SOURCE: The St. Petersburg Times
DATE: Issue #1485 (47), Tuesday, June 23, 2009
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TITLE: Suicide Bomb Hits Ingush President
AUTHOR: By Shamsudin Bokov and Mike Eckel
PUBLISHER: The Associated Press
TEXT: NAZRAN, Russia — A suicide car bomber attacked a convoy carrying the president of the troubled Russian province of Ingushetia Monday, critically wounding him and killing two bodyguards — the latest in a string of assassination attempts that have rocked the North Caucasus.
No one immediately claimed responsibility for the attack on Yunus Bek Yevkurov, a sharp escalation of the violence that has targeted police and government officials with growing frequency in the southern provinces surrounding Chechnya.
President Dmitry Medvedev called for a “direct and harsh” response to the attacks, which he linked to federal and local efforts to bring calm to the North Caucasus after nearly 15 years of war, crime and terrorism in Chechnya.
“The bandits actively dislike this,” he said.
Hospital officials said Yevkurov — who was appointed president in October after the Kremlin forced out the region’s longtime leader Murat Zyazikov — was to be flown to Moscow later Monday for further treatment along with other survivors.
The bomber attacked at about 8:30 a.m. as Yevkurov traveled outside the Ingush provincial center, Nazran. A car maneuvered around a police escort vehicle, drove directly into the convoy and then exploded, said Svetlana Gorbakova, a spokeswoman for the Ingush Investigative Committee, and other officials.
Presidential spokesman Kaloi Akhilgov said Yevkurov suffered a serious concussion and broken ribs, but that his life was not danger. Hospital and emergency officials, however, said the president was in critical condition, with burns, brain injuries and damage to internal organs.
Yevkurov’s burnt-out armored sedan stood in the grass off the roadside, its windows shattered, its wheels missing and most of its front end destroyed. Shrapnel was scattered for hundreds of meters and there was blood on the ground in several places. Two roadside houses had their roofs damaged and their windows shattered.
Yevkurov, who used to work for the GRU foreign intelligence service, is the third top official to be wounded or killed in Ingushetia in the past three weeks and the fourth in the North Caucasus this month.
Ingushetia is home to hundreds of refugees from the wars in Chechnya, to the east, and is one of Russia’s poorest provinces. Like other North Caucasus regions, it has seen an alarming spike in violence in recent years. Much of the violence is linked to the two separatist wars that ravaged Chechnya over the past 15 years, but persistent poverty, corruption, feuding ethnic groups and the rise of radical Islam also are blamed.
The Kremlin had put Yevkurov in charge of Ingushetia after removing Zyazikov, a former KGB agent who was widely reviled in Ingushetia for his repressive policies.
Law enforcement forces have conducted sweeps of the forested regions along Ingushetia’s border with Chechnya in recent months, trying to keep militants from moving into Ingushetia.
On June 10, gunmen killed the region’s deputy chief Supreme Court justice opposite a kindergarten in Nazran as she dropped her children off. Three days later, the region’s former deputy prime minister was gunned down as he stood outside his home in Nazran.
On June 5, the top law enforcement officer of another North Caucasus province, Dagestan, was killed by a sniper as he stood outside a restaurant where a wedding was taking place.
That killing prompted Medvedev to go to Dagestan to showcase the Kremlin’s campaign to bring calm to the North Caucasus.
Meeting top security officials in Moscow on Monday, Medvedev said Yevkurov “has done a lot to bring order and but also to bring a civil peace to the region. The bandits actively dislike this.”
“Of course everything that has happened is a consequence of the strengthening of the position of the administration and their work in all forms,” he said in televised comments.
Later, Medvedev told the president of Chechnya that the fight against terrorism “should be continued so those who commit these acts understand that the reaction will be direct and harsh.”
Suicide bombings have been rare in Russia in recent years. The most recent occurred in May when a person detonated explosives outside police headquarters in the Chechen capital Grozny, killing four police officers and wounding five.
Akhilgov, Yevkurov’s spokesman, noted that Monday was the fifth anniversary of nighttime attacks on police and government in Ingushetia that killed nearly six dozen people — most of them police.

TITLE: Court Marshals Order Sale of Telenor Stake in VimpelCom
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Federal Court Marshals Service on Friday ordered the state to auction off Telenor’s 26.6 percent stake in VimpelCom, a move that the Norwegian telecoms company said made the possibility of losing the shares “quite realistic.” 
The auction was organized to cover a $1.7 billion fine that Telenor faces in Russia for blocking VimpelCom’s expansion into Ukraine after a little-known minority filed a lawsuit seeking damages. The news sent Telenor’s shares down 4 percent in Oslo on Friday, while VimpelCom’s New York-traded shares closed down 0.2 percent. 
Analysts said Friday’s decision appeared to be another attempt to make Telenor bow to the wishes of Mikhail Fridman’s Alfa Group, which owns 44 percent of VimpelCom. It remains to be seen, however, whether political leaders are willing to let the dispute harm investor sentiment, they said. 
“We see the threat of the sale of our stake as quite realistic,” Telenor spokesman Dag Melgaard said. “But we will continue to fight, as there is an appeal from our company in the Moscow Arbitration Court, and the date of the hearing will be set soon. We are appealing to stay the bailiff’s actions.” 
Melgaard declined to comment on whether there were any negotiations being held between his company and Alfa, saying only that “there could be no solutions between Telenor and Alfa as long as Farimex is alive.” 
In February, a court in Omsk ruled in favor of Farimex Products, which owns 0.002 percent of VimpelCom, saying Telenor would have to pay $1.7 billion in damages to Russia’s second-largest mobile operator for blocking its expansion in Ukraine back in 2005. 
Telenor has claimed that Farimex is acting on behalf of Alfa Group. Altimo, the telecoms unit through which Alfa holds its VimpelCom stake, has denied any connection to Farimex. 
In March, nearly all of Telenor’s 29.9 percent stake in VimpelCom was arrested, and the Norwegian telecom operator has been trying to appeal the move since then. Telenor’s latest appeals hearing in a Tyumen court was adjourned on June 10 until Sept. 30. 
Telenor said on its web site Friday that it had not received any other information from the bailiff’s office. A spokeswoman at the Federal Court Marshals Service declined to comment on the case. Calls to the Federal Property Management Agency, the body ordered to sell the stake, were not answered Friday. 
Altimo senior vice president Kirill Babayev said Friday that his company was not interested in buying Telenor’s stake, “at least so far.” 
There are currently no talks between Altimo and Telenor, he said. 
Finam Management telecoms analyst Anna Zaitseva said Alfa Group was one of the likeliest buyers of the stake. “The other major players of the market, MTS and MegaFon, don’t have money for that now,” Zaitseva said. 
Farimex’s lawyer Dmitry Chyorny said the Federal Property Management Agency had two months, by law, to organize the auction. “It’s just another level of the court proceedings, which are dragging on because Telenor refuses to pay the fine,” he said. 
“Everything is happening in strict compliance with the law.” 
Norwegian Prime Minister Jens Stoltenberg told President Dmitry Medvedev and Prime Minister Vladimir Putin on May 19 that his government, a major Telenor shareholder, strongly wanted the trial to go through all the possible appeals before Telenor’s stake is sold. 
After the talks, Putin said his government had an interest in making sure that foreign investors felt “comfortable” in Russia. 
“I would very much like partners in telecommunications companies to come to terms about effective joint work in third countries’ markets rather than putting sticks in one another’s wheels,” Putin said. 
If Russian private companies enter into disputes with their foreign partners, the government’s task is to ensure the rule of law, he said. 
“We believe Telenor’s stake in VimpelCom is unlikely to be sold,” VTB Capital wrote in a research note Friday. “The bailiffs are technically obliged to proceed, but this does not imply that there has been a ‘political decision’ to execute what is likely to be perceived as a large-scale expropriation of the property of the Norwegian state.” 
VTB Capital telecoms analyst Viktor Klimovich said by telephone that the consequences would be catastrophic should the stake be sold. “Should it happen, the consequences for the Russian investment climate might be similar to the arrest of [former Yukos chief Mikhail] Khodorkovsky, as a foreign investor is directly involved in the case, and we hope the government understands it,” Klimovich said. 
Before his arrest in 2003, Khodorkovsky was widely believed to be preparing to sell a major stake in his company, then Russia’s largest oil producer, to a foreign major. 
“As we understand the process … Alfa Group has been suggesting a number of options for Telenor involving the changes of its ownership structure in VimpelCom and Kyivstar,” said Klimovich. 
Telenor owns 53.5 percent in Kyivstar, while Alfa controls the rest of the company. 
“Telenor is trying to save its positions, as it considers its stake in VimpelCom a strategic investment, and wants to hold its shares in Kyivstar because Telenor consolidates financial results of the Ukrainian telecom operator,” Klimovich said.

TITLE: Anti-Crisis Plan, Part 2 Signed 
By Putin
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The government’s first anti-crisis plan contained a staggering 55 points. Its second, signed by Prime Minister Vladimir Putin on Friday, has just seven. 
Declaring the first anti-crisis plan nearly fulfilled, the government on Friday switched to a second package of measures to prepare for the “postcrisis” period by removing barriers to business, creating a powerful financial system and fulfilling the state’s social responsibilities. 
“The crisis is a chance to free the economy from ineffective industries. To solve problems brought by poor management, strategic mistakes and inadequate attention of the owners to the effectiveness of their assets, the bankruptcy mechanism will be used,” says the 30-page plan, which is posted on the government’s web site. 
The document says the first package of anti-crisis measures, made up of 55 points that the government began to implement in November, were undertaken to “defend the people and the economy from crisis shock,” and “the realization of this plan is almost complete.” 
The latest plan continues to solve crisis issues as well as create a “foundation for sustainable socio-economic development of the country in the period after the crisis,” the document reads. 
The program is a combination of anti-crisis measures and long-term projects meant to construct a newer, more efficient economy. 
The measures are reflected in the 2009 budget, which was passed last November and predicted that budget revenues would fall from 10.9 trillion rubles ($350 billion) to 6.7 trillion rubles. Total expenditures are set at 9.7 trillion rubles. 
The plan outlines seven state priorities: fulfilling the state’s social responsibilities; raising industrial and technological potential for future growth; increasing domestic demand for Russian products; restructuring and innovating the economy; removing barriers to business; creating a powerful financial system; and stabilizing macroeconomic indicators. 
Expenditures on social programs and the pension fund will increase to about 4.37 trillion rubles in 2009. The government will allocate an additional 43.7 billion rubles in subsidies to regional budgets to “stabilize the situation on the labor market” and halve quotas for foreign workers in 2009. 
The plan cites a list of 295 strategic industries as one of the mechanisms in “support of efficient industries.” The government first compiled the list last December. The Regional Development Ministry has come up with an additional 1,148 companies of regional importance. 
Companies will be allowed to dip into a pool of 300 billion rubles if they meet conditions like “radical cuts in management bonuses,” “transparency” and “a program of innovative development, which includes raising energy efficiency, developing new products, and introducing latest technologies.” Companies that receive financial support from the government will have to report on how they carried out these conditions, and companies that collect “considerable” sums will have to give “public accounts” at the end of the year. 
A report outlining the criteria for “innovative development programs” for natural monopolies and large state companies will be submitted to the government in December. 
One of the biggest recipients of government money, AvtoVAZ, was recently criticized by Sberbank chief German Gref for an outdated product line that “has no future.” 
The government will slow down the growth of energy prices, which was previously set as part of the plan to liberalize the energy market. 
“Natural monopolies will finance their investment programs by raising efficiency of the company,” the plan says. 
To stimulate energy efficiency, the practice of fining companies for “underextraction” of gas will be dropped. 
The government will pay special attention to developing agriculture, housing construction, the food and light industry, pharmaceuticals, the auto industry and domestic tourism as they have “the most potential” for growing domestic demand and decreasing imports.

TITLE: In Brief
TEXT: <strong>Record Collection</strong>
ST. PETERSBURG (SPT) — A St. Petersburg man has made it into the Guinness Book of World Records for owning the world’s largest collection of zithers, Interfax reported Friday.
A panel of experts from the book of records has confirmed that the collection of 151 zithers belonging to Valery Bruntsev is the largest in the world, announced the steering committee of “Zither in Russia” on its web site, zither.spb.ru. The zither is a stringed instrument of Bavarian origin that is usually plucked, according to the report.
Bruntsev’s collection has already been reported to be the only significant collection of zithers in Russia and the largest of its kind. 
The collection contains 15 types of zither, all of which are different in form, color and construction, as well as zithers of different origins. The oldest instrument in the collection is a “Schlagzither” made in Germany at the beginning of the 19th century, whereas the most expensive is a gilded, engraved zither featuring a coat of arms made in Mittenwalde, Germany, by special order. The most unusual is an experimental zither with an elongated neck made in Austria at the beginning of the 20th century.
The zither first appeared at the end of the 17th century and became widespread throughout central Europe, eventually coming to Russia and the U.S. in the middle of the 19th century.

<strong>Businessmen Robbed</strong>
ST. PETERSBURG (SPT) — A pair of unidentified thieves robbed two businessmen of a bag containing 2.5 million rubles ($80,000) Friday on Vasilyevsky Island, Interfax reported.
According to an unnamed source within the city’s law enforcement network, two robbers in masks attacked A. Lavrentsov, the commercial director of the firm “Prometei,” and A. Zakharov, consultant to the firm “Amber,” outside number 5 on the 26th Line of Vasilyevsky Island. The robbers fired several shots from a nonlethal riot-control pistol at the two businessmen as they exited their Lexus, then stole the bag of money and sped off in a Volga-brand automobile.
The money in the bag belongs to M. Denisov, the general director of the firm “Petersburg Estate,” and had just been withdrawn from a branch of Bank VTB Northwest.
The two businessmen were in a good condition at the Mariinsky Hospital, according to the source. Lavrentsov suffered bruising to his abdomen and right thigh, while Zakharov is suffering from bruising on his left temple.

TITLE: Georgian Soldier Appeals To Russians for Asylum
PUBLISHER: Combined Reports
TEXT: MOSCOW — A Georgian lieutenant said Friday that he had deserted his military unit and requested asylum in Russia because he feared renewed fighting between the two countries.
Tbilisi ridiculed the announcement by Alik Bzhania, 35, and said the Russian military was trying to repair its image after a Russian soldier defected to Georgia in January.
Bzhania, who joined Georgia’s Black Sea coast guard in October, said he fled his unit on the port of Poti on May 23 to avoid another outbreak of fighting.
“[President] Mikheil Saakashvili intends to restart the war,” Bzhania said. “I don’t intend to fight against my brothers.”
Bzhania said he had expressed displeasure with Saakashvili’s political course and feared persecution within his unit.
Bzhania first announced his decision to move to Russia on Ekho Moskvy radio on Thursday.
Georgian Reintegration Minister Temuri Yakobashvili said Friday that Bzhania had been discharged on May 18 for disciplinary violations that he would not disclose.
Yakobashvili accused Russian special services of trying to overshadow Georgia’s public relations victory earlier this year when Russian Sergeant Alexander Glukhov fled his unit in South Ossetia, saying conditions were unbearable.
Russia initially accused Georgia of kidnapping Glukhov but then charged the soldier with desertion.
Bzhania denied that the Russian special services had used him to contrive a defection story.
“I thought, ‘Now or never,’ and fled,” Bzhania said Friday. 
Asked for proof of his account, Bzhania produced what he said was an identification card that should be turned in upon leaving the military service.
The Federal Migration Service said Bzhania had applied for political asylum.
Political analysts described Bzhania’s actions as the latest volley in an ongoing media war that broke out between Russia and Georgia after Georgia tried to retake its separatist region of South Ossetia by force last August and was quickly repelled by Russian troops.
President Dmitry Medvedev could raise the Bzhania incident at talks with U.S. President Barack Obama next month and argue against the image that Georgia has cultivated of being a “free, young state that its aggressive northern neighbor is trying to oppress,” said Alexei Mukhin, an analyst with the Center for Political Information.
Mukhin said Bzhania’s defection was Russia’s “response” to the Russian’s defection in January.
Stanislav Belkovsky, an analyst with the National Strategy Institute, said Georgia’s poor economic situation might have been behind Bzhania’s decision to leave for Russia, but his political declarations had been “formulated” by Russian authorities as a “condition” of his right to stay in the country.
Belkovsky said the January defection had dealt a big blow to Russia’s image and would tempt Russian authorities to “blow up” the Bzhania incident in the media.
Igor Mintusov, chairman of political consulting agency Nikkolo M, concurred that Bzhania’s political declarations resembled a public relations ploy and said they showed that Russia and Georgia remained unready for a constructive dialog with each other. 

(SPT, AP)

TITLE: Medvedev Offers to Cut Nukes
AUTHOR: By Oleg Shchedrov
PUBLISHER: Reuters
TEXT: AMSTERDAM — Russia is ready to drastically cut its nuclear stockpiles in a new arms pact with the United States if Washington meets Moscow’s concerns over missile defense, President Dmitry Medvedev said Saturday. 
“We are ready to reduce by several times the number of nuclear delivery vehicles in comparison with the START-1 pact,” Medvedev said at a news conference in Amsterdam. 
“As far as warheads are concerned, their numbers should be lower than envisaged by the Moscow 2002 pact,” he added. 
He was referring to an interim pact called the Strategic Offensive Reductions Treaty that commits the sides to further cuts in their arsenals to 1,700 to 2,200 warheads by 2012. 
A new arms pact to follow the 1991 Strategic Arms Reduction Treaty, which expires on Dec. 5, is at the center of efforts by Medvedev and U.S. President Barack Obama to improve bilateral ties that sank to post-Cold War lows under the previous U.S. administration. 
A successor treaty aimed at cutting long-range nuclear weapons will be a major topic at talks between Medvedev and Obama in Moscow from July 6 to 8. Negotiators from both sides are expected to start a new round of consultations on a new pact this week, Medvedev’s spokeswoman Natalya Timakova told reporters. START stipulates that neither side can deploy more than 6,000 nuclear warheads and no more than 1,600 strategic delivery vehicles, which includes intercontinental ballistic missiles, submarines and bomber aircraft. 
A Kremlin source said Medvedev’s remarks amounted to instructions to Russian arms negotiators. 
But Medvedev again made clear that progress on START was linked to the future of U.S. plans to deploy elements of its missile shield in Central Europe. 
In a separate statement posted on the Kremlin web site and distributed by Kremlin officials to journalists, Medvedev said, “We cannot agree to the U.S. plans of a global missile defense system. 
“I would want to stress that cuts proposed by us are only possible if the United States lift Russia’s concerns [about missile defense],” he said. 
“In any case, the connection between offensive and defensive strategic weapons should be reflected in the new treaty.” Russian leaders see signs of the Obama administration taking a more cautious approach to the missile defense project and feel that some kind of compromise can be worked out. 
Medvedev also said Russia was concerned about U.S. plans to deploy non-nuclear warheads on strategic missiles, which it says reduces the chances of solid verification of any future treaty and increases security threats. 
Medvedev also reiterated Russia’s insistence that deployment of strategic weapons in the outer space should be banned. “We need a solid, verifiable document,” he said.

TITLE: Chechen Brother Arrested in Honor Killing
PUBLISHER: Combined Reports
TEXT: MOSCOW — A young Chechen man has been arrested and accused of shooting his sister to death in an honor killing, prosecutors said Saturday.
The man has confessed to killing his sister Wednesday with multiple gunshots because of her “immoral behavior,” prosecutors said in a statement.
The murder was the latest in a string of killings and disappearances of women in the region, officials said. About 30 women, aged 18 to 27, have been killed or gone missing since last fall. Most of the cases have remained unsolved.
Chechen President Ramzan Kadyrov said recently that some of the victims were rightfully shot by their male relatives for their “loose morals.” Kadyrov has carried out a campaign to impose Islamic values and strengthen the traditional customs of Chechnya. Kadyrov has described women as the property of their husbands, and said their main role is to bear children. He has encouraged men to take more than one wife, even though polygamy is illegal in Russia. Women and girls are now required to wear headscarves in all schools, universities and government offices.
Chrystal Callahan, a Canadian model and documentary director who started presenting English-language news on a Grozny television channel this month, also wears a headscarf on her program, “Highlights of the World With Chrystal Callahan,” which is posted on Chechnyatoday.com. 

(AP, SPT)

TITLE: Journalists Protest Following Arrests On Nevsky for Use of Foul Language
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: On Thursday, two journalists who were detained by the police in the city center last week and charged with using obscene language in public wrote to the City Prosecutor asking for action to be taken against both arresting officers and their colleagues who wrote up the reports at the police station. They suspect the arrests were made to obstruct their professional activities.
Dmitry Zhvaniya, a journalist and the director at the Media SPb news agency, responsible for web sites including Zaks.ru and Lenizdat.ru, and the agency’s reporter Alisa Kustikova were on their way to a coffee house near Kazan Cathedral on Nevsky Prospekt, St. Petersburg’s main street. They were due to have coffee with a colleague and two other men including architecture preservation activist Alexei Yarema when they were stopped by plainclothes policemen at 9.15 a.m. on Wednesday.
According to the journalists, all six present — two reporters, a photographer, two architectural preservationists and a woman who happened to be passing the scene on her bicycle — were bundled into a police van without any explanation and taken to the Precinct 27 police station, where the reports were written. 
According to the police report, Zhvaniya and the other detainees were using “obscene language in public,” thus “expressing sheer disrespect for society.” Copies of the Zhvaniya report and the journalists’ letters to the Prosecutor’s Office are available on Lenizdat.ru, a web site specializing in local media issues.
Two hours later, the detainees were taken to a court, but were released when the judge ordered the cases to be sent to their respective local courts for a later hearing.
Speaking on Monday, Zhvaniya claimed that the detentions were related to his and Kustikova’s professional activities, as they were meeting Yarema, an activist with the architectural preservation group ERA, to  photograph materials set to be used for a campaign to protect historic St. Petersburg at Media SPb’s nearby offices at 11 Malaya Morskaya Ulitsa.
In their letters to the prosecutor, Zhvaniya and Kustikova wrote that the policemen who made the detentions violated their freedom of movement and the Law on the Police, and that the officers at the Precinct 27 station had written reports containing “deliberately false accusations.” They described the charges as “outrageous and cynical lies,” “libel” and “criminal insult.”
“First of all, if we were detained because they knew Yarema was going to be there, that means there is a political surveillance problem, and secondly, we were detained for no reason, as if we were wanted criminals. Third, we were slandered; these are the three things that I am not happy about,” Zhvaniya said by phone on Monday.

TITLE: The Moscow Mayor, a Market and a Haul of $2 Bln
AUTHOR: By Ira Iosebashvili, Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: Last September, a police raid on Moscow’s sprawling Cherkizovsky Market resulted in the confiscation of 6,000 containers of purportedly pirated and smuggled goods from China worth $2 billion — the biggest haul of contraband in Russia’s history. 
Yet there was little mention of the seizure until earlier this month, when Prime Minister Vladimir Putin suddenly asked why the investigation was showing no results. 
“A result would be to send people to jail — but where are the convictions?” Putin asked senior ministers at a June 1 government meeting, according to a transcript on his web site. 
Unsurprisingly, authorities showed a flurry of activity after the prime minister’s public complaints. 
On Monday officials seized a trainload of bootleg Chinese goods en route to the Cherkizovsky market valued at 1 billion rubles ($32 million), Bloomberg reported. “We have arrested seven people, but we believe that many more are involved,” a press official said by phone, declining to be identified because of ministry policy.
The Investigative Committee said last week that a criminal case had been opened and three customs officers have been arrested for illegally clearing the goods. Prosecutor General Yury Chaika announced that 22 containers with Chinese-made children’s clothes would be destroyed because of “health risks.” 
The case did not stop there. 
Last Sunday, Chaika’s deputy Alexander Buksman upped the ante by calling Cherkizovsky Market “hellspawn” that needed to be exterminated. 
“It is a source of corruption, offenses and various crimes. We need the will and the power to tear out this pest,” Buksman said in televised remarks. 
Cherkizovsky is no small enterprise — the market is said to be Eastern Europe’s biggest trading ground. Closing it would not only put thousands of traders out of work but destroy a profitable part of Ast Group, the conglomerate that controls it. 
Ast Group is owned and controlled by Telman Ismailov, a 52-year-old, Azeri-born businessman who rose from humble beginnings as a small trader to become one of the country’s wealthiest people. Forbes ranks him as Russia’s 61st wealthiest individual with an estimated personal fortune of $600 million. 
And Ismailov is said to be a close friend of Mayor Yury Luzhkov. 
While the multimillionaire has not been accused of wrongdoing by law enforcement agencies, he was the target of a recent documentary film that claimed that billions of dollars have been laundered at Cherkizovsky Market. 
The film, titled “Cherkizon” and aired on June 8 on Rossiya state television, was authored by Arkady Mamontov, a muckraking journalist who in the past has been accused of producing work for the Kremlin. 
Thus, it came as little surprise when Luzhkov appeared on TV Center, the channel that he controls, earlier this week and promised to shut the market by the end of the year. 
“After everything that happened, I think the market will certainly be closed. And we will try to have this done by the end of the year,” a somewhat tense Luzhkov said Tuesday. 
The next day, the Investigative Committee said it would send Luzhkov written recommendations on how to accomplish this. It also announced that it would oversee a new joint committee of prosecutors and officials from the Interior Ministry, customs and security services to investigate the case further. 
Mamontov and news reports on state-controlled media have suggested that Ismailov was falling from grace because he had been feasting in a time of famine. 
On May 23, a week before Putin’s remarks, Ismailov threw a party that might have just been too lavish for the crisis-fraught times. A coterie of celebrities, including Richard Gere, Sharon Stone and Paris Hilton, appeared at the glamorous opening of his Mardan Palace Hotel in Antalya, Turkey, which reportedly cost $1.5 billion to build. 
Located on the Mediterranean coast, the luxurious hotel boasts a 16,000-square-meter outdoor pool that takes a half-hour to traverse by gondola and that hides a glass-domed underwater aquarium. The hotel also offers gold-plated mirrors on the floors of suites’ bathrooms and a private beach made of 9,000 tons of silky white sand imported from Egypt. 
Russian media showed Ismailov dressed in a three-piece suit at the opening, sitting on a posh, embroidered sofa with golden lion armrests. 
Another prominent guest at the opening was Mayor Luzhkov, who attended with his billionaire wife, Yelena Baturina, national media reported. 
Ismailov has denied that he or his company have anything to do with the market accusations. His lawyer, Pavel Astakhov, said in a statement that Ast Group was merely subletting space and could not be blamed for tenants’ illegal activities. 
“The seized goods belonged to tenants who brought them to the storage facilities. Only they, traders or manufacturers can be held responsible for smuggling or counterfeit,” the statement said. 
Messages left over the past week at the many companies that make up Ast Group were not returned. 
Putin’s spokesman Dmitry Peskov declined to comment on the case Thursday. 
Analysts agreed that the sudden market investigation could not be a coincidence, but they were divided over whether the real target was Ismailov or Luzhkov. 
Ismailov opened a luxurious $1.5 billion hotel in Antalya, Turkey, on May 23.
“There is a complicated web here, and it is difficult to understand who wins and who loses,” said Nikolai Petrov, an analyst who follows Moscow city politics at the Carnegie Moscow Center. 
Sergei Mitrokhin, head of the liberal Yabloko party and a City Duma deputy, suggested that Ismailov’s decision to invest his fortune in Turkey rather than at home had upset the federal government. 
“By spending all this money abroad, he did not behave gratefully. That is why authorities are now investigating business activities that they had long closed their eyes to,” Mitrokhin said. 
Others called the affair the beginning of the end of Luzhkov’s career. 
“Ismailov has slowly been moving his assets into Turkey, and it would be impossible for him to do this without Luzhkov’s political cover,” said Alexei Mukhin, an analyst with the Center for Political Information. 
“This is the first step in a campaign to unseat Luzhkov,” he said. 
The mayor seemed to hit back at his critics in an article in Thursday’s Moskovsky Komsomolets, which quoted an anonymous source in the city administration as saying that Luzhkov would not bow out easily. “If the pressure gets too strong, he can go all-in like Murtaza Rakhimov did,” the source said. 
Earlier this month, Bashkortostan President Rakhimov launched a strong public attack on the “vertical power” system set up by Putin. 
But Mitrokhin said he saw no evidence that the country’s leadership wanted to challenge the city’s powerful mayor. He said a massive market like Cherkizovsky needed more than just cover from City Hall. “It cannot exist without tacit support from the police, customs and federal authorities,” he said. 
Mitrokhin noted that City Hall had tried unsuccessfully to close the market before. “Luzhkov tried a few times, but he was barred from doing that,” he said. 
Spokespeople at City Hall refused to comment on the market investigation. 
But Luzhkov said Tuesday that City Hall had failed in previous attempts to challenge the market’s rental agreement in the courts. He said 80 percent of the market’s premises were rented from the Federal Sports University and that the university had no right to engage in the trading business. 
The Investigative Committee, for its part, has opened an investigation into former university rector Oleg Matytsin, who signed the current rental agreement with the market. Matytsin, who left his post in 2006, is accused of abuse of office because rent payments bypassed the federal budget and went straight to the university, the committee said in a statement posted on its web site. 
The university hit back this week, saying in a statement on its web site that it had canceled the lease agreement as early as 2007 but that tenants had won court rulings allowing them to stay until December 2009. 
Rent is seen as the key to profitability at Cherkizovsky and other markets, where middlemen like Ismailov’s Ast Group rent comparably cheap government land and sublet it to traders at much higher prices. 
In another sign that Ismailov’s once-excellent ties with City Hall are deteriorating, investigators have questioned his brother Fazil Izmayilov, the prefect of the capital’s northern administrative district, Izvestia reported. 
Izmayilov, who looks strikingly similar to Ismailov and shares the same patronymic, Mardanovich — has changed the spelling of his surname, the newspaper reported, citing sources in the city administration. 
The brothers are members of the city’s tightly knit community of Mountain Jews who hail from Azerbaijan and the North Caucasus and speak an Iranian language. 
A representative of the community described Ismailov as a “well respected” and “very generous” member. 
“Most Russians have broken the law in one way or another,” he said on condition of anonymity. “But Ismailov, I think, is actually cleaner than many people.” 
Meanwhile, some national media have speculated that Ismailov might opt for a better future in Turkey, reporting that he has applied for citizenship.

TITLE: Light Shed On Milk Dispute
PUBLISHER: The St. Petersburg Times
TEXT: Before a feud broke out over dairy imports, Belarus had raised its quotas on milk exports to Russia by 40 percent, Prime Minister Vladimir Putin said Friday, hinting at the reason behind Russia’s decision to temporarily ban nearly all Belarussian milk.
“There was an agreement on the size of the quota. Unfortunately, our partners raised it 40 percent, and this created well-known difficulties for our milk producers,” Putin said, RIA-Novosti reported.
Agriculture Minister Yelena Skrynnik has said Belarus and Russia agreed on cutting imports of powdered milk from Belarus from June 15 to Sept. 30. “During the period of ‘big milk,’ there appears a certainty that milk made by Russian agricultural producers will be processed and bought on the market at fairer prices,” the ministry’s press service said.
Putin said the two sides had reached an agreement that Belarus would not supply powdered milk in the second and third quarters but that Belarus was reacting “badly and emotionally” to the deal.
“The economy is the economy, and we have to put our relations in line with the market conditions,” Putin said.
The Federal Consumer Protection Service said last week that the bans would be lifted.

TITLE: Goldman: No Growth Without Lending
AUTHOR: By Paul Abelsky
PUBLISHER: Bloomberg
TEXT: Russia’s economic slump may deepen in the second quarter to an annual contraction of 10.9 percent because rising oil prices won’t spur growth without a recovery in lending, according to Goldman Sachs Group Inc.
“Russia’s deep output decline, in our view, is less the direct impact of lower commodity prices and more the effect of the sudden stop in capital inflows that the country suffered beginning in the third quarter of 2008,” Rory MacFarquhar, a Moscow-based economist at Goldman, said in a report Monday.
The world’s biggest energy supplier is falling into its first recession in a decade after the global decline sapped demand for commodities while capital flows to riskier markets dried up. A stimulus package has failed to spur lending even as the central bank cut interest rates three times since April.
Capital investment in May fell an annual 23.1 percent, the biggest drop since December 1998, as industrial output declined a record 17.1 percent last month. Russian retail sales slid an annual 5.6 percent in May, the fourth consecutive decline and the biggest since September 1999.
The economy contracted a record annual 9.8 percent in the first quarter. High borrowing costs contributed to a downturn in manufacturing and construction, while the lack of retail loans led to a drop in consumer demand, MacFarquhar wrote.
Lending to households and companies declined in the fourth quarter of last year by the equivalent of 5 percent of gross domestic product and fell 6 percent of GDP during the first three months of 2009 from a year earlier, according to Goldman.
In previous years, the non-financial sector expanded borrowing by over 20 percent of GDP annually and Russia’s external debt grew by 30 percent every year, the report said.
The rise in oil prices will result in a stronger ruble and increase nominal GDP, leading to a budget shortfall of 6.2 percent this year, compared with an official forecast for a deficit of more than 10 percent, according to Goldman.
Urals crude oil, Russia’s chief export earner, traded at more than $71 a barrel this month after falling to a low of $32.34 in December. The higher oil prices won’t spur growth because the profits are largely collected by the government in taxes, MacFarquhar wrote.
The economy will begin to gradually recover in the third quarter and may show quarterly growth faster than the record pace in 2007, the report said.

TITLE: World Bank Warns Of Fallout From Russia
AUTHOR: By Torrey Clark and Alex Nicholson
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s economy is shrinking more than expected, sending “damaging waves” throughout the former Soviet Union, the World Bank said.
Collapsing industrial production, rising unemployment and capital flight will reduce Russia’s gross domestic product by 7.5 percent this year and restrain “intraregional trade flows and transfers,” the World Bank said in a report posted on its web site Monday.
The Washington-based bank’s last Russian forecast, in March, was for the economy to shrink 4.5 percent. Klaus Rohland, the bank’s chief representative in Russia, said in an interview last month that he agreed with the International
Monetary Fund’s projection for a contraction of 6 percent.
“Remittances to the broader CIS region are expected to decline for the first time in a decade, by 25 percent,” the World Bank said. The CIS, or Commonwealth of Independent States, is an alliance of former Soviet republics.
The economy of the world’s biggest energy exporter shrank an annual 9.8 percent in the first quarter, the most in 15 years, as companies struggled to raise funds and falling incomes stifled consumer demand. Industrial production shrank a record annual 17.1 percent in May.
Funds sent to the Commonwealth of Independent States amounted to $3.17 billion in the fourth quarter, a decrease of $1.1 billion compared with the previous three-month period, Russia’s central bank said in a statement on its web site on March 11. Remittances to the CIS accounted for 92 percent of the total sent abroad from Russia last year.
Prime Minister Vladimir Putin said on Friday that Russian unemployment fell for the first time in 10 months in May while retail sales dropped the most in almost a decade.
“Despite a series of positive signals, conditions in the economy remain difficult,” Putin said. “Most industries are gradually adapting to the new economic realities.”
The average monthly wage decreased an annual 3.3 percent in May, while real disposable incomes dropped 1.3 percent.
“The prolonged credit crunch, untamed recession in the euro area, and sharp contraction in Russia will continue to put pressure on current accounts in a number of countries,” the World Bank said on Monday.
CIS countries have more than $283 billion of short-term debt coming due this year and only Russia has the funds to pay creditors, due to its current-account surplus and foreign currency reserves, the largest after China and Japan, the World Bank said.
“The small oil-importing countries in the CIS will be the most affected owing to their close economic ties with Russia,” the lender said. “GDP is expected to fall by six percent in Armenia, by 3.3 percent in Belarus, and by three in Moldova.”

TITLE: In Brief
TEXT: <strong>Apartments Allocated</strong>
ST. PETERSBURG (Bloomberg) — LSR Group, a St. Petersburg-based property developer, said it won a contract to sell 4.7 billion rubles ($150 million) of apartments to Russia’s Defense Ministry.
The ministry agreed to buy 1,704 apartments with a total area of 106,000 square meters, most of which are “in panel houses currently under development,” LSR said in a regulatory filing.

<strong>Free Float May Be Soon</strong>
MOSCOW (Bloomberg) — Russia’s central bank may come close to allowing a free float of the ruble within two years, Interfax reported, citing bank Chairman Sergey Ignatiev.
Ignatiev reiterated that Bank Rossii’s main goal is to move to inflation targeting and a ruble free float, the Moscow-based news service reported.

<strong>Food Retail Sales to Slow</strong>
MOSCOW (Bloomberg) — Russian food retail sales this year will grow at less than half 2008’s pace as the credit crunch leads to lower salaries and discourages consumers, according to Prosperity Capital Management.
Sales will increase 11 percent, compared with 24 percent last year, Prosperity estimated. Russian retail sales overall rose 28 percent to 13.9 trillion rubles ($444 billion) in 2008, fueled by higher wages and consumer spending, according to Renaissance Capital investment bank in Moscow. Renaissance in February had forecast food retail sales growth of 16 percent in ruble terms for this year.

<strong>Aeroflot Plans Staff Cuts</strong>
ST. PETERSBURG (Bloomberg) — Aeroflot may fire 40 percent of its workforce to cut costs and start bankruptcy proceedings for its two regional units, Vedomosti reported, citing Chief Executive Officer Vitaly Savelyev.
The Moscow-based carrier may fire as many as 6,000 workers as part of the restructuring, the newspaper said, citing remarks by Savelyev after the company’s annual board meeting on Saturday.
Aeroflot cut planned spending for 2009 by $160 million in the two months since Savelyev became chief executive officer in April, Vedomosti said.

<strong>President on Agriculture</strong>
MOSCOW (Bloomberg) — Russian agriculture, which provides a livelihood for a third of the nation’s population, is less affected by the global economic crisis than domestic industry, President Dmitry Medvedev said.
“As opposed to industry, agricultural production isn’t falling, it’s growing,” Medvedev said in an interview with state television, according to a transcript posted on the Kremlin web site Sunday. The government hasn’t cut or changed its plans to support Russian farmers, he said.
State assistance in the form of subsidized credits and grain stockpiling is helping farmers get through the crisis, Medvedev said. Domestic production got a boost as food imports dropped when the ruble weakened earlier this year, he said.
Medvedev struck a populist note, saying he always thought foreign ice cream was “tasteless.” Foreign manufacturers working in Russia have since adapted to local tastes, producing ice cream that is “sweeter, richer and creamier.”
His own family prefers Russian food products, he said.

TITLE: Rosneft Boosts Board’s Powers
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: State-controlled Rosneft drastically expanded the powers of its board of directors at its annual shareholders meeting Friday as it announced plans to increase output and develop a major new field. 
The government also voted to include Vladimir Bogdanov, chief of rival oil producer Surgutneftegaz, in Rosneft’s board. Bodganov’s nomination earlier this year fed speculation that the companies were moving toward some form of merger, a possibility that Rosneft chairman and Deputy Prime Minister Igor Sechin brushed off on Friday. 
Answering a question from a shareholder on the possibility of a merger, Sechin pointed to Bogdanov, who was nodding off nearby, and said, “Judging by the fact that Bogdanov ... is taking a bit of a nap, no, it’s not being planned. Otherwise, he wouldn’t be sleeping. The answer is no.” 
Last year’s shareholders meeting was held while Rosneft’s shares were near their all-time high of 288 rubles on the MICEX, shortly before crashing equities markets and world oil prices drove them down 70 percent to 83 rubles in November. Rosneft’s share finished Friday up 2.7 percent on the MICEX. 
Despite the tumultuous year, Rosneft shareholders — many of whom bought small stakes during the vaunted “people’s IPO” in July 2006 — appeared at least as interested in the company’s future, although management didn’t escape thorny questions about its dividends policy. 
Under the company’s newly approved charter, Rosneft’s board will take the place of shareholders in hiring and firing company heads, giving them greater flexibility with its top executive. The new charter also dropped the requirement that its chief executive be an oil industry veteran, a change that could signal the dismissal of longtime CEO Sergei Bogdanchikov. 
“It will be the board that defines requirements for the chief executive in the event of appointing a new one,” said Larisa Kalanda, vice president for legal affairs. 
In a further tightening of the screws on management, shareholders approved measures allowing for greater board involvement in running the company, including a rule that lets the board slap unspecified sanctions on the CEO if he does not cooperate. 
The board’s control will be so tight that it will now appoint an acting CEO every time the top executive takes a trip or a leave of absence. 
Bogdanchikov brushed off the changes, saying they reflected what had already been the board’s heavy involvement in managing Russia’s largest oil producer. 
“This just reflects the situation that has become the practice in the company’s activity,” he said in response to a question from The St. Petersburg Times on the sidelines of the meeting. 
“It’s because of the size of the company, its prospects and large projects. ... Not that I am afraid of responsibility, but ... we can’t just look at what’s beneficial for the company,” Bogdanchikov said. “Sometimes, it could run counter to the interests of the state, which would probably be wrong.” 
The board will also be able to approve additional share offerings of as much as 25 percent of existing shareholder equity. 
Bogdanchikov said at the shareholders meeting that there was no reason to expect a conflict of interest because of Bogdanov’s nomination. 
“The interests of the companies virtually don’t intersect,” he said, adding that Rosneft considered LUKoil and TNK-BP as its main rivals. 
Bogdanchikov said at a news conference later that Rosneft and Surgut supplied different markets in Russia and abroad and that such divisions would continue to 2030. Sechin said on the sidelines of the meeting that the two companies pumped oil in different areas, adding that the nomination of a highly qualified oil executive to the board would help increase transparency in running Rosneft. 
Sechin said in July 2008 that he wanted fewer state officials on Rosneft’s nine-member board. The outgoing state representatives — Kremlin chief of staff Sergei Naryshkin and Gleb Nikitin, deputy head of the Federal Property Management Agency — were replaced by Bogdanov and Nikolai Tokarev, president of state oil pipeline operator Transneft. 
Rosneft will start developing a major new field next year after it launches Vankor later this year, Bogdanchikov told shareholders. Rosneft will spend 25 billion rubles ($800 million) on the Yurubcheno-Tokhomskoye field next year alone, he said. 
The company will increase production in 2009 to 112.3 million tons, from 110 million tons last year, Bogdanchikov said. The company has not cut its capital investment. 
“I can’t say we had to shrink,” he said. “We are making decent money.” 
Rosneft’s anti-crisis plan stipulates cutting costs from last year by 18 billion rubles, Bogdanchikov said, adding that the company was on track to reduce its debt burden to $15 billion in 2010, a level that he called “optimal.” 
Rosneft has paid off or restructured more than $7 billion of its debt so far this year, Sechin said, much of which was incurred while swallowing up the assets of now-bankrupt Yukos. 
Sechin and Rosneft executives fielded numerous questions from individual shareholders about raising dividends and reducing or canceling hefty salaries for board members. Sechin politely rebuffed suggestions of cutting the payouts, saying the company’s peers, such as BP and Gazprom, paid their board members even more. 
The company said in April that its 2008 dividends would be 20 percent higher than a year earlier, but many shareholders remained disgruntled, especially after board member Hans Jorg Rudloff said Western companies the size of Rosneft generally pay more in dividends. Sechin tried to drum up enthusiasm for the dividend in his opening speech. After an initial statement that dividend payments would be increased drew only a tepid response, he encouraged the audience by saying, “It’s the right reaction,” and he then clapped until he got more enthusiastic applause.

TITLE: Micex Becomes First Bear Market Since March Rally
AUTHOR: By Michael Patterson and Laura Cochrane
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s Micex Index tumbled more than 20 percent from its 2009 peak, becoming the world’s first benchmark equity index to enter a bear market since global stocks began rallying in March.
The index of ruble-denominated shares slid 7.8 percent to 937.98 on Monday in Moscow, bringing its decline since June 1 to 22 percent. The 30-company gauge led a worldwide retreat in stocks this month on concern the global recession will persist for longer than investors anticipated.
“The market needs to pause because it has been going up too much,” said Nicholas Field, who helps manage about $11 billion in emerging-market stocks at Schroders Plc in London, including Russian equities. “Nothing goes in a straight line.”
The MSCI All-Country World Index slid 5.8 percent from its 2009 high, paring its gain from a six-year low on March 9 to 39 percent.
The Micex, which rallied as much as 135 percent since October, is tumbling this month after reaching the most expensive level relative to profit estimates since January 2007, according to data compiled by Bloomberg. Russia’s economy may shrink 7.5 percent this year as industrial production collapses, unemployment rises and investors pull capital from the world’s largest energy exporter, the World Bank said Monday. That compares with the Washington-based lender’s forecast for a 2.9 percent contraction in the global economy.
“Some of Russia’s main industrial production data was disappointing and is a reminder that the real economy is going to be impacted quite severely this year,” said Michael Wang, an emerging markets strategist at Morgan Stanley in London. “There is not going to be a quick V-shaped recovery in Russia.”
After Russia, Croatian stocks are the closest to a bear-market decline since the global equity rally began. The Balkan nation’s Crobex index is down 15 percent from its 2009 high. A bear market is defined as a decline of 20 percent or more.
Brazil’s Bovespa Index has dropped 8.5 percent from its peak this year, while India’s Bombay Stock Exchange Composite Index slid 7.4 percent. The Shanghai Composite Index closed Monday at its highest level since July 28.
The Micex’s rally from its four-year low on Oct. 24 to its peak this month was the steepest among stock benchmarks in the world’s 70 biggest markets. Investors poured money into the Russian market as oil more than doubled and the nation’s currency, the ruble, recovered from a 19 percent slide against the dollar last year.
Oil has dropped 8.6 percent from its high this year, while the ruble has weakened 2.3 percent against the dollar since June 1.

TITLE: Gazprom Neft Sticks to Plan
AUTHOR: By Stephen Bierman
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom Neft, the oil arm of Russia’s biggest company, will consider further acquisitions and the sale of bonds to international investors as it sticks to plans to more than double output by 2020.
Production from Gazprom licenses would amount to 20 million tons a year by 2020, Gazprom Neft Chief Executive Officer Alexander Dyukov told reports in Moscow on Monday. He confirmed the long-term strategy of more than doubling output to 100 million tons in the same period. The company’s 2009 production should rise with the acquisition of shares in Serbia’s Naftna Industrija Srbije, or NIS, and Sibir Energy, Dyukov said.
The state run company, over 95 percent owned by Gazprom, has sought to increase flagging output from maturing fields through acquisitions of new producers and by taking over Gazprom’s oil licenses. The method of transfer and compensation for the Gazpom licenses has yet to be determined.
Gazprom Neft Chief Financial Officer Vadim Yakovlev said the company would consider selling bonds worth between $500 million to $1 billion to international investors in the next three months. He declined to give further details. Gazprom Neft re-appointed Stuard Detmer on Monday as CEO of Sibir Energy.

TITLE: Mechel’s Controlling Shareholder Pledges Nearly 38% of Shares as Collateral
PUBLISHER: Bloomberg
TEXT: Mechel, the Russian steel and coal producer, said controlling shareholder Igor Zyuzin pledged almost 38 percent of his shares as collateral against “certain financings.”
Bellasis Holdings, Dalewave and Armolink, which are Cyprus-registered companies controlled by the billionaire, have pledged a total of 157.9 million Mechel shares, Moscow-based Mechel said in a regulatory filing to the U.S. Securities and Exchange Commission dated June 19. The company didn’t give details of the financings. There are 417.3 million Mechel shares outstanding, according to data compiled by Bloomberg.
Zyuzin owns 66 percent of Mechel via the three companies, according to the filing. He gained control of Mechel in 2006 after co-founder and former Chief Executive Officer Vladimir Iorich left the company and sold his shares. Previously, the two men controlled 42 percent of Mechel each.
Alexander Tolkach, head of Mechel’s investor relations, couldn’t be immediately reached for comment.

TITLE: Life Expectancy Remains Low
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Western visitors to Russia are often struck by what seems to be Russians’ preoccupation with their health. Children are bundled up in hats and snowsuits even in temperatures approaching 20 degrees Celcius, and almost every family has a blood pressure reader and a thermometer at home, along with a cabinet full of medicine. Foreigners may observe that Russians seem to wash their hands very often, and always leave their outdoor footwear at the door in order not to bring dirt and bacteria into the house.
So at first sight it appears that in some respects, Russians are far more concerned with their health than Westerners. Unfortunately, their efforts do not translate into longer life expectancy.
Stastically, the average life expectancy for a Russian male is just 58.8 years, while Russian women live on average for 72.1 years. European men, in comparison, live for an average 75.1 years, while women in Europe live for 80.9 years. 
Dr. Yevgeny Zheleznyakov, an expert in non-communicable diseases at the World Health Organization, said that Russia suffers from a lack of “well-known cost-effective interventions which can significantly increase people’s awareness of their health and thus reduce the burden of disease.”
“Those interventions include counseling in order to give up smoking, and the promotion of regular physical exercise and a healthy diet,” said Zheleznyakov.  “These interventions are widely applied in Western countries, but not in Russia,” he said.
“Therefore people in Russia are simply less educated and less aware than Western people about health risks and how to prevent them. This ranges from obesity, heart disease and other chronic diseases to HIV/AIDS and other sexually-transmitted diseases,” Zheleznyakov said.
Another problem is that many physicians and other health care workers in Russia are neither trained nor motivated to promote a healthy lifestyle and advise their patients, he said.
“Other factors contributing to the lower life expectancy of Russians are chronic stress, environmental pollution, the high prevalence of alcohol abuse (specific to Russia), drug abuse and tobacco use, the unfavorable climate, and high incidence of death due to car accidents and other accidents,” Zheleznyakov said.
The number of smokers in Russia is seven percent higher than in European countries, meaning more than one third of the population smokes. Russians also do less sport and physical exercise than Europeans, research conducted by Rus State Pharmaceutical Company showed.
The chances of dying in an accident or violence in Russia is 3.6 times higher than in Western countries, according to research by the Human Ecology and Demography Center at the National Economy Forecast Institute.
The average age of people dying from these causes in Russia is 42.2, while in the West it is 55.7.
Up to 30,000 people die in car accidents annually in Russia, where drivers are not known for their caution or respect for pedestrians and fellow drivers. It was only 18 months ago that the Russian authorities introduced higher fines for driving without a seat belt. Financial punishment proved to be the only effective measure in convincing Russian drivers and their passengers to buckle up. Before that, drivers were even liable to get offended if their passengers fastened their seat belt, taking it as a sign of distrust of their driving skills.
Health and safety standards are practically non existent in Russia in comparison to Western Europe and the U.S., and hundreds of Russians die or are injured every year in accidents barely imaginable for Westerners.
Last year, there were several cases in St. Petersburg alone of people falling into uncovered manholes in the street. While some fell into unmarked holes whose drain covers were missing or not fixed securely and escaped with a broken limb, the unluckier ones fell directly into hot water from pipes that had burst, causing the ground above to give way — often with fatal results.
Other common causes of accidental death are drowning after attempting to go swimming when drunk or after falling through the ice when ice-fishing, falling out of windows and off balconies (again, usually when people are drunk), getting severely injured in street fights, or dying from alcohol poisoning after drinking poor quality homebrew.
Low standards of living and problems in the country’s health system also contribute to Russians’ poor health, said Zheleznyakov.
“There is a strong established link between poverty and chronic diseases,” he said. “The lower the socioeconomic group, the more it is at risk of developing chronic diseases and dying prematurely from them, including many middle-aged people,” he said.
“In some cases, this may be because the poor have higher rates of exposure to risk factors such as smoking prevalence and maternal malnutrition,” he said.
Russians die far younger than Westerners from the world’s most common illnesses.
The average age of those dying from cardiovascular diseases in Russia is 67.6. In Western countries, that figure is 78.6 years old, according to research by the National Economic Forecast Institute.
The average age of people dying from cancer in Russia is 63.6, while in the West, it is 73.8.  The average age of those who die from infection in Russia is 44 years old, and 68.9 in the West.
“A weak and inefficient health system and lack of government support and investment in health are also causes of Russia’s lower life expectancy figures,” said Zheleznyakov.
Most Europeans believe that good health is the result of their own efforts on control and prevention, while most Russians believe that good or bad health is determined by nature and it is difficult to do anything about it, a survey conducted recently in Russia showed.
Europeans believe that life cannot be fully enjoyed without taking care of their health, while for Russians, healthcare is stressful. Many Russians get nervous just thinking about visiting the doctor, the research showed.
This attitude is particularly characteristic of Russian men, whose shockingly low life expectancy worries the country’s demographers most of all.
Men’s major health problems have to do with heart disease. Russian men are statistically more reluctant to visit the doctor than women, and tend to put it off until the situation becomes critical. As a result, they often have heart attacks and strokes before they receive any medical help.
At the same time, many Russian men smoke, and many more drink heavily or are even alcoholics. Those two factors have a serious detrimental effect on men’s health.
Twenty years ago, life expectancy in Russia was higher, possibly partly due to the country’s large-scale involvement in sports at that time.
Twenty to thirty years ago, sport was very popular in the country, especially among children, many of whom attended special sports schools and summer camps. However, after the collapse of the Soviet Union, many sports facilities were closed due to a lack of funding, and today many children are more likely to amuse themselves with computers and TV.
As a result, in recent decades the number of healthy children in Russia has decreased by 32 percent, and five million children have chronic diseases, according to the web site Detsky Sport.

TITLE: 'Western' Clinics Remain Popular With Foreigners
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Back in the ’90s, it was not uncommon for foreigners who developed a health problem in St. Petersburg to go to nearby Finland for treatment, especially in emergencies and for surgery.
Now there are several private medical clinics and hospitals in the city offering Western-standard services, treatment and facilities aimed mainly at foreigners. They are managed or funded by foreigners and some provide foreign doctors. 
These private clinics, which include MEDEM, Euromed, Scandinavia, and American Medical Clinic, accept international insurance policies, which means that in most cases patients won’t be asked for additional cash payments. Euromed, for example, accepts policies from 150 international insurance companies such as International SOS, Global Voyager Assistance CIS, Europe Assistance and Merkur Assistance.
Francesco Bigazzi, an Italian journalist and writer and former Consul on Culture and Media at the Italian Consulate General in St. Petersburg, said that in his experience, most Italians who reside in or visit St. Petersburg choose Western clinics without any hesitation.
“The structure and organization of the entire treatment process are much better in Western clinics; everything is exactly how we are used to seeing it at home,” said Bigazzi. “Besides, for foreigners, dealing with a Russian clinic involves a titanic amount of bureaucracy. In many Russian clinics they have no experience in dealing with a foreign insurance policy.”
“I remember that in some cases Western medical centers resorted to sending Italian patients to Russian hospitals for some serious treatment — but even on those occasions, the Western clinics organized and controlled the whole process,” Bigazzi added.
During the past few years, a new breed of private modern Russian clinics has emerged. They do not make a point of hiring foreign doctors, but focus on the quality and range of equipment.
“Until very recently, despite the fact that Russian doctors are highly qualified, many foreigners preferred to return to their home countries to get treatment, or at least resorted to clinics with Western funding and management,” said Anna Blokhina, marketing and sales director of MEDI Group, which owns MEDI International Clinics, the largest private medical and dental business in Russia. The clinics offer dental services, plastic and cosmetic surgery, aesthetic medicine and laser vision correction.
“In our clinics, we employed Western standards from the very beginning,” said Blokhina. “In 2008, we qualified for the international management quality standard ISO 9001-2000. We treat foreign clients on a regular basis, with many clients contacting us on recommendations from relatives, colleagues or friends who had been with us before. The foreign patients appreciate English-speaking personnel and doctors.”
MEDI, however, remains one of the few exceptions on the Russian market.
Yury Kondakov, a local surgeon with over 35 years of experience in the city’s hospitals and clinics, said the main disadvantages of state-run clinics that prompt foreigners to go private are bureaucracy, outdated or insufficient equipment, rude personnel and shabby premises.
“The truth is that in state clinics the doctors can sometimes prescribe a diagnostic test but there will be up to a three-month wait, which is most distressing, but no state doctor can do anything about it,” said Kondakov. “Many Russian hospitals are stocked with second-hand, sometimes outdated and cheaply-bought foreign equipment, which does not look very attractive either.
“Nobody likes to wait in a rundown hall for two hours to get in, and then be dealt with in a rush,” he said.
Despite all that, Kondakov said that doctors in Russian clinics often have better qualifications because they gain valuable experience by dealing with many patients on a daily basis. “It is an open secret that a doctor in a foreign clinic may sit all day and get a couple of patients at the most. Additionally, they learn to rely on the equipment too much. In contrast, many Russian doctors — with less equipment available — develop better professional instincts because they have to listen and examine the patients more attentively.”
Another difference between the Western and Russian clinics is the overall philosophy relating to medicine. In Russia, doctors are typically trained as specialists, whom patients consult with a specific problem, whereas in Western Europe and the U.S., doctors are trained as general practitioners.
The largest full range medical facility in town is MEDEM Clinic & Hospital, which offers 2,000 kinds of medical services provided by 300 doctors in spacious facilities. MEDEM spent over $20 million building this state-of-the-art medical facility, which houses some of the most modern clinical technology in Europe.
Doctors at the city’s Russian-Finnish Scandinavia Clinic train in Scandinavian countries. The clinic also offers a family approach with adult and pediatric sections situated under the same roof.
Foreign investment in Scandinavia exceeded 10 million euros, with 2.2 million euros coming from the World Bank (its first medical project in the city). The doctors on Scandinavia’s adult and pediatric wards have the opportunity to consult with their Finnish counterparts in real time via telemedical equipment.

TITLE: Americans Lend Helping Hand
AUTHOR: By Aimee Linekar
PUBLISHER: The St. Petersburg Times
TEXT: A team of four American cardiac experts made up of two surgeons, a cardiologist and a specialist nurse recently visited St. Petersburg on a week-long special mission organized by the Almazov Foundation for the Development of Medical Science and Education. From May 31 to June 5, Drs. Dennis Mello, John Heim and Thomas Young and nurse Jaime Grayson undertook a marathon of sophisticated heart operations on children from throughout Russia.
At a press conference held in the city, the Almazov Foundation’s executive director Dr. Maria Prokudina paid tribute to the American team’s generosity in sharing their “colossal experience” with Russian healthcare professionals, giving a “priceless gift” both to doctors in St. Petersburg and the Leningrad Oblast and to the young patients they treat. 
Due to the time-consuming nature and complexity of the operations carried out, many of which stretched to seven hours or more, the team undertook only ten of the anticipated fifteen procedures. “Some of the patients will be treated next year, when the appropriate specialist is due to come to Russia,” said Prokudina. “Unfortunately we were subject to time constraints — with such long operations, there just weren’t enough hours in the day.”
 The majority of the team’s patients were children who require operations to supplement surgery carried out at birth; babies born with congenital heart defects usually require several delicate surgical interventions as they grow up. 
 Dr. Heim, a heart surgeon from Philadelphia already participating in his fourth expedition with the foundation, explained that while Russian medical staff have extensive expertise in handling non-congenital heart problems in adults, the country’s health service lacks qualified specialists experienced in dealing with the unique challenges associated with treating pediatric patients with congenital defects. 
 “For the whole of the St. Petersburg region there’s only one experienced specialist in this field — Dr. Vadim Lyubomudrov,” Heim told The St. Petersburg Times. “He does a great job, but one surgeon is not enough.” His colleague, cardiac specialist Dr. Young of New Orleans, added that Louisiana alone has five such specialists to cater for the state’s five million-strong population. The Almazov Foundation considers that the Northwest of Russia needs eight such surgeons. 
The American team was keen to emphasize that the process of knowledge-sharing was a natural one, continuing a long-standing historical tradition of international medical co-operation dating back to the earliest days of heart surgery, when American physicians traveled to London to learn about new techniques pioneered by English surgeons. 
The Russian teams are already making visible progress: “When I first started coming here, the Russian surgeons were performing relatively ‘easy’ procedures, but every time we come they are doing more and more complex things,” said Heim. 
His colleague Dr. Young expressed his hope that a “critical mass” of experienced practitioners would in time be reached, such that Russian specialists can start training their own congenital cardiac disorder specialists. 
 Heim also stressed the importance of establishing long-term, well-structured training programs and career paths for young doctors, so that talented young Russians will be attracted to the field — a challenging specialism requiring eight to 10 years of in-depth training. 
“Let’s be honest: Money plays a very important role in medicine, and the government has to decide what its priorities are,” said Heim. 
While Heim and Young were reluctant to touch on the political dimension of the issue, Prokudina was frank in her critique of government funding policies. She explained that though the Almazov Foundation was grateful for donations of medical equipment and financial support from private and commercial donors, she looked forward to the day when “the [Russian] government might begin to fund — not increase the level of funding, but even begin to fund” — the necessary training programs for cardiac physicians. 
The visit was the third such trip organized by the charity as part of a long-term project to improve cardiac care provision in Northwest Russia. The first of the foundation’s twin aims is the provision of cutting edge surgery and aftercare to patients suffering from heart disease, such as on this trip; the second is an exchange scheme that has already seen 15 young Russian doctors from the Northwest region undertake one- and two-month exchange programs at Yale University to upgrade their skills. The foundation also administers the Almazov Award, a prize for young scientists in the field of medical research.     

TITLE: Garlic, Mustard and Herbs: Russian Folk Remedies
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: If, when entering a Russian home or even an office, you are hit by the strong odor of raw garlic, it’s not necessarily because someone is cooking or eating garlic.  
More likely, it is because someone is ill, and in order to stop others from getting infected, people have chopped up garlic and left it on a plate. In Russia, many people believe that garlic’s phytoncaedos kill diseases — even viruses as strong as flu.
Garlic therapy is one of Russia’s most popular folk remedies. During flu epidemics, Russian parents may put a piece of garlic in their children’s pockets. They also tend to eat more garlic in the winter in order to strengthen the immune system.
Like most other countries, Russia has a wide range of so-called traditional folk remedies, and Russians rely to a large extent on medicinal herbs and a number of other centuries-old healing procedures.
Another popular Russian folk medicine against colds is drinking hot milk with honey and butter before going to bed. If someone gets sick, has a cold, sore throat or cough, drinking hot milk is considered almost essential.
This is apparently most effective when done while simultaneously warming one’s feet in hot water mixed with dry mustard. For best results, so they say, patients should soak their legs in hot water up to the knees for 10 to 15 minutes, and then go straight to bed, put on woolen socks and get under a warm blanket. Practice has shown that this treatment does help to treat coughs and colds, but is not recommended for people suffering from fever. 

Coal for the Soul
Mustard flour features heavily in Russian home remedies. When people have a bad cough, they may use gorchichniki — small pieces of paper covered with a layer of mustard flour, available from the apteka or drugstore. In medicine, they are used to cause a rush of blood to the skin and warm up a patient. The gorchichniki are first soaked in very warm water, and then applied to the chest and back of the person suffering from the cough for 10 to 20 minutes.  The patient should be covered with a warm blanket during the treatment. After the procedure, the person should stay in bed for the night so as not to lose the warmth gained from the gorchichniki.  Some Russians swear by this remedy.
For sore throats, the home remedy is to mix half a teaspoon of salt and half a teaspoon of household soda in a glass of warm water. This mixture should then be gargled sip by sip, and then spat out. Alternatively, the mixture can be made of chamomile or other antiseptic herbs. Russians rely heavily on gargling when they have a sore throat, and Russian doctors advise patients suffering from a sore throat to gargle often — at least once every two hours, or even every hour — in order to get rid of bacteria in the throat.
The Russian remedy for food poisoning is to ingest several tablets of coal, in order to absorb the toxic substances. Such tablets are available from the apteka for just a few rubles per packet. Coal is also said to be good for alcohol poisoning.
Beauty recipes include making face masks from cucumber or strawberry, or alternatively, from sour cream or kefir (sour milk).  The Russian culinary favorite of sour cream is also sometimes used to treat sunburn.

The Herbal Approach
Many Russians, including doctors, are knowledgeable about medicinal herbs. The most popular herbs in Russia include St. John’s wort, chamomile, eucalyptus, Valeriana, coltsfoot, sage, mint, bur marigold, stinging nettle and cranberry leaves.
St. John’s wort decoction is used for treating colds, stomach problems, skin diseases and kidney ailments. Mint, mellissa, motherwort and Valeriana are used to treat nervous system problems. Camomile is known for its antiseptic qualities, and is used to treat sore throats and diarrhea. Stinging nettles are used to stem bleeding, and decoction of the weed is applied to the scalp to strengthen hair.
Bur marigold is known as an effective measure against skin allergies, especially for babies and small children. Russian mothers may add decoction of bur marigold to a baby’s bath if the child has skin problems.
Fresh cabbage leaves are known for their anti-inflammatory effect. When breast-feeding mothers have inflamed nipples, cabbage leaves are believed to ease the problem.
Other Russians rely on the healing effect of mumiyo — a natural blend of organic and non-organic soluble substances that originate in cracks between rocks. Mumiyo is used to treat wounds, gastric ulcers and headaches, and to strengthen the immune system.
Foreigners may be surprised by the Russian faith in iodine. It may be daubed onto deep bruises in the shape of a grid to accelerate healing, or used for more serious health scares — when rumors circulated last year that there had been an accident at the LAES nuclear plant in the nearby town of Sosnovy Bor, stocks of iodine quickly sold out of the city’s drug stores, as Russians hastened to drink the diluted substance, which neutralizes the effects of mild radiation poisoning. Fortunately for those who didn’t make it to the drugstore before stocks were depleted, the rumors turned out to be untrue.
Another Russian medical hit is the banya — a steam bath house. The Russian banya differs from the Finnish dry sauna in that it provides damp heat. In the banya, people use veniki — bunches of birch or oak twigs and leaves — to thrash each other in order to improve circulation.
The banya is not just about getting clean. It is believed to have a medicinal effect on the skin, lungs, nasal passages, joints and metabolism. Some people visit the banya regularly and swear that their health improves after doing so, and many believe that sickly children can become much healthier if they visit the banya on a weekly basis.
Folk healers, known as babki in Russian, still exist. Usually these healers are elderly women who are considered to have supernatural healing skills. People usually consult babki when standard medicine has failed to help them, especially for treatment of allergies, skin diseases, recurring headaches, neurological problems and infertility.

TITLE: A Possible Trap Awaits Obama in Moscow
AUTHOR: By Lilia Shevtsova
TEXT: State visits don’t usually influence world politics. But the visit of U.S. President Barack Obama to Moscow on July 6 to 8 might become an exception. Obama has a unique chance to tell the world what U.S. policy toward Russia will be under his administration. He could provide an understanding of whether that strategy will be high-priority or pushed to the back burner. He could clear the air about his thinking about Russia’s neighbors, the other former Soviet republics that Moscow views as its “areas of privileged interests.” He could help Europe define its “Eastern dimension.” 
Taken together, Obama’s insight on these issues could give us a clue as to what foreign policy his administration will chose — that of the 20th century or, more likely, what philosopher Francis Fukuyama called “realistic Wilsonianism,” a combination of pragmatism and values.    
The outcome of Obama’s visit to Moscow will depend on the willingness of the U.S. side to see the differences between the national interests of Russia and the interests of Russia’s ruling elite. 
The interests of Russian society, which is longing for openness, social welfare and the supremacy of the rule of law, do not contradict the interests of the United States. The problem is in the Russian elite, which would like to integrate into the West but at the same time is trying to close the rest of Russian society from the West and consolidate it through decidedly anti-U.S. rhetoric.
Obama may take the easy route of conducting talks with the Russian elite only. By doing so, he could accomplish his goals of reaching an agreement on a replacement to the Strategic Arms Reduction Treaty, which expires in December, and setting up a framework for ongoing consultations between U.S. Secretary of State Hillary Clinton and Foreign Minister Sergei Lavrov. At the same time, Obama could make progress on trade and security issues, both of which are high on the U.S.-Russian agenda.
Supporters of realpolitik on both sides of the Atlantic — people who say U.S.-Russian relations need to be developed on a foundation of common interests and not be tied to Russian domestic issues — are calling on the White House to embrace talks with the Russian elite. Some in this camp find Russia’s transformation in the 18 years since the Soviet collapse to be a hopeless endeavor and are urging Obama not to irritate the Kremlin. Others are using realpolitik to promote their own interests and to legitimatize the current Russian system of government. 
It is clear that the Russian government would support Obama’s embrace of realpolitik. Interestingly, relations between Russia and the United States during the eight years of George W. Bush’s presidency were built on a foundation of realpolitik, and their ideologists are the same people who today are giving advice to the White House on how to go about “resetting” ties. But this old foundation for ties failed to avert a crisis in relations that reached post-Cold War lows last year. Who can guarantee that the old prescriptions being offered to Obama will work effectively today? 
Obama, however, might offer Russia his own version of pragmatism, showing that his vision of “resetting” ties differs from what is expected in Moscow. During his visit, he could demonstrate to the Kremlin that Russia is not a priority for him and suggest that all cooperation be kept low profile. Such a stance would deal a blow to the hopes of the Kremlin elite who expect a comeback of “special relations” with the United States. The elite would then resort to a well-known mantra of “we are being ignored and humiliated” and again try to prove their importance by “breaking windows” in neighboring countries.
Obama’s speech to the Muslim world in Cairo on June 4 gave proof that the U.S. president has embraced a new way of strategic thinking. But could he deliver a speech in Moscow that manages to simultaneously call for a transformation of Russia and take into the account the West’s errors in its dealings with Russia in the 1990s? Such a feat seems unlikely. Western “engagement through transformation” politics don’t go over well in Russia. Moreover, the U.S. neocons who tried to make the world a better place with their “spreading democracy” campaign have not yet been forgotten. 
Therefore, it would be understandable if Obama decided to adopt the simplest approach: downgrading ties with Russia. But the Kremlin could end up offended if Washington decides to attach no special status to the “resetting” of U.S.-Russian ties. Moreover, pro-Western Russians would be disappointed by Obama’s unwillingness to take a value-based approach to Russia.
So Moscow might turn into a trap for Obama. The White House has little chance of being able to cooperate with the Kremlin without making some concessions to the Russian elite. However, such cooperation promises to promote the current Russian system, which functions with the “besieged fortress” mentality in which Russia is surrounded by enemies. If Obama takes a value-based approach, his opportunities on security will be limited. 
Nevertheless, Obama might try to pull off something in Moscow that no other U.S. president has succeeded in doing: reaching an agreement with the Kremlin on issues of common interest and at the same time offering a different world vision to Russian society.
The significance of rhetoric and other gestures during state visits should not be exaggerated. But with Obama’s visit, the words of a person who is recognized by many as a world leader hold a special value. If Obama mentions key issues like modernization, freedom, contentiousness and respect for neighboring countries’ sovereignty, his words will have an impact that goes well beyond the pro-Western Russians waiting for some encouragement from the United States. His words in Moscow could be heard in Kiev, Tbilisi, Warsaw and Berlin. Crucial conclusions could be made in those capitals about Washington’s strategic viewpoint — or its absence. 
Obama’s choice of words is not the only important part of his visit. With whom he decides to meet will also be essential. It is one thing if he sits down with human rights leaders and the opposition and quite another if he agrees to meet with representatives of the Kremlin-appointed “civil society” and pro-Kremlin political parties. 
Whether Obama will let the Kremlin use him in its own games is also of great importance. Obama could unknowingly end up promoting or undermining one of the two players in the ruling tandem — President Dmitry Medvedev or Prime Minister Vladimir Putin. 
Obama is coming to a country mired in an economic crisis. The political system is paralyzed and the leaders are disorientated. He has an opportunity to come to Russia and address Russians as an embodiment of change. But for change to happen, he needs a strategic vision and an understanding that Russia is not just another board piece in a U.S. geopolitical chess game. Russia is a challenge.

Lilia Shevtsova is a senior associate at the Carnegie Moscow Center and chair of the Davos Forum’s Global Agenda Council on the Future of Russia.

TITLE: Making a Move
AUTHOR: By Anna Shcherbakova
TEXT: Even the economic crisis with its salary cuts and threat of unemployment is incapable of forcing people to change their habits. Only 17 percent of Russians are ready to work in another town, even within their own region, in the event of their losing their jobs. Eight percent are ready too move to any other Russian city and 5 percent would go abroad to look for new job, according to VTsIOM research carried out in May with 1,600 people across Russia having been polled.  
In terms of mobility Russians can’t in general be compared with Americans or Europeans, predominantly because of the overpriced and under-developed market for residential property which makes moving so difficult. But those who live in the Northwestern region are even less mobile than your average Russian. According to VTsIOM, if faced with unemployment, only 14 percent of Northwesterners (which includes St. Petersburgers) are prepared to move within the region, only 6 percent would move across the country and only 2 percent would move abroad. 
Having been born in St. Petersburg I can understand why we are as conservative in choosing the where we live. We have a lot to lose. St. Petersburg is comfortable to live in and large enough to find a job in in almost any profession, although in Moscow people are spoiled with greater employment opportunities and salaries that are almost double. On the other hand, some people manage to work in Moscow and spend weekends in St. Petersburg, which may be the best of both worlds. However, we have other emotional ties to the city.
Millions are prepared to tolerate traffic jams, pollution, a frenetic pace and huge amounts in rent for the sake of a high salary and bonuses. But now that the economy has been hit by the crisis many are starting to look for something a little bit more comfortable. A friend of mine whom I thought was a lost cause, having become a Muscovite, admitted to me recently that life haqs become intolerable in the official capital now that her salary has been cut by 50 percent. 
So Moscow life is looking like more and more like a marriage of convenience, whereas in Petersburg it looks like an affair of the heart. I’m sure there will be more Muscovites moving to  Thailand and other popular places to emigrate to, not least because they have more savings to set themselves up there with.
Those who stay in the country should get used to lower salaries and shrinking demand on employment market. Many professionals desperate to find a job have launched their own small businesses. For instance, a former manager from a construction company I know is now an agent for European real estate. And I know several business journalists that have launched PR or marketing bureaus with mixed success. Examples of innovation-based businesses are harder to find. Unfortunately, Russians are more successful in science, which involves converting money into knowledge, than in innovation, which involves converting knowledge into money, as the head of Rosnano, Anatoly Chubais, noted when discussing the prospects for innovation at the St. Petersburg Economic Forum.  
The number of start-ups specializing in niche businesses will certainly grow. It is here, no doubt, that the key to recovery from the crisis lies. As a result of the crisis, the St. Petersburg city budget will short about 20 billion rubles — $644 million — in taxes from big federal companies that registered here as taxpayers several years ago. Small business, which has always been neglected by the authorities, will not be able make up for this engine of the economy. But it is worth a try.  

Anna Shcherbakova is the St. Petersburg bureau head of business daily Vedomosti.

TITLE: Hermitage Amsterdam Opens Its Doors to Public
AUTHOR: By Larisa Doctorow
PUBLISHER: The St. Petersburg Times
TEXT: AMSTERDAM — The past 10 days have shown impressive proactivity on the part of Russia’s foreign policy initiators. Diplomatic power was exercised at the CSTO gathering in Moscow on June 14, shoring up the regional security arrangements in the “near abroad,” then the June 15-16 BRIC meetings and the Shanghai Cooperation Organization in Yekaterinburg highlighted Russia’s position on the world stage. A follow-up bilateral meeting with the Chinese President focused on Russia’s economic power with the announced frame agreements amounting to $100 billion in trade.
This was the background to the bold display of Russia’s “soft power” — cultural diplomacy — when on Friday President Dmitry Medvedev arrived in the Netherlands for the official opening of the Hermitage Amsterdam together with Dutch Queen Beatrix.
Seven hundred journalists from all over Europe were taken on a tour of the dazzling inaugural exhibition entitled “At the Russian Court. Palace and Protocol in the 19th century” which marks the completion of a long process of rebuilding and refitting one of Amsterdam’s most significant architectural monuments of the 17th century as what is, in effect, a 10,000 meter Russian cultural center.
The Hermitage Amsterdam is the biggest branch of the State Hermitage abroad. It will organize long running exhibitions from the Hermitage collections like the present one, which will last for six months, as well as exhibitions of works from other Russian museums.
The path leading to the present opening goes back to February 1996 when the director of Amsterdam’s Nieuwe Kerk museum, Ernst Veen, invited Mikhail Piotrovsky, the director of St. Petersburg's State Hermitage Museum, to visit a historic site in the city center featuring classicist fa?ades and a large river frontage, the Amstelholf, dating from 1681. The complex had long served as a parish home for elderly women but was no longer fit for use, and was being made available for redevelopment for cultural uses. 
Speaking to The St. Petersburg Times, Veen said that he had an intriguing question for Piotrovsky: “Would you like to create a permanent exhibition site for the Hermitage in Amsterdam? Just as Peter the Great opened a window to Europe by building St. Petersburg, you will open up for the Dutch the treasures of the Hermitage through exhibitions.” 
Veen said that Piotrovsky replied that it was “an odd idea, but very tempting.”
Thirteen years later, this “odd” idea has materialized and the State Hermitage now has a multi-functional complex with exhibition rooms, a caf?-restaurant, shops, study center, an auditorium and a Hermitage for Children.
In an interview, Ernst Veen, who is now the director of the Amsterdam Hermitage, explained the circumstances that made it possible for this ambitious initiative to succeed: “The major factors were our friendship, personal contacts and the professional devotion of the people involved.”
For its first exhibition, the State Hermitage has loaned 2,000 objects illustrating the court life of Russian tsars, among them the Romanovs’ throne, jewelry by Faberge, hundreds of spectacular ball gowns, unique furniture, china services, the artist Ilya Repin’s portrait of Nicholas II and his wife Alexandra Fedorovna’s grand piano. Together these fabulous works of art evoke the atmosphere of an epoch that has passed but continues to stir modern imagination. 
The Russian court was one of the most brilliant among 19th-century European royalty. The exhibition focuses on official protocol with its public display of power and wealth: Visitors to the exhibition get a participant’s view of the magnificent dinners, balls, hunting parties and musical evenings. 
In the 19th century, the Hermitage complex in St. Petersburg was a curious combination of a museum and a private royal residence. Official events were held in the St. George Hall of the Winter Palace. The Big Gallery of the Amstelhof splendidly recreates the ambience of this hall. In the center is the throne with a two-headed eagle belonging to Paul I, while a large procession of courtiers in ceremonial uniforms and court dresses advances toward it. The walls are decorated with the portraits of the Russian emperors and empresses. 
The small rooms exhibit items belonging to the members of the royal family, among them jewelry, musical instruments, pipes, weapons and children’s toys. The last room contains a photographic reportage about the palatial rooms seen before and after 1917 to emphasize the destructive force of the Revolution.
In the central room, everything has been made ready for a state dinner. The table is laid with a china set manufactured in Berlin — a present from the Dutch king Willem II to his brother-in-law, Nicholas I. 
Another large museum gallery has been transformed into a ball room. To the accompaniment of dance music, glass cases containing sumptuous ball gowns rotate. Enormous windows look out onto vistas of the Neva. Footage from Sokurov’s film “Russian Ark” plays, creating the impression among visitors that they are present in the Winter Palace during the ball season.
Balls with up to 3,000 guests comprised a very important component of Russian court life. They started exactly at 7.30 p.m, and to arrive late was considered bad form as each social rank had its specific entry time and place. The balls were officially opened by the Emperor and Empress, who would dance a Polonaise. After midnight a display of fireworks indicated the ending of the ball. 
Further on in the exhibition, the smaller rooms portray the history of themed balls. They were especially popular during the reign of Nicholas I, and courtiers were required to come dressed in keeping with the theme. There were Old Russian style, Chinese, Greek and Renaissance balls. The last costumed ball was given in the Winter Palace in 1903 on the occasion of the 200th anniversary of St. Petersburg.
To celebrate this grand event, the new museum staged a White Nights Festival on Saturday and Sunday. The museum was open for 31 hours non-stop. In the chapel and concert hall, as well as on the embankment in front of the museum and in the museum garden, Russian musicians performed continuous concerts. These festivities gave an insight into what the museum will offer in the future besides showcasing the Hermitage collections. 
The new Hermitage museum on the Amstel is going to be a culture center with daily performances, lectures, films and courses about the Russian language and the country’s culture and history. The youth education center plans to serve 20,000 children every year from the schools of Amsterdam. 
Speaking to The St. Petersburg Times on Thursday, Mikhail Piotrovsky expressed pride in the project. “I am sure it is the biggest and most important culture and education center in this city. Our success owes everything to human relations and indispensable help from the Dutch people.”
He was enthusiastic in his response when asked if the undertaking could be compared with the work of the British Council. “[It’s the same but] with a much bigger budget, dedication and incomparable cultural possibilities.”
When asked if he planned to continue setting up such embassies in other places, Piotrovsky smiled enigmatically. “We don’t want to rush events,” he said.

“At the Russian Court” runs through Jan. 31, 2010 at the Hermitage Amsterdam. www.hermitage.nl.

TITLE: Forthcoming Exhibition to Make Children's Dreams a Reality
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The St. Petersburg Children's Hospice is set to hold a charity exhibition of pictures by seriously ill children in St. Petersburg’s KGallery from June 25 to July 1.
The exhibition, called “I Dream…,” will feature pictures the children have painted inspired by their dreams. On July 1 the organization will also hold a charity party to raise sponsorship  that will go toward making some of the children’s dreams come true.
“At this exhibition you won’t see any unique masterpieces, new techniques or new artistic trends, but you’ll be able to experience the emotions, feelings and suffering of children who face pain and uncertainty, and have such a strong desire to live,” said the organizers of the exhibition.
“Children who suffer from incurable diseases may not survive to adulthood. They need a miracle in their life on time, today, that might allow them to live longer,” they said.
The exhibition will showcase works by about 20 of the hospice’s young patients. Their dreams are somewhat unusual and range from the very simple to the more inventive.
“This time we have a picture in which one of the children has drawn his dream about a flight on a hot-air balloon. Another child depicted a dream about a trip to a sunken shipwreck, a third one said he wanted to hold a tame monkey,” said Darina Yakunina, head of the Hospice’s “Dreams Come True” project.
Tamara, 12, dreams of owning a dog. She suffers from an advanced-stage cancer, and after the amputation of her leg, she has very little spiritual strength left to battle her illness.  She doesn’t even want to go outside, the organizers of the exhibition said on their web site.
“But when we spoke to Tamara, she said that if she had a dog, that would give her the motivation she needed to go for a walk,” they said.
Oleg, 10, is also seriously ill. With every day it becomes harder and harder for him to walk and to lead a normal life. Despite his physical limitations, Oleg dreams of swimming in a warm sea with a mask and flippers, surrounded by exotic sea creatures. He can’t afford to wait to fulfill his dream because fairly soon he won’t be able to walk, the organizers said.
“We want to do everything possible to make his dream come true! Positive emotions could help to prolong his life,” they said.
Some children dream of a certain model of a cellphone, some of a laptop computer, and others would like nothing more than a pair of roller-shoes.
The “Dreams Come True” project began its work at the Children’s Hospice six years ago.  Since then, many ill children have had their dreams come true.
Many of them have shared their positive memories on the project’s website at  www.iwish.info.
For instance, 17-year-old Maxim, who underwent major surgery last year, tells of how happy he was when his dream of seeing a Bayern Munich match was made reality. As well as attending the match itself, Maxim and his mother took an excursion around Munich, stayed in a nice hotel, and rode in a Mercedes Benz.
Maxim said that dreams can aid recovery.
“You should definitely have dreams! There are so many interesting places to visit in the world. A dream can help you to forget about things that aren’t going so well in life. I hope that other children won’t lose faith because if one person can fight their illness, then others can too,” Maxim said.
Six-year-old Anya, who has already had surgery for a tumor, a bone-marrow transplant, and several courses of chemotherapy, had always dreamed of owning a real horse. Of course there wasn’t enough space for the real thing at home, so she was given a big soft toy version instead and was very happy.
Shortly after his surgery, Sasha, 12, received the laptop computer of which he had always dreamed. Even though he was still very weak after his operation, he immediately forgot about his pain and began to explore the computer enthusiastically, the project’s organizers said.
In the past, other children’s dreams have included meeting Russian football superstar Andrei Arshavin and boxing champion Nikolai Valuyev, traveling to Scandinavia, owning a microscope, a globe, or a Playstation Portable, being a princess, meeting an old friend, watching a circus rehearsal, going fishing, and even  owning something as simple as Lego. All of these dreams were made reality thanks to donations from the individuals and companies who supported the project.
Yakunina explained that the program received support both from large and small companies as well as private donors.
“For example, when we got a substantial sum of money from Pepsi, we were able to fulfill a number of dreams at once,” she said.
Among the charity sponsors of the project are mobile operator Megafon, Promsvyazbank, marine engineering construction firm Rubin, the Lukomorye chain of children’s stores, investment advisors Ground, Evropa Plus Radio, customs and transport logistics operator Arvist, telecommunications company Nienschantz, and Stroimoda.
The Children’s Hospice was opened in 2003 as part of an initiative by the Russian Orthodox Church. The hospice’s programs help to improve children’s quality of life. Experienced doctors, nurses and psychologists work with the children and their families. Currently, the hospice cares for 180 children aged from one to 18 years old who live in St. Petersburg and the Leningrad Oblast. All of the hospice’s services are free.
In 2007, the hospice’s “Dreams Come True” program was rolled out nationwide, allowing terminally-ill children from all over Russia to share their dreams with adults and wait for them to be realized.

The exhibition will take place from June 25 to July 1 from 10 a.m. to 7 p.m. at KGallery on Nab. Reki Fontanki. The charity event will take place on July 1 at 7.30 p.m. at KGallery. Donations will be gratefully accepted  at any time during the exhibition as well as at the charity reception.  
For more information, phone +7 800 333 90 06 or +7 921 313 0335, or visit www.iwish.info.

TITLE: Iran's Revolutionary Guards Make Threats
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: CAIRO — Iran’s most powerful security force threatened Monday to crush any further opposition protests over the disputed presidential election, warning demonstrators to prepare for a “revolutionary confrontation” if they take to the streets again. It was the sternest warning yet from the elite Revolutionary Guard.
An Iranian woman who lives in Tehran said there was a heavy police and security presence in the location where an opposition march was slated to take place Monday. She asked not to be identified because she was worried about government reprisals.
“There is a massive, massive, massive police presence,” she told the Associated Press in Cairo by telephone. “Their presence was really intimidating.”
The country’s highest electoral authority, the Guardian Council, acknowledged voting irregularities in 50 electoral districts in the June 12 vote, the most serious official admission so far of problems in the election that the opposition has labeled a fraud. But the council insisted the problems do not affect the outcome of the vote. The electoral council said President Mahmoud Ahmadinejad won by a landslide.
The Revolutionary Guard, in a statement posted on its Web site, warned protesters to “be prepared for a resolution and revolutionary confrontation with the Guards, Basij and other security forces and disciplinary forces” if they continue their near-daily rallies.
The Basij, a plainclothes militia under the command of the Revolutionary Guard, have been used to quell streets protests that erupted after the election result was announced. At least 17 protesters have been killed, according to an official Iranian toll.
The Guard statement ordered demonstrators to “end the sabotage and rioting activities” and said their resistance is a “conspiracy” against Iran.
Opposition leader Mir Hossein Mousavi vowed Sunday night to keep up the protests, charging the election was a fraud. The 67-year-old Mousavi, who heads a youth-driven movement for reform, claims he was the true winner of the election.
His statement was in defiance of Supreme Leader Ayatollah Ali Khamenei, who holds ultimate power in Iran. In a sermon to tens of thousands on Friday, Khamenei said demonstrators must stop their street protests or face the consequences and he firmly backed Ahmadinejad’s victory.
“The country belongs to you,” Mousavi’s latest statement said. “Protesting lies and fraud is your right.”
Mousavi’s Web site called Monday for supporters to turn on their car lights in the late afternoon as a sign of protest.
Mousavi’s latest statements posted on his Web site also warned supporters of danger ahead, and said he would stand by the protesters “at all times.” But he said he would “never allow anybody’s life to be endangered because of my actions” and called for pursuing fraud claims through an independent board.
The former prime minister, a longtime loyalist of the Islamic government, also called the Basij and military “our brothers” and “protectors of our revolution and regime.” He may be trying to constrain his followers’ demands before they pose a mortal threat to Iran’s system of limited democracy constrained by Shiite clerics, who have ultimate authority.
Mousavi ally and former president Mohammad Khatami said in a statement that “protest in a civil manner and avoiding disturbances in the definite right of the people and all must respect that.”
Official figures say 17 people have died in a week of unrest.
Iran state media reported at least 10 people were killed in the fiercest clashes yet on Saturday and 100 were injured. A graphic video that appears to show a young woman dying within minutes after she was shot during Saturday’s demonstrations has become the iconic image seen by millions around the world on video-sharing sites such as YouTube.
Police said Monday that 457 people were arrested on Saturday alone, but did not say how many have been arrested throughout the week of turmoil.
Severe restrictions on reporters have made it almost impossible to independently verify any reports on demonstrations, clashes and casualties. Iran has ordered reporters for foreign news agencies to stay in their offices, barring them from any reporting on the streets.
The country’s highest electoral authority, the Guardian Council, agreed last week to investigate some opposition complaints of problems in the voting.
It said Monday it found irregularities in 50 voting districts, but that this has no effect on election outcome. Council spokesman Abbas Ali Kadkhodaei was quoted on the state TV Web site as saying that its probe showed more votes were cast in these constituencies than there were registered voters.
But this “has no effect on the result of the elections,” he said.
Mousavi has demanded that the election result be annulled and a new vote held.
Khatami said “taking complaints to bodies that are required to protect people’s rights, but are themselves subject to criticism, is not a solution” -- effectively accusing the Council of collusion in vote fraud.
The government has intensified a crackdown on independent media — expelling a BBC correspondent, suspending the Dubai-based network Al-Arabiya and detaining at least two local journalists for U.S. magazines.
English-language state television said an exile group known as the People’s Mujahedeen had a hand in the street violence and broadcast what it said were confessions of British-controlled agents in an indication that the government was ready to crack down even harder.
The Foreign Ministry lashed out at foreign media and Western governments, with ministry spokesman Hasan Qashqavi accusing them of “a racial mentality that Iranians belong to the Third World.”
“Meddling by Western powers and international media is unacceptable,” he said at a news conference shown on state TV, taking particular aim at French President Nicolas Sarkozy.
“How can a Western president, like the French president, ask for nullification of Iranian election results?” Qashqavi said. “I regret such comments.”

TITLE: Airstrikes Kill 21 As Pakistani Bases Hit
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: CAIRO — Iran’s most powerful security force threatened Monday to crush any further opposition protests over the disputed presidential election, warning demonstrators to prepare for a “revolutionary confrontation” if they take to the streets again. It was the sternest warning yet from the elite Revolutionary Guard.
An Iranian woman who lives in Tehran said there was a heavy police and security presence in the location where an opposition march was slated to take place Monday. She asked not to be identified because she was worried about government reprisals.
“There is a massive, massive, massive police presence,” she told the Associated Press in Cairo by telephone. “Their presence was really intimidating.”
The country’s highest electoral authority, the Guardian Council, acknowledged voting irregularities in 50 electoral districts in the June 12 vote, the most serious official admission so far of problems in the election that the opposition has labeled a fraud. But the council insisted the problems do not affect the outcome of the vote. The electoral council said President Mahmoud Ahmadinejad won by a landslide.
The Revolutionary Guard, in a statement posted on its Web site, warned protesters to “be prepared for a resolution and revolutionary confrontation with the Guards, Basij and other security forces and disciplinary forces” if they continue their near-daily rallies.
The Basij, a plainclothes militia under the command of the Revolutionary Guard, have been used to quell streets protests that erupted after the election result was announced. At least 17 protesters have been killed, according to an official Iranian toll.
The Guard statement ordered demonstrators to “end the sabotage and rioting activities” and said their resistance is a “conspiracy” against Iran.
Opposition leader Mir Hossein Mousavi vowed Sunday night to keep up the protests, charging the election was a fraud. The 67-year-old Mousavi, who heads a youth-driven movement for reform, claims he was the true winner of the election.
His statement was in defiance of Supreme Leader Ayatollah Ali Khamenei, who holds ultimate power in Iran. In a sermon to tens of thousands on Friday, Khamenei said demonstrators must stop their street protests or face the consequences and he firmly backed Ahmadinejad’s victory.
“The country belongs to you,” Mousavi’s latest statement said. “Protesting lies and fraud is your right.”
Mousavi’s Web site called Monday for supporters to turn on their car lights in the late afternoon as a sign of protest.
Mousavi’s latest statements posted on his Web site also warned supporters of danger ahead, and said he would stand by the protesters “at all times.” But he said he would “never allow anybody’s life to be endangered because of my actions” and called for pursuing fraud claims through an independent board.
The former prime minister, a longtime loyalist of the Islamic government, also called the Basij and military “our brothers” and “protectors of our revolution and regime.” He may be trying to constrain his followers’ demands before they pose a mortal threat to Iran’s system of limited democracy constrained by Shiite clerics, who have ultimate authority.
Mousavi ally and former president Mohammad Khatami said in a statement that “protest in a civil manner and avoiding disturbances in the definite right of the people and all must respect that.”
Official figures say 17 people have died in a week of unrest.
Iran state media reported at least 10 people were killed in the fiercest clashes yet on Saturday and 100 were injured. A graphic video that appears to show a young woman dying within minutes after she was shot during Saturday’s demonstrations has become the iconic image seen by millions around the world on video-sharing sites such as YouTube.
Police said Monday that 457 people were arrested on Saturday alone, but did not say how many have been arrested throughout the week of turmoil.
Severe restrictions on reporters have made it almost impossible to independently verify any reports on demonstrations, clashes and casualties. Iran has ordered reporters for foreign news agencies to stay in their offices, barring them from any reporting on the streets.
The country’s highest electoral authority, the Guardian Council, agreed last week to investigate some opposition complaints of problems in the voting.
It said Monday it found irregularities in 50 voting districts, but that this has no effect on election outcome. Council spokesman Abbas Ali Kadkhodaei was quoted on the state TV Web site as saying that its probe showed more votes were cast in these constituencies than there were registered voters.
But this “has no effect on the result of the elections,” he said.
Mousavi has demanded that the election result be annulled and a new vote held.
Khatami said “taking complaints to bodies that are required to protect people’s rights, but are themselves subject to criticism, is not a solution” -- effectively accusing the Council of collusion in vote fraud.
The government has intensified a crackdown on independent media — expelling a BBC correspondent, suspending the Dubai-based network Al-Arabiya and detaining at least two local journalists for U.S. magazines.
English-language state television said an exile group known as the People’s Mujahedeen had a hand in the street violence and broadcast what it said were confessions of British-controlled agents in an indication that the government was ready to crack down even harder.
The Foreign Ministry lashed out at foreign media and Western governments, with ministry spokesman Hasan Qashqavi accusing them of “a racial mentality that Iranians belong to the Third World.”
“Meddling by Western powers and international media is unacceptable,” he said at a news conference shown on state TV, taking particular aim at French President Nicolas Sarkozy.
“How can a Western president, like the French president, ask for nullification of Iranian election results?” Qashqavi said. “I regret such comments.”

TITLE: Bombs Kill 18 People in Baghdad Area
AUTHOR: By Patrick Quinn
PUBLISHER: The Associated Press
TEXT: BAGHDAD — Bombings killed as many as 18 people in the Baghdad area on Monday as violence intensifies ahead of a planned withdrawal next week of U.S. troops from major cities and urban areas.
The bombings, nearly all in Shiite areas of the capital, came just two days after the year’s deadliest attack — a truck bombing that killed at least 75 people in northern Iraq.
The escalating violence will test the Shiite-dominated government’s ability to provide security around the country without the immediate help of the U.S. troops remaining in Iraq.
Starting June 30, most of the 133,000 American troops left here will be housed in large bases outside the capital and other cities — unable to react unless called on for help. The withdrawal is part of an agreement under which all U.S. troops are to leave Iraq by the end of 2011.
The reclusive Shiite cleric Muqtada al-Sadr called on the Shiite-led government to take whatever steps necessary to protect Iraqis from attacks. But in a statement, the anti-American cleric blamed the violence on the continued presence of U.S. troops in the country and demanded a faster withdrawal.
“The Iraqi people are heading toward a new phase that might lift them out from their suffering,” the cleric said in a statement. He also called on his followers to remain peaceful.
Last August, he ordered militiamen loyal to his Mahdi Army to lay down their arms and take up social work. The edict came just after U.S. troops working with Iraqi soldiers routed the militia in its stronghold in Baghdad’s Sadr City.
In that Shiite bastion, a roadside bomb exploded next to a bus carrying high school students to their final exams on Monday, killing at least three people and wounding 13, including three of the students, police said. The bomb peppered the bus with shrapnel and left the floor of the vehicle littered with blood-soaked textbooks.
The U.S. military said only one civilian was killed and eight wounded. Conflicting casualty tolls are common in the aftermath of bombings in Iraq as victims are often taken to multiple hospitals.
At least five people also were killed and 20 were wounded by a bomb planted near a car in the Karradah district of the Iraqi capital, on the east side of the Tigris River. The bomb exploded on a road leading to a checkpoint that controls access to a bridge into the Green Zone, which houses the Iraqi government and U.S. Embassy.
The U.S. military put the casualty toll at two killed and six wounded.
Another roadside bomb targeted a police patrol in a commercial area of eastern Baghdad’s Ur district, killing three and wounding 25, according to police, although the U.S. military said just two were killed.
In the fourth attack, a suicide car bomber targeted the mayor’s offices in Abu Ghraib, a predominantly Sunni district west of Baghdad.
The explosion occurred when the car struck a civilian vehicle before reaching the government building, damaging a nearby U.S. vehicle that was providing security for a meeting, said Maj. David Shoupe, a spokesman for U.S. forces in Baghdad.
He said four civilians were killed and 10 people were wounded, including three U.S. soldiers, while a local police officer said seven civilians were killed and 13 wounded.
The Iraqi officials all spoke on condition of anonymity because they weren’t authorized to release the information.
In northern Iraq, rescue crews were searching for at least 12 people still missing in a massive explosion Saturday near the ethnically tense city of Kirkuk that flattened a Shiite mosque and dozens of mud-brick houses around it.
Iraqi police have blamed al-Qaida in Iraq for the attack, saying it was part of an insurgent campaign to destabilize the country and undermine confidence in the government.
Americans will remain ready to help, as they were in the aftermath of Saturday’s bombing, but many Iraqis fear their departure after two years of a steady urban presence will prove deadly.

TITLE: Officials: 10 of 50 Bodies From Jet Crash are Brazilian
AUTHOR: By Stan Lehman
PUBLISHER: The Associated Press
TEXT: SAO PAULO — Ten of 50 bodies recovered from the Air France flight that plunged into the Atlantic three weeks ago have been identified as Brazilians, medical examiners said.
Five of the first 11 bodies to be identified were Brazilian men, five were Brazilian women and one was a “foreigner of the male sex,” the Public Safety Department of the northeastern state of Pernambuco said in a statement Sunday.
The department did not reveal the nationality of the non-Brazilian victim.
Dental records, fingerprints and DNA samples were used to identify the bodies, the statement said. Investigators are reviewing all remains, debris and baggage at a base set up in Recife, capital of Pernambuco.
The families of the Brazilian victims and the embassy in Brazil representing the foreigner’s home country have been notified, but the identities will not be publicized in keeping with the families’ wishes, the statement said.
Air France Flight 447 fell into the ocean off the northeast coast of Brazil on the night of May 31, killing all 228 people aboard.
Thus far, 50 bodies have been retrieved from the ocean.
Searchers from Brazil, France, the United States and other countries are methodically scanning the surface and depths of the Atlantic for signs of the Airbus A330, which crashed after running into thunderstorms en route from Rio de Janeiro to Paris.
Still missing are the plane’s flight data and voice recorders, thought to be deep under water. French-chartered ships are trolling a search area with a radius of 50 miles (80 kilometers), pulling U.S. Navy underwater listening devices attached to 19,700 feet (6,000 meters) of cable. The black boxes send out an electronic tapping sound that can be heard up to 1.25 miles (2 kilometers) away.
Brazilian and American officials said that as of Sunday evening no signals from the black boxes had been picked up.
Without the black boxes to help explain what went wrong, the investigation has focused on a flurry of automated messages sent by the plane minutes before it lost contact. One of the messages suggested a failure in the speed readings. Some experts have speculated external speed monitors iced over, helping destabilize the plane’s control systems.