SOURCE: The St. Petersburg Times
DATE: Issue #1469 (31), Tuesday, April 28, 2009
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TITLE: United Russia Wins Sochi Election
PUBLISHER: Combined Reports
TEXT: SOCHI, Krasnodar Region — The Kremlin favorite won an overwhelming victory in the mayoral election in the Russian city hosting the 2014 Winter Olympics, an official said Monday, but the top opposition candidate claimed fraud and said he would challenge the result.
With all the ballots from Sunday’s election in Sochi counted, acting Mayor Anatoly Pakhomov had 76.8 percent of the vote, according to preliminary results, elections commission spokeswoman Valentina Tkachyova said.
Pakhomov is the candidate from Prime Minister Vladimir Putin’s United Russia party. Putin personally backed the Sochi Olympic bid and his reputation is riding on a successful Olympic Games in a city that must build most of the facilities during the global financial crisis.
Kremlin critic Boris Nemtsov, a distant second with 13.6 percent, accused the authorities of pressuring vulnerable state workers to vote for Pakhomov in balloting before election day. Those votes accounted for about a quarter of the total ballots cast — a proportion the independent election monitoring group Golos said Monday was “extremely high.”
“Thirty thousand people voted under pressure, blackmail and threats,” Nemtsov told The Associated Press. “This is blatant fraud and falsification.”
Kremlin critics and electoral experts say early voting is often abused to boost the votes for government-backed candidates. They say teachers, doctors, soldiers and other government-paid workers are pressured to vote a certain way during early balloting, which usually takes place under the supervision of their bosses.
Nemtsov claimed a study of the results suggested that Pakhomov won 95 percent to 100 percent of the votes cast early in many polling districts, numbers he said proved early voters were pressured. Sochi Election Commission chairman Yuri Rykov denied that early voters were pressured.
Nemtsov demanded on Sunday that all the early votes be counted separately and the proportion of votes for Pakhomov be compared with the proportion cast Sunday. Candidates can ask for such a division when early votes amount to more than 1 percent of the total vote.
“Early voters for the most part were forced to vote by their employers,” Nemtsov said at Polling Station No. 4,530, located in a sanatorium in Sochi’s Khosta district.
A white bus stood between a bustling marketplace and the Abkhaz border control station on Sunday, offering three curtained booths and 2,000 ballots to vote for Sochi’s mayor.
Sochi’s election committee decided that this would be the place where people without permanent residency permits stamped in their passports could vote, said the committee’s deputy head, Gurgen Annartsumyan. He could not explain why the bus was placed on the Abkhaz border.
His committee ruled last week that thousands of people from Georgia’s breakaway region of Abkhazia with Russian citizenship and Sochi residency permits could participate in the mayoral election.
By 3 p.m., only four people had voted at the polling station, none of them Abkhaz. One of them, Andrei, declined to say whom he voted for but acknowledged that he was homeless. “I live here and there,” he said, showing his passport with a canceled registration.
Rovshan Dzhavadov, who has no permanent registration in his passport, also successfully voted on the bus.
“Frankly, I don’t think I should be allowed to decide for the people of Sochi who should be their mayor — I don’t know the local problems, I live in Murmansk,” Dzhavadov said.
“Theoretically, you could bus all of the homeless people in the country to vote here,” he added.
The bus and its border location cap a list of grievances compiled by rivals of Pakhomov. Sunday’s vote, widely seen as a test of President Dmitry Medvedev’s commitment to democracy, has proved to be the most colorful election in recent memory.
Pakhomov’s rivals have complained of a dirty campaign, noting that the acting mayor has received blanket coverage in the local media while they have been largely ignored except for some criticism.
Election officials reported no serious violations Sunday.
Turnout reached 39 percent of Sochi’s 290,000 eligible voters, RIA-Novosti reported shortly after Sochi’s 211 polling stations closed at 8 p.m. No minimum turnout was needed to validate the election.
Pensioner Galina Masalkina, who voted for Pakhomov at the nearly empty Polling Station No. 58, located in the downtown Moscow Hotel, said it would be “ridiculous” to vote for the opposition because the next mayor would help prepare Sochi for the 2014 Winter Olympics.
“The city has to develop, to prepare for the Olympics,” she said. “I don’t know who Pakhomov is, but I respect United Russia, and I respect Putin. I vote for United Russia.”
In Imeretinka, a neighborhood that is a part of Sochi’s Adler district, many people would disagree. The neighborhood has protested against the expropriation of their land for the Olympics.
“The city needs a young and energetic mayor,” said Alexander, 48, as he exited a polling station located in a local school. “I support Nemtsov. He was born in Sochi, and I like him.”
(SPT, AP)
TITLE: Kudrin Served Summons In U.S.
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A U.S. court marshal delivered a court summons to Finance Minister Alexei Kudrin in Washington on Friday to testify in a case involving bankrupt oil company Yukos.
“An unidentified person foisted some papers whose contents were unknown on the minister,” his spokesman Pavel Kuznetsov said Saturday, Interfax reported.
The papers later turned out to be a notice from the U.S. District Court for the District of Columbia, Kuznetsov said. The federal court had summoned Kudrin to give evidence in the trial of former Yukos chief Mikhail Khodorkovsky that is taking place in a Russian court, Kuznetsov said.
It remained unclear Sunday why a U.S. court was involved in a Russian trial. Some news outlets reported that the summons were on behalf of 12 American minority shareholders in Yukos who are seeking compensation for the bankruptcy.
A man in sunglasses walked over to Kudrin as the minister shook hands and exchanged greetings with C. Fred Bergsten, director of the Peterson Institute for International Economics, at the entrance to the research institute, television footage showed. The man handed some folded papers to Kudrin, who barely gave them a look as he accepted them, continuing to talk to Bergsten, according to the footage filmed by the international Russian-language channel RTVi.
Kudrin’s subsequent speech at the private institute — on the Russian government’s anti-crisis measures — was part of a visit to Washington for a meeting of G20 finance ministers.
Khodorkovsky’s lawyers prepared the court notice “in an extremely compressed amount of time and in a secret way,” Kuznetsov said.
U.S. lawyers from the Baker Botts law firm, which Russia hired for legal advice on the matter, said a U.S. court could still dismiss the notice, Kuznetsov said.
But Khodorkovsky’s two key lawyers, Vadim Klyuvgant and Karina Moskalenko, said they did not know where the notice had come from.
“Everything that I know is from the mass media,” Klyuvgant said Sunday.
Khodorkovsky has asked that Kudrin and other senior government officials testify at his trial in Moscow’s Khamovnichesky District Court, where he is being tried on charges of embezzlement and money laundering. Once the biggest Russian oil company, Yukos went bankrupt after being hit by massive back tax claims. Its assets changed hands in a series of auctions and were snapped up mostly by state-controlled Rosneft.
Khodorkovsky is already serving an eight-year prison term for tax evasion and fraud.
Kudrin was finance minister as Yukos collapsed.
Radio Liberty reported that Friday’s summons were for Kudrin to testify in a court case that 12 U.S. holders of Yukos’ American Depository Receipts filed against the Russian government in October 2005, demanding $9 million in compensation for bringing the company to bankruptcy.
Kudrin was first served a notice to appear in court as a witness in that case in January 2006. Court marshal David Felter delivered the notice when Kudrin headed for a meeting with then-U.S. Finance Secretary John Snow, Thomas Johnson Jr., a lawyer at Covington and Burling representing the complainants, said at the time.
Kudrin denied being served at the time.
RTVi identified the man who handed Kudrin his notice Friday as David Felter.
In other news, Kudrin blamed developed countries for resisting the reform of the International Monetary Fund after a meeting dedicated to the institution.
“We already meet cool attitude and even resistance [to reform plans],” Kudrin told reporters Sunday in Washington. “The leading countries are not in a hurry. … This was the main discussion, the nerve of the IMF meeting.”
Kudrin said Russia was ready to invest some of its $385 billion forex reserves — the world’s third largest — in IMF securities but needed to make sure that they were liquid enough for Russia to get its money back quickly.
During the Peterson institute speech, which was attended by economists and financiers such as George Soros, Kudrin said the government would give banks more funds if their nonperforming loans exceeded 10 percent of the total. He also warned that the budget deficit might grow higher than the estimate of 8 percent of the gross domestic product.
One of the attendees, Russia analyst Andrew Kuchins, said he was glad that Kudrin didn’t look stressed at the event — an apparent reference to Prime Minister Vladimir Putin’s remark last week that Kudrin was stressed.
Kudrin said at a recent meeting that external conditions, such as oil prices, have been extremely favorable for the Russian economy but would not be the same in the next 10 to 50 years. But some news outlets misquoted him as saying that Russia wouldn’t recover from the crisis for 50 years, prompting Putin to retort at a separate meeting that the finance minister was “stressed” when he had said that.
TITLE: Moscow Cop Kills 3, Injures 7 in Shootout
AUTHOR: By David Nowak
PUBLISHER: The Associated Press
TEXT: MOSCOW — A Moscow district police chief opened fire on the street and in a supermarket early Monday, killing three people and wounding seven others — four of them critically, Russian investigators said.
Police Major Denis Yevsyukov, who heads a southern Moscow police department, opened fire just after midnight and was detained after killing a driver, a supermarket cashier and customer, federal investigators said in a statement.
Yevsyukov, whose wife had recently left him, finished his late shift Sunday and hitched a ride to the supermarket, Moscow police chief Vladimir Pronin told Russian television. Yevsyukov was dressed in civilian clothes, with one part of his uniform slung around his shoulders, Pronin said.
Yevsyukov shot the driver of the car with a gun that Russian news agencies reported was unlicensed. Yevsyukov then entered a supermarket and killed a cashier and customer before shooting at least seven others, authorities said.
Details of those killed were unavailable, but Russian news agency Interfax reported that four people were hospitalized with head injuries and they were aged between 19 and 23.
Russian television network NTV reported that supermarket employees activated a silent alarm to alert police as the shooting progressed. Yevsyukov shot at and missed an officer who managed to disarm and detain him, NTV said.
“He killed the cashier, we know for sure, and then there were more shots, three shots inside the store,” a young, unnamed female witness told NTV. “Then a shop assistant came running up to us and asked: ‘What are you doing here? There is a killer here and you should run away,’” the witness said.
TITLE: FSB Under Fire for List of Terrorist Tactics
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Federal Security Service has published a detailed list of terrorist tactics and activities on its web site that it says are typical of recent attacks.
But some critics say the document could serve as a how-to manual for would-be terrorists, telling them what they should focus on and what to avoid.
The nearly 1,000-word document, titled “About Tactics Used For Diversionist-Terrorist Acts,” was apparently only recently added to the FSB’s web site under the heading “Professional Advice,” which also contains articles advising citizens how to behave in a terror attack or a hostage situation.
The authors say the document is the result of FSB investigations into recent, unspecified terrorist attacks.
The tactics list includes a collection of indications of a terrorist plot, like the purchasing of nuts and bolts for bomb-building, and an overview of the advantages of suicide bombings, high number of victims and high publicity.
The document also contains a checklist of how terrorists plan attacks, starting with intelligence gathering at the target, choosing able candidates to carry out the attack, preparing them psychologically and planning emergency solutions like “liquidating the executor.”
“The arsenal of methods to carry out attacks is very broad,” the document says, and includes home-built explosive devices in cars and apartments, roadside bombs, suicide bombings and airline hijackings.
The Newsru.com news web site, which first reported about the document Friday, said the analysis could be viewed as detailed instructions on how to conduct attacks.
An FSB spokesman reached by telephone refused to comment and asked for questions in writing.
TITLE: Lavrov Says Pyongyang Won’t Budge
PUBLISHER: Combined Reports
TEXT: North Korea will stay away from international nuclear disarmament talks, Foreign Minister Sergei Lavrov said Friday after visiting the secretive state and pressing Pyongyang to return to the sputtering discussions.
North Korea, which raised regional tensions with a defiant rocket launch earlier this month that was widely seen as a disguised test of a long-range missile, can send satellites into orbit on Russian rockets, Lavrov said after leaving North Korea.
North Korea responded to UN punishment for the launch by saying it would boycott the nuclear talks with Russia, China, Japan, South Korea and the United States as well as restart a plant that makes arms-grade plutonium. “North Korea at this point does not intend to return to the six-party talks,” Lavrov told reporters in Seoul.
Lavrov, the first high-level envoy from a global power to visit the reclusive North since after the launch, and South Korean Foreign Minister Yu Myung-hwan agreed to work together to have North Korea return to the nuclear talks, Yu said at the joint news conference.
North Korea, arguing that it has the right to have a peaceful space program, said it sent a satellite into orbit in the April 5 launch.
Lavrov, who delivered a message from President Dmitry Medvedev to the North’s leader, Kim Jong Il, said Russia stood by the UN move to chastise Pyongyang and tighten existing sanctions that limit the North’s arms trade and imports. Lavrov did not meet Kim.
While Lavrov was in North Korea, he also attended the opening of a Russian language school at the Pyongyang Institute of Foreign Languages.
(Reuters, SPT)
TITLE: Medvedev Dismisses GRU Spymaster
PUBLISHER: Combined Reports
TEXT: MOSCOW — President Dmitry Medvedev on Friday dismissed the country’s military intelligence chief, a veteran who opposed Kremlin plans for sweeping military reform.
Medvedev signed a decree relieving General Valentin Korabelnikov, 63, of his post as director of the GRU, a Kremlin statement said. Korabelnikov had held the position since 1997 and was replaced by Lieutenant General Alexander Shlyakturov, a first deputy in the organization.
The dismissal of the respected spymaster is one of Medvedev’s highest-profile dismissals since he became president in May 2008, and the Kremlin gave no explanation for the decision.
The GRU, created in 1918 under Leon Trotsky, is controlled by the General Staff of the armed forces and reports directly to the president. It is Russia’s largest spy agency and has a dense global network of agents. It also has thousands of special forces troops inside Russia, some of whom were deployed in Georgia last year.
Korabelnikov had criticized reforms that the Kremlin says aim to turn Russia’s outdated army into a mobile fighting force. Under the reforms, the number of generals will be slashed and the armed forces will be cut to 1 million from more than 1.1 million.
Independent military analyst Pavel Felgenhauer said Korabelnikov clashed with Defense Minister Anatoly Serdyukov over plans to carve up the GRU and strip it of special units over which it wielded control. “This is the beginning of a major reform of Russia’s military intelligence,” Felgenhauer said.
He added that the Defense Ministry was positioning to bring the GRU under more direct control, effectively weakening the General Staff.
Another analyst, Alexander Golts, said Korabelnikov was too transfixed on traditional enemies such as the United States and failed to identify a steady buildup of weapons in Georgia before a short war with Russia in August.
Both said Korabelnikov’s replacement, Shlyakturov, was less likely to resist the reforms.
A Defense Ministry spokesman said Korabelnikov had been dismissed because he was already three years over the maximum age ceiling of 60 for generals, news reports said.
To remain in service after 60, the president must either sign a decree to extend their contract or fire them. Medvedev on Friday ordered that Korabelnikov be decorated for his service to the state and named him an adviser to the General Staff.
The GRU has no web site or spokespeople, unlike the smaller Foreign Intelligence Service, known as SVR, and the Federal Security Service, or FSB.
The public was given a rare chance to see parts of GRU’s Moscow headquarters when Putin visited it in 2006 and was shown taking part in shooting practice.
TITLE: Arms Talks 'Off to A Fast Start'
AUTHOR: By Phil Stewart
PUBLISHER: Reuters
TEXT: ROME — U.S. and Russian arms negotiators held a “very productive” initial round of talks on Friday aimed at agreeing on a new treaty to curb nuclear weapons as part of a broader effort to improve relations.
Rose Gottemoeller, U.S. assistant secretary of state for verification and compliance, said the meeting in Rome was “very productive” and “got off to a fast start.”
Her Russian counterpart, Anatoly Antonov, who unexpectedly held a joint news conference with Gottemoeller at the U.S. Embassy in Rome, said Moscow would do its “utmost” to prepare a new draft treaty by year-end.
“We are sure, we are sure that this treaty, new treaty, will help to improve relations between [the] United States and [the] Russian Federation,” Antonov said, speaking in English.
“We are sure that this treaty could promote confidence, predictability in the world. And I hope that it will be a very impressive impulse to international movement regarding getting rid [of the world’s] nuclear weapon[s].”
The Rome talks were called after Presidents Barack Obama and Dmitry Medvedev agreed in London earlier this month to work out a replacement for the Strategic Arms Reduction Treaty, which expires in December.
Both sides see a new arms reduction deal as a way to show that the former Cold War foes can work together.
TITLE: In Brief
TEXT: TV Censorship?
ST PETERSBURG (SPT) — Contrary to previous reports, the head of a local TV talk show will not be taken off the air after a conflict with a politician who appeared on the show, a TV station spokesperson said Monday.
Tatiana Aleksandrova, who produces and presents the program “Peterburgsky Chas” (“The St. Petersburg Hour”) on Channel Five, will continue to carry out her regular duties, according to Channel 5 public affairs chief Larisa Konashenok, Interfax reported.
Meanwhile, well-informed sources have been confirming Aleksandrova was taken off the air as of the end of last week, the report noted. The information service RIA-Novosti quoted Aleksandrova as saying on Monday that she has been temporarily taken off air.
The scandal began when Sergei Bodrunov, the recently appointed head of the St. Petersburg Committee for Economic Growth, Industrial Policy and Commerce, appeared on the April 8 episode of “Peterburgsky Chas” to discuss City Hall’s anti-crisis plan. Journalists on the program pointed out the discrepancy between Bodrunov’s description of the city’s economic situation and official figures on prices and unemployment.
After the show, Bodrunov made several derogatory comments toward Channel Five journalists and viewers who called in to the program. As a result of a city hall investigation of the incident, Bodrunov posted an apology to the journalists on the economic committee’s website Thursday, which Aleksandrova refused to accept in such a form, Interfax reported.
“Peterburgsky Chas,” which airs weekdays from 8 to 9 p.m., recently won best “Daily Information Program” in the federally supported TEFI –Region 2008 awards for its news segment, “Now in St. Petersburg.”
New Church
ST PETERSBURG (SPT) — The proposed construction of a Russian Orthodox memorial church at the site of a WWII-era crematorium will remain under discussion, St. Petersburg Governor Valentina Matviyenko announced Saturday.
According to Matviyenko, Russian law prohibits any new construction on the site in Moskovsky Park Pobedy (Victory Park) because it is a protected area, Interfax reported. The governor said the project initiators will have to work with the City Planning and Architecture Committee and the Committee for the Preservation of Monuments to decide the project’s fate.
Sergei Mironov, the speaker of the Russian parliament’s upper house and leader of the pro-Kremlin A Just Russia party, previously pledged personal and party financial support for the project. According to reports, Mironov announced his intention that the church be constructed by the 65th anniversary of Russian victory in the Great Patriotic War on May 9, 2010.
Russian Orthodox believers initiated discussion about the construction of a memorial church at the site of the former crematorium, which according to Soviet estimates cremated over 600,000 inhabitants and defenders of Leningrad during the Nazi blockade of the city.
During the 1990’s, veterans fought against plans to build a shopping center at Park Pobedy.
TITLE: Fur Auction Meets Resistance
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Animal rights activists blocked Sojuzpushnina’s Fur Palace in St. Petersburg on Sunday as Russia’s only organizer of fur auctions was about to start its 179th auction, with 170,000 skins of sable on offer.
Though Sojuzpushnina’s offices are in Moscow, auctions are held in St. Petersburg, where the Fur Palace was built on Moskovsky Prospekt especially for this purpose in 1939. Apart from sable, the skins of 300,000 minks, 6,500 blue foxes, 2,200 red foxes, 1,000 silver foxes, 3,000 raccoons and 1,200 ermines are on offer at the current auction, which runs through Tuesday.
At a previous auction in February, the main buyers were from the U.S., Italy and Greece, “with good support from Russia,” according to a news release from Sojuzpushnina. However, a drop in demand and prices was reported in February.
At 8 a.m. on Sunday, half an hour before the auction was due to open, 15 animal rights activists staged a protest at the entrance of the Fur Palace, with five activists chaining themselves to the doorway, preventing buyers and Sojuzpushnina’s employees from entering the building.
They blocked the entrance for more than 20 minutes until the police arrived on the scene, undid the chain and detained five activists, charging them with violating the rules of holding public rallies. Three hours later they were acquitted in court.
“It came as a surprise, but the judge said they were detained illegitimately,” said an activist, who spoke on condition of anonymity, by phone on Monday.
Animal rights activists, who have campaigned against Sojuzpushnina since 2005, demand that the auction be closed as an “obsolete remnant of the past.”
“The fur industry has long since had its day,” the protesters said in a news release.
“Many people have realized that buying clothes for which dozens or even hundreds of animals had to be killed, and wearing their skins on oneself is not only absurd, it’s barbarism. But there remain those who make money out of it, and we won’t leave them alone until we stop them.”
The fur industry is also criticized by animal rights organizations for mistreating animals, which they say are bred under distressing conditions, poorly fed and killed cruelly by methods including electrocution via the genitals, gassing and having their necks broken.
Fur factory farms are banned in the U.K., while both fox and chinchilla farming are being phased out in the Netherlands, according to the web site of PETA (People for the Ethical Treatment of Animals).
Sojuzpushnina declined to comment when called on Monday.
“We have nobody to speak to the press, because we’re in the middle of an auction,” said a woman who answered the phone at the Fur Palace in St. Petersburg.
“We only answer questions by appointment,” said an employee at Sojuzpushnina’s offices in Moscow, before suggesting calling after Wednesday, because “everybody is in St. Petersburg.”
TITLE: Duma Praises Putin's Plan to Combat Crisis
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prime Minister Vladimir Putin and his government were praised for their efforts to handle the financial crisis in a report approved by the State Duma on Friday despite unanimous opposition from all non-United Russia deputies.
Deputies from the Communist Party, the Liberal Democrat Party and A Just Russia all criticized the resolution for lacking any criticism and offering unjustified praise of the government’s performance last year.
“It contains no assessments and contains false information,” Maxim Rotmistrov, the second-ranking Liberal Democratic official in the Duma, said by telephone.
The resolution says the government “delivered timely financial aid to the real sector of the economy,” which contradicts the government’s own report that says “the money allocated for anti-crisis measures didn’t reach the real sector of the economy,” Rotmistrov said.
He said all the factions except United Russia unanimously voted against the resolution, which was approved after Putin delivered a report to the Duma on April 6 about his government’s anti-crisis plan and its performance for last year. Rotmistrov speculated that United Russia deputies, who control the Duma, were “afraid” to criticize the government.
Andrei Vorobyov, United Russia’s No. 2 official in the Duma, defended the government’s anti-crisis plan, calling it “timely” and insisting that the budget money did reach the real sector of the economy.
“It’s another matter that this money might not have been enough,” Vorobyov said by telephone.
When asked about the criticism of the resolution by the other three Duma factions, Vorobyov said the critics’ “emotions dominated over their common sense.” Putin heads United Russia.
But Gennady Gudkov, deputy head of the A Just Russia faction, said by telephone that the resolution had “no analysis” of the government’s actions and contained “no criticism.” He called the resolution “a sloppy work.”
Senior Communist official Ivan Melnikov called the resolution “a low-quality formal reply” that consisted of “general phrases,” according to an interview published Friday in Nezavisimaya Gazeta.
Communist officials were not available for further comment Friday.
The Communists and A Just Russia criticized the government’s anti-crisis plan when Putin presented it to the Duma this month.
Also Friday, deputies passed a resolution allowing members of the Public Chamber to speak for up to five minutes at Duma sessions considering bills that might contain civil rights violations, Interfax reported.
The Duma also approved a bill in a third and final reading that would allow parties that collect less than 7 percent of the vote in Duma elections to get one or two seats in the parliament. The Kremlin-backed bill must now be passed by the Federation Council before it can be signed into law by President Dmitry Medvedev.
TITLE: State Demography Policy Won’t Work, UN Warns
AUTHOR: By Jessica Bachman
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The United Nations cautioned Friday that the government’s demographic policy would fall far short of its goal of stabilizing a rapid decrease in the country’s population, which could contract by 10 million to 20 million people over the next 16 years.
Presenting the results of the 2008 United Nations Human Development Report for Russia, the report’s authors said the government needed to take more than just fertility into account if it wanted to mitigate the effects of a demographic crisis.
“We need to overcome the widely held and simple idea that fertility rates are easy to control and will change according to the amount of social investment put into the promotion of birth,” said Sergei Zakharov, deputy director of the Institute of Demography at the High School of Economics.
Central to Russia’s demographic policy, which was adopted in 2007, are “family capital” provisions. For every second child, a mother now receives 300,000 rubles ($9,040) in so-called maternity payments. The funds, however, cannot be used immediately. They must remain in the bank for three years, or, as of this year, be used in full to pay off mortgages.
While Russia saw the number of births in 2007 rise slightly, the UN report says the money-for-birth model “usually causes only short-term surges and shifts in timing of births. ... International experts regard such payments as least efficient from the point of view of long-term influence on fertility.”
The vast majority of Russians are also unswayed by the payments. In a survey included in the report, 81 percent of Russian respondents said the maternity payments and other pro-family measures adopted in 2007 have “no effect” on their decisions to have children. Only 1 percent said, “We will surely have more children than planned before.”
The report also emphasized the need for the state to focus on increasing the low life expectancy of Russian males, improving its migration policy to help compensate for dwindling birth rates and adapting its institutions to better serve a mushrooming aging population.
By 2025, the State Statistics Service estimates, the country will lose 14 million people from its working-age population, while the number of retirees will increase by 5 million people.
The population fell by more than 12 million people from 1992 to 2008, making the current population about 142 million.
TITLE: Belarus ‘Dictator’ Meets With Pope
AUTHOR: By Nicole Winfield
PUBLISHER: Associated Press Writer
TEXT: ROME — Belarusian President Alexander Lukashenko met with the pope Monday on his first trip to Western Europe since the European Union lifted a travel ban imposed a decade ago over his dismal human rights record.
Lukashenko, whom some in the West have called “Europe’s last dictator” because of his stifling of dissent, met with Pope Benedict XVI at the Apostolic Palace and later met the Vatican secretary of state.
He was to dine Monday night with Italian Premier Silvio Berlusconi, news reports said.
The Vatican said talks were conducted in a “positive” climate. A statement said some “internal problems” were discussed, though it didn’t specify human rights.
Lukashenko arrived in Italy on Sunday, his first trip to Western Europe since the EU slapped a travel ban on him in 1999 and froze his assets to punish him for a crackdown on Belarus’ opposition.
The EU lifted the ban to allow Lukashenko to attend an East-West summit in Prague, Czech Republic, in May. The summit is to launch an EU program of trade and aid benefits for Belarus and five other former Soviet republics.
Italian Foreign Minister Franco Frattini defended the decision to welcome Lukashenko in an open letter Monday to Corriere della Sera, Italy’s leading daily, which over the weekend had criticized the government for hosting someone who “imprisons dissidents and gags unaligned newspapers.”
TITLE: ‘L’Orfeo’ Proves Revelation at Golden Mask Awards
AUTHOR: By Raymond Stults and Zsofia Budai
PUBLISHER: Special to The St. Petersburg Times
TEXT: Faced with two worthy contenders for this year’s Best Production of Opera Award, the Golden Mask musical theater jury came up with the same sort of compromise it has often reached in the past, honoring just one with the award but indicating a close call by naming the individual who staged the other as Best Director in Opera.
The delightful version of Gioacchino Rossini’s “La Cenerentola” by St. Petersburg’s Zazerkalye Theater emerged as the best production, probably a mere nose ahead of the Perm Theater of Opera and Ballet’s ambitious and profoundly moving version of Claudio Monteverdi’s four-century-old “L’Orfeo,” while “L’Orfeo” brought Georgy Isaakyan the award as best director. The jury’s approval of both productions was further evidenced by its choosing Zazerkalye maestro Pavel Bubelnikov as Best Conductor in Opera and Ernst Heidebrecht as Best Designer in Musical Theater for his “L’Orfeo” decor.
Both productions lacked a certain authenticity, “La Cenerentola” with its absence of true Rossini voices and its recitative sung in Russian, “L’Orfeo” with an orchestra made up mostly of modern instruments and a cast of nonspecialists in music of the 17th century. Yet only the most ardent snobs and purists would likely deny that both productions emerged as compelling musical theater.
The ups and downs of “La Cenerentola” were commented on at length in The Moscow Times. It was also mentioned that “L’Orfeo” might prove the revelation of this year’s Golden Mask operatic competition. And to the one who wrote those words, it turned out to be just that.
The first performance of “L’Orfeo,” in 1607, took place in a room of the Ducal Palace in the Italian city of Mantua. Perm’s version, for the most part, played out on a similarly small scale, with both the audience and all but one scene of the opera confined to the stage of the Operetta Theater. The one exceptional scene, however, served as the production’s moment of sheer magic. As Orpheus embarked on the tragic journey to rescue his beloved Eurydice from Hades, curtains suddenly parted to reveal the theater’s darkened auditorium, peopled with the ghosts of the departed. That moment alone seemed surely enough to entitle director Isaakyan to his Golden Mask.
Perm’s cast of soloists sang with considerable elegance, and its chorus proved particularly adept at dealing with Monteverdi’s madrigal-like choral episodes.
By judiciously avoiding vibrato, the strings of the orchestra came remarkably close to sounding like an early-music ensemble, while a pair of specialists from Moscow produced an authentically ancient-sounding accompaniment to the recitative on lutes and other strummed instruments.
Among the other individual Golden Mask winners in opera, the most deserving of all was mezzo-soprano Kristina Kapustinskaya, whose superb singing and stage performance were largely what made the Mariinsky Theater production of Rodion Shchedrin’s “The Enchanted Wanderer” worth enduring.
This year’s festival offered an eclectic collection of ballet and modern dance productions, with companies from Ekaterinburg, Novosibirsk, Perm and St. Petersburg presenting the best that they had to offer alongside three nominated productions of the Bolshoi Theater. The festival’s jury, however, was singularly captivated by ballerina Diana Vishneva and awarded prizes both to her and to a production that was conceived especially to showcase her extraordinary talents.
“Diana Vishneva: Beauty in Motion,” a joint U.S.-Russian ballet project masterminded by impresario Sergei Danilyan, walked away with the awards for Best Production of Ballet and Best Female Dancer, as well as one of the festival’s two critics’ prize. And the program of three one-act ballets choreographed for the internationally admired Mariinsky Theater prima ballerina did indeed stand apart from the rest of the field.
Perhaps the program failed to make full use of Vishneva’s formidable gifts. For one, it included very little of what could be called classical choreography, something in which Vishneva truly excels. But it did allow her to shine in some imaginative and inventive pieces. The ballets created by Moses Pendleton (“F.L.O.W.”) and Dwight Rhoden (“Three Point Turn”) both explored and played with the physical limits of Vishneva’s technique, the former placing her on the floor on a mirror in a sensuous duet with herself and the latter pairing her with the formidable U.S. contemporary dancer Desmond Richardson in a high-energy, sexually charged romp on stage.
Igor Zelensky received the prize for Best Male Dancer for his performance in the Novosibirsk Theater of Opera and Ballet’s production of “La Bayadere,” which he also staged in his capacity as the company’s artistic director. Even after a career spanning two decades, Zelensky proved that he still has the technique and charisma to charm and delight audiences. A special jury prize was bestowed on Bolshoi dancers Natalia Osipova and Vyacheslav Lopatin for their bewitching duet in the theater’s Golden Mask-nominated production of “La Sylphide.”
TITLE: Russian Revival Seen at Art Auctions
PUBLISHER: Bloomberg
TEXT: NEW YORK — A stately, 1.5-meter-tall portrait of Russian painter Nicholas Roerich by his son Sviatoslav fetched $2.99 million at Christie’s sale of Russian art in New York on Friday.
The painting, which depicts a white-bearded man in a Tibetan robe, sold for more than twice its high estimate of $1.1 million. It also beat by more than 10 times the artist’s auction record set just two days earlier at rival Sotheby’s Russian sale. Sotheby’s took in $13.8 million in Russian art sales Wednesday.
Christie’s auction of 390 lots of Faberge, icons and 19th- and 20th-century paintings and contemporary art took in $13.2 million, surpassing its high estimate of $13 million. About 31 percent of the lots failed to sell.
“A work of art is worth as much as a person is willing to pay for it,” said Elena Kuprina, an art consultant who bought the work with her husband, Maxim Lyakhovich, for a Russian art collector of Nicholas Roerich. “This is a cultural treasure.”
Lyakhovich also placed a winning $1.2 million bid (without commission), for the senior Roerich’s mountainous landscape “The Greatest and Holiest of Tangla” (1929).
It was purchased for the same collection, Kuprina said.
Last April, Christie’s took in $17.6 million from the sale of 294 Russian lots. The auction house’s annual Russian sales, held in London and New York, swelled to $145.1 million in 2007 from $7.1 million in 2001.
Collecting art became fashionable among the ultrawealthy, including billionaires such as Roman Abramovich, LUKoil deputy CEO Leonid Fedun and Alfa Bank president Pyotr Aven.
“We had a number of regulars who didn’t turn up at the auctions in November,” said Alexis de Tiesenhausen, Christie’s international department head of Russian art. “We had to readjust. The estimates now are about 20 percent less than in November.”
Conservative estimates attracted active bidding in the room and on the phone.
A 11.4-centimeter-tall Faberge parrot eating a cracker fetched $290,500, almost six times its presale high estimate. The ruby-eyed bird, carved from translucent chalcedony in St. Petersburg from 1896 to 1903, sits on a red enamel perch, tethered by a silver link chain.
TITLE: Senator’s Son Takes Charge After Buying French Paper
AUTHOR: By Jessica Bachman
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Alexander Pugachyov, the 23-year-old son of Senator Sergei Pugachyov, has been named general director of the French tabloid France-Soir, Agence France Presse reported Friday.
The appointment made Alexander Pugachyov the second son of a Russian oligarch to take the reins of a struggling foreign newspaper this year. In January, Alexander Lebedev bought a controlling stake in London’s Evening Standard and promptly appointed his son, Yevgeny Lebedev, senior executive director of the paper’s holding company.
The younger Pugachyov’s purchase comes two years after a French court barred another Russian-Israeli tycoon, Arkady Gaidamak, from buying it. By law, noncitizens cannot own more than 20 percent of a French media outlet. The younger Pugachyov holds a French passport, and in January a Lille court allowed him to take control.
Sablon International, nominally controlled by Alexander Pugachyov, boosted its 19.9 percent stake to 85 percent that month, leaving former owner Jean-Pierre Brunois with 15 percent.
Spokespeople for Sablon or Luxavdor, Sergei Pugachyov’s Luxembourg-based holding, declined to comment. A spokesman for the elder Pugachyov’s Russian holding, OPK, directed questions to Luxavdor’s PR officer at SPN Oglivy, who declined to comment.
A receptionist at France-Soir said the paper did not have a press service.
Sergei Pugachyov, whom Forbes says is worth about $500 million, is an avowed Francophile. Luxavdor owns gourmet French grocer Hediard and designer furniture factory Artelano.
The new management has already caused turbulence at France-Soir. On April 10, a majority of the paper’s employees passed a vote of no confidence against their new editor-in-chief, Gilles Bornais, accusing him of public humiliation, harassment and incessant sarcasm.
TITLE: Mortgages Plummet In Volume and Value
AUTHOR: By Yelena Zborovskaya
PUBLISHER: Vedomosti
TEXT: The volume of mortgages taken out in the first quarter was eight times less that of the same period last year, and the total value of those taken out was 10 times less, the St. Petersburg Mortgage Agency (SPBIA) announced last week. Only banks that are partly state-owned remain on the market, along with Bank St. Petersburg. VTB 24 bank only issues allocated loans for buying existing residential real estate, said Tatyana Khobotova, head of mortgage lending at the bank’s St. Petersburg branch.
Bank St. Petersburg, on the other hand, has stopped its program for issuing loans to buy existing property, said Pavel Filimonenok, deputy chairman of the bank’s board of directors, via the bank’s press service. The risks are lower on the newly-built property market, since the majority of major construction companies are the bank’s clients, according to Filimonenok. Mortgages are issued as long as the construction project is more than 80 percent complete.
Khobotova said that all the mortgages issued this year were set in rubles, while in 2008, 20 percent of them were set in foreign currencies. Borrowers are calling for mortgages issued in foreign currencies to be refinanced, particularly those issued in 2006 and 2007. The average amount being borrowed has dropped from 2.5 to 3 million rubles ($75,000 to $90,000) one year ago to one million rubles ($30,000), she added.
In the fall, mortgage rates rose by two to three percentage points up to 14 to 16 percent, and the size of down payments rose from 10 percent to 30 percent, said Vyacheslav Shemyakin, director of private client credit services at the Severo-Zapadny (Northwest) Bank.
Interest rates for loans set in rubles are up to 20 percent, said Filimonenok. Shemyakin said that loans in other currencies have not been issued since the autumn. Sberbank has converted 112 loans worth a total of 176.1 million rubles from foreign currencies into rubles, while the City Mortgage Bank (GIB) has offered only loans in foreign currencies since the autumn, according to its deputy chairman, Igor Zhigunov.
Baltinvestbank has cancelled virtually all of its mortgage programs and has made half the staff of its mortgage department redundant, said Igor Kirillovykh, the bank’s managing chairman. He said that the bank had issued no more than 10 mortgages in the first quarter as part of a joint program with the SPBIA, and that the number would not change in the next few months.
This year, the volume of mortgages will be two to three times less than last year, predicted Zhigunov. Khobotova said that the volume of loans being issued would not return to last year’s level, and that mortgages would likely return to the level they were at in 2005.
TITLE: Kudrin Says Russia May Ask For Help From World Bank
AUTHOR: By Paul Abelsky
PUBLISHER: Bloomberg
TEXT: Russia may seek billions of dollars in loans from the World Bank to help fund projects as tax revenue wanes because of the global financial crisis, Finance Minister Alexei Kudrin said.
“Since Russia is facing a budget deficit, which will be substantial in the next three years, no less than three percent, we are ready to consider borrowing funds from the World Bank to finance some of our projects,” Kudrin said in an interview broadcast on state television channel Vesti on Monday. He said the government may seek “billions of dollars” in the coming years.
The government expects revenue to plunge 30 percent this year as the economy enters its first recession in a decade. The budget gap may be wider than the official estimate of 7.4 percent of gross domestic product, Kudrin, who visited Washington over the past three days to meet officials from the bank and the International Monetary Fund, said on Friday.
Russia may also seek to raise $5 billion next year in the government’s first international bond sale since the 1998 default, Arkady Dvorkovich, President Dmitry Medvedev’s top economic adviser, said on April 14. Banks and pension funds may be the chief buyers of the bonds, according to Kudrin.
“It’s too early to speak about the market and about pricing,” Kudrin said on Vesti. “It depends on how we cope with this difficult year before the future bond issue.”
Loans from the World Bank are a “realistic” option as the cost of borrowing on the market remains high, said Elina Ribakova, Citigroup Inc.’s chief economist in Moscow.
“Arranging loans from the World Banks would be cheaper than raising money from investors,” Ribakova said. Russia may sell as much as $10 billion in bonds, according to Citigroup.
The scale of the program will depend on the negotiating process and any strings the lender may attach, Ribakova said. Details of the planned borrowing may be made public when a World Bank mission visits Moscow in May or early June, she said.
The World Bank may offer financial assistance to the Russian regions most affected by the economic crisis and provide guarantees on bonds issued by Russian Railways and Vnesheconombank, Russia’s state development bank, Interfax reported Monday, citing Klaus Rohland, the World Bank’s chief representative in Russia.
The lender’s last major loan to Russia was for $1.5 billion on Aug. 6, 1998, to support economic reforms, 12 days before the government’s default on its $40 billion debt. The World Bank’s recent joint projects with Russia included an agreement last September to buy carbon units from Rosneft, the country’s largest oil producer, and a loan of $200 million announced on Feb. 26, 2008, to improve the quality of housing and communal services.
Russia’s Reserve Fund may be exhausted by the end of this year, Kudrin told Vesti. The fund will be replenished and may already show an increase starting in 2011 if oil prices stay above $50 a barrel, according to Kudrin.
Russia’s two sovereign wealth funds fell in March to a combined seven trillion rubles ($209.5 billion) as the government began transferring money to cover its budget shortfall.
TITLE: Klepach Says GDP Plunged by 9.5%
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: The economy plunged by 9.5 percent in the first three months of 2009 and might contract by 6 percent this year, Deputy Economic Development Minister Andrei Klepach said Thursday, painting a bleaker picture than the government had previously forecast.
The Economic Development Ministry is now reconsidering its forecast of a 2.2 percent drop in gross domestic product for 2009, Klepach said, calling a recent International Monetary Fund forecast of 6 percent “quite realistic,” Interfax reported.
Klepach declined to give any exact figures.
Just weeks earlier, Klepach and other government officials had criticized as “overly pessimistic” a World Bank report that predicted GDP would fall by 4.5 percent this year.
Klepach got into trouble with Prime Minister Vladimir Putin in December for saying the economy would go into its first recession in a decade. Putin said economic growth would continue in 2009, and Klepach later retracted his statement.
The Economic Development Ministry had predicted earlier this month that the economy would shrink by 7 percent to 8 percent in the first quarter, but Klepach said Thursday that the figure had in fact hit 9.5 percent.
Klepach said risks for the economy were “higher than expected” because lending and construction had not revived as quickly as the government had hoped.
“We forecast that lending will grow by 7 to 8 percent, down from the previously expected 10 to 13 percent,” Klepach said.
He said his ministry has raised its forecast for the average price of oil by $4 to $45 per barrel for 2009 but does not see inflation slowing down from the expected 13 percent for the year.
Klepach said retail turnover would show negative growth this year, compared to the previously expected growth of 0.3 percent. Turnover fell by 1.1 percent in the first quarter, while investment tumbled by 15 percent, according to the State Statistics Service.
“But we think that we reached the bottom in January and there will be a sort of rebound in the second quarter,” Klepach said.
The rebound will be spurred by higher federal spending, increased lending and bigger revenues for exporters because of the effect of the ruble devaluation, Klepach explained.
The economy in the second quarter, however, is still expected to fall by 8.7 percent to 10 percent, Klepach said.
Some market players suggested that Klepach’s figure remained too optimistic.
“The data voiced by the deputy minister show that the economic fall in January was not the bottom,” Rye, Man and Gor Securities said in a research note. “The revival of the economy will not be possible without a significant change in interest rates.”
The Central Bank on Thursday cut the refinancing rate for the first time since 2007, to 12.5 percent from 13 percent. Klepach said the 0.5 percent difference would not affect the economy.
TITLE: In Brief
TEXT: Russia Gets Sub Order
MOSCOW (Bloomberg) — Russia received a $1.8 billion order to build six submarines for Vietnam, Kommersant reported.
The Kilo 636 subs were originally intended for Venezuela and will be built by St. Petersburg-based Admiralteyskiye Verfi, a subsidiary of state-owned United Shipbuilding Corp., the Russian newspaper reported, citing two unidentified people at government arms trader Rosoboronexport.
Rosoboronexport broke a contract with Venezuela to supply the submarines after the April 18 meeting of the South American country’s president, Hugo Chavez, with U.S. President Barack Obama, Kommersant reported.
Hyundai Needs Loan
SEOUL (Bloomberg) — Hyundai Motor Co., South Korea’s largest automaker, said it may borrow about 250 million euros ($319 million) to build a plant in Russia.
The Seoul-based automaker is in talks with banks for the loans, Hyundai said in an email Monday, without giving details including the names of the banks.
Hyundai in June last year began to build a 330-million-euro factory in St. Petersburg to become the top car producer in Europe’s fastest-growing major auto market.
Local Breguet Store
MOSCOW (Bloomberg) — Swatch Group plans to open Breguet outlets in St. Petersburg and Yekaterinburg to add to its 30 Swatch boutiques in Russia, Vedomosti reported, citing Chairman Nicolas Hayek.
Sales in Russia are three times higher than local sales of the company’s nearest competitor, Hayek told the newspaper.
AvtoVAZ Plans Bargain
ST. PETERSBURG (Bloomberg) — Russian automaker AvtoVAZ plans to build a passenger car priced at less than 200,000 rubles ($5,990), Vedomosti reported, citing two company managers it didn’t name.
The company is spending as much as $100 million to develop the model, which is based on the Lada Kalina sedan, and needs government funds to begin production, the newspaper said. Togliatti, Russia-based AvtoVAZ expects to start selling the new model in two years, according to Vedomosti.
Medvedev Wants Bonds
MOSCOW (Bloomberg) — Russia is prepared to buy International Monetary Fund bonds if the Washington-based lender decides to sell them, RIA Novosti reported, citing a Kremlin statement.
President Dmitry Medvedev told the central bank to come up with proposals for participating in the possible sale, the state-run news service said Monday.
Pipeline to China Started
MOSCOW (Bloomberg) — Transneft began welding Russia’s first oil pipeline to China on Monday, Interfax reported from a ceremony in Skovorodino, where the state company’s East Siberia-Pacific Ocean pipe currently ends.
China will make “all efforts” to ensure the link is completed by the end of 2010, the news service said, citing China National Petroleum Corp. Vice President Wang Dongjin.
Transneft will finish building pumping stations on the East Siberia-Pacific Ocean pipeline by the end of this year, Interfax reported, citing Deputy Prime Minister Igor Sechin.
Fewer Migrant Workers
MOSCOW (SPT) — The number of migrant workers arriving in Russia dropped by 27 percent in the first quarter of 2009, while the number of crimes committed by migrants grew by 3.8 percent, Federal Migration Service chief Konstantin Romodanovsky said Friday.
“Declarations about a crisis-related growth in the number of illegal migrants in Russia are baseless,” Romodanovsky told Interfax.
Romodanovsky also defended the migrants, calling the growth in crimes “insignificant” and saying migrants “as a rule” are “decent” people. (MT)
Custody Deal After Kidnap
MOSCOW (SPT) — The French father of a 3-year-old girl kidnapped by her Russian mother last month has agreed to joint custody, Interfax reported.
The girl, Elise Andre, will live six months with her father in France and six months with her mother in Russia under the terms of the agreement expected to be signed this week by lawyers representing the divorced parents, the report said.
But the mother, Irina Belenkaya, who is being held by Hungarian police as a court considers extraditing her to France to face kidnapping charges, still wants complete custody rights, telling Vesti-24 television that the agreement “wasn’t the right decision.”
Hotel Collection
ST PETERSBURG (SPT) — The Rocco Forte Collection, an international hotel company that owns the Hotel Astoria and manages the Angleterre Hotel in St. Petersburg, will open a hotel in the Czech Republic and a resort in Sicily in May, the company announced.
Rocco Forte will open the Augustine, a 101-room hotel in the center of Prague, on May 14 and the Verdura, a 203-room golf and spa resort, on the Sicilian coast on May 29. According to company press releases, both destinations are currently accepting bookings.
The collection, which was founded in 1996, will own a total of 13 hotels all over Europe with the opening of the two new properties. The company acquired the historic Hotel Astoria in 1997 by buying a 25.5 percent share.
Prices at the Verdura start at 350 euros ($460) a night in the low season and 720 euros ($945) a night in the high season. The Augustine is currently offering rooms for 370 euros ($485) a night.
Signs of Georgian Violence?
TBILISI, Georgia (AP) — After two weeks of nonviolent rallies against President Mikheil Saakashvili, signs emerged Friday that protesters might be expecting things to get physical.
Television footage — including from channels that cover opposition activities — showed several wooden sticks and at least one baseball bat being distributed to protesters. Reports in the Georgian and Russian media said the distribution of potential weapons was wider.
Some opposition leaders denied that weapons were being handed around, calling it a setup by Georgian authorities looking for an excuse to violently disperse the crowds. Others, however, said they needed sticks to defend themselves.
Armenia Remembers War
YEREVAN, Armenia (Reuters) — Armenians flooded to a monument above Yerevan on Friday and laid flowers in remembrance of the World War I killing of Armenians by Ottoman Turks, even as the country looks to a historic accord with Turkey.
The neighbors announced late Wednesday that they had agreed on a road map to normalize ties after a century of hostility that traces its roots to the 1915 mass killing and deportation of Armenians, a crime Armenia says was genocide.
Canada, Ukraine Eye Energy
KIEV (Reuters) — Canada’s governor general, Michaelle Jean, called on Saturday for intensified energy cooperation with Ukraine, including in the nuclear sphere, to help it achieve energy self-sufficiency.
Jean also said it was up to Canada and other industrial nations to help Ukraine find permanent solutions to the dire consequences of the Chernobyl nuclear disaster, which occurred 23 years ago on Sunday.
TITLE: Bulgarian Summit Sets Up Tense Talks in Moscow
PUBLISHER: Combined Reports
TEXT: Russia and Bulgaria will soon bridge differences over Sofia’s participation in a Moscow-backed pipeline project to bring gas to Europe and sign a final deal, Energy Minister Sergei Shmatko said Saturday.
Bulgarian Prime Minister Sergei Stanishev was scheduled to arrive in Moscow on Monday for a three-day working visit, which will include a meeting with President Dmitry Medvedev on the first day and talks with Prime Minister Vladimir Putin on Tuesday.
The talks in Moscow follow two-day gas negotiations in Sofia. Putin canceled his attendance after Bulgaria declined to give in to Gazprom’s demands on the South Stream pipeline, Bulgarian Foreign Minister Ivailo Kalfin said, the 24 Hours newspaper reported Saturday.
Shmatko told a news conference that both sides should be ready to compromise and reminded Bulgaria to live up to its political promise to join South Stream. Bulgargaz, the country’s state-run gas utility, said it was demanding a direct gas supply contract with Gazprom, which would enable Sofia to seek compensation for losses caused by gas cuts.
Bulgargaz chief executive Dimitar Gogov told reporters that the company was negotiating a new agreement with Gazprom to replace the current deal, which expires in 2010. Gazprom’s external affairs director, Stanislav Tsygankov, said his company wanted to eliminate Bulgargaz from the talks.
“I kindly ask Gazprom not to determine with whom they will work in Bulgaria,” Bulgarian President Georgi Parvanov told reporters.
Sofia is reluctant to sign a final deal on the 900-kilometer South Stream unless Moscow agrees to pay transit fees for the option of using existing pipelines, officials say. The Balkan country is opposed to Russia’s plan to use its gas network to reduce the project’s 10 billion euro ($13.2 billion) cost, arguing that this would undermine its goal of diversifying routes.
“Both sides must have reasonable positions and readiness for a compromise,” Shmatko said after meeting Stanishev.
“We must not allow economic and company logic to dictate the political agenda,” he said, speaking through an interpreter. “We believe that in the near future, we would reach an agreement.”
South Stream, led by Gazprom, has been criticized in private by U.S. and European Union officials who are concerned that it will raise Europe’s dependence on Russian gas. The EU, which relies on Russia for a quarter of its gas, is instead promoting the rival Nabucco pipeline to use gas from the Caspian Sea region but has not secured supplies so far.
Western diplomats in Sofia said the United States was unhappy to see Russia cementing its presence in the Balkans, possibly gaining a political and strategic foothold as well as an economic one.
Government officials in Sofia deny any involvement of Washington or Brussels in their position on South Stream, saying Bulgaria is simply defending its interests.
Gazprom pumps 17.8 billion cubic meters per year to Turkey, Greece and Macedonia via Bulgaria under a 30-year contract that started in 2006. About 3.5 bcm of that is consumed by Bulgaria, which gets all of its gas from Russia under a separate agreement that expires next year.
Bulgaria was the EU country worst hit by a two-week disruption of Russian gas supplies via Ukraine in January. Russia has rejected claims, saying Bulgaria’s supply contract is with three of Gazprom’s foreign subsidiaries, Bulgargaz’s Gogov said.
Parvanov said Bulgaria should not rush into a deal but that it should also not postpone it beyond May, because the country would enter an election period that might delay the whole South Stream project. Bulgaria is due to hold parliamentary elections in July.
The intergovernmental South Steam agreement signed by Russia and Bulgaria in 2008 envisions building a separate pipe, Parvanov said Saturday.
“We will work to implement the South Stream agreement under the terms that we signed with Mr. Putin in 2008,” Parvanov said.
(Reuters, Bloomberg)
TITLE: Nabucco Supporters Urge Action
PUBLISHER: Reuters
TEXT: SOFIA, Bulgaria — European governments and gas consumers must back the Nabucco gas pipeline with cash and contracts now if Europe is to cut its reliance on Russian gas, an energy security conference heard Friday.
The EU-backed 7.9 billion euro ($10.4 billion) project to pump gas from the Caspian region via Turkey, Bulgaria, Romania and Hungary to Austria needs to quickly become a reality after years of squabbling over terms.
“It is time for the poker game to end and decisions to be made,” Jeremy Ellis, head of business development at RWE Supply and Trading, a Nabucco shareholder, told the forum.
“Europe and Turkey must now show their hands; the supply countries and investors will not wait forever. ... The gas reserves in the Middle East and the Caspian offer an opportunity for opening the southern corridor.”
Gazprom, which is planning its own northern and southern pipelines to bypass transit countries and bring gas to Europe, also criticized the EU for not doing enough to commit to diversification of routes.
“We need clear signals from consumers about where, when and what quantities they want of additional gas,” said Stanislav Tsygankov, head of external relations at Gazprom. “If Europe is in doubt about the long-term need, we are ready to turn to Asian markets,” he told the Sofia summit.
Energy Minister Sergei Shmatko later told reporters that Moscow was not afraid of competition from Nabucco because the European project had taken so long. “South Stream is much further down the line in terms of preparation than Nabucco,” he said.
Four months after a cutoff of Russian supplies to Europe that idled factories and left thousands of people without heating, the bloc has done little to line up supplies and reach any political and financial agreement on Nabucco.
It has secured only one-fifth of the gas needed to be viable.
European Commission President Jose Manuel Barroso told the forum that he was keen to see work advancing rapidly. But the EU has so far not given Azerbaijan, Turkmenistan and other potential suppliers an incentive to supply the project.
Suppliers, however, warned that time was running out as competition for resources from the Central Asian region was growing, with Russia, China and Iran buying up the available gas.
The forum in Sofia, designed to speed up work, achieved little on a political level because of the absence of Turkish Prime Minister Tayyip Erdogan and presidents of Caspian countries.
Analysts have said Central Asian producers, fearing Russia’s anger, would be reluctant to make any promises for Nabucco on paper unless Brussels presented them with a set of guarantees on its timing, transit arrangements and financing.
Critics say the EU is reluctant to put in as much cash and diplomatic resolve as Russia or China have used to promote their own projects.
TITLE: Public Opinion Poll Shows Joblessness No. 1 Concern as Level Reaches 10%
PUBLISHER: Bloomberg
TEXT: Russians want the government to make job creation and unemployment benefits its highest priority during the global economic crisis, a poll showed.
Joblessness topped the list of concerns, according to a poll released Sunday by the All-Russian Center for the Study of Public Opinion, or VTsIOM. It’s the first time the issue led the list in five surveys since December, the pollster said.
Unemployment was named by about seven percent of respondents.
Russia is slipping into its worst economic crisis in a decade as shockwaves from the global recession hit eastern Europe. Russian unemployment reached 10 percent of the working population, or 7.5 million people, in March, the Economy Ministry said Monday in a report on its web site.
Russia has 2.2 million registered unemployed, the number that the government earlier expected to reach by the end of the year. The Economy Ministry expects the jobless rate to average between 10.4 percent and 10.7 percent this year, with the number of unemployed at 7.8 million, Interfax said on Friday.
TITLE: Deripaska to Give Up 25% Stake in Strabag
PUBLISHER: Bloomberg
TEXT: VIENNA — Strabag SE’s biggest shareholders will agree this week to take over Russian billionaire Oleg Deripaska’s 25 percent stake in central Europe’s biggest construction company.
Raiffeisen Holding NOe-Wien and Strabag Chief Executive Officer Hans-Peter Haselsteiner will gain the holding from Deripaska, who will keep one share in the company and hold a call option on his stake until December 20, 2009, Raiffeisen Chief Executive Officer Erwin Hameseder said Monday at a briefing in Vienna.
Deripaska will remain a “partner” of Strabag for now, Hameseder said.
“We are confident that Deripaska will manage to consolidate his finances and make use of the call option,” Hameseder said at the briefing. If that doesn’t happen, the investors may look for another partner, he said.
Deripaska two years ago agreed to buy a stake in Strabag to help the Austrian builder expand its business in Russia, which was set to become the company’s biggest single market. A falling stock price has forced him to either give up the stake or pledge more collateral on the loans that he used to purchase it.
Strabag shares peaked in November 2007 at 54.85 euros ($72.08) about two weeks after the company’s initial share sale, on prospects that growth in Russia will boost the company’s profits. The stock fell 63 percent over the past 12 months and was trading at 15.54 euros as of 11:24 a.m. in Vienna on Monday, giving the company a market value of 1.77 billion euros.
TITLE: Steelmakers Anxious Over Chinese Iron Ore Deals
AUTHOR: By Courtney Weaver
PUBLISHER: The St. Petersburg Times
TEXT: Russian steelmakers are nervously looking east, waiting to see what effect a series of deals hammered out in China will have on their own fortunes.
Traditionally, on April 1, the start of China’s fiscal year, Russia’s steel producers hold negotiations with iron ore miners to work out the terms of their annual contracts.
Chinese iron ore producers are reluctant to agree to contracts that by UralSib’s estimates will likely represent a 30 percent to 40 percent price cut from last year because of low steel prices worldwide. And the longer they wait to accept it, the greater advantage low-cost steel exporters such as Russia have.
Usually, an agreement is reached in April; last year it was reached in June. This year, it could drag on even longer.
Since 2008, Russia has grown from the fifth-largest steel exporter to the largest thanks to the ruble’s devaluation and a troika of competitive advantages: raw materials, inexpensive labor and low energy costs. Severstal, the country’s biggest steelmaker, announced Friday that it would be exporting half of its output this year because of rising demand in Southeast Asia.
The Russian steel industry as a whole is seeing roughly 70 percent of its flat steel and 30 percent of its long steel sent abroad, Renaissance Capital metals analyst Rob Edwards said.
But the industry, which is capitalizing on the higher prices that it can manage on Asian markets, will see the heyday come to an end when China’s iron ore agreements are finalized. With a lower production cost, local steel is likely to sweep out most competitors.
“When the iron ore price falls, the relative cost position of the Russians may weaken,” said Michael Kavanagh, a senior metals analyst at UralSib. “In other words, the cost curve might flatten.”
The increased volume on the market will also help drive out foreign competition.
“Once costs come down in Asia, the domestic Asian producers are going to ship more, and that’s going to displace some of the Russian tonnages that are being shipped there,” Edwards said. “That tonnage has to find a home somewhere else, hopefully by which time domestic demand will have recovered.”
That somewhere else will have to be the domestic market, where summer usually represents a peak in demand. So far, apparent demand for steel here is down approximately 30 percent year on year, while real demand has probably fallen 25 percent, Edwards said.
Russian steel production bottomed out in December, when the country produced 3.3 million tons over the month. But output has been rising steadily since, with production reaching 4.6 million tons in March. China, the world’s top producer, posted a rise of 1.4 percent in the first quarter for 45 million tons in March.
A small market rally and revving output helped steel stocks recover their losses after a miserable Monday, though analysts were of different minds concerning what lies ahead for the sector.
Bucking the trend was Magnitogorsk Iron & Steel Works, or MMK, whose Global Depositary Receipts gained 6 percent over the week in London after Bank of America bumped it up to “buy,” citing increased domestic demand. The GDRs had fallen 6.3 percent last Monday.
Others were not so lucky, with a round of bad marks from banks weighing on sentiment. ING cut Severstal and Evraz to “sell” on lower steel price forecasts. Severstal also got a downgrade from Credit Suisse, which lowered both it and Novolipetsk Steel, or NLMK, to “underperform,” also citing weaker prices.
Severstal’s London-traded shares fell 9.9 percent Monday and limped back to close the week down 4.3 percent. NLMK shed 6.7 percent on the week’s first day and closed on Friday down 5.5 percent for the period. Evraz recovered from a 5.6 opener in London to end the week down 0.5 percent.
Coal and steel maker Mechel had the biggest first-day drop, sinking 14.8 percent in New York, though it managed to finish the week behind just 1.4 percent after saying Wednesday that it would buy the coking-coal assets of Bluestone Coal for at least $1.4 billion.
The ruble-denominated MICEX Index finished the week down 1 percent, and the dollar-denominated RTS Index fell 0.4 percent.
TITLE: Foreign Minister Slams NATO Military Exercises
PUBLISHER: Reuters
TEXT: MOSCOW — Russian Foreign Minister Sergei Lavrov on Monday criticized NATO exercises which will take place in Georgia next month as harmful and said other countries should join Russia in boycotting them.
NATO had invited Russia to send observers to the near month-long exercises that will involve 1,300 troops from NATO members and other countries.
“Of course, Russia will not be participating and advises other countries against doing so,” Lavrov told a news conference. “We believe that these exercises, in the current environment, are harmful.
Diplomatic links between Tbilisi and Moscow were cut after last August’s brief war over the breakaway region of South Ossetia and Russia’s subsequent recognition of the breakaway republic.
Moscow also opposes Georgia’s efforts to win membership of the western military alliance.
NATO says the scenario for the exercises which, if they go according to plan, will run from May 6 to June 1, will be a crisis response operation and poses no security threat to Russia.
Russia has already protested against the exercises by calling off a planned meeting of senior military officials in Brussels early next month, although formal political talks at ambassadorial and ministerial level are still going ahead.
“Rather than hold exercises in Georgia, you need to make the current Georgian regime fulfill its obligations,” Lavrov said, referring to an August ceasefire agreement brokered by French President Nicolas Sarkozy.
Central Asia’s Kazakhstan has ruled out participating in the exercises, saying its military forces will be too busy to join them.
The row has muddied separate efforts by Moscow and Washington to improve relations that soured in recent years, partially over NATO interest in admitting ex-Soviet states like Georgia and Ukraine as members.
Fixing ties with NATO is part of a broader Moscow effort to improve relations with the United States, which have reached their post-Cold War lows under the previous U.S. administration of George W. Bush.
TITLE: Ukraine Remembers Chernobyl
PUBLISHER: Agence France Presse
TEXT: KIEV — Ukraine on Sunday paid homage to victims of the Chernobyl catastrophe 23 years after the worst nuclear accident in history.
“Today, we remember with profound sadness those heroes who fought against the nuclear storm and sacrificed themselves for us and our children,” President Viktor Yushchenko said in an address published by his press service.
Some 100 Ukrainians, including Yushchenko and other top officials, laid wreaths overnight before the monument to Chernobyl’s victims in Kiev and lit candles during a religious service dedicated to the tragedy, an AFP photographer reported.
The “liquidators” — men who took part in cleaning the site after the catastrophe — in their turn hung a long fir-tree wreath around the monument, many unable to keep back tears.
In Slavutich, a small town 50 kilometers (30 miles) away from the accident’s site where many of the power station’s personnel used to live, the night vigil gathered hundreds who brought flowers and candles to the Chernobyl victims’ monument, according to another AFP photographer.
The disaster occurred on April 26, 1986 at 1:23 a.m., when one of the reactors exploded — contaminating the Soviet states of Ukraine, Russia and Belarus with the fallout also spreading to other parts of Europe.
Over 25,000 people known as “liquidators” — most of them Ukrainians, Russians and Belarussians — died getting the accident under control and constructing a concrete shield over the wreckage, according to Ukrainian official figures.
A United Nations toll published in September 2005 set the number of victims at just 4,000, a figure challenged by non-governmental organisations. In Ukraine alone, 2.3 million people are designated officially as “having suffered from the catastrophe.”
Some 4,400 Ukrainians, children or adolescents at the time of the accident, have undergone operations for thyroid cancer, the most common consequence of radiation, the health ministry says.
Chernobyl nuclear power station was finally closed in 2000 after one reactor had continued producing electricity.
But the dead power station remains a threat because the concrete cover, laid over 200 tonnes of magma, consisting of radioactive fuel, is cracking.
A new steel sarcophagus is due to cover the seal hurriedly flung over the reactor in the immediate aftermath of the disaster.
Internationally funded construction of the new steel cover is due to be launched this year or early next year and completed by 2012 by the Novarka consortium including France’s Bouygues and Vinci companies.
TITLE: Russia Relaunches Chechen Operation
PUBLISHER: Reuters
TEXT: MOSCOW — The military launched new counterterrorism operations in at least three districts of Chechnya on Friday, just over a week after it ended similar missions across the whole region, Interfax reported.
Federal commanders reintroduced the security restrictions associated with counterterrorism operations in the Shali, Shatoi and Vedeno districts near the Caucasus Mountains in the region.
“Militants are intensifying their activities in the Shali, Shatoy and Vedeno districts of the republic,” Interfax reported, citing an official report. “We have received information on terrorist attacks planned against executive authorities and law enforcement officials.”
Officials could not be immediately reached for comment.
Chechen President Ramzan Kadyrov declared victory in the war against rebels after the Kremlin lifted security restrictions on April 16.
The Kremlin ordered soldiers into Chechnya in 1999 to end the republic’s de facto independence won in a 1994-96 war.
TITLE: No Repeating the Miracle of 1998
AUTHOR: By Vladimir Mau
TEXT: In the same way that generals prepare by analyzing past wars, economists and politicians prepare by analyzing past economic crises. On the whole, this makes sense because we know what happened in the past, and we can analyze only what is known. Despite this preparation and analysis, nations continue to repeat the same blunders and have been hit repeatedly by the same economic crises over the past 100 years.
During the economic boom years when the price of Russia’s main exports of oil, gas and metals hit unprecedented highs, many economists and politicians occasionally posed the question: What will happen when this boom turns into a bust?
It was clear that it would have a disastrous effect on the federal budget. But it was not perceived as being potentially fatal to the country’s economic growth because there is a natural flip side to a crash in natural resources’ prices — a drop in the ruble, which would in turn lead to increased competitiveness for goods produced domestically and for import substitution.
To put it another way, everyone was expecting a repeat of Russia’s quick economic rebound from 1999 to 2001 after the 1998 default and ruble devaluation. The problem with this analogy is that this crisis is much different from the 1998 crisis for four main reasons.
First, the Russian economy in 2008 was operating much closer to full capacity than in 1998. The abundance of unused capacity in 1998 provided a powerful stimulus for economic recovery, especially in the private sector, and this was accomplished with practically minimal capital investment. Political and macroeconomic stabilization starting in 1999, coupled with a sharply lower ruble, was enough to spark a quick economic rebound. Ten years later, new investment is much more badly needed to revive the economy. But investors are nervous about getting back into the Russian market. Meanwhile, high interest rates — about 12 percent — further stifle investment.
The second factor is the global character of the current crisis versus the more localized nature of the 1998 crisis. The Asia crisis started in 1997. Then it hit Russia in 1998 and finally reached Brazil and Argentina in 1999 and 2000. The key difference is that these series of crises were relatively short, and they hit each successive country separately, generally starting in one region only after it had lost force in the previous one.
Third, the current devaluation of the ruble is less severe than it was in 1998. Then, the exchange rate went from 5.3 rubles to the dollar to 21 rubles in only a few weeks. This time around, however, the ruble’s fall was not only spread out over a longer time period — from late 2008 to early 2009 — but the fall itself was less dramatic, dropping by only 40 percent. But this means that the current crisis won’t receive the same boost to the economy that the sharp 1998 ruble drop provided in 1999, 2000 and 2001.
Fourth, the currencies of almost all of Russia’s major trade partners in Eastern Europe and other former Soviet republics fell in value against the U.S. dollar more or less to the same degrees. This means that their goods also became more competitive, and Russia’s commodities were therefore left with no significant comparative price advantage. What’s more, the ruble fell less in relation to the euro than to the dollar. This diminished the potential benefit since a significant portion of Russia’s imports is purchased in euros.
These arguments do not mean that a lower exchange rate will not exert a positive influence on the economy. Benefits of the weakened ruble have slowed the pace of the recession, and we have already seen increased activity in February and March among some firms operating on the domestic market.
The 2009 devaluation has proven far less capable of producing the same benefits to the economy as it did a decade earlier. We can no longer hope for a repetition of the “1998 Miracle.” The conclusion is simple: Russia cannot achieve the strategic tasks without a fundamental modernization of its economy. And that reformation must be started now in the midst of a global crisis.
Vladimir Mau is rector of the Russian Academy of National Economy. This comment appeared in Vedomosti.
TITLE: The Return of Brezhnev’s Stability
AUTHOR: By Alexei Bayer
TEXT: A friend recently sent me a RuTube link to two Soviet-era television documentaries by journalist Valentin Zorin, titled “America in the 1970s.” Perhaps because many Soviet Jews were already living in the United States — and writing home about American life — those programs were unusually sophisticated. They included street footage from New York and San Francisco and acknowledged the United States’ economic prowess, breathtaking skyscrapers and natural wonders. Still, their real point, driven home by Zorin, who had made his mark with books such as “America’s Uncrowned Kings” was to convince viewers that behind the glittering facade, life for ordinary Americans was no bowl of cherries.
But rather than harp on the old canards about the exploited and downtrodden U.S. working class and a clique of greedy capitalists who had all the money and power, Zorin talked more about the uncertainty of life in the United States. Time and again he returned to the theme that a U.S. worker could lose his job or home at any moment.
The unspoken contrast with the predictability of Soviet life was obvious. If your cousin sends you a photo of his new car six months after arriving to New York, don’t be tempted to follow him. Here, your life is stable and your right to work is guaranteed by the Soviet Constitution.
Curiously, stability has been claimed by the current regime as its main achievement. While Soviet propaganda contrasted communist stability with the unpredictable perils of the United States, now the contrast is drawn with the lawless ‘90s. Just like Zorin’s documentaries, the implicit message from today’s Kremlin is: In the 1990s, you may have had freedom, but now you’ve got law and order.
The similarity is not surprising, perhaps. As a foreign correspondent with a highly sensitive assignment, Zorin probably worked closely with the KGB, the agency where Prime Minister Vladimir Putin began his career.
When the current economic crisis began in early 2008, Russian officials kept repeating that Russia would remain an island of stability. Once the crisis hit home, the chant was changed to: “OK, we have a little crisis on our hands — caused by the United States, incidentally — but it is not going to be as bad as 1998.” The current ruble drop, we were told, doesn’t even come close to the 75 percent devaluation we saw in 1998.
Soviet — and now Russian — propagandists make two mistakes. First, they confuse stability with stasis. The U.S. economic system may have its problems, but it is dynamic, mobile and vibrant, offering opportunities to its own people as well as immigrants. Leonid Brezhnev’s Soviet Union may have avoided political and economic shocks, but its “stability” was more like the stillness of death.
Russia has gone through a period of social turmoil in the 1990s, but now a new stagnation is setting in. A decade ago, children in Russia sometimes answered the usual question of what they were going to do when they grew up by answering, “Gangsters.” Now, the children of the privileged lean toward careers in the security apparatus.
The second mistake is even more serious. Over the past century, Russia has suffered severe shocks unknown to other nations. As a result, its society has become restless and even lumpenized. Few Russians are middle-class in the Western sense. Of greater concern is that more Russians are eager to leave the county to try their luck elsewhere. Over the past five years — during the peak of Putin’s oil-fueled stability — at least 440,000 Russians have emigrated, according to data from the Institute of Demographic Studies.
Alexei Bayer, a native Muscovite, is a New York-based economist.
TITLE: Button Wins Bahrain Grand Prix
AUTHOR: By Chris Lines
PUBLISHER: The Associated Press
TEXT: SAKHIR, Bahrain — Brawn GP’s Jenson Button won the Bahrain Grand Prix on Sunday, giving the Briton his third win in the four Formula One races this year.
Red Bull’s Sebastian Vettel was second, 7.1 seconds behind Button, and Toyota’s Jarno Trulli, the polesitter, took third at the Sakhir circuit.
The result gives Button a 12-point lead in the drivers’ championship, with a two-week break before the series heads to Europe.
“This race win for us is probably the best out of the lot, because we don’t have a competitive edge,” said Button, referring to his rival teams’ recent improvement. “We are not as strong as we used to be and had to work doubly hard.”
Defending champion Lewis Hamilton was fourth for McLaren, ahead of Brawn GP’s Rubens Barrichello. Kimi Raikkonen finished sixth to give Ferrari its first points of the season, with Toyota’s Timo Glock and Renault’s Fernando Alonso seventh and eighth.
Button’s key move was when he passed Hamilton at the start of the second lap, while Vettel got stuck behind the McLaren, which was slower through bends but hard to pass because of its KERS power-boost.
“That move really made the race for us,” Button said.
Glock started on the outside of the front row and got the best of the start to lead Trulli in the early stages, and the Toyota teammates held that advantage until the first set of pit stops. However, Toyota’s strategy to use the less-preferred medium-compound tire through the long second stint of the race gave the advantage to Button, who effectively led from the 13th of 57 laps.
Button has 31 points from four races, putting him 12 points ahead of Barrichello. Brawn is well out front in the constructors’ championship as well.
Ferrari’s points avoided it going through the first four races of the season without a point for the first time in its F1 history.
TITLE: Taliban: Pakistani Peace Pact ‘Worthless’
AUTHOR: By Zarar Khan
PUBLISHER: The Associated Press
TEXT: ISLAMABAD — Taliban militants said Monday their peace deal with the Pakistani government was “worthless” after authorities deployed helicopters and artillery against hide-outs of Islamist guerrillas seeking to extend their grip along the Afghan border.
A collapse of the pact would likely please Obama administration officials pressing Islamabad hard for more robust action against extremists threatening Pakistan’s stability and U.S. and NATO troops in neighboring Afghanistan.
President Asif Ali Zardari called for more foreign support for cash-strapped Pakistan to prevent any danger of its nuclear arsenal falling into the hands of al-Qaida and its allies.
In another sign of mounting Western concern, British Prime Minister Gordon Brown was due in Pakistan for talks on topics including cooperating against international terrorism, the British Embassy said.
Zardari also said Pakistani intelligence thought Osama bin Laden — recently offered sanctuary by militants in the area covered by the peace pact — might be dead, but said there was no evidence of the al-Qaida chief’s demise.
“He may be dead. But that’s been said before,” Zardari told a group of reporters. “It’s still between fiction and fact.”
The government agreed in February to impose Islamic law in Swat and surrounding districts that make up Malakand Division if the Taliban there would end their violent campaign in the one-time tourist haven.
In recent days, Taliban forces from Swat began entering Buner, a neighboring district just 100 kilometers from the Pakistani capital.
American officials have described the pact as a capitulation and urged Pakistani leaders to switch their security focus from Pakistan’s traditional foe India to violent extremists inside their borders.
Pressure on the creaking peace deal grew further Sunday when authorities sent troops backed by artillery and helicopter gunships to attack Taliban militants in Lower Dir, part of the region covered by the pact.
Paramilitary troops killed 20 suspected militants Monday, and a total of 46 have died since the operation began, an army statement said.
Maulvi Umar, a spokesman for the umbrella group of Pakistan’s Taliban, claimed that insurgents in Dir had killed nine troops and lost two of their own.
Some terrified residents have fled the area clutching no more than their children and a few belongings. At least one soldier was killed Sunday.
A spokesman for the Taliban in their Swat Valley stronghold denounced the operation as a violation of the pact and said their fighters were on alert and waiting to see if a hard-line cleric who mediated the deal pronounced it dead.
“The agreements with the Pakistan government are worthless because Pakistani rulers are acting to please Americans,” Muslim Khan, spokesman for Taliban militants in the Swat Valley, told The Associated Press.
TITLE: Scramble to Stop the Spread of Swine Flu
AUTHOR: By Ray Lilley
PUBLISHER: The Associated Press
TEXT: WELLINGTON, New Zealand — Three more New Zealanders recently returned from Mexico are suspected of having swine flu and Spain announced the first confirmed case of the deadly virus in Europe on Monday, as countries rushed to screen travelers for fevers.
World Health Organization spokesman Peter Cordingley said the new virus was spreading quickly in Mexico and the southern United States, raising fears of a global pandemic.
“These are early days. It’s quite clear that there is a potential for this virus to become a pandemic and threaten globally,” Cordingley, WHO’s spokesman for the Western Pacific, told AP Television News.
“But we honestly don’t know,” he added. “We don’t know enough yet about how this virus operates. More work needs to be done.”
As of late Sunday, the number of suspected swine flu cases in Mexico had climbed to 1,614, including as many as 103 deaths, according to Health Secretary Jose Angel Cordova. The United States has confirmed at least 11 cases of swine flu, and Canada six cases.
Spain’s Health Minister Trinidad Jimenez said the confirmed case was found in a young man who had recently returned from Mexico. The man is responding well to treatment. Another 20 people in the country are suspected of having the disease.
Meanwhile, New Zealand was testing several students, their parents and teachers who were showing flu-like symptoms. Israel has put two people under observation, while France and Brazil have also reported suspected cases.
Cordingley singled out plane travel as an easy way the virus could spread, noting that the WHO estimates that up to 500,000 people are aboard planes at any time.
Governments in Asia — with potent memories of SARS and bird flu outbreaks — heeded the warning amid global fears of a pandemic.
Singapore, Thailand, Japan, Indonesia, and the Philippines dusted off thermal scanners used during the 2003 SARS crisis and were checking for signs of fever among passengers arriving at airports from North America. South Korea and Indonesia introduced similar screening.
In Malaysia, health workers wearing face masks took the temperatures of passengers as they arrived from a flight from Los Angeles.
Officials said travelers with flu-like symptoms would be given detailed health checks.
Russia, Hong Kong and Taiwan said visitors returning from flu-affected areas with fevers would be quarantined.
Australian Health Minister Nicola Roxon said pilots on international flights would be required to file a report noting any flu-like symptoms for passengers aboard their planes before being allowed to land in Australia.
China said anyone experiencing flu-like symptoms within two weeks of arrival had to report to authorities.
But some officials cautioned the checks might not be sufficient.
The virus could move between people before any symptoms show up, said John Simon, a scientific adviser to Hong Kong’s Center for Health Protection.
“Border guardings, thermal imaging will not detect much of this flu when it eventually comes through because a lot of people will be incubating,” he said.
In Hong Kong, Thomas Tsang, controller for territory’s Center for Health Protection, said the government and universities aim to develop a quick test for the new flu strain in a week or two that will return results in four to six hours, compared to existing tests that can take two or three days.
Swiss drug company Roche Holding AG said it could deliver its 3 million packages of Tamiflu anywhere in the world within 24 hours.
In New Zealand, Health Minister Tony Ryall said two students and a parent among a group of 15 who just came back from a class trip to Mexico had mild flu and were being tested for swine flu. On Sunday, officials said nine students and one teacher from a separate group that also were in Mexico “likely” have swine flu.
Results from a WHO-registered laboratory were expected within days.
All the New Zealand students and teachers along with their families had voluntarily quarantined themselves at home. In addition, Ryall said three small groups of returned travelers were being monitored after reporting flu symptoms following recent trips to North America. He gave no further details.
Prime Minister John Key said everyone showing flu symptoms was being treated with Tamiflu as a precaution. Other passengers and crew on the suspect flights were also being given the antiviral drug, said health department official Julia Peters.
China and Russia banned imports of pork and pork products from Mexico and three U.S. states that have reported cases of swine flu, and other governments were increasing their screening of pork imports.
Indonesia — the country hardest hit by bird flu — said Monday it was banning all pork imports to prevent swine fever infections.
Many governments issued travel warnings for Mexico, including Hong Kong and South Korea. Japan’s largest tour agency, JTB Corp., suspended tours to Mexico at least through June 30.
Many measures recalled those taken across Asia during the severe acute respiratory syndrome epidemic and used more recently to monitor bird flu.
Drawing on their fight against SARS, experts in Hong Kong warned that swine flu seems harder to detect early and may spread faster.
TITLE: Bayern Munich Replaces Coach Jurgen Klinsmann
PUBLISHER: Agence France Presse
TEXT: MUNICH — Jurgen Klinsmann was on Monday sacked as head coach of Bayern Munich following a series of poor results, the defending Bundesliga champions announced.
The 44-year-old only took charge in July 2008, but recent poor results have seen Bayern crash out of the Champions League after a 4-0 hammering at Barcelona while Saturday’s 1-0 defeat by Schalke leaves them third in the German league.
“Of course, I am very disappointed at the moment,” said Klinsmann in a statement on the Bayern website.
“Nevertheless, I would like to extend my heartfelt thanks to Bayern Munich, the fans, the trainers, the players and my colleagues for an exciting time.
“We have laid the foundations for the future. I still believe that the team can be German champions this season.”
Former Bayern trainer Jupp Heynckes will take over as head coach for the remaining five league games with Hermann Gerland as his assistant.
Klinsmann, who along with assistant coaches Martin Vasquez and Nick Theslof, will leave with immediate effect, was told of the decision in a meeting with Bayern team manager Uli Hoeness and chairman Karl-Heinz Rummenigge on Monday.
“We did not come to this decision lightly,” Rummenigge said in a statement.
“But the results of the past weeks, the way in which they came about and above all, the situation we find ourselves in five games before the end of the season forced us to act out of a sense of responsibility to the club.
“In Jupp Heynckes and Hermann Gerland, we have two experienced coaches who will take over the running of the team until the end of the season.”
Having guided Germany to third at the 2006 World Cup, Klinsmann’s Bayern contract had been until June 30, 2010, but he only lasted ten months in his first role in charge of a domestic team and lost seven of his 29 league games.
The first signs of trouble came last September when Werder Bremen embarrassed Bayern 5-2 in front of their own fans at Munich’s Allianz Arena in the Bundesliga.
And having been knocked out of the German Cup 4-2 by Bavarian neighbours Leverkusen in March, dreams of repeating last season’s domestic League, Cup and League Cup treble quickly faded.
The alarm bells rang in earnest when Bayern were hammered 5-1 at Wolfsburg on April 4 in the Bundesliga before being routed 4-0 by Barcelona at the Nou Camp four days later in the first leg of the Champions League quarter-finals.
And Saturday’s 1-0 home defeat to Schalke was the final straw as Rummenigge refused to speak to reporters when leaving the stadium.
TITLE: Safina Determined to Prove She's True No. 1
AUTHOR: By Ryland James
PUBLISHER: Agence France Presse
TEXT: BERLIN — Dinara Safina celebrates her 23rd birthday on Monday determined to prove she deserves to be world number one despite never having won a Grand Slam title.
The Russian takes to the clay courts of Stuttgart for the first time since her controversial elevation to the top of the rankings where she displaced Serena Williams, the holder of 10 Grand Slam crowns.
“There’s no question that while I am very proud of my results over the past year, I would have liked to reach this achievement in a different manner,” said Safina, the runner-up to Williams at the Australian Open this year.
“I hope to prove to everyone over the coming months that I merit the honour of being world number one.”
Serena has made no secret at her puzzlement over the way the rankings operate.
“Well, she’s really a good girl and she is a nice person. I just have the utmost respect for not only her, but everyone on this tour,” said the American.
“I just think it’s crazy that I can be so consistent throughout the year and last year and barely be No. 1. I have won two of the last four Grand Slams and got to the finals of three of the last four.
“I can’t compute it. It’s just psycho.”
The Porsche Grand Prix, which starts in Stuttgart on Monday, will also feature six other top ten players including Russian Olympic champion Elena Dementieva and 2008 tournament winner Jelena Jankovic from Serbia who will be competing for a total of 700,000 dollars prize money.
Belarus teenager Victoria Azarenka will be looking to prove her surprise defeat of Serena Williams in the final of the WTA Miami event was no fluke earlier this month.
With the French Open starting on May 24, the Stuttgart tournament is a good chance for the world’s top stars to work on their claycourt game as the surface has been imported from France and is the same used at Roland Garros.
“The players will have the ideal preparation for the French Open in Paris. We've got the same kind of clay and the same court dimensions as at Roland Garros,” said tournament director Markus Guenthardt.
In contrast to a normal clay court, which has is approximately 60cm deep and made of a wide variety of materials, the clay in Stuttgart new court is only 2.5 centimeters thick.
After the tournament, the three clay courts will be removed and disposed of by being used in road construction.
TITLE: Recession Leads To Huge Rise In Abandoned Pets
PUBLISHER: Agence France Presse
TEXT: LONDON — Household pets have become the latest victims of the global slowdown, with the number abandoned rising by more than 50 percent in the past year, the RSPCA said on Monday.
The Royal Society for the Prevention of Cruelty to Animals called for people to donate more time or money to help it support the thousands of extra animals across England and Wales that were dumped by their owners.
Last year, a total of 11,586 pets were abandoned in what was a 57 percent increase on the 7,347 supported by the charity in 2007. In the first two months of this year, the RSPCA said a further 1,432 animals were abandoned.
“It is a crisis out there for the animals,” said Tim Wass, the RSPCA inspectorate’s chief officer.
“It is a challenging time for the RSPCA ... Now more than ever we need the public’s support,” he said, adding: “It’s only because of the public’s help that we’re able to do what we can.”
TITLE: Cult Leader Esapes From French Island Jail
AUTHOR: By Idriss Issa
PUBLISHER: Agence France Presse
TEXT: SAINT DENIS, Reunion — A cult leader jailed for sex attacks on children escaped in a helicopter from a prison on the French Indian Ocean island of Reunion on Monday, the regional administration said.
Juliano Verbard — who was serving a 15-year term for raping and sexually assaulting children — and two of his jailed followers were hauled on board a chopper hijacked by three accomplices, said senior official Jean-Francois Moniotte.
Verbard’s flight was France’s 11th helicopter jailbreak since 1986, and is bound to revive questions about security in its jails.
“All our search procedures have been put into action to find them,” said Moniotte, who is chief of staff to Reunion’s prefect, the central government’s representative and police chief on the island.
The helicopter landed on waste ground a short distance from the jail and the gang escaped in a van that had been waiting for them, he told AFP. The two crew members were unhurt and are assisting police.
Earlier, the hijackers had boarded the chopper pretending to be tourists, before seizing control and directing the pilots to Domenjod prison, where it landed in the exercise yard and took on the escapees.
“One of them put a gun to my temple while another threatened to set fire to a bottle of petrol he had in his hand with a cigarette lighter,” the pilot told local broadcaster Antenne Reunion.
Verbard, 27, was the guru of the self-styled “Sorrowful and Immaculate Heart of Mary”, a cult with no connection to mainstream Catholic institutions, on the island of Reunion, a French territory in the Indian Ocean.
He escaped along with two followers, the father and son duo Alexin Jismy and Fabrice Michel, who were jailed for their part in the kidnap of a boy, 12-year-old Alexandre, whom Verbard had decided would be his successor.
He was jailed in February 2008 for attacks on children aged nine and 13, whose mother was the sect’s treasurer. He was also convicted of Alexandre’s kidnap and is under investigation in another alleged paedophile case.
At the time of his trial, psychiatrist Gerard Toulfayan described Verbard as “an extremely powerful manipulator with great intelligence.”
Verbard launched his cult in 2002 after convincing scores of followers that the Virgin Mary appeared to him every month. Adepts paid 20 euros (26 dollars) each for the honour of taking part in an appearance ceremony.
According to Verbard, Mary called him her “Lily of Love”.
Authorities attempted to dismantle the sect after it was implicated in the kidnap of 12-year-old Alexandre, a boy that Verbard claimed was destined to become his successor at the head of the group.
Spectacular helicopter escapes have become a regular embarrassment for French penal authorities and, unlike Reunion’s Domenjod, jails in mainland France now often have protective nets over their exercise yards.
Since 1986, there had been 11 escapes from French jails in helicopters, most recently in July 2007 when gangster and murderer Pascal Payet managed to get out of Grasse prison in a hijacked chopper.
It was Payet’s second successful helicopter jailbreak, and he was convicted of organising a third in which some of his accomplices also escaped.
TITLE: Wenger Says Arsenal Can Overcome 'Everybody' When Playing at Best
AUTHOR: By John Percy
PUBLISHER: Agence France Presse
TEXT: LONDON — Arsenal manager Arsene Wenger said his side could beat “everybody” when they were at their best as he urged them to be fearless against Manchester United in Wednesday’s Champions League semi-final first leg clash at Old Trafford.
The Gunners head into that match unbeaten in 20 games after Cesc Fabregas’s double - his first goals in six months - secured a 2-0 Premier League victory at home to relegation-threatened Middlesbrough here on Sunday.
The only concern for Wenger was a back injury to former United defender Mikael Silvestre, who is rated at “fifty-fifty” for the game in Manchester.
Arsenal’s hopes of catching Chelsea, to book an automatic Champions League place next season, remain alive and Wenger will prepare for the crunch match with United confident of again upsetting rival manager Sir Alex Ferguson.
The Scot, whose team are looking to retain both their English and European titles, will know exactly what he’s up against after sitting in the stands of the Emirates Stadium to witness Arsenal’s fifth successive home win.
And Wenger said: “It’s important that we are at our best on Wednesday night because when we are at our best we can beat everybody.
“If you go to Old Trafford without belief you make it very difficult from the start.
“We will go there with belief, desire and enjoyment because we enjoy to be where we are. Sir Alex knows us and what he will think is that it will be an exciting game between two teams who like to play.
“We know each other well but the talent on the pitch always surprises you. I believe that both teams will go for it. We will be faithful to the game we play and everywhere we go in Europe we try to win the game.
“If we play at our best we have a good chance, we can do it.
“Sir Alex was here? I thought he was coming to watch Middlesbrough! But we do have good red wine here in the directors’ box so that was maybe why he came to watch us,” Wenger joked.
Middlesbrough manager Gareth Southgate’s team, who tackle United next week, are now three points from safety.
The former England centre-back saw Fabregas end Middlesbrough’s resistance in the 26th minute after good approach work from Russia’s Andrei Arshavin.
Middlesbrough’s best chance came five minutes into the second-half through Jeremie Aliadiere when the former Gunner was released by Stewart Downing but he was denied by an alert Manuel Almunia, who saved his shot at his feet.
Fabregas later rounded Brad Jones with 23 minutes remaining to set the seal on a comfortable victory, before he was substituted in a bid to make sure he will be fit for Wednesday’s match.