more than $5 billion in public funds. 
By comparison, executives at Russian firms that have received any sort of aid as a grant or under favorable lending terms from the state would be subject to Ivanov’s bill. 
If passed, the bill would pertain to a very small group of people and allow Russia to meet its agreement to curb executive bonuses in line with accords reached earlier this month at the Group of 20 summit in London, Ivanov wrote in explanatory notes to the bill. 
Natalya Orlova, chief economist at Alfa Bank, estimated that the tax would affect only 5 percent of staff at state corporations but up to 20 percent of all wages combined. 
Yevgeny Nadorshin, chief economist at Trust Investment Bank, said the bill would create a host of enemies because it did not differentiate between companies that have received different types of state loans. 
“It’s a great problem when you begin to put everyone under a single measure irrespective of what loans they have received. I don’t think this is the best way to approach the problem of high bonuses,” he said. 
Medvedev said at the G20 summit that he was committed to encouraging self-discipline among executives at state companies. “When things are bad for everyone, it’s no time to be paying such inflated bonuses,” Medvedev said. “If a company gets support from the state or belongs to the state, its management should show self-restraint.” 
While some recipients of state aid have been reluctant to agree to a clampdown on bonuses, others had earlier eliminated bonuses for last year. “The president has said to limit bonuses, which means we’re going to limit them,” VTB president Andrei Kostin said earlier this month. 
Gazprombank has decided not to pay bonuses for 2008 and 2009, and AvtoVAZ’s top managers also will forgo bonuses for that period. 
Sberbank did pay bonuses for 2008 and has not yet decided about this year.

TITLE: Tbilisi, Kiev Seek U.S. Assurances
PUBLISHER: The Associated Press
TEXT: WASHINGTON — Georgian and Ukrainian officials are seeking assurances from the Barack Obama administration that they will not lose out as the United States seeks greater cooperation from Russia.
Georgian Foreign Minister Grigol Vashadze met U.S. Secretary of State Hillary Rodham Clinton, while Georgian Secretary of National Security and Defense Raisa Bogatyreva met other senior administration officials Tuesday. The visiting officials said they discussed documents signed during the final months of the George W. Bush administration that outlined ways to deepen cooperation with the United States.
The meetings follow efforts by the Obama administration to improve relations with Russia after years of tension that peaked after Russia’s invasion of Georgia in August.

TITLE: Kudrin Considers Loans From Foreign Markets
AUTHOR: By Ira Iosebashvili
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Finance Minister Alexei Kudrin said Tuesday that the government would hold an international investment road show this year and consider issuing debt abroad in 2010, tapping foreign markets for the first time in a decade. 
Kudrin outlined the proposals at a Finance Ministry meeting attended by Deputy Finance Minister Sergei Storchak, marking his first appearance in an official capacity since being released from jail last October. 
“In this crisis period, conditions will persist that are not as favorable as they were in preceding years,” Kudrin said. “We should look into the possibility of going to the external markets next year and holding a road show this year.” 
Konstantin Vykhovsky, the head of the ministry’s debt department, told reporters that Russia could sell up to $5 billion in eurobonds with maturities of three to five years. 
“The important issue here is not so much to receive funds to cover the budget deficit but to create a benchmark for corporate borrowers,” he said. 
Later in the day, however, Kremlin aide Arkady Dvorkovich said the actual size of the offering had not been determined. 
“I wouldn’t start naming specific figures just yet,” Dvorkovich said when asked about an estimate by Citi that the government would be able to borrow up to $10 billion by issuing bonds. “I think that if the demand is for $10 billion and we issue only $5 billion, it means the prices will be very good.” 
Russia has made significant efforts to clean up its foreign debt since the 1998 ruble collapse and default and has not issued a eurobond since 2000. Russia’s investment-grade rated sovereign debt stands at $28.4 billion. 
Russian companies, meanwhile, have about $423 billion in foreign currency debt. Several state-controlled companies have announced that they will be floating eurobond issues, including VEB and Gazprom, which is issuing a $2 billion bond. 
A government eurobond issue could be snapped up fairly quickly, despite a lack of liquidity in global markets, said Nikolai Podguzov, an analyst at Renaissance Capital. 
“There has been a definite lack of sovereign Russian debt in the European bond markets, and this will generate some demand,” Podguzov said. 
“But,” he added, “it would probably be more suitable for Russia, as a major world economy, to try to develop its own, internal credit markets.” 
Kudrin also said the ministry planned to issue 10 billion to 20 billion rubles in debt in late April. 
Kudrin called the government’s forecast that the economy would shrink by 2.2 percent this year “optimistic” and said a recovery would not come as quickly as it did after the 1998 crisis, when the economy was spurred by rising oil prices. 
He said the 2010 budget would be cut from 10 trillion rubles down to 9 trillion, and the regions might face subsidy cuts and additional taxes. 
The crisis will force the government to “treat each kopek more scrupulously,” and federal ministries should be held to a strict yearly budget and not turn to the Finance Ministry for more funding when they receive new assignments, Kudrin said. 
He said all current expenses should be inventoried and new expenses taken on selectively.     
Storchak made no comments at the meeting, his debut back at work after an extended vacation following his October release from custody, pending trial. Storchak was jailed in November 2007 after being accused of attempting to defraud the state of $43.4 million. 
His supporters say his arrest is the result of an internal power struggle in the government involving the siloviki clans.

TITLE: Alleged Kidnapper to Be Deported
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A Hungarian court on Wednesday ordered a Russian woman to be extradited to France, where she faces charges of kidnapping her young daughter from her ex-husband — the latest turn in a high-profile parental battle that has stretched across the continent. 
The court in Budapest ruled that Irina Belenkaya should be handed over to French authorities within 40 days, the Russian Embassy in Budapest said, Interfax reported. 
She is to be held in a detention facility pending her extradition, the embassy said. 
The case of 3-year-old Elise Andre, who has been caught in a brutal dispute between her Russian mother and French father, highlights the lack of transnational agreements about custody of children with dual citizenship when their parents’ marriages break up, experts said. 
“We see a terrible gap in international law,” said Boris Altshuler, head of the organization Child’s Right and an adviser to the State Duma’s Family, Women and Children Committee. “There is no regulation on this.” 
Elise has been at the center of a tug-of-war custody dispute in which one of her parents has snatched her from the other on three separate occasions. 
French police say Belenkaya was involved in the assault last month of her former husband, Frenchman Jean-Michel Andre, and the subsequent kidnapping of their daughter. Several men attacked Andre as he was walking with his daughter in the southern French town of Arles, after which the girl was spirited away. 
Acting on an Interpol warrant, Hungarian police detained Belenkaya on Sunday as she was trying to cross the border into Ukraine with her daughter. 
In September, Andre came to Russia and took Elise away from her nanny while they were walking in Moscow and brought the girl back to France. The Investigative Committee said this week that it is investigating Andre on suspicion of abducting his daughter. 
The girl is currently with her father in France. 
When Belenkaya and Andre, an oceanographer, divorced in 2007, a French court gave the father custody and Belenkaya visiting rights. She secretly took the child back to Russia, however. 
While in Russia, Belenkaya received custody from a Russian court — despite the French court’s decision. 
Meanwhile, Andre got French authorities to issue an international order for her arrest. 
Belenkaya faces charges in France of kidnapping a minor and of taking part in a premeditated violent attack, French media reported. 
Public Chamber member Alexander Sokolov flew to France on Wednesday morning to discuss the case with law enforcement authorities. Speaking by telephone from France, Sokolov told The St. Petersburg Times that he planned to travel to Strasbourg and Paris to speak with Council of Europe officials and Russia’s ambassador to France. 
“The question of mixed marriages isn’t resolved even between France and Germany, and therefore we need to solve this problem in principle so that there aren’t any more such tragedies,” Sokolov said. 
French Foreign Ministry spokesman Romain Nadal said Tuesday that France would favor an approach that would, “in concert with the Russian and French authorities, yield a solution in the best interests of the child,” France 24 television reported on its web site. 
Hours before Wednesday’s court ruling, Sokolov said the Public Chamber would provide Belenkaya with legal assistance and would attempt to negotiate with the father should she be extradited. “I’ve talked to [prominent lawyer and Public Chamber member Anatoly] Kucherena, and he’s ready to take part.” 
Kucherena told a news conference in Moscow on Wednesday that he would fly to Budapest and work with Belenkaya’s lawyer, Robert Fridman, to present evidence in order to prevent her extradition, Interfax reported. 
The case is complicated by the fact that under Russian law, Belenkaya committed no criminal offense by taking her child since a Russian court granted her custody. 
“Irina Belenkaya behaved according to the decision of the Russian court,” Altshuler said. 
Such abductions “happen all the time,” said Yekaterina Kalashnikova, a lawyer who specializes in international divorces, adding that many of the cases are a result of the circumstances of Russian wives and the specifics of Russian law. 
Russian women who marry foreigners and move abroad are often “mail-order brides” who have poor language skills and little financial independence, Kalashnikova told The St. Petersburg Times by telephone from London. 
“They call Russian lawyers, and the Russian lawyer tells them, ‘If you hate this situation so much, if you find yourself on Russian territory, basically there’s no [legal] responsibility for your actions. There’s no responsibility for kidnapping the child if it’s your child,’” Kalashnikova said. 
Such women are often unaware that they run the risk of criminal charges abroad, she said.

TITLE: Court Dismisses Charges Against Activists, Police Make New Arrests
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: As a court dismissed charges issued by the police to oppositionists, arrests of peaceful demonstrators continued this week, while the opposition launched a campaign calling for the head of the St. Petersburg police to be fired, and held two protests against police beatings.
On Monday, a St. Petersburg court dismissed charges against three activists of the United Civil Front (OGF) and the National-Bolshevik Party (NBP) who had been detained and charged with violating the rules of holding a rally when they went to City Hall to deliver the opposition’s anti-crisis demands to Governor Valentina Matviyenko as part of the March 12 Dissenters’ Day protests. The activists said they had not held any rally and were detained unlawfully.
As thwarting of public protests and activists’ detentions continue, the local democratic organizations Oborona, Youth Human Rights Group, Russian Social-Democratic Youth Union, Solidarity, Soldiers’ Mothers and Yabloko party appealed to Interior Minister Rashid Nurgaliyev demanding that Vladislav Piotrovsky, the head of St. Petersburg Interior Ministry Department (GUVD), be fired. 
Released on Tuesday, the letter said that Piotrovsky was personally responsible for both obstructing peaceful rallies and for the police’s unlawful actions toward civil activists.
Later the same day, five activists from Yabloko, Oborona and Soldiers’ Mothers held a 40-minute series of one-person protests on Nevsky Prospekt, St. Petersburg’s main street. They held posters criticizing Piotrovsky, and distributed the letter and a leaflet detailing recent police beatings of peaceful demonstrators that were reported on Dec. 14, March 27 and April 5. 
Although this form of demonstration does not require any authorization under the Russian law, two activists were detained after what looked like deliberate provocations. One of them, Yabloko’s Alexander Gudimov, was charged with violating the rules for holding demonstrations, an offense punishable by a fine.
Two more activists were detained on Wednesday when the OGF and Oborona held an unauthorized march marking the second anniversary of the April 15, 2007 Dissenters’ March, when dozens of demonstrators and passers-by were brutally beaten by OMON special-task police brought to St. Petersburg from several cities.
The 14 protesters, who marched one kilometer from Ligovsky Prospekt to Vladimirskaya Ploshchad, carried a banner reading “Fire Putin!” and photographs of the beatings with slogans “We Won’t Forget This” and “You Will Answer For This.” OGF activists Yekaterina Redkina and Igor Andreyev were detained when entering Vladimirskaya metro and charged with violating the rules for holding demonstrations.

TITLE: Moldova Starts Recount as OSCE Sees Abuses
PUBLISHER: The Associated Press
TEXT: CHISINAU, Moldova — Moldovan authorities began a recount Wednesday of votes cast in the country’s disputed April 5 parliamentary elections, an official said. 
Iurie Ciocan, a spokesman for the Central Election Committee, said results would be announced Friday. Initial results showed the Communist Party with about 50 percent of the vote. 
In Vienna, the Organization for Security and Cooperation in Europe said it had verified some claims that authorities abused demonstrators who protested the election results. The organization requested access to detention facilities and a meeting with a prosecutor. 
Czech Prime Minister Mirek Topolanek will also visit Chisinau on April 22 to assess the situation, the Moldovan president’s office said Wednesday. The Czech Republic currently holds the rotating presidency of the European Union. 
Also Wednesday, the Ukrainian Prosecutor General’s Office said it would extradite two Moldovans suspected of organizing anti-government protests last week. 
Gabriel Stati and Aurel Marinescu are being held in Odessa, where they were detained Thursday, said Yuriy Boichenko, a spokesman for the prosecutor’s office. He said the two men might be handed over Thursday. Stati is the son of Anatol Stati, one of Moldova’s richest men.

TITLE: City to Get 500 Kilometers of New Roads by 2015
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The St. Petersburg authorities plan to build almost 500 kilometers of new roads in the city by 2015, increasing the total length of local roads from 3,150 kilometers to 3,630 kilometers.
The new roads will include 138 kilometers of highways and 68 kilometers of freeways, the government said at a meeting on Tuesday during which the plan for the city’s road traffic development was approved. 
The city government also proposed ambitious plans to introduce 75 transport intersections, 34 bridges and tunnels, and more than 40 underground and overland pedestrian crossings.
The aim of the project is to ensure that car owners will be able to get anywhere in the city in a matter of minutes when all the planned roads and intersections are built.

FEDERAL SUPPORT
St. Petersburg Governor Valentina Matviyenko said that some of the major projects of the city’s road infrastructure would be built at the expense of the federal budget, including part of the ring road (KAD) and the Western High Speed Diameter (ZSD).
“We wouldn’t be able to do as much without the support of the federal government, without the support of the country’s prime minister Vladimir Putin,” said Matviyenko.
Putin, who on Tuesday headed the meeting in St. Petersburg devoted to the realization of the program for modernizing Russia’s transport system in 2009, said the federal government would allocate 20.6 billion rubles ($617 million) for the construction of the ZSD if the city authorities kept their word to invest 6.6 billion rubles ($198 million) into the project.
“We planned the construction of this road together with private investors, but unfortunately, in today’s conditions, private investors can’t work on it,” Putin said, Interfax reported.
“Therefore we have made the decision to finance the project during the next two years at federal expense in order to keep on the workers and to build the road,” Putin said. 
The project is due to be completed in five years at a total cost of 212 billion rubles.
According to the plans for the city’s new roads, all the traffic in the city will be concentrated around its main highways. Two of them — the ring road and ZSD — are still under construction, and three more highways are still at the planning stage.
The ring road is due to be completed by 2010.
In 2010-11, the city will begin to realize the projects for the remaining three highways — a broad highway with a bridge over the Neva in the location of Ulitsa Fayansovaya and Ulitsa Zolnaya, a highway from the Arsenalnaya embankment to Vyborgskoye Shosse with a bridge over the Neva, and a freeway along the right bank of the Neva and the Bolshaya Nevka.

BUILDING BRIDGES
The city needs a new bridge as soon as possible, the city’s Transport Committee said.
“Palace Bridge needs major repairs. It’s in a critical condition,” said Oleg Virolainen, head of the city’s Maintenance and Roads Committee.
“But we can’t close the bridge now. First we need to build a bridge in the location of the 22nd and 23rd lines of Vasilyevsky Island,” he said.
Virolainen said the project is currently being drawn up, and should be finished by next month, Fontanka reported.
Matviyenko called the project “a priority task”, saying that funds for its construction would be allocated.
Virolainen said it was hard to say how much money would be needed to fund the whole program and when this money could be allocated.  
Matviyenko said that during the crisis, the focus should be on completing the projects and preparation work, so that when financing once again becomes available, the city is ready to begin construction. She said that for the moment, money would only be allocated to priority parts of the program.
In 2011-12 the authorities plan to reconstruct many of the city’s embankments. They plan to complete repair work on Liteiny Bridge and construct a tunnel, and in 2013, construction of the Mytninskaya and European embankments is due to be completed. In 2012, the government plans to complete the building of a bridge over the Neva to Serny Island.
There are also plans to dismantle at least 38 of the city’s railway crossings that are no longer used, in order to speed up the city’s traffic circulation. 

GOING UNDERGROUND
The meeting also focused on the subject of tunnels, which St. Petersburg lacks almost entirely, compared to Moscow and other major world cities. Vice-Governor Mikhail Oseyevsky said he wondered why St. Petersburg, unlike other world capitals, was not planning to build underground tunnels to regulate traffic flow in the city.
Virolainen said that the city had to see first how the Orlovsky tunnel project would work out.
In total, experts evaluated the cost of the program at 647 billion rubles. Currently the city cannot afford such an expense, so it is expected that some projects will attract federal funds and private capital, and some of the highways will be operated as toll roads.
Meanwhile, the federal government plans to increase the general level of funding for the country’s transport system.
The volume of investment into the sphere will increase by 100 billion rubles (30 percent) to 559.9 billion rubles, Putin said at the meeting in St. Petersburg.

PRIORITY PROJECTS
The government identified several priority areas in this sphere this year. In aviation, airdrome infrastructure objects are due to be completed in a number of cities including Sochi, Rostov-on-Don, Gelendgik, Khatanga and other cities, while in Irkutsk, a new airport project is due to be completed.
In the field of sea transport, priorities include the construction of an automobile and railway ferry complex in Ust-Luga in the Leningrad Oblast, and the reconstruction of other objects in major Russian ports. Some of the complexes will be built without budget funds, including the oil cargo complex in Ust-Luga. 
Parts of St. Petersburg’s ring road, a roundabout intersection near Sochi and parts of federal highways, including the M10 Rossiya are on the priority list for automobile transport.
The priorities also include work on the infrastructure of Sochi and Vladivostok, high-speed railways and the introduction of innovative technologies, including GLONASS — Russia’s global navigation satellite system.

TITLE: Kudrin Tells Firms: ‘Plan for a Siege’
PUBLISHER: Bloomberg
TEXT: ST. PETERSBURG — Russian companies need to be cautious about risk and plan for a “long siege” because consumer demand won’t return to pre-crisis levels for years, Finance Minister Alexei Kudrin said.
“I meet a lot of businesspeople who say, ‘Not to worry, in three years we’ll be out of our crisis,’” Kudrin told reporters at a conference in Moscow on Wednesday. “That’s not a well-considered assessment.”
Russian companies are cutting costs and firing workers at the fastest pace since the recession that followed the government’s 1998 default and ruble devaluation. Industrial production declined 14.3 percent last quarter, the most since at least 2003, when a new methodology was introduced, the Federal Statistics Service said Wednesday.
Kudrin, who called Russia “an island of stability” at the World Economic Forum in Davos, Switzerland, last January, said Wednesday that there’s no way to know when the country’s economic contraction will end.
“We don’t know how long it will take us to get out of the crisis,” Kudrin said. “So every enterprise needs to balance its policy and be ready for a long siege because demand will not return to its prior levels in the next few years.”

TITLE: Consul Reveals Plans for the City’s Sixth German Week
TEXT: Having taken up his new position as German Consul General to St. Petersburg at the end of August, 2008, Peter Schaller found himself busy preparing for one of the major events in the city’s cultural calendar – the German Week in St. Petersburg, which runs from April 18 to 26 (www.deutsche-woche.ru). The St. Petersburg Times spoke to Schaller about this year’s event and his input into its packed program.

Q: When you arrived at your new job in St. Petersburg last year, had work on the preparations for German Week 2009 already begun?
A: The initial planning was already underway and essentially the basic layout of the week was already in place. You really have to start a year in advance in the planning of an event of this scale. That’s especially true when it involves major German cultural ensembles and groups – they have long-term plans and are booked up a year in advance, sometimes even two years.
With those preliminary plans in place, you then see what’s possible and what isn’t. It’s also a question of money, of course – you have to finance it all. But, yes, the basic layout was already in existence. 
Q: What is the German Consulate in St. Petersburg’s role in the running of the event?
A: This isn’t just the work of the German consulate, of course. You have to remember that the Goethe Institute, our key cultural organization, which also has an office in St. Petersburg, makes an enormous contribution when it comes to the cultural section of the event. And we also have the German Chamber of Commerce, so it really is a joint effort. Our job at the German Consulate is merely to coordinate everyone’s efforts and we act, essentially, as a kind of umbrella for the whole German week. 
Just by looking at our list of key sponsors you can see that German firms are also very much involved - without the sponsorship from these German companies we just wouldn’t be able to organize and finance a week like this. You also have to remember that we have enormous support from Russian companies, and there are also Russian-German joint ventures. So it’s quite an effort and we are very happy with the sponsorship – we got much more than we expected in a time of economic crisis.
Q: Has the crisis had an impact on the scale of the event or on any particular aspects of it?
A: Not really. It’s had a limited impact on the economic element of the program. If you look at the program itself, you’ll see that we cover culture, society and values, as well as careers and the economy. 
For the last German Week we had something that was pretty much a job fair. Companies gave presentations there and we invited young people and students so that they could get to know these German companies and find out what job opportunities they had. Unfortunately, we couldn’t organize that this year - because of the crisis the companies were reluctant to organize a job fair of this kind as they don’t have that much to offer at the present time. 
Q: What about support for German Week from the Russian and St. Petersburg authorities?
A: We have the full support of the St. Petersburg administration. They have provided us with advertising space for free, they support us in all kinds of ways. We also cooperate with other Russian institutions, for example the Ministry of Justice. And we also work, of course, with a lot of Russian theaters and cultural institutions, with universities, with cinemas and with clubs. I have to say that we find Petersburg to be in every respect a very open city when it comes to working with us. They actively seek opportunities for ways that we can work together. 
A great example of this was an initiative that actually came from the Russian Justice Ministry. We’re going to put on a kind of play. What we’re going to do is present a legal case, and we’re going to see how that case would be handled within the framework of Russian law and how it’s handled by German law. We’ll see how an identical case would be handled in the two different systems. What’s great is that this was an idea that came from the Russian side. 
Another event will be titled “Apple. Pear. Hamburger” and it's going to focus on the relationship between fast food and lifestyles – what does it mean to eat good food and what affects will it have on your children if they eat junk food instead of healthy, well-prepared food? All that's going to be covered in a lecture.
Q: What other highlights in the program would you recommend?
A: Our overall approach has been to focus on the younger generations because that's the future of Russian society - the young people are important because they will be the future leaders. The Goethe Institute is going to create a real German cafe at their premises. You'll be able to visit this cafe have a coffee and some German cake and engage in discussions in the German language. That will run for the whole week.
Another highlight is modern ballet. In Petersburg they favor the classical style in dance, but we'll be bringing in a contemporary dance ensemble, the Wee Dance Company. 
 Another fascinating subject is the renovation of Soviet prefabricated buildings. This, of course, is a huge subject in Russia because of the large commuter-belt neighborhoods, and in Germany we have a lot of experience in this field because we had the same kind of buildings in the former GDR. 
And then we have German fashion, with cooperation having been set up between fashion institutions and design universities in St. Petersburg, Moscow and Berlin. I think that's going to be very interesting because, when it comes to fashion, everyone thinks about Paris and Milan, but in Germany you also have fashion, you also have some interesting labels there. 
I think that all this, taken together, will give a very broad spectrum of German culture and current developments in Germany.
We're also going to have a German wine-tasting which people might find interesting! 
It's great that something like this can get so many government, semi-government and private institutions involved. It just shows that if you have the right concept you can mobilize a lot of energy and a lot of effort and come up with a great deal of ideas – we will have over 80 different kinds of activities and events going on, and for St. Petersburg this is a unique event – nobody else organizes anything of this size in the city, and back home in Germany the German Week in St. Petersburg is recognized as a model for the representation of Germany world-wide. That really is quite an achievement.
What's your general outlook on German-Russian relations?
We are Russia's biggest trading partner and no other country has such a long common history with Russia - if you look back at the history, it started around 1000 years ago.  Most people think of the Second World War and the First World War; then they think about Catherine the Great, who was German and there were many other German princesses here. 
In reality, however, our history starts about a thousand years ago with the Hanseatic League, with contacts between Western Europe and Russia. In June of this year we will be celebrating a major event in Novgorod, because the city was part of this association of cities that we call the Hanseatic League. So our common history goes back hundreds and hundreds of years and we still share a great deal, so the overall political picture really isn't bad at all. Of course we had this problem with the Caucasus and Georgia, but you see the basic elements are very stable, and it's actually very simple – Russia has to modernize; we have the equipment and technology, we have the knowhow. 
As a result of all that, we see ourselves as being in a strategic partnership. It's not only about the economy and raw materials, it's also about working together within the framework of Europe and world-wide, so when we look to the East we see Russian as our main partner — there's no doubt about that.

TITLE: Germans Share Ideas on Renovating Soviet Buildings
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: The ubiquitous pre-fabricated panel buildings that sprang up around the Soviet Union have become one of the calling cards of the former Eastern Bloc. Considered unattractive and outdated at best, and at worst in a poor state of repair and barely conforming to modern standards of living, the question of what to do with the buildings is a burning one, not least for their inhabitants.
The solution may lie partly in the experience of Germany, which faces the same problem in federal districts of former East Germany, and during the past 15 years has actively worked on renovating its panel buildings. Architects from Germany and Russia will gather to discuss the issue of modernization and exchange ideas at a conference next week entitled “Modernizing Pre-Fabricated Panel Buildings,” followed by an exhibition entitled “Modernizing Pre-Fabricated Panel Buildings. Germany’s Experience” organized within the framework of the Week of Germany in St. Petersburg. 

A TARNISHED IMAGE
“The concept of pre-fabricated panel buildings is in Germany primarily associated with the former German Democratic Republic,” said Christina Grawe, the exhibition’s curator in Germany. 
“After the fall of the Berlin Wall, the image of such buildings rapidly deteriorated. Many consider them to be the embodiment of standard, unappealing East German architecture, but this is a false conception. There were such constructions in West Germany too. In Berlin, there are apartments as well as clubs and other entertainment venues in pre-fabricated panel buildings that remain popular even after reunification,” she said.
Having gradually overcome their reputation as architectural pariahs, the potential of such buildings is now recognized in Germany and they are continuously modernized in a variety of ways that will be showcased at the exhibition.
“The exhibition will present the most successful examples of how, during the past 15 years in Germany, panel buildings and their surrounding territory have been transformed, along with the architectural and design methods used to make them more attractive” said Grawe. 

Home Sweet Home
The German projects on display will include residential buildings, public buildings and infrastructure, some of which were realized as part of large-scale city reconstruction programs. 
Grawe said that panel buildings are often used for a different purpose following redevelopment. She cited the example of a workers’ hostel that was turned into a community center. Another of the projects shown at the exhibition is a cottage built from elements of a deconstructed panel building.
The Russian part of the exhibition will portray the current state of pre-fabricated panel architecture in the country and attempts to renovate such buildings. The exhibits range from completed projects to fantastical designs, with the aim of illustrating both the physical and ideological foundation to which German experience could be applied. 
The focus of both the German and Russian parts of the exhibition is residential buildings.
 “The main question tackled by the Russian part of the exhibition is of course large-scale residential panel buildings and what to do with them,” said Vladimir Frolov, curator of the Russian part of the exhibition.
In Germany, many pre-fabricated panel residential buildings were left empty following a decline in the urban population of both eastern and western Germany about ten years ago. This is far from the case in Russia, where much of the urban population still lives in Krushchyovki, as the standard five-story panel buildings built in the 1950s and 60s during the reign of Nikita Krushchev are known.
 “Unlike Germany, there are hardly any ‘extra’ buildings abandoned by their residents, which could be turned into middle-class housing by means of a new design, technical innovations and increased space,” said Frolov. “On the contrary, we have a real housing deficit.” 
Frolov said that German experience in the sphere of updating panel buildings was already being applied in Russia.
“The Russian part of the exhibition includes projects in St. Petersburg designed by the Berlin architectural bureau nps.tchoban.voss,” he said. “The designs would modernize industrial buildings dating from the late Soviet era by turning them into interesting new architectural objects without demolition or new construction.”

Differing Conditions
As well as parallels between such architecture in Russia and Germany, contrasts in the task facing the two countries and the differing situations and existing conditions will also be examined in the exhibition.
“The exhibition does not present universal recipes for successful modernization,” said Grawe. “By showing a range of diverse building tasks, it demonstrates that behind the seemingly dull theme of modernizing panel buildings, there is room for fantasy and imagination.”
“German experience can be used where it is appropriate and suitable,” said Frolov. 
Grawe said that the exhibition would demonstrate how modernization can significantly increase the quality of panel buildings, both in terms of technology and aesthetics. Non-traditional solutions will comprise a vital part of the work on display.
“The results of modernization need not be boring,” she added. 
In conjunction with the exhibition in St. Petersburg, the Chamber of Architects in Germany has organized a competition to find the best work in the sphere of urban construction, landscape architecture, infrastructure and residential accommodation. The jury will consist of representatives from German architectural bureaus.
The exhibition also features a series of photos taken by Alexei Naroditsky. Titled “Pigeonholes,” the photos depict the often dilapidated condition of panel buildings on the outskirts of Moscow today.
The project is sponsored by the German Consulate in St. Petersburg along with the German Chamber of Architects.

The conference “Modernizing Pre-Fabricated Panel Buildings” will take place at the Pro Arte Institute in the Peter and Paul Fortress on Tuesday and Wednesday.
The exhibition “Modernizing Pre-Fabricated Panel Buildings. Germany’s Experience” runs from April 21 to May 4, 10 a.m. to 6 p.m. in the Nevskaya Kurtina of the Peter and Paul Fortress. www.deutsche-woche.ru

TITLE: Garderobe 2009 Highlights Serious Side to Fashion
AUTHOR: By Olga Kalashnikova
PUBLISHER: The St. Petersburg Times
TEXT: While France may be the first country that people associate with cutting-edge fashion trends, the German Week in St. Petersburg is out to prove that it is no less a la mode.
This year is only the second time that fashion has featured on the cultural program of the annual event. Fashion today is perceived as a powerful communication tool, and can reveal a lot about the culture of a country.
A common misconception is to believe that fashion is only about images of brand new clothes, shoes and accessories. Although the creative component is an important one, every famous brand is primarily a commercial enterprise. 
The project Garderobe 2009 will highlight the technical aspect of fashion by means of an exchange of experience. Russian artists will demonstrate new drawing techniques, while their German colleagues will explain what the design is. 
“We usually associate practicality and quality with Germany, but not fashion,” said Olga Kalashnikova, the coordinator of the project Garderobe 2009 (and no relation to the author of this article). “But Germany knows best of all that design is a system, an industry,” she said.
A common problem for Russian artists is the country’s underdeveloped industry. It is built on the same basis as foreign markets — fashion houses that produce new and expensive styles of clothing — but there is a difference.
“The market in Russia is lacking,” said Kalashnikova. “There is no marketing; merchandising is not developed. Our artists do not imagine what the fashion industry is and do not understand their place in it,” she said.
The experience exchange will not only focus on the theory of marketing. The creations of new artists will be introduced at special master classes, the topic of which will be both traditional and at the same time unusual. 
The 25 participants from Germany, Moscow and St. Petersburg must create a “little black dress” — a concept made popular by Coco Chanel in the 1920s. The designer’s dress was calf-length (as she considered knees to be the ugliest part of a woman’s body), straight and decorated only by a few diagonal lines. The contemporary students will show new concepts of this eternal wardrobe essential. 
“The point is that students still don’t know the topic of the master-class,” said Kalashnikova. “They will find out only at the lesson, and on April 24, there will be a fashion show in which all 25 little black dresses will be shown.”
The German fashion week will culminate in a fashion show in which the distinguishing features will be introduced of the three most important arts and crafts schools of Russia and Germany — from St. Petersburg, Moscow and Pforzheim. Each school will present 30 models. 
“The most important and surprising thing for the students is the prize,” said Kalashnikova. “It is unusual that the prize is not only a diploma, but money. The winner will receive a check for 45,000 rubles ($1,350) that can be spent in a specialized designer shop.”
The special guest at the final show will be the German label c.neeon. 
“They pay a lot of attention to technology, use innovations and as a result of their marketing, they have 43 distribution points around the world,” said Kalashnikova. 
The final part of the Garderobe 2009 project will be an exhibition of the work of German clothes designer Heinz Oestergaard, one of the most outstanding German designers of the post-war period. In 1971 he designed a project for a new German police uniform that is still worn by police officers to this day.
Garderobe 2009 is the first event devoted to fashion that does not make the catwalk the cornerstone of the project. German designers not only show an attractive picture; they have a more serious approach to the fashion industry, which will probably make the event more effective, the project’s coordinators say. Young artists can see how the fashion world works abroad, which may be a springboard for some, since those who reach the highest levels usually work with foreign fashion industries.

TITLE: Opening Salut for German Week
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The opening ceremony of this year’s German Week in St. Petersburg will feature a concert performance by Hamburg’s Salut Salon quartet on the stage of the city’s Komissarzhevskaya Drama Theater at 7 pm on Saturday.
The four female musicians, playing violin, piano and cello will take the audience on a voyage through German classical music, tango and folk songs, even venturing afield into the realm of Bond film soundtracks. 
Their performance will also feature eight-handed piano-playing and a four-handed tune on a violin.
The idea of combining classical music and modern musical innovations and trends interested two young violin players, Angelika Bachmann and Iris Zigfried, in early 2000. They began to organize regular literature and musical salons presenting an experimental mixture of creative improvisations from a range of musicians and actors.
Out of these salons developed Salut Salon itself — a group of four friends that began to perform concerts on a more professional basis and with a specific dress style of little black dresses and high-heel shoes. 
The group’s first concert took place in 2002 and since that date the quartet has toured throughout Germany, Europe, the United States and Canada. Salut Salon recently completed its first Asian tour to Shanghai and Beijing. 
In St. Petersburg, the quartet will play Brahms, Schumann and original variations of folk and rock standards.
“A good show for us is always an improvisation,” Bachmann said.

TITLE: Krautrocker Liebezeit
To Play at SKIF Festival
TEXT: Best-known as a founding drummer of the Krautrock band Can, Jaki Liebezeit has been described as “half man, half machine” by his former fellow musicians for the very precise style of  his playing. 
But while Can’s bassist Holger Czukay and vocalist Damo Suzuki have played in St. Petersburg over the past few years, Liebezeit’s performance at the Sergei Kuryokhin International Festival (SKIF) later this month, will be his local debut. 
Liebezeit is regarded by some as the driving force behind Can, the band he played with from 1968 to its split in 1979 and again when it was reformed in 1986-1991. He was born in Dresden in 1938 and had a jazz rather than rock background, performing with jazz bands such as Manfred Schoof’s quintet in the 1960s.
With his main band long gone, Liebezeit, who is noted for creating his own “cycle-based” approach to drumming, as well as building an innovative drumset, can be heard on recorded work by extremely diverse artists, ranging from Brian Eno’s album “Before and after Science” (1977) to Depeche Mode’s “Ultra” (1997). He is also known for his work with Jah Wobble.
Liebezeit will perform at SKIF as part of a duo with German electronic musician Bernd Friedmann.
The two musicians came together in Cologne in 2001 and found that they both share an enchantment with what they call “Secret Rhythms” — less common, non-Western rhythms. “Secret Rhythms,” “Secret Rhythms 2” and “Secret Rhythms 3” are also the names for a trio of albums the duo has released since their creative collaboration began.
The duo’s work with David Sylvian has perhaps been their highest profile undertaking. Sylvian was the lead singer of the New Romantic band Japan and a performer who subsequently developed into an astonishing avant-garde rock musician and composer since his band folded in 1982. It has been reported that  it was Friedmann, who worked on Sylvian’s “Blemish” remix album, who secured the vocalist to sing on “The Librarian,” a track on the “Out in the Sticks” mini-album in 2005.
“It possibly incorporated many elements of this earth without featuring any specific elements,” the duo’s MySpace page quotes Liebezeit as saying of the duo’s creative approach.
“The individual elements have been made abstract, no ethnic or national character remains, there’s nothing typical to Seville or Istanbul, but the properties held in common by all types of music have been abstracted and processed.” 
The Sergei Kuryokhin International Festival is dedicated to the local avant-garde musician and composer who died in 1996. It was established in New York in 1997 and moved to St. Petersburg the following year. It is held at the Sergey Kuryokhin Modern Art Center.
Bernd Friedman and Jaki Liebezeit will perform at 8 p.m. on April 24.

Check www.kuryokhin.ru for updates and schedule.

TITLE: The 2nd Wave Is Coming
AUTHOR: By Natalya Orlova
TEXT: While it appears that the worst of the financial crisis has already hit the international financial markets, the full effect of the crisis on Russia lags behind developed markets and will likely only be felt here in the second half of 2009, manifesting itself in the form of bad corporate debt. 
After experiencing some turbulence on the interbank market, the Russian financial system first felt a considerable impact from the international financial crisis in the second half of 2008. The first wave of the banking crisis was accompanied by a liquidity squeeze, instability in the exchange rate and significant withdrawal of bank deposits. But since there was a similar run on the largest banks in summer 2004, these developments were neither new nor particularly ominous. Having learned from previous experience, the Central Bank took action by cutting banks’ reserve requirements and enlarging refinancing options to provide banks with the needed liquidity.
What is more threatening for Russia’s banking sector is the question of nonperforming debt that looms on the horizon. This debt is particularly dangerous for Russian banks because they do not have experience working with bad loans. In the 1990s, all banking sector activity was focused on the currency market and later moved on to the state bond market. Prior to 1998, loans made up only 40 percent of bank assets — compared with the current level of 60 percent — and were concentrated on interconnected borrowers. Thus, in 1998, bad loans in a number of cases reflected bank owners’ decisions to sacrifice their banking business in order to save the productive assets of the group.
Lending began to grow in Russia in 2003 and 2004, fueled by the penetration of foreign banks into the local market as well as the wider availability of foreign capital flowing in from global markets. In the period from 2002 to 2008, corporate loans as a portion of gross domestic product grew from 15 percent to 30 percent, and the retail lending market sprouted from a ridiculous level of 1 percent of GDP in 2002 to 9 percent of GDP in 2008. In recent years of high economic growth, bad loans — particularly bad corporate debt — were not an issue for the banking sector. In the first half of 2008, the level of nonperforming loans under Russian accounting standards was about only 1 percent of banks’ lending portfolios.
But today, Russian banks are vulnerable to one overarching risk — the palpable decline of economic activity that is affecting all sectors of the country’s economy. The current economic downturn means that all banks will face mounting nonperforming loans to one degree or another. Exporters are suffering from the decline in commodity prices and the unavailability of foreign capital, and under these circumstances they will certainly face liquidity problems. Furthermore, the decline in the country’s construction sector suggests that the credit quality of companies operating in the manufacturing, transportation and trading sectors will deteriorate. The dramatic drop in equity and real estate prices has caused a reduction in the value of collateral used by borrowers. Retail clients will also have trouble servicing their long-term debt. 
The bigger issue for Russia is short-term corporate debt of $220 billion (out of a total corporate debt of $780 billion) that comes due before the end of this year. Half of this amount is denominated in foreign currency loans, which means an additional financial burden considering the significant depreciation of the ruble since September. 
This $220 billion debt makes up roughly 20 percent of Russia’s current GDP. Given today’s environment of declining global and local demand, it is indeed difficult to imagine that the real sector of the economy will be able to generate the necessary revenue flows to service its outstanding debt. The peak for nonperforming loans can be expected in the third quarter, at which point Russia will experience its “second wave” of the crisis. 
Given the fact that $220 billion has to be paid this year, it appears that a 15 percent level of bad loans is inevitable. A domino effect of bad debt could lead to a level of nonperforming loans as high as 30 percent. Clearly, banks are working to reduce their exposure to troubled borrowers to limit the prevalence of bad loans. This, in turn, is exacerbating the problem for struggling companies that face severe liquidity problems now. Insolvency is a real possibility for many of these companies.
There is, however, a silver lining. First, the Russian economy as a whole is still not highly leveraged by global standards. The total debt that Russian companies owe to domestic and foreign banks represents approximately 52 percent of GDP. In the East Asian economies that were overwhelmed by the financial crisis of 1997, corporate debt accounted for up to 150 percent of GDP. After bad loans reach their peak in the second half of the year, the Russian economy could resume its growth by expanding its leverage. Thus, the economic downside potential for Russia appears to be considerably limited. The question lies in its ability to generate a higher upside.
Second, this crisis offers an excellent opportunity for a much-needed consolidation in the banking sector. At present, 200 banks control about 90 percent of the country’s entire banking sector. This suggests that there is a significant opportunity for smaller banks to improve efficiency of their business through consolidation as well as find synergies to address the current crisis. Consolidation would also substantially improve the Central Bank’s monitoring function.

Natalya Orlova is chief economist at Alfa Bank.

TITLE: The Unemployed Worker’s Anti-Crisis Plan
AUTHOR: By Yulia Latynina
TEXT: Two stories came out in the media at the same time in late March. The first reported that First Deputy Prime Minister Igor Sechin had initiated a review of Norilsk Nickel deals. Simultaneously, Vneshekonombank, VTB and the Audit Chamber started paying close attention to the company as well. 
In a surprising coincidence, the State Council of China met in Beijing the next day to appoint Syao Yatsin, the former head of the Aluminum Corporation of China, as assistant secretary of the council. Yatsin’s task in his new post will be to manage the acquisition of shares in foreign raw materials firms for the benefit of China’s state-owned companies.
These two stories illustrate a big difference in how the Russian and Chinese governments operate. In the first story, Russian officials use the crisis to leech off a company’s profits and to seize its assets. In the second, Chinese authorities use the crisis as an opportunity to gain an even more dominant position in the global economy.
Why are the assets of Russian companies so cheap and their debts so expensive? The high debt prices reflect the companies’ desire to reach an agreement with the banks, and the low asset prices demonstrate that private property in Russia is practically worthless.
Why did Russian companies run up such high debts? One goal: They wanted to take out cheap Western loans to pay their Russian taxes. Did they use the loans to develop Russia’s own manufacturing base? No. A significant portion of this debt was used to buy assets in the West for the simple reason that they knew that Russian-based assets are always at risk of becoming the subject of one of Sechin’s arbitrary government inspections, whereas the Western assets are well beyond Sechin’s reach.
The Russian economy survived the 1998 default in large part because Russia’s oligarchs made a fundamental change in their strategy: They stopped acting as bankers and became industrialists.
Now, not a single industrial group in Russia is changing its tactics. Oleg Deripaska is a perfect example. He has about $30 billion in debts, but he is not about to part willingly with a single asset. His whole strategy consists of dragging out negotiations in the hope that the dollar drops in value, making his dollar-dominated debts more affordable.
The overall volume of Russia’s assets has shrunk, even while its debt obligations remain unchanged. The only way of “solving” the disproportion of debts to assets is barter, and this means that even well-managed companies won’t be able to operate normally. 
Imagine, for example, that you own a gold mining company that happens to be the only business left in Russia with no debts. Obviously, if every other company has resorted to the barter system for paying its bills, you wouldn’t be foolish enough to continue using cash.
What does that mean in terms of social unrest? It won’t be anything like the mass protests that our leaders fear so much. In Russia, the main form of social protest in response to worsening conditions is more often than not self-degradation. The average unemployed factory worker will not start up his own business or take to the streets. He will most likely grab a bottle of vodka and quietly drink himself into oblivion for the next couple of years. This is his best anti-crisis program.
Russian authorities became accustomed to making bad decisions when money was in abundance, and the relative cost of their mistakes was negligible. Now the cost of making bad decisions has increased exponentially. 

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.

TITLE: Chernov’s choice
TEXT: <b>Jane Birkin</b> will not perform at Music Hall as scheduled, promoter Light Music announced. Instead, the concert was moved to Leningrad restaurant, a posh, Soviet retro-style enterprise, where it will be held on Sunday.
This is a bit of a shame, really, because when Birkin performed in the city in 2005, it seemed she packed the Music Hall — arguably a more appropriate venue for her kind of performance — easily. More people could have attended the show, and the entrance would have been cheaper, too.
When called on Thursday, Leningrad restaurant said that 3,000 rubles ($90) would buy entrance to Birkin’s concert, as the deposit for a seat. This sum can be used to pay for foods or drinks.
On Thursday, most tables were already booked, except for some on the balcony, according to the restaurant (Tel: 644 4446).
Birkin became known in the 1960s for her film roles (she was one of the models in Michelangelo Antonioni’s 1966 film “Blowup”) and for such songs as “Je t’aime... moi non plus,” the 1969 duet with Serge Gainsbourg.
As well as being a singer, Birkin is a humanitarian activist and works with Amnesty International. She was reportedly reluctant to come to perform in Russia for the first time in 2005 due to the war in Chechnya, but was persuaded by an activist from Soldiers’ Mothers, an organization set up to fight multiple human rights violations in the Russian military and call for the abolishment of the draft system.
When she was in St. Petersburg, she read about the murder of anti-Nazi activist and punk musician Timur Kacharava, who was killed by neo-Nazis in the city days before her concert, and dedicated a poem to him at her concert at Music Hall. She preceded the poem with a brief speech against war and fascism.
Speaking then at a news conference in the city, Birkin said she had visited the Anna Akhmatova Museum. Birkin said Akhmatova’s poetry has helped her in her political activism.
“In the poem [‘Requiem,’ 1935/40] she wrote about waiting for her son outside the prison, and she mentions a woman saying, ‘Can you describe this?’ Anna said: ‘I can.’ I’ve used that in my political arguments,” she said. 
Birkin campaigns to help political prisoners in Burma, and supports a number of activities aimed at helping people in Chechnya. Information about her causes, including a video for the song “Burma,” can be found on the Vigilance section of Birkin’s official web site at www.janebirkin.net.
In 2005, Birkin performed a set largely based on “Arabesque,” her 2002 album, in which her songs were flavored with Arabic rhythms. Her most recent album is “Enfants d’Hiver,” released in November. According to her web site, it is the first album for which she has written all the lyrics. 

<i>— By Sergey Chernov</i>

TITLE: Dodin’s ‘Love’s Labours Lost’ Up For Golden Mask
AUTHOR: By John Freedman
PUBLISHER: The St. Petersburg Times
TEXT: The Golden Mask Festival would not be the Golden Mask without St. Petersburg’s Lev Dodin and his Maly Drama Theater. This playhouse is a perennial nominee for awards, and this year is no exception. Dodin is one of 14 individuals vying for the nod as Best Director at the ceremony that takes place Saturday at the Stanislavsky and Nemirovich-Danchenko Musical Theater in Moscow, while his staging of Shakespeare’s “Love’s Labours Lost” is up for Best Large-Scale Production. 
“Love’s Labours Lost” is considered one of Shakespeare’s earliest as well as one of his least consequential plays. One suspects that this is exactly what attracted Dodin. His production is light, airy and relatively swift. It engages just 13 of the 18 characters in Shakespeare’s original and runs under two and half hours as a single act with no intermission. 
It rests almost entirely on the company’s younger actors who have recently come or are in the process of coming to prominence. Only Igor Ivanov, as the profoundly love-struck Spaniard Don Adriano, and Alexander Zavyalov, who plays Boyet, the slightly bawdy attendant to a bevy of giggling French aristocratic girls, come from the stable of actors who helped Dodin establish his international reputation over the last three decades. 
Dodin stripped the play down to its essentials: A group of young people with grand ideas in their heads immediately get caught up in the currents of life. 
Ferdinand, the king of Navarre (Vladimir Seleznyov), encourages his friends Biron (Alexei Morozov) and Longaville (George Tsnobiladze) to abandon their pursuit of the opposite sex for three years in order to devote themselves to refining their sensibilities and increasing their knowledge. At the moment they make their youthful pact, a suite of feminine emissaries arrives from the King of France and makes mincemeat of their plans. 
That, essentially, is the story. The rest is the telling of it. 
Dodin’s king and lords of Navarre are athletic, handsome and damned sure of themselves. They speak while doing handstands and cartwheels or climbing thick tree trunks rendered by designer Alexander Borovsky in the form of huge, hollow metal pipes with irregular holes cut into them. The women, also, are fleet afoot and speak with the speed and forcefulness of youngsters who know that life is big and must be taken by storm. 
The village clown Costard (Oleg Ryazantsev) is a comically awkward, happy-go-lucky type who has no interest in getting caught up in his lords’ plans for celibacy, and he unwittingly plays a role in making sure that they don’t observe it for long themselves. 
Borovsky dressed everyone in variations of white summer clothes, although the men often strip down to their bare torsos or legs. The Princess of France (Darya Rumyantseva) and her friends Rosaline (Yelizaveta Boyarskaya) and Maria (Yelizaveta Solomonova) are dressed in long white smocks but occasionally do a bit of nude sunbathing in the park outside of Ferdinand’s palace. 
Everything here is fun and games, from the acrobatics to the masquerade that the not-so-reluctant lovers engage in to fool each other about their identities. This is a picture of hormones running loose, of instinct obliterating serious intent, of life unfolding as it sees fit regardless of what anybody thinks or desires. 
It is an unusual show for Dodin, whose productions of “Life and Fate,” “Brothers and Sisters,” “King Lear” and many others are huge, sweeping and often even crushing theatrical works that tackle the great conundrums of the human experience and wrestle them to the ground. 
In “Love’s Labour’s Lost” Dodin left life’s great cares behind. It is a work every director and every theater needs to try on for size from time to time. A chance to take a long, deep breath and then exhale without thinking about what that means. 
Dodin, of course, is Dodin, and Shakespeare was no slouch. So there is that moment — the delivery of the news that the King of France has died — that abruptly turns everything on end. The games are suddenly over. Everyone is older. Everything has changed. 
But that concerns what happens after the curtain closes. 
Dodin’s production of “Love’s Labours Lost” is a bit of a romp in the woods. It makes few demands and answers few questions. For some it may deliver less than Dodin is capable of delivering. I think, however, that he was most interested in just having some fun. That’s not such a bad evening’s work. 

“Love’s Labours Lost” (Besplodniye Usiliya Lyubvi) plays May 16 at the Maly Drama Theater, 18 Ulitsa Rubinshteina. M: Dostoevskaya or Vladimirskaya. Tel. 713 2078. Running time: 2 hours, 25 minutes.

TITLE: Expelled Inspectors Depart From
North Korea
AUTHOR: By Kwang-Tae Kim
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea — UN nuclear experts left North Korea on Thursday after the communist regime ordered their expulsion amid an escalating standoff over the regime’s recent rocket launch.
Inspectors from the International Atomic Energy Agency left the main site in Yongbyon north of Pyongyang after removing all seals and switching off surveillance cameras, IAEA spokesman Marc Vidricaire said in a statement.
They arrived in Beijing on a flight Thursday, but declined to speak to reporters.
Four U.S. experts monitoring the nuclear plant in Yongbyon were also preparing to depart after North Korea ordered them out, the State Department said. A small group of experts have been rotating into Yongbyon since November 2007.
U.S. State Department spokesman Robert Wood said their departure would be “a step backward.”
The expulsions come after the UN Security Council unanimously condemned North Korea’s April 5 rocket launch as a violation of previous resolutions barring the North from ballistic missile-related activity. 
The U.S., Japan and other nations have accused North Korea of using the launch to test long-range missile technology since the delivery systems for sending satellites and missiles are similar.
North Korea, which claims the right to develop a space program, said it launched a satellite into orbit and reacted furiously to the UN censure by vowing to boycott international disarmament talks and restart its nuclear program.
China, which is Pyongyang’s only major ally but backed the UN rebuke, urged calm and restraint.
“We hope all parties could proceed from the long-term and overall interest, exert calmness and restraint and properly handle relevant issues so as to devote themselves to safeguarding the six-party talks,” Foreign Ministry spokeswoman Jiang Yu said.
Russian special envoy Grigory Logvinov called the North’s move “disappointing,” but held out hope for the resumption of nuclear talks.
“We believe that there is a chance to return to the negotiating table — nobody has burned bridges and the door has not been slammed shut,” Logvinov was quoted by the Interfax news agency as saying.
Russia’s chief nuclear envoy, Deputy Foreign Minister Alexei Borodavkin, has getting the talks back on track is the “most important task,” according to the ITAR-Tass news agency.
Pyongyang conducted a nuclear test in 2006 but later agreed to dismantle its nuclear program in return for shipments of fuel oil under a 2007 deal reached with China, Russia, South Korea, the U.S. and Japan. The process has been stalled since last year by a dispute over how to verify North Korea’s past nuclear activities.
North Koreans, meanwhile, were basking in a two-day holiday celebrating the April 15 birthday of late founder Kim Il Sung.

TITLE: U.S. Sailors Who Thwarted Pirates Fly Home
AUTHOR: By Ann Sanner
PUBLISHER: The Associated Press
TEXT: ANDREWS AIR FORCE BASE, Maryland — A rainy morning outside the nation’s capital couldn’t dampen the spirits of the crew of the Maersk Alabama, who returned to the U.S. a week after their ordeal off the coast of Somalia.
After they disembarked the charter flight from Kenya early Thursday, one crewman, carrying a child toward the terminal, shouted, “I’m happy to see my family.”
Another exclaimed, “God bless America.”
The crewmen were greeted at Andrews Air Force Base around 1 a.m. EDT by several dozen family members who crowded onto the wet tarmac near the arriving plane, waving small flags in the unseasonably cool air. A bevy of reporters and cameras captured the scene, which included a banner adorned with yellow ribbons reading “Welcome Home Maersk Alabama” that shipping company employees displayed near the runway.
The crowd erupted in cheers and whistles and applause as the crewman, carrying bags and belongings, climbed down a ramp from the plane to hugs and kisses from family members.
Second mate Ken Quinn told ABC’s “Good Morning America” that the hero’s welcome was unexpected. “I was just a worker doing my job,” he said. “If you’re a movie star or something you expect that stuff every day, but just Joe Blow on the street, it doesn’t happen to us.”
Missing was the Alabama’s skipper, who arrived in Mombasa, Kenya, on Thursday aboard the U.S. Navy destroyer that had saved him.
The crewmen did not stop to talk with reporters and quickly entered the terminal with their families, where a reception area was set aside for their privacy.
The crew was bused to the Gaylord National Resort and Convention Center about 10 miles away, where they spent the night.
One week ago, pirates took over the Alabama briefly before Capt. Richard Phillips surrendered himself in exchange for the safety of his 19-member crew. Phillips was freed Sunday after five days of being held hostage in a lifeboat when U.S. Navy SEAL snipers on the destroyer USS Bainbridge killed three of his captors.
The Alabama crew had scuffled with the pirates, wounding one of them with an ice pick, in taking back control of their ship. The bandits fled the ship with Phillips as their captive, holding him in the lifeboat in a high-stakes standoff until the SEAL sharpshooters took action.
Quinn said Thursday that he’d have second thoughts about sailing again through pirate-infested waters. “It would be good to be armed ... but if we start shooting at them they might start killing more seamen,” he said.
The Bainbridge was diverted Tuesday to chase pirates attacking a second U.S. cargo ship, thereby delaying Phillips’ homecoming. The cargo ship, the Liberty Sun, escaped after sustaining damage from automatic weapons fire and rocket-propelled grenades.
Another chartered plane was waiting at the Mombasa airport for Phillips, a Kenyan airport official said.
Phillips’ wife, Andrea, and two children were still home in Vermont and did not know when or where they would meet him, said her mother, Catherine Coggio.
“We’re just so thankful that things have turned out the way they have,” Coggio said by phone from her home in Richmond, Vermont

TITLE: Indians Go To Polls For World’s Largest Election
AUTHOR: By Elizabeth Roche
PUBLISHER: Agence France Presse
TEXT: NEW DELHI — Indians voted in their tens of millions Thursday as the world’s largest democracy kicked off month-long, five-stage elections, with little hope of a clear winner emerging at the end of it all.
From the southern tropical state of Kerala to the Himalayan foothills of Kashmir in the north, they cast their ballots at the start of a process so complex and spread out that six million civil and security personnel are needed to keep it on track.
Neither the ruling Congress party nor its main rival, the Hindu nationalist Bharatiya Janata Party (BJP), is expected to win outright when voting wraps up on May 13, setting the stage for some old-fashioned political horse-trading to build a coalition that can govern India’s one billion people.
The election comes at a pivotal time for India and its 714 million electorate, with a once red-hot economy feeling the strain of the global downturn and relations with neighboring Pakistan at a new low since the deadly Mumbai attacks in November.
Domestic security concerns were highlighted soon after polling opened when Maoist rebels launched attacks in several eastern states, killing at least 18 people, including 10 paramilitary troopers and five election workers.
The Maoists have been described by Prime Minister Manmohan Singh as the biggest overall threat to India’s stability.

TITLE: Most-Wanted Colombian Drug Lord Caught
AUTHOR: By Cesar Garcia
PUBLISHER: The Associated Press
TEXT: BOGOTA — Colombia’s most wanted drug lord was cowering like a dog under a palm tree when he was captured Wednesday in a jungle raid involving hundreds of police officers, the defense minister said.
Daniel Rendon Herrera, a far-right warlord known as “Don Mario,” was taken in shackles to the capital to await possible extradition to the United States.
Operating in a banana-growing region bordering Panama, he commanded a private army of hundreds and shipped some 100 tons of cocaine to the United States, authorities said.
President Alvaro Uribe described Rendon, 43, as “one of the most feared drug traffickers in the world.” National police director Gen. Oscar Naranjo said his organization is believed to have committed 3,000 murders in the last 18 months.
The bulk of those killings occurred in turf battles with other drug lords, police said, including former lieutenants of 14 paramilitary leaders Colombia extradited to the United States last year to stand trial on drug trafficking charges.
As has always occurred in Colombia’s drug underworld, Rendon ascended in power as other kingpins were captured or extradited.
Naranjo said that when a police dragnet tightened on Rendon earlier this year, he offered his assassins $1,000 for each police officer they killed, in hopes of evading arrest.
Colombian officials had offered a reward of up to $2 million for information leading to the capture of the man whose organization, controlling key smuggling routes to Central America, is believed to have been working closely with Mexican traffickers.
“This guy put bounties on the heads of government officials, so he was Public Enemy No. 1 in Colombia,” said Thomas Harrigan, operations chief for the U.S. Drug Enforcement Administration.
The U.S. wants to put him on trial in New York on charges of conspiring to distribute cocaine in the United States, outlined in a bare-bones, four-page federal indictment filed last July and unsealed Wednesday. Such extraditions can take months.
Some 300 police officers joined the raid in the northern Colombian jungle town of San Jose de Apartado.
Uribe said nine months of patient planning and intelligence work went into the operation, which he called the latest proof of Colombia’s skill in combatting organized crime.
At the time of his capture, Rendon had been cowering “like a dog” under a palm tree for two days, Defense Minister Juan Manuel Santos said with evident satisfaction.
Various people helped police locate the hideout of “Don Mario” and may share parts of the reward, Santos added.
Just two weeks ago, a senior police official told The Associated Press that Rendon had slipped through a police dragnet after a Colombian newspaper report pinpointed his location.
“Many people in the area are working as his eyes and ears, he’s bought off so many,” said the official, speaking on condition of anonymity because he was not authorized to divulge the information.
Colombia’s far-right militias, known as the United Self-Defense forces of Colombia, or AUC, initially formed in the 1980s to counter kidnapping and extortion by leftist rebels but evolved into regional mafias that committed more than 10,000 murders, built lucrative cocaine trafficking operations and stole millions of acres of land, often in collusion with local political, business and military leaders, prosecutors say.
Daniel Rendon and his brother, Freddy, otherwise known as “The German” for the discipline he demanded from his troops, controlled an area of river-laced jungle near the Panama border that has long been a major corridor for drug and arms traffickers.
The brothers were among the last paramilitary leaders to demobilize under a 2003 peace deal that promised fighters reduced sentences and protection from extradition to the United States if they confessed to all their crimes.
But while his brother and other paramilitaries agreed to await justice in jail, “Don Mario” fled back to the jungle and rearmed, police say.
Santos said he was particularly pleased that with Wednesday’s arrest, all four paramilitary chiefs who rejected the peace deal have been recaptured or killed.
Santos said the government has captured 5,600 members of paramilitary groups to date and that this latest arrest “is a message for all others: It doesn’t matter what they do or where they are, eventually they will fall.”