SOURCE: The St. Petersburg Times
DATE: Issue #1492 (54), Friday, July 17, 2009
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TITLE: Bad Debts Loom, But GDP Beats Forecast
AUTHOR: By Oleg Nikishenkov
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — The economy contracted by a less-than-expected 10.1 percent in the first half of 2009, the Economic Development Ministry said Wednesday, but an OECD report warned of tough times ahead if Russia doesn’t deal with bad debt.
Economic Development Minister Elvira Nabiullina said gross domestic product had shrunk by 10.1 percent compared with the 10.2 to 10.4 percent previously forecast by the government and would end the year at minus 8 to 8.5 percent.
The Organization for Economic Cooperation and Development predicts that Russia’s economy will contract by only 6.8 percent this year, a fact that Nabiullina noted in her remarks at a presentation of the organization’s report.
Russia “possesses the potential to develop itself through a reduction of energy consumption and an increase in labor efficiency and competitiveness,” Nabiullina said.
“These measures coupled with government initiatives to stimulate domestic consumption and support banks will lead Russia to more sustainable development,” she said.
While the OECD forecast is more optimistic than the government’s, the Paris-based group told the government that it needed to take urgent and decisive measures to deal with the country’s first recession after a decade of strong growth.
“The near term challenge is to limit the severity and duration of the downturn,” it said in the report prepared by its economics department.
A major challenge, it said, is the growing specter of bad debt overwhelming the banking sector.
“The government tries to spur credit growth, but a major threat to it arises from the declining capacity of borrowers to repay bank loans,” the report said.
The Central Bank said Wednesday that overdue bank loans in June reached 4.6 percent of all loans, an increase of 0.4 percent from May.
Alfa Bank chief economist Natalya Orlova said 4.6 percent for overdue loans appeared too low and probably reflected overdue interest payments, not nonperforming loans where interest and principal payments have been postponed by mutual agreement between banks and borrowers.
Nonperforming loans alone account for about 5 percent of all loans, she said, calling them hidden defaulted loans because they don’t generate any cash flow for banks.
In the worst-case scenario, Orlova said, the banking system could face bad debt of $130 billion over the next 12 months, with some $200 billion in corporate debt coming due, although corporations only expect to make a net profit of $70 billion in that time.
Bad debt will spark a second wave of the crisis in October or November, but only the banking sector will be affected, said Troika Dialog president Pavel Teplukhin.
Teplukhin said 90 percent of loans issued just before the financial crisis would come due this fall because most were issued for a 12-month period.
“Companies won’t be able to pay. As a result, there will be an accounting operation called the second wave,” he said at a news conference, Interfax reported.
Clemens Grafe, chief economist for Russia with UBS, said he doubted bad loans would spark a second crisis because bank lending is “not the most important issue for the Russian economy.”
Unlike in developed Western economies, bank lending has never been a factor that seriously contributed to the growth of the Russian economy, Grafe said.
He said bank loans contribute no more than 10 to 11 percent growth to the Russian economy, while the rest lies within real economy. “Lately, the Russian economy has expanded by itself, not because of banks,” he said. “If and when the economy finds sources for recovery, the bad loans issue will become easier.”
The OECD report offers three remedies for the ailing economy: “strengthening the macroeconomic policy framework, improving the functioning of the financial system and raising the levels of competition throughout the economy via streamlined state involvement and lower barriers to entry.”
The report is a regular survey on Russia published every 1 1/2 to two years.

TITLE: Activist Abducted and Killed in Caucasus
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Natalya Estemirova, a prominent human rights activist who documented abductions and murders in the North Caucasus, was snatched off a Grozny street Wednesday morning and found dead hours later along an Ingush highway.
The horrific killing of Memorial’s representative to Chechnya sent shock waves through the human rights community, and President Dmitry Medvedev ordered an investigation.
Memorial, the Russian human rights group, said “state terror” was to blame for the death its activist, calling the killing of Estemirova an “extrajudicial execution” by government-backed death squads, the Bloomberg news agency reported on Thursday.
“We already know how such cases are investigated,” Oleg Orlov, the head of Memorial, said in an interview published on the Moscow-based group’s web site. “Hundreds of similar cases have come to us. That’s why we’re hated and Natasha was killed.”
The attack may also put international attention back on the North Caucasus, where violence has spiraled in recent weeks.
Attackers grabbed Estemirova as she left her Grozny home at around 8:30 a.m. Wednesday and forced her into a white Zhiguli, Memorial said.
“She could only shout that she was being kidnapped,” the human rights group said in a statement on its web site.
When Estemirova failed to appear at scheduled meetings, Memorial representatives went to her home and learned about the abduction from an eyewitness, Memorial said. She had several meetings planned for the day, including a trip to the Stavropol region with Chechen Interior Ministry officials.
Estemirova’s body was found at around 4:30 p.m. lying in grass about 100 meters from the Kavkaz federal highway near the village of Gazi-Yurt, north of Ingushetia’s main city of Nazran, the Investigative Committee said.
Estemirova had been shot repeatedly in the head, chest and abdomen, most likely with a 9 mm Makarov pistol, investigators said. Her purse was lying nearby, and it contained her passport and papers identifying her as a human rights activist.
Estemirova, a 50-year-old single mother, had frequently spoken out against violence and kidnappings in Chechnya. She had also worked as a freelance journalist and was awarded the first annual Anna Politkovskaya Award in 2007 for her work as a female human rights defender.
Reporters Without Borders urged the authorities to bring Estemirova’s killers to justice. “A human rights activist’s abduction in the heart of Grozny and ensuing murder at a time when Chechnya is supposedly safe again shows that, despite the optimistic claims, the issue of the Caucasus has not been resolved,” the media watchdog said in an e-mailed statement.
The Kremlin announced an end to counterterrorism operations in Chechnya earlier this year, but violence has continued to rattle the republic and has increased in Ingushetia and Dagestan.
Estemirova helped Reporters Without Borders conduct a fact-finding visit to Chechnya, Ingushetia and Dagestan in March. “The information and analyses she shared with Reporters Without Borders reinforced our conviction that the Caucasus is on the brink of chaos and that human rights activists like her are bravely filling the gap left by a dwindling independent press,” it said.
Medvedev’s spokeswoman Natalya Timakova said the president was outraged by Estemirova’s killing and had ordered Investigative Committee chief Alexander Bastrykin to investigate.
“Unfortunately, it is clear that this premeditated murder might be linked to Natalya Estemirova’s human rights work,” she said, Interfax reported. “So the punishment for the criminals should be that much harsher.”
The Chechen government saw the killing as an attempt to undermine stability in the republic. “She was well known to all of us, and it is outright tragic that this happened now, when the situation in Chechnya is stabilizing,” Timur Aliyev, an adviser to Chechen President Ramzan Kadyrov, told The St. Petersburg Times.
Human rights groups have accused Kadyrov of kidnappings, torture and murder to keep order in the republic. Kadyrov denies the charges.
Lev Ponomaryov, a prominent human rights activist, said he had no doubt that Estemirova’s death was linked to her human rights activities. “I knew her very well. She had received many threats,” Ponomaryov told Interfax.
Estemirova, who was born in the Saratov region, joined Memorial in 2000 after stints as a history teacher and journalist in Grozny. She was the recipient of the Right Livelihood Award, known as the Alternative Nobel Peace Prize, from Sweden’s parliament in 2004, and a medal from the European Parliament in 2005. She had worked closely with Politkovskaya, who was shot dead in her Moscow apartment building in 2006, and human rights lawyer Stanislav Markelov, who was killed in central Moscow in January.
Violence, meanwhile, has continued to grip Chechnya and surrounding republics this week, killing at least 14.
On Wednesday, gunmen killed an Ingush court marshal and a passenger in his car on the same highway where Estemirova’s body was found hours later.
In Chechnya, four Interior Ministry troops were killed and five were injured Tuesday in a gunbattle with rebels in the mountainous Vedeno district. A day earlier, a bomb attached to a police truck killed a policeman in Grozny.
In Dagestan, ambushes and gunbattles killed at least seven this week.
Last month, a suicide bomber badly injured Ingushetia’s president, and snipers killed Dagestan’s interior minister.
Analysts said the violence was worse than the usual summer peak when rebels can take shelter in mountain forests. Speculation has been rife that regional officials have been paying rebel leaders not to attack them.
Maxim Agarkov, an analyst with the SK-Strategia think tank, said a reduction in funds sent from Moscow to the North Caucasus was partly to blame.
Agarkov also said that mounting unrest in Chechnya might be linked to the lifting of the counterterrorism operation in the spring, which enabled authorities there to introduce a local customs levy.
“Federal bureaucrats do not like this at all because they fear losing revenues,” he said.

TITLE: Local Home Birth Advocate Faces Medical Malpractise Trial
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: Yelena Yermakova is being held in a pretrial detention center in the eighth month of her pregnancy and is likely to give birth behind bars.
Ironically, she is on trial for her role as a midwife in a series of home births that ended tragically.
Many expectant mothers dread the thought of going to the hospital, where medical staff are known to swear and shout and babies are only reunited with their mothers at feeding time.
As a result, some Russian and expatriate mothers opt instead to give birth at home with the assistance of midwives — a practice that is unregulated and skates on thin legal ice.
Yermakova worked at a St. Petersburg center called Kolybelka, or Cradle, headed by her husband, Alexei Yermakov. They organized prenatal classes and — unofficially — helped women give birth at home.
Eight women went to court after two suffered severe complications during childbirth and the other six lost their babies between 2001 and 2006.
In 2006, the Yermakovs were charged with unlicensed private medical practice that caused bodily harm and death. A St. Petersburg court is due to hear their case in a rare instance of alleged medical malpractice making it to the courts.
Yermakova, 41, was detained in March after missing several court hearings on what she said were health grounds. She already has five children, including one who is barely 2.
Her husband has posted letters from her online in which she writes that she is suicidal. Supporters have petitioned the St. Petersburg human rights ombudsman and President Dmitry Medvedev.
 “She feels OK, physically,” Yermakov said in a recent telephone interview. “Of course, she can’t get a massage or move around much.”
He said the couple has conducted home births since 1992 with low complication rates.
Out of 1,500 births, only about 10 have required hospitalization, Yermakov said.
“If we are guilty, that guilt lies outside the legal case,” Yermakov said, describing the medical histories in the eight mothers’ cases as “very ambiguous.”
The trial has provoked strong emotions and debate in the media, with headlines such as “Death in the Cradle.” Both sides have used the Internet to argue their case. The eight women have set up a web site that includes graphic details of each birth.
In turn, the Yermakovs’ supporters have opened a LiveJournal page and posted medical details about the women.
The first woman to initiate legal action against Yermakova, in 2006, was Olga Vasilyeva, whose baby was born dead after a breech delivery, when the head comes out last.
Talking quickly and emotionally, Vasilyeva told The St. Petersburg Times that the pathologist’s report found that the baby had traumatic brain injury and a basal skull fracture.
Vasilyeva blamed Yermakova for the baby’s death, saying tests found that the baby was otherwise healthy. “Birth traumas are always the fault of the midwife,” she said.
Yermakova removed all her equipment after the birth and left before emergency services arrived. “She told me not to talk about them,” she said.
Vasilyeva complied and told emergency services that she gave birth alone. “The baby had such injuries that suspicion fell on me that I had murdered the child,” she said.
The case began after she told investigators that she had given birth with Yermakova.
On the Yermakovs’ supporters’ site, details that sound like Vasilyeva’s are published without her name. They contradict her story, saying the baby died in the womb from a problem with the placenta.
Vasilyeva has posted an appeal on the Internet and appeared on television, asking for other mothers to come forward.
“When you go to Kolybelka, you only see happy mothers,” she said. “I didn’t hear of one bad case.”
As the case goes to trial, the group of eight mothers has become close, Vasilyeva said. “We’re already like a family, we celebrate holidays together,” she said.
The earliest case dates back to 2001, when Olga Goncharenko gave birth to a son who is severely disabled with cerebral palsy.
She writes on the women’s site that her child was born blue after a long labor, with the umbilical cord wrapped around his neck, and it took Yermakova 20 minutes to resuscitate him.
Doctors told her that “all of this would have been possible to avoid,” Goncharenko said by telephone.
She is seeking compensation of $1.5 million to cover the cost of caring for her child.
“Drugs, doctors — it’s all endless,” she said.
Vasilyeva said she doubts that Yermakova will get a prison sentence if convicted because of her young children. “They should ban her from practicing. It’s not important whether they jail her,” she said.
The case has focused attention on the home birth movement, which is neither accepted by official medicine nor regulated in any way.
“Home births are extremely dangerous and completely unjustified,” Russia’s chief gynecologist, Vladimir Serov, told The St. Petersburg Times. “The midwives are committing a gross error. It is not acceptable under our standards.”
He said a doctor should always be in charge of a birth, and the midwife should assist.
Serov said he hadn’t heard of Yermakova’s case, but said, “According to our law, she doesn’t have the right [to deliver a baby]. She should be punished.”
The Yermakovs’ case is high-profile partly because litigation over medical malpractice is still rare in Russia.
Supporters of home births argue that similar deaths in maternity hospitals go unpunished.
“There’s never been a big case about a doctor at a maternity hospital,” said Yekaterina Perkhova, who edits a magazine on home birth, Domashny Rebyonok.
She has signed a petition to Medvedev to free Yermakova from custody, although she doesn’t know her personally.
“We think it’s more dangerous to give birth in a maternity hospital than at home,” Perkhova said. “There is a lack of rights. They [medical staff] are still inhumane in their relations with the patients. They can shout at you or swear.”
“At a maternity hospital, they take away the baby and only bring it for feeding. If the baby dies, no one finds out what it died of,” said Tatyana Sargunas, who gives lectures on natural births and acts as an “instructor” at home births.
Evidence that the situation in maternity hospitals needs to be improved lies in the fact that Russia’s infant mortality rate is significantly higher than in Western Europe.
Health and Social Development Minister Tatyana Golikova said in March that infant mortality — deaths under the age of 1— fell from 10.2 children to 8.5 children per 1,000 births between 2006 and 2008. However, UNICEF puts Russia’s figure at 13 in 2007.
According to UNICEF figures, the infant mortality rate in 2007 was five deaths per 1,000 live births in Britain and seven in the United States.
Sargunas and Perkhova called for licensing of midwives who assist at home births, saying this would protect both sides.
Yermakova has medical training, but it is legally impossible to register as a private midwife, her husband said.
“Private midwives can’t get registered. There was never any need for this. The practice [of registration] was destroyed during the Revolution,” Yermakov said.
Yermakova studied at a midwife college and gained a medical degree from the St. Petersburg Therapeutic Institute, a private medical university, he said.
He estimated that there are 200 such private birth midwives in Russia.
Kolybelka was registered as a center that offered consultations, Yermakov said. “The fact that Lena helped women give birth was an agreement between themselves,” he said.
The center’s web site does not mention home births. It lists lectures as well as yoga, swimming and belly-dancing classes among its activities.
The mothers said they had no documents linking them to Yermakova. On their web site, they write that they paid 18,000 to 20,000 rubles for the births.
Yermakov described his wife’s role as “accompanying a birth.” He said that “natural births” do not involve medical intervention.
“Medical procedures must be carried out in a medical institution because they are fraught with all kinds of complications,” Yermakov said.
Asked what preparations the couple made for emergencies, Yermakov said no mother had needed a blood transfusion and maternity hospitals are obliged to admit a woman who is giving birth.
“Before a woman gives birth at home, she prepares quite seriously,” he said. “We minimize many risks with preventive measures.”
Molly Caliger, a U.S. midwife who has worked in St. Petersburg since 1992, said she didn’t know Yermakova personally but had talked to “a few dozen” women who gave birth with her.
“I would say for the most part their impressions were negative,” she said.
“She tends to talk about roddoms [maternity hospitals], convincing women it’s better to stay home and have a complicated birth,” Caliger said. “Women really seem to be brainwashed into the experience.
“The whole idea is that only healthy, low-risk women should give birth at home,” Caliger stressed.
Caliger also questioned Yermakov’s statement that only 10 mothers out of 1,500 required hospitalization.
It’s widely accepted that 8 percent to 13 percent of women having home births will require hospitalization, she said, while Yermakov’s figure is less than 1 percent.
“It’s hardly anything to brag about. It shows how dangerously they were practicing,” Caliger said.

TITLE: Authorities Call For Ban On Migrant Workers in Trading
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Federal Migration Service has recommended that migrant workers be banned from working as traders next year after finding numerous employment violations at Moscow’s sprawling Cherkizovsky Market. 
The recommendation stems from the migration service’s finding of numerous forged work permits among former traders from Cherkizovsky Market, which was closed in late June over sanitary and fire violations, migration service spokesman Konstantin Poltoranin told The St. Petersburg Times on Tuesday. 
He said 2,300 migrant traders had worked at Cherkizovsky, Eastern Europe’s biggest market, and up to 1,000 of them had been employed illegally. 
The Migrants of Russia Federation said earlier that the market’s closure on June 29 had left about 100,000 migrants jobless. 
It was impossible to reconcile the figures. 
Poltoranin said 450 migrant workers at Cherkizovsky had officially been hired by construction firms and firms providing communal services that had sold their quotas for the employment of foreigners to firms working at Cherkizovsky. 
A government regulation for 2009 bans the employment of foreign workers at markets and kiosks, a senior expert with the state Labor and Social Insurance Research Institute, Yuliana Aleksentseva, told RIA-Novosti late Monday. 
However, Russian law allows the employment of foreigners in trade other than at markets and kiosks, which allowed the migrant workers from Cherkizovsky to obtain work permits for trade without indicating their place of work, Aleksentseva said. 
The Federal Migration Service will seek to extend the duration of its recommendation to ban migrant workers from working as traders to 2010 and will call on lawmakers to cap the overall number of migrant traders to provide more jobs for Russians, Poltoranin said. 
“We don’t need a big number of them,” Poltoranin said of the migrant traders. 
According to his agency, 1.5 million foreigners work in Russia, including 250,000 in the trade sector, Vedomosti reported Tuesday.

TITLE: Tu-154M Crashes in Iran, Kills 168
AUTHOR: By Nasser Karimi
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — Investigators have recovered two of the three black boxes belonging to a Russian-made jetliner that crashed shortly after taking off from Tehran, Iran’s state radio reported Thursday.
All 168 people aboard the Caspian Airlines aircraft bound for Yerevan, Armenia, on Wednesday were killed. The radio’s report quoted chief investigator Ahmad Majidi as saying one of the two recovered boxes was damaged. It said the boxes — the plane’s cockpit voice and flight data recorders — would likely be sent to the aircraft’s Russian manufacturers for analysis.
The search for the third black box was continuing, Majidi said.
Bodies of the victims would be taken to Tehran later Thursday for identification, he added.
Most of the passengers were Iranians, many of them from Iran’s large ethnic Armenian community, as well as 11 members of Iran’s national youth judo team. Five Armenian citizens were among the dead, Armenia’s Foreign Ministry said in a statement, along with two Georgians, including a staffer from the Caucasus nation’s embassy in Yerevan.
Armenia on Thursday announced a one-day national state of mourning to mark the death of its citizens in the crash, according to the Russian news agency ITAR-Tass.
Reporting from Yerevan, the agency said flags would fly at half-mast on government buildings and Armenian embassies abroad. Local radio and TV have canceled entertainment programs in a show of respect, it said.
The crash was the latest in a string of air disasters in recent years that have highlighted Iran’s difficulties in maintaining its aging fleet of planes.
Iranian airlines, including state-run ones, are chronically strapped for cash, and maintenance has suffered, experts say. U.S. sanctions prevent Iran from updating their 30-year-old American aircraft and make it difficult to get European spare parts or planes. The country has come to rely on Russian aircraft, many of them Soviet-era planes that are harder to get parts for since the Soviet Union’s fall.
Witnesses said the plane’s tail was on fire before it went down, plowing a deep, long trench into agricultural fields outside the village of Jannat Abad, and the aircraft was blasted to bits.
Flaming wreckage, body parts and personal items were strewn over a 200- meter area. Firefighters put out blazes from the crash, but smoke smoldered from the pit for hours after as emergency workers searched for data recorders and other clues to the cause.
Ali Akbar Hashemi, a 23-year-old, was laying gas pipes in a house by the field when he saw the stricken jet overhead. He said the plane was circling in the air, flames shooting from its tail section.
“Then, I saw the plane crashing nose-down. It hit the ground causing a big explosion. The impact shook the ground like an earthquake,” Hashemi told The Associated Press by phone.
The Tu-154M jet had taken off from Tehran’s Imam Khomeini International Airport. It crashed at 11:30 am, about 16 minutes after takeoff, outside Jannat Abad, near the city of Qazvin, around 75 miles northwest of Tehran, civil aviation spokesman Reza Jafarzadeh told state media.
At Yerevan’s airport, Tina Karapetian, 45, sobbed and said she had been waiting for her sister and the sister’s 6- and 11-year-old sons, who were due on the flight.
“What will I do without them?” she cried before collapsing to the floor.

TITLE: Bookies Slam New Gambling Rules
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Bookmakers said Tuesday that they were “shocked” about a State Duma initiative that would require them to drastically boost their charter capital, warning that the measure would run them out of business. 
Legislation submitted to the Duma this week would require bookmakers to increase their charter capital from the current 100 million rubles ($3 million) to 600 million rubles ($18.5 million) and the value of their net assets from the current 100 million rubles to 600 million rubles. 
“The initiative is aimed at protecting the rights of consumers,” said Yevgeny Fyodorov, a co-author of the bill and chairman of the Duma’s Economic Policy and Entrepreneurship Committee. 
He said the bill would bar unfair players from the bookmaker business, which is one of the few types of gambling that remains legal after a law came into force on July 1 that restricts casinos and slot machine halls to four far-flung regions. 
Bookmakers said the change, if approved, would force them to close. 
“The bookmakers are shocked,” said Oleg Zhuravsky, head of the National Association of Bookmakers. “If the amendments are embraced, we will have to shut down.”  

TITLE: Site's Closure Linked To Matviyenko, Not Hitler
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Popular historical web site Hrono.info was up-and-running Tuesday after being transferred to a new provider, but its editor said he suspected an article critical of St. Petersburg Governor Valentina Matviyenko was responsible for its brief closure, not Adolf Hitler’s “Mein Kampf.” 
The web site with historical sources was closed down after the cyber crime squad of St. Petersburg police contacted the provider on June 19 with a warning that the site contained “Mein Kampf.” 
The book is banned by a Russian law on countering extremist activities, although Hrono editor Vyacheslav Rumyantsev said he only posted an outline of the book. 
Rumyantsev said Tuesday that he suspected that the real reason for the closure last week was an article critical of Matviyenko that was posted on the site’s magazine section on June 15, four days before the police warning. 
“It was a very quick reaction,” he said. “’Mein Kampf’ was on the site for two years, and no one lifted a finger.” 
The article criticized the bureaucracy faced by survivors of the Siege of Leningrad, specifically the red tape involved in claiming funeral expenses. It said paying for the funerals of all the remaining survivors would be cheaper than paying Matviyenko’s declared 2008 salary of 1.7 million rubles. 
Rumyantsev also noted that the warning came from St. Petersburg police, although both he and his former provider are in Moscow. 
“I think it’s very strange that the site and the provider are in Moscow. Why do they take orders from St. Petersburg?” he said. 
A St. Petersburg police spokesman, Vyacheslav Stepchenko, said last week that the physical location of the site’s provider was “irrelevant.” 
Contacted Tuesday, he denied Rumyantsev’s suspicions. The site’s provider was warned amid the police’s usual “monitoring of Internet resources,” he said. “It is in no way linked to other factors.” 
He said the police took a long time to react to the posting of “Mein Kampf” due to “limited human resources in the police system.” 
Rumyantsev posted an article Tuesday headlined “The Invisible Fight” that suggested the closure might have been connected to the article on Matviyenko. But the article concludes that the story is only a “version” of what might have happened, saying the site has no “time or desire” to go to court with Matviyenko or the police. The resurrected site no longer contains the excerpts from “Mein Kampf,” although it still has the Matviyenko article.

TITLE: Regions Consider Cow Limits
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Rural Russians might have to cut down their number of chickens, pigs and cows if a bill being considered by the State Duma becomes law. 
Under the proposal, regional authorities could impose limits on how much livestock individual citizens may own. 
Critics say the law is a return to Soviet fetters for private farming and is being pushed by big agriculture corporations that fear competition from individual farmers. 
But the bill’s initiators, deputies from the Stavropol regional legislature, say it is necessary to close legal loopholes that allow people to hold as many animals as they like without proper sanitary provisions. 
In an explanatory report, published on the State Duma’s web site, the Stavropol deputies say authorities have received many complaints but could do nothing against private holders of up to 600 pigs and 1,000 sheep in settled areas. 
“These enterprises become sources of dangerous animal diseases that pose a risk to humans,” the report says. 
Stavropol veterinary officials in March confirmed an outbreak of swine fever at a collective farm, the third such incident in the area since October. 
Igor Smolkin, the CEO of Agro-Invest, a subsidiary of Sweden’s Black Earth Farming that harvests 150,000 hectares of land in six regions, said there was an urgent need to regulate private cattle ownership. 
“This would greatly improve the situation we have now. Where in the world can you open a cowshed without registering a farm?” Smolkin said. 
He said that currently “anybody can keep 20 or more cows like pet dogs, while nobody ensures that necessary measures like immunization against swine fever are taken.” 
“If you work in agriculture, you must meet sanitary norms,” he said, adding that the proposed measures should not hurt small-scale farmers. 
“What this is about is limiting the numbers [of livestock] in unregistered enterprises,” he said. 
But critics said that animal limits could hit millions of small farmers. 
Roman Kipot, an analyst at the Institute for Current Agricultural Markets, said about 50 percent of the country’s livestock is owned by individual farmers, most of whom do not pose a threat to industrial-level producers. 
“Small cattle owners typically sell their animals at farmers markets and do not aim at the retail system,” he said. 
In contrast, big agricultural holdings beat small owners in price and quality, he said. 
Kipot conceded that mid-size private farmers might pose a threat in peripheral territories like in southern Stavropol and along the Volga River. But he said the proposed system reminded him of limits introduced by Soviet leader Nikita Khrushchev. “Then you had to pay tariffs for each additional apple tree — and that also led to nothing,” he said. 
Any sanitary problems should not be addressed by a new law but by the Federal Consumer Protection Service, he said. “That is their responsibility,” he said. 
J?rgen Wandel, a researcher at the Institute for Agricultural Development in Central and Eastern Europe at the University of Halle in Germany, said any loophole regarding sanitary requirements did not mean that limiting animal numbers was the right answer. 
“This makes no sense economically. The best way is to let the market decide which production size is most efficient,” he said in a telephone interview. 
Wandel said the sanitary requirements could be easily addressed by introducing straightforward regulation. 
It was likely that large agricultural enterprises had lobbied for the legislation, he added, because barriers for entry are low, especially in the chicken and pig business. 
“Chicken can be slaughtered 40 days after hatching. That makes it easy to enter this lucrative business, and Russia recently has seen quite a few newcomers in this sector,” he said. 
The Duma, meanwhile, has not scheduled a first reading for the bill. Instead, it forwarded the bill on June 26 to regional governments, the Public Chamber and other institutions for further consideration. 
Nikolai Kharitonov, a Communist member of the Duma’s Agriculture Committee, has expressed worry that the bill would harm small farmers surviving with a handful of cows. But on Tuesday he took a more nuanced approach, saying the bill needed to take into account regional peculiarities. 
“In regions like Stavropol, where neighbors complain about livestock next door, it seems justified,” he told The St. Petersburg Times in a brief telephone interview. 
A man who picked up the phone at the office of the Stavropol legislature’s agriculture committee said that nobody was available for comment because the lawmakers were on summer recess.

TITLE: Adygeya Officials Caught 
In Scandal Over Poaching
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Natural Resources and Environment Ministry told Krasnodar region officials on Tuesday to take strict measures against a group of people, including an Adygeya deputy finance minister, who illegally entered a nature reserve and were carrying unregistered hunting rifles. 
More than a dozen people were briefly detained earlier this month by OMON special forces and officials from the Caucasus State Biosphere Reserve, a Russian and UNESCO protected area, park employees said. At least one, Adygeya Deputy Finance Minister Tembot Kumpilov, a brother of the republic’s prime minister, is now facing criminal weapons charges. 
The government has taken a harder stance against poaching and lawlessness in the country’s nature reserves after a helicopter crashed in Altai in January, killing several prominent federal and regional officials. That party had been illegally hunting the rare argali sheep from the helicopter, sparking outrage when photos of the crash site, including dead sheep, were published. 
Such incidents, which rarely become public, are thought to be widespread because corrupt park and game officials can supplement their incomes by turning a blind eye to illegal activity. 
“Carrying weapons in a state reserve is a criminal offense,” the ministry said in a statement, adding that an administrative case against Kumpilov had been dropped. 
Under Article 258 of the Criminal Code, carrying a weapon in a protected nature reserve is punishable by up to two years in prison. 
Reserve officials, including deputy director Gennady Pilipenko, and a special OMON squad flew by helicopter to detain the group, a park ranger who participated in the operation told The St. Petersburg Times. 
“Everyone says [Adygeya Prime Minister Murat] Kumpilov was there, but I don’t know what he looks like,” he said, requesting anonymity because of the sensitivity of the issue. He said 14 people were detained. 
But the statement from the Natural Resources and Environment Ministry said there were only 11 people, for whom 11 citations were written by the park rangers. The party entered the reserve on horseback from Adygeya on July 4 and were detained the following day. 
The reserve’s director, Sergei Shevelev, referred all questions to the Natural Resources and Environment Ministry. Pilipenko, who oversaw the operation, did not answer calls to his mobile phone Tuesday. 
Nikolai Gudkov, a spokesman for the ministry, confirmed that it was conducting its own investigation, following an order Monday from Minister Yury Trutnev. Gudkov declined to confirm the identities of those detained because the citations said none of them was carrying documents and the group had only provided verbal identification. 
Trutnev criticized the trespassers Monday, saying government officials should be prosecuted “more harshly” for such violations. It is a federal offence to cross into the reserve without a park permit, and guns are not allowed on its territory. 
The citations, copies of which were obtained by The St. Petersburg Times, list one of the detainees as Adygeya Deputy Finance Minister Tembot Kumpilov, who told the park inspectors that he was unemployed. All but three of the people said they did not have jobs. 
Two hunting rifles — a loaded Bars and an MC 105-04 — were confiscated from Tembot Kumpilov, the citations said. No registration for the guns was found. Kumpilov said he brought guns for protection and forgot his license to carry them in the car, according to the citation he received. 
Irina Khapayeva, a spokeswoman for Adygeya Prime Minister Murat Kumpilov, declined to connect a reporter with him, saying he was out of the office.

TITLE: Local Real Estate Prices Sink to Three-Year Low
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Prices for new build real estate in St. Petersburg have dropped to as little as 50,000 rubles ($1,580) per square meter, bringing them down to 2006 levels. 
The first major developer in the city to offer such a price was LEK, Delovoi Peterburg reported.
Pavel Andreyev, head of LEK, said the decrease in prices was made possible due to lower costs, including production costs, cost of contractors’ work and use of barter schemes, the newspaper reported.
Andreyev said the company was not currently thinking about profits.
“Today our cost price is equal to the price that we sell the objects for,” he said.
The policy of such a large company has influenced the market as a whole, with some other construction companies also beginning to lower their real estate prices. Among the residential buildings planned for completion and permitting in 2009, there are price offers of 52,000 to 53,000 rubles ($1,640 to $1,670). Until recently, such prices were only offered in the city for projects at the initial stage of construction, Delovoi Peterburg reported.
Lenspetsstroi construction company is prepared to sell its new build housing planned for completion in 2010 to 2011 for 47,300 ($1,480) rubles per square meter, Vedomosti daily reported.
Local real estate agency Arin said that since the beginning of 2009, the price for a square meter of new build real estate decreased by 12 percent, and by 15 percent on existing real estate.
Zosya Zakharova, an analyst at ARIN, said the market had not yet hit the bottom, and that the city can expect a further decrease in costs per square meter of real estate, Vedomosti reported.
According to ARIN’s data, during the second quarter of the year the average city price for a square meter was 62,249 rubles ($1,965) in economy-class apartments, 66,966 rubles ($2,110) in comfort-class apartments, and 156,886 rubles ($4,950) in elite buildings.
The current tendency may lead to the fulfillment of President Dmitry Medvedev’s dream of real estate that costs 30,000 rubles ($950) per square meter.
Nikolai Pashkov, director for professional activities at Knight Frank Consultancy, told The St. Petersburg Times that in a pessimistic scenario, prices for real estate in St. Petersburg may drop to the level of 2005 to 2006 when they stood at $1,000 to $1,200 per square meter.
“This may happen if the macro economic situation gets worse in the event of a second wave of the economic crisis,” Pashkov said.
Pashkov said that even the lower prices on the city’s real estate market were not attracting many more clients.
“This is the effect of the expected dynamics, when people expect that prices may fall even lower,” he said. 
Pashkov said the fall in real estate prices “was conditioned by a decrease in the population’s income and narrowing of opportunities for construction companies, through a deficit of financial resources, say.”
The volume of new build real estate is also decreasing in St. Petersburg. According to statistics from the city’s construction committee from January through May this year, 681,000 square meters of real estate became available, — 72,000 square meters less than for the same period last year.
Arin’s data for the first quarter of 2009 showed that 300,000 new build square meters (5,000 apartments) were sold in the city, whereas this index before the crisis was three times higher, Vedomosti reported.
Leonid Sandalov, deputy head of Becar real estate agency, said that today clients mainly look for either economy class apartments or elite real estate. Previously, demand was distributed fairly equally among all classes of real estate. Currently, business-class apartments are seeing very low demand, he said.
Experts say most potential clients have been affected by a decrease in their income and reduced chances of getting a mortgage.
St. Petersburg Mortgage Agency said that in the first quarter of this year, only 693 mortgages were issued in the city, compared to 5,461 loans last year.

TITLE: RZD Gets Record Loan From EBRD
AUTHOR: By Paul Abelsky and Denis Maternovsky
PUBLISHER: Bloomberg
TEXT: Russian Railways (RZD), the country’s railroad monopoly, borrowed $500 million over 10 years from the European Bank for Reconstruction & Development in the agency’s biggest-ever loan.
The deal is the London-based development bank’s largest single investment since it was founded in 1991 to fund infrastructure in former communist nations in Europe and central Asia, the EBRD said in a statement on Wednesday. Moscow-based Russian Railways sold 90 billion rubles ($2.8 billion) of domestic bonds this year, more than any other company in the country, to finance its investment program.
The financing brings the amount the EBRD has lent to nine Russian railroad projects to almost $1.2 billion since 2001, the statement said. Russian companies, including the biggest state- owned corporations, are struggling to raise new funds this year after global financial crisis cut access to financing, forcing them to rely on local banks and the ruble bond market.
The loan “means there are alternative borrowing sources for Russian Railways,” said Stanislav Ponomarenko, a fixed-income analyst at ING Groep in Moscow. “I doubt they could raise anything with that duration in the market.”
Russian Railways, the country’s biggest commercial employer, is seeking fresh funds after posting a loss of 17.1 billion rubles ($534 million) in the first quarter. Rail cargo shipments fell an annual 23 percent in the first half and may drop 19 percent in the year, Vladimir Yakunin, the company’s chief executive officer, said July 6.
Russian Railways cut annual spending by more than 34 percent, to 252 billion rubles, this year after the government reduced financial support for the company and domestic demand for its services waned, Yakunin said in an interview published Wednesday in Vedomosti newspaper. Railroads account for about 85 percent of Russia’s total cargo transport capacity, according to VTB Capital data.
EBRD aims to invest a minimum of $3 billion in Russia this year, President Thomas Mirow said last month at an economic forum in St. Petersburg. It agreed in June to extend a $150 million loan to investment bank Troika Dialog and a $75 million loan to Bank Saint Petersburg.
The EBRD owns stakes in TransContainer, Russia’s biggest rail freight carrier, and London-listed Globaltrans Investment, the country’s largest privately owned rail shipper, according to data compiled by Bloomberg.

TITLE: Imported Cars to Be Checked for Pests
PUBLISHER: Vedomosti
TEXT: Border checkpoints began inspecting used vehicles being imported into Russia for dangerous pests hiding in their tires and crevices on Wednesday, a measure that could create headaches for both private importers and small automobile dealerships.
The measure, announced Tuesday by the Federal Phytosanitary Inspection Service and the Federal Customs Service, calls for vehicles to be checked twice — once at the border and once at their destination. The list of vehicles subject to inspection includes ordinary cars and trucks, as well as tractors and several types of specialized vehicles ranging from mobile cranes to fire engines.
Vehicles that do not pass a visual inspection could be held for up to 20 days, Natalia Puchkina, a spokeswoman for the phytosanitary service, told Vedomosti. 
Reasons for not passing inspection could include certain insects, plants or types of soil being found on the automobile.

TITLE: Growth Not Expected to Rebound Until 2012
PUBLISHER: Bloomberg
TEXT: Russia’s economy will fail to match last year’s pace of growth until 2012, even under the government’s most optimistic forecast, as capital investment dries up, the Economy Ministry said.
Investments will probably lag as much as 14 percent behind their 2008 peak as borrowing costs remain high, according to a report Wednesday from the ministry, whose “moderately optimistic” forecast for the next three years was approved by the government on Monday.
“Expanding the activity of the banking sector and reducing interest rates” are “the most important factors for the recovery of economic growth” in the forecast, the report said.
The economy of the world’s biggest energy exporter may shrink as much as 8.5 percent this year, the ministry said, revising its May forecast for an 8 percent contraction. A fall in company inventories accounted for 80 percent of the drop in gross domestic product during the first three months, according to the ministry’s estimate. GDP contracted the most in 15 years in the first quarter, tumbling an annual 9.8 percent.
The economy last year grew at the slowest pace since 2002, expanding 5.6 percent compared with 8.1 percent in 2007. 
The central bank has cut the refinancing rate, seen as the limit for borrowing, four times this year, the first reductions since 2007.
Bank lending will probably advance 1.9 percent this year after jumping 35.9 percent in 2008, the report said. Under the forecast, loans to consumers and companies will rise 12 percent next year, between 15 percent and 17 percent in 2011 and as much as 24 percent in 2012.
Russia’s working population will annually decrease by about 1 million every year between 2009 and 2012, the ministry predicts. The country’s population fell to a post-Soviet low of 141.9 million in 2008, the 14th consecutive year of a decline.

TITLE: Medvedev’s Military Stagnation
AUTHOR: By Marcel de Haas
TEXT: The Russia-Georgia war last August demonstrated Moscow’s assertive stance in foreign and security policy, of which military power is one of its major instruments. But the short five-day war showed that much of Russia’s weaponry is obsolete and that its ability to conduct skillful warfare is limited. Although Russian forces were victorious against their southern neighbor, whose active military personnel numbers about 36,000, compared to Russia’s one million, the Georgian conflict clearly demonstrated the shortcomings in the Russian armed forces.
After the conflict, President Dmitry Medvedev concluded that these shortcomings should be corrected by instituting military reforms and procuring new, modern weapons systems. But the successful implementation of these plans has been hampered by the political elite, which put far too much emphasis on nuclear modernization, as well as by the military elite, who continue to think and act in a Cold War framework.
Military operations in the West take a completely different approach. Every aspect of warfare at all levels of the spectrum — from evacuation of noncombatants to full-scale war — is covered within one single operation. This concept is often referred to as a “three-block war.” These comprehensive operations demand specific doctrines and a military force that can cope with any task at the same time. Examples of this concept can be seen in Iraq and Afghanistan. Furthermore, Western military forces have expeditionary capability and can be deployed far away from the homeland at short notice. This requires highly skilled permanent forces that can perform strategic air and sealifts and that have high-tech equipment for communications, command and control, and intelligence.
As a result of Sept. 11, Western armed forces also have to strengthen homeland security to avert terrorist attacks. To do so, close cooperation with police and other nonmilitary security agencies is necessary as part of a larger coordinated and centralized command at a national level. These security demands have completely restructured the Western military apparatuses from what they were during the Cold War.
When Vladimir Putin served as president, he set several ambitious foreign policy goals, but they required a highly skilled, modern military force that could be deployed at short notice anywhere in the world. At the same time, protracted conflicts in the North Caucasus required a military capable of conducting asymmetric warfare against an irregular opponent. In October 2003, then-Defense Secretary Sergei Ivanov released a defense white paper titled “The Priority Tasks of the Development of the Armed Forces of the Russian Federation.” It rightly focused on local conflicts as a defense priority as opposed to large-scale conventional wars. The modern-day threats of extremism, separatism and terrorism were listed, but there were also traditional, worn-out Cold War vestiges in the strategy document, such as expansion of military blocs and military presence in traditional regions of Russian interest.
Under Medvedev, current modernization plans assume a realistic approach toward building a modern military. If these measures are carried out, they would cut some of the deadweight from the officers’ ranks, establish a professional noncommissioned officers corps and increase the number of combat troops.
Western armed forces have largely demilitarized obsolete, Cold War-era unit levels, such as divisions and army corps. In their deployments overseas, brigades and battalions are the commonly used units. The Russian reform plans intend to do the same. Furthermore, most large unfilled framework units will be dissolved in order to focus on permanent ready units. If successfully carried out, these measures will increase the combat readiness of the armed forces. Additionally, the planned massive introduction of modern weapons and equipment as of 2011, as well as the formation of airborne rapid reactions forces, can create the capacity to conduct power projection abroad.
But it is doubtful whether there is any real chance that the restructuring of the armed forces will succeed. The military and political leadership are fond of announcing ambitious new military reform programs, but none of them have been carried out to any serious degree. The attempts at reforms are constantly thwarted by the country’s generals and a lack of political will. Currently, Defense Minister Anatoly Serdyukov is confronted with severe opposition from the military leadership, who remain focused on large-scale warfare against the United States and NATO. Although Russia’s defense budget rose rapidly during Putin’s two presidential terms, there was no considerable improvement of combat readiness because of rampant corruption and the inefficient allocation of resources.
In addition, the global financial crisis has hit Russia more severely than most other nations. As a result, diminishing federal funds will probably be spent on efforts to avoid social unrest than on improving military capabilities. Furthermore, the military and political elite still consider nuclear arms’ modernization to be its top security priority. But without modern-day armed forces, the Kremlin will not be capable of handling internal irregular conflicts nor of conducting operations abroad.
Lieutenant Colonel Marcel de Haas is senior research fellow at the Netherlands Institute of International Relations Clingendael. His book “Russia’s Foreign Security Policy of Putin, Medvedev and Beyond” will be published in February.

TITLE: Status Quo Restructuring
AUTHOR: By Konstantin Sonin
TEXT: Recent events concerning two automakers — GM and GAZ — underscore the difference in the U.S. and Russian governments’ approaches to dealing with the economic crisis.
The U.S. government acted decisively. The previous GM owners were replaced, creditors received as much compensation as was possible under the circumstances, and last week the giant automaker emerged from bankruptcy proceedings. Freed of more than two-thirds of its former debt load, the company now has a fighting chance in today’s difficult automobile market.
The Russian government, however, could not even carry out the first step in restructuring GAZ — removing Oleg Deripaska as the owner of the company. In addition, rather than writing off its debts, the firm was granted state guarantees on new debt.
When a company cannot meet its debt obligations and the owner is not replaced, this is always a recipe for disaster. In an economy that is functioning properly, ownership of such companies is transferred to either its creditors or to someone who can settle the demands of the company’s creditors. The new owner then decides the fate of the company’s managers; in some circumstances, it may choose to retain them.
But this approach is unworkable for state-owned businesses because they almost always have access to budgetary funds to pay off their creditors. In this situation, managers are always less motivated to restructure, and this is precisely why the granting of additional funds to state-owned businesses should always be accompanied by a sweeping reorganization of its top management. Without following that simple rule, the provision of state guarantees is, in effect, an even more ineffective form of support than subsidies. After receiving subsidies, managers have some form of stimulus to restructure their operations, but state guarantees are a direct invitation for a company to continue the status quo — that is, continue getting involved in the kind of unjustifiably risky projects that got them into trouble in the first place.
It requires a lot of political willpower by a country’s leaders to compensate creditors and redistribute ownership of a failing state company. Dealing with politically vital enterprises that have gone bankrupt is no easy task for any government. The U.S. administration used all of its leverage to force GM creditors to agree to the terms of restructuring.
In Russia, the government’s policy toward bankrupt companies has been based not on what is best for the economy, but according to what connections the company owner has with the ruling elite. GAZ and AvtoVaz, which received enormous federal funds to prop them up, are vivid examples of government inefficiency and incompetence.
Since a significant part of the world economy is in recession, Russia’s economic slump — although one of world’s worst — is not drawing a great deal of attention. But as soon as other countries that have efficient government institutions begin to pull out of the crisis, it will become clear that Russians should  have demanded a lot more from their government.

Konstantin Sonin, a professor at the New Economic School/CEFIR, is a columnist for Vedomosti.

TITLE: Brand New Opera Debuts in City
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: “Tsaritsa,” a modern opera focusing on the life of Catherine the Great and composed by David Tukhmanov, arguably the most acclaimed Soviet-era melodist, will see its world premiere at St. Petersburg’s Alexandriinsky Theater on Wednesday and Thursday.
The opera, which boasts opulent sets inspired by the interiors of the Catherine Palace in Tsarskoye Selo, covers the entire history of the empress’s reign. 
“What I find especially precious about David Tukhmanov’s score is that it has tonal, rhythmic music, and, most importantly, it has melodies which have almost evaporated from opera as a genre since the times of Sergei Prokofiev and Dmitry Shostakovich,” said Dmitry Bertman, the director of “Tsaritsa” and artistic director of Moscow’s Helicon-Opera Theater.
The staging will be performed by the soloists, choir and orchestra of the Helicon-Opera. 
Tukhmanov’s melodies made him a living legend and one of the most admired composers during the Soviet era. He left Russia for Germany in the wake of perestroika when he found himself, like many musicians of his generation, out of work and thrown into oblivion.
It took Tukhmanov three years to complete the opera, which the composer said has been his top priority during that time. “I was engrossed by the idea completely and would not let anything else distract me,” he said.
The idea first came to the composer more than ten years ago when he was living in Cologne, Germany. He was working on the opera without any hope of ever having it staged, motivated entirely by inspiration. 
“The first musical motifs date back to those times,” he recalls. “But I began working regularly on the opera three years ago, though it had not been commissioned. I was especially pleased by the fact that I was not limited or pressured by any orders.”
Tukhmanov’s enthusiasm proved to be infectious. He succeeded in winning over the poet Yury Ryashentsev to create the verse and libretto for the opera, and convinced the popular singer Lev Leshchenko to help in the crucial process of turning an ambitious idea into a real opera production.
Director Bertman said that “Tsaritsa” will be what he calls an “open opera” — a new approach to the traditional centuries-old genre. “In ‘Tsaritsa’ the audience will see a juxtaposition of a bold and contemporary acting style with traditional operatic singing,” he said. 
“It has everything necessary to become a most captivating show: There will be lyrical arias, powerful choir scenes, a superb orchestral score and bell-ringing; the libretto is engaging and all of the historical events that constitute the structure of the opera are very well known to the public.”
Bertman hopes that the opera will interest a broad range of audiences, from traditional opera-goers to those who prefer lighter genres. “Tukhmanov’s opera bears a tangible yet tasteful flavor of a musical, so, in truth, the production’s genre is a kind of fusion, a cocktail of opera and musical,” the director said.
Opulence is key to the production’s sets, which feature dozens of mirrors, ornate furniture, expensive fabrics and nearly 700 candles. 
The project’s ideologists stressed they were free to choose any venue in the city, but opted for the Alexandriinsky Theater with its beautifully restored historic interiors and stately monument to Catherine the Great in the garden opposite its entrance.
St. Petersburg opera-goers are familiar with Bertman’s work. His staging of Verdi’s “Nabucco” — renowned for the director’s very personal and psychological approach — has been running at the Mariinsky Theater since October 2005. Bertman’s production was originally created for Moscow’s Helicon-Opera, where it premiered in 2004 as a joint project with the Dijon Opera Theater and Paris’s Opera de Massy to high critical acclaim. 
While most directors tend to interpret “Nabucco” as a story of confrontation between two nations, Bertman created a passionate drama, with almost Biblical characters who mask their weakness and loneliness with cruel brutality.nBertman’s signature style is to create opera shows that explore the connections and parallels between ancient times, historic events and the modern day on various levels.
The Helicon-Opera is one of Russia’s most successful musical theaters, having won eight prestigious Golden Mask awards — Russia’s most important award for the performing arts — since it was founded in April 1990.
Moscow audiences will have an opportunity to see “Tsaritsa” in November when the production will travel to the capital. The Moscow performances are scheduled to take place at the State Kremlin Palace on Nov. 25 and 26.

“Tsaritsa” premieres at the Alexandriinsky Theater at 7 p.m. on Wednesday and Thursday. Plohchad Ostrovskogo 6, M: Gostiny Dvor. Tel: 312 1545. www.opera-carica.ru, www.helicon.ru

TITLE: Chernov’s choice
TEXT: The <strong>St. Petersburg Prosecutor’s Office</strong> has admitted that local music fans are under police surveillance — officially as a measure to counteract “extremist activities.”
The city’s Primorsky District police “have organized the exposure of members of informal entities, whose activities may have an extremist nature, on a permanent basis,” the web site of the Prosecutor’s Office reported on July 2.
According to the report, the district’s criminal police have identified and included on a register “88 people who attribute themselves to informal entities such as ‘Skinheads,’ ‘Aggressive Football Fans,’ ‘Punks,’ ‘Emos,’ ‘Black Metallers,’ ‘Fans of [the band] Kino,’ ‘Alternative Rock Fans,’ ‘Anarchists’ and others.”
Kino was a local 1980s pop-rock band influenced by The Cure and Duran Duran, and is still popular with young people in Russia, though it split up when its frontman and sole songwriter Viktor Tsoi died in a car crash in 1991. Plans to erect an official monument to Tsoi are underway in the city.
The report said that apart from the criminal police, “this work” is also conducted by neighborhood police inspectors and juvenile police departments.
Once exposed and registered, the music fans and members of the other “informal entities” are the subject of “preventive work” conducted by the district’s police officers, the district’s administration officials and educational institution staff to “prevent crimes, including those of an extremist nature.”
Since then-president Vladimir Putin signed the Law on Extremism in 2006, the law has reportedly been used indiscriminately by the police to persecute oppositionists, human rights activists and artists such as Novosibirsk-based artist Artyom Loskutov.   
On what grounds have the police and prosecutors decided that fans of music groups and people united on common philosophical grounds such as anarchists could be involved in extremist activities, Maxim Ivantsov, coordinator of the Youth Human Rights Group asked in a letter to the district’s prosecutor and police chief.
He also wondered what “informal entities” are meant by the word “others.”  Finally, Ivantsov inquired whether such activities by the Primorsky District’s criminal police are lawful.
Earlier this year, an unidentified police detachment stopped a concert at the local club Arctica and detained some 400 fans for hours, fingerprinting and taking photos of them, which can only be done with a person’s consent under Russian law.
Indeed, when so many departments and police officers are busy dealing with artists and music fans, criminals can walk free. 
The city’s big international shows this weekend are <strong>Nick Cave</strong> (Stereoleto, Lenexpo, Friday), <strong>Britney Spears</strong> (Ice Palace, Sunday) and <strong>Buena Vista Social Club</strong> (Oktyabrsky, Sunday). 
Don’t get caught.

<em>— By Sergey Chernov</em>

TITLE: Meat feast
AUTHOR: By Tobin Auber
PUBLISHER: The St. Petersburg Times
TEXT: Casa del Myaso — yet another restaurant to find a home in the cellars surrounding the city’s historic stock exchange — isn’t shy about expressing its fondness for meat. Its title translates as “house of meat” and the publicity materials that accompanied its recent opening announced that it is a “no fish restaurant.” 
     This is a restaurant for committed meat-lovers — the menu does in fact have one fish dish, but warns that you should whisper to the waiter when ordering. 
And that means bad news for vegetarians: There is only one option, a paltry plate of grilled vegetables (zucchini, aubergines, paprika and cherry tomatoes) at 250 rubles ($7.85) that’s unlikely to get the city’s veggies and vegans decamping en masse from The Idiot and Botanica.
The room itself is an open-brickwork cellar with high vaulted ceilings and an open kitchen at one end and a bar along another of the walls. It’s a warm, welcoming environment with upholstered velvet sofas, black leather chairs and classic Stax and Motown soundtrack, although the artworks prominently featured might not be to everyone’s taste. 
In the center stands the focal point of both the design and the menu — the Casa’s salad bar. If you order it on its own as a main course, the unlimited salad bar is a fairly steep 650 rubles ($20.50), but if you order it alongside a main course it’s still unlimited but comes at 450 rubles ($14) — and you get a bowl of soup into the bargain.
Beautifully presented on a sea of cracked ice, the salad bar selection is quite something. The usual pitfall here is that there are so many different things on offer that you end up with a severe case of indigestion. Casa del Myaso avoids this by keeping the list of delights on offer very short and there are no violent culinary clashes. 
Among the meaty delights you’ll find some incredible cream cheese (the waiter informed us it was made on the premises), some great herring and smoked salmon (so much for this being a fish-free zone) and not a smear of mayonnaise in sight. 
If taken on its own, then, the salad would make for a very healthy meal, as long as you resisted the temptation to pile your plate high with the smoked salmon, cream cheese and the excellent spiced toast which together formed a top-notch sandwich. 
From the main courses, which ran from 1,200 rubles ($38) for the Casa del Myaso steak to 660 rubles ($21) for the grilled ribs, we shared the duck leg confit with sarladaise potatoes and truffle pesto (690 rubles, $21.50.) The duck may have been a little too fatty for some, but this was one very happy reviewer thanks to the large quantity of succulent meat and excellent garnish. Unlike the salad bar which was very light and healthy, this is one to tackle when you’ve worked up a serious appetite.
Already struggling, we decided to share a tarte tatin with vanilla sauce and ice-cream (200 rubles, $6) which packed in the apples and loaded on the ice-cream — another palpable hit.
Casa del Myaso is worth trying out then, particularly as it has a pleasant terrace area for the summer that overlooks the stock exchange building. Vegetarians might like to bring something along to go with their grilled vegetables, however.

TITLE: Flying to Mars for $21,000 With No TV or Internet
AUTHOR: By Mansur Mirovalev
PUBLISHER: The Associated Press
TEXT: MOSCOW — Engineers broke a red wax seal and six men emerged from a metal hatch after 105 days of isolation in a mock spacecraft, still smiling after testing the stresses that space travelers may face on the journey to Mars.
Sergei Ryazansky, the captain of the six-man crew, told reporters at a Moscow research institute that the most difficult thing was knowing that instead of making the 276-million kilometer journey they were locked in a windowless module of metal canisters the size of railway cars.
The men, chosen from 6,000 applicants, were paid 15,000 euros ($21,000) each to be sealed up in the mock space capsule since March 31— cut off almost entirely from the outside world.
They had no television or Internet, and their only link to the outside world was communications with the experiment’s controllers — who also monitored them via TV cameras — and an internal e-mail system. Communications with the outside world had 20-minute delays to imitate a real space flight.
Each crew member had a personal cabin. The interiors had hatches similar to a submarine’s and were paneled in faux wood according to Soviet style of the 1970s, when the structure was originally built for space-related experiments. The module’s entrance was locked with a padlock and red sealing wax and twine — the kind that Soviet government bureaucrats have used for years to close up their offices at the end of the work day.
Common facilities included a gym and a small garden, and the modules were equipped with new European and Russian exercise and training equipment for biomedical research. The crew also had specially prepared meals and used toilets closely resembling those on the space station.
Some veteran space explorers belittled the value of the experiment, but its backers at the Russian and European space agencies insist that it will only move humans closer to a real mission.
“What we’re doing is important for future missions exploring the solar system,” said Simonetta Di Pipo, director of the human space flight program at the European Space Agency.
“The most difficult part was that the flight was not for real,” Ryazansky, wearing a blue, NASA-style jumpsuit with a large patch reading “Mars 500,” told reporters Tuesday, hours after he and the crew emerged from isolation.
Crew member Alexei Baranov said the worst thing was not being with his relatives: “The separation from my loved ones and nature was depressing.”
Television showed images of the men — four Russians, a German and a Frenchman — during their stay, conducting experiments, lifting weights or lounging in leather reclining chairs, surrounded by throw pillows and Oriental rugs. The men said most of them gained weight during their stay, exercising much of the time and running experiments for medical researchers.
Psychologist Olga Shevchenko said they avoided conflicts thanks to a busy schedule and intense physical training. However, she said they all complained about being deprived of the sight of the natural world and about being separated from their families.
While officials at the Institute for Medical and Biological Problems praised the experiment as a success and promised to conduct a 500-day simulation experiment later this year, some veterans of the Soviet and Russian space programs doubted its value.
“This is nothing but a test of the long-term isolation of average people,” two-time cosmonaut Valentin Lebedev wrote in an opinion column published in the Sovetskaya Rossiya newspaper last month. “Such an experiment has only vague relation to understanding the possibility of interplanetary flight.”
The experiment was the second for the institute, whose previous effort in 1999 ended in scandal when a Canadian woman complained of being forcibly kissed by a Russian captain and said that two Russian crew members had a fist fight that left blood splattered on the walls.
Russian officials at the time downplayed the incidents, attributing them to cultural gaps and stress.

TITLE: Taylor Says He Okayed Skull Use on Roads
AUTHOR: By Mike Corder
PUBLISHER: The Associated Press
TEXT: THE HAGUE, Netherlands — Former Liberian President Charles Taylor told a war crimes court Thursday he saw nothing wrong with displaying the skulls of slain fighters at roadblocks as his rebel forces swept into the country in a 1989 revolution.
The invasion of Liberia and his ascent to power was a prelude to Taylor’s involvement in the brutal 1991-2002 civil war in neighboring Sierra Leone, for which he is accused of 11 counts of war crimes and crimes against humanity.
He has pleaded not guilty to all charges at the Special Court for Sierra Leone.
Taylor is not on trial for offenses in Liberia, but his testimony appeared aimed at allegations at the heart of the prosecution case that rebels backed by Taylor in Sierra Leone used terror tactics, including systematic amputations to intimidate the population.
Taylor has dismissed those allegations as lies and rumors.
He used his third day on the witness stand to directly deal with some of the most grisly prosecution evidence — that his fighters in Liberia strung human entrails across roadblocks and displayed human heads on poles to strike fear into the local civilians and soldiers of the Liberian army.
He dismissed as “nonsense” the allegation that his troops disemboweled their enemies and tied their intestines across roads.
One of his former commanders who testified for the prosecution, Joseph “Zigzag” Marzah, said Taylor drove past such scenes. Taylor said that was “a blatant, diabolical lie.”
But the 61-year-old former president conceded that skulls of Liberian soldiers were used as a symbol of death and displayed at strategic roadblocks in 1980 as a warning to follow the orders of the revolutionaries.
Taylor, who earned an economics degree at a U.S. college, said he had seen images of skulls used in many “fraternal organizations” and Western universities.
“I got to realize they were enemy skulls and we didn’t think that symbol was anything wrong,” he said. “I did not consider it bad judgment. I did not order them removed.”
He also conceded atrocities were committed in Liberia, but said he had trained his small band of rebels — from their initial training in Libya — to abide by the laws of war.
“We found out that they were taking place and we acted to bring those responsible to justice,” he said. Rebel soldiers who committed excesses were court-marshaled and sometimes executed, but civilian judicial institutions were left in place in areas under rebel control.
Taylor told the three-judge panel that for his 168-strong force to seize power in Liberia it would need the support of the local population.
“There would be no excesses,” he said.
Taylor is the first defense witness in the trial, which opened in January 2008, following 91 prosecution witnesses who claimed Taylor commanded Sierra Leone rebels from the presidential mansion in Liberia. The rebels’ signature crimes were amputations, rape and the conscription of child soldiers and enslavement of women.
In his first three days, Taylor sketched a turbulent African continent in the 1980s that was the backdrop for American anti-communist efforts and African freedom fighters backed by Libyan leader Moammar Gadhafi struggling to shake off “the yoke of colonialism.”
Taylor is expected to testify for several weeks before the prosecution begins its cross-examination.

TITLE: U.S. Hit By 15 Percent Rise In Foreclosures
AUTHOR: By Alan Zibel
PUBLISHER: The Associated Press
TEXT: WASHINGTON — The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills.
The mushrooming foreclosure crisis affected more than 1.5 million homes in the first six months of the year, according to a report released Thursday by foreclosure listing service RealtyTrac Inc.
The data show that, despite the Obama administration’s plan to encourage the lending industry to prevent foreclosures by handing out $50 billion in subsidies, the nation’s housing woes continue to spread. Experts don’t expect foreclosures to peak until the middle of next year.
Foreclosure filings rose more than 33 percent in June compared with the same month last year and were up nearly 5 percent from May, RealtyTrac said.
“Despite all the efforts to date, we clearly haven’t got a handle on how to address the situation,” said Rick Sharga, RealtyTrac’s senior vice president for marketing.
More than 336,000 households received at least one foreclosure-related notice in June, according to the foreclosure listing firm’s report. That works out to one in every 380 U.S. homes.
It was the fourth-straight month in which more than 300,000 households receiving a foreclosure filing, which includes default notices and several other legal notices that homeowners receive before they finally lose their homes. Banks repossessed more than 79,000 homes in June, up from about 65,000 a month earlier.
On a state-by-state basis, Nevada had the nation’s highest foreclosure rate in the first half of the year, with more than 6 percent of all households receiving a filing. Arizona was No. 2, followed by Florida, California and Utah. Rounding out the top 10 were Georgia, Michigan, Illinois, Idaho and Colorado.
The Obama administration in March launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments, but it’s off to a slow start.
As of early July, about 130,000 borrowers were enrolled in three-month trial modifications under the plan, and 25 mortgage companies have signed up to receive potential payments of up to $18.6 billion, according to the Treasury Department. But analysts and housing counselors say it isn’t having much of an impact.
“The plan isn’t going well, at least not yet,” said Mark Zandi, chief economist at Moody’s Economy.com. “It’s a creative plan with lots of incentives, but it’s very complex.”
In testimony prepared for delivery at a Senate hearing on Thursday, Bank of America executive Allen Jones said the company has about 80,000 loan modifications in the works under the new government guidelines, including some that aren’t in the three-month trial phase yet.
“We have achieved this level of success by devoting substantial resources to this effort,” Jones said, noting that the company has more than 7,000 employees handling calls and working on modifications. Industry experts, however, say the response from most mortgage companies has been lackluster.

TITLE: Pakistan Promises It Will  Catch Mumbai Attackers
AUTHOR: By Sarah El Deeb
PUBLISHER: The Associated Press
TEXT: SHARM EL-SHEIK, Egypt — Pakistan promised India on Thursday that it would do “everything in its power” to bring the Mumbai terror attackers to justice, a key demand by New Delhi to improve relations.
The prime ministers of the two nuclear powers also agreed that action on terrorism should not be linked to their peace talks, the joint statement said, something that has been asked for by Islamabad.
Indian Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani met on the sidelines of the Non-Aligned Summit in Sharm el-Sheik, in a much anticipated meeting that comes after a seven-month freeze in their peace talks due to an attack by alleged Pakistani gunmen on India’s financial capital of Mumbai that killed 166 people.
“Prime Minister Singh reiterated the need to bring the perpetrators of the Mumbai attacks to justice. Prime Minister Gilani assured that Pakistan will do everything in their power in this regard,” said the statement.
The two prime ministers agreed to cooperate on the investigation into the incident, which India maintains was planned and launched from Pakistan.
“Pakistan has provided an updated status dossier on the investigations of the Mumbai attacks and (the prime minister) has sought additional information and evidence,” the statement said.
The leaders also agreed that they would “share real time, credible and actionable information on any future terrorist threat.”
In a move of great importance to Pakistan, the two leaders also agreed to delink their wider talks on issues such as water, demilitarization and the disputed territory of Kashmir from the discussions over terrorism.
India previously had been unwilling to continue the composite talks until its concerns over Pakistan response to terrorism had been addressed.
It was unclear exactly when the composite talks would restart, but the statement did promise that the countries’ foreign secretaries would “meet as often as necessary” and the foreign ministers would meet at the upcoming UN General Assembly meeting in September.
“The most important thing is that what we were hoping, for that there should be constructive engagement, (happened),” said Pakistani minister of state for foreign affairs, Nawabzada Malik Amad Khan.
“They decided in the future there will be constant engagement and that will help us break the deadlock,” he told The Associated Press.
In India, meanwhile, Lalit Mansingh, the former foreign secretary, described the meeting as a step forward and welcomed Pakistan’s commitment to go after the attackers, noting that they are scheduled to try five suspects for plotting the attacks.

TITLE: China’s Economic Growth Accelerates
AUTHOR: By Joe McDonald
PUBLISHER: The Associated Press
TEXT: BEIJING — China’s economic growth accelerated in the second quarter amid a stimulus-fueled investment boom, boosting hopes the world’s third-largest economy is emerging from the global downturn.
The economy expanded by 7.9 percent in the April-June period from a year earlier, up from 6.1 percent growth in gross domestic product the previous quarter, the National Bureau of Statistics reported Thursday.
“The data showed the economic recovery is stronger than expected,” said economist Zhu Jianfang of Citic Securities Ltd. “There will be no suspense about achieving the government’s goal of 8 percent GDP growth this year.”
Many analysts expect China to be the first major country to emerge from the worst global slump since the 1930s. That could help pull the rest of the world out of recession as China buys more raw materials, industrial components and consumer goods from struggling economies in the United States, Europe and elsewhere.
The International Monetary Fund earlier this month raised its forecast of China’s 2009 growth by one percentage point to 7.5 percent. The World Bank boosted its forecast last month from 6.5 percent to 7.2 percent.
Goldman Sachs said compared with the previous quarter — the way other major economies measure growth — China’s second-quarter growth accelerated to 16.5 percent on an annualized basis.
The government warned, however, that a full-fledged recovery is not firmly established.
“The difficulties and challenges in the current economic development are still numerous,” a statistics bureau spokesman, Li Xiaochao, said at a news conference. “The basis of the rebound of the people’s economy is not stable.”
The faster growth came despite a plunge in China’s trade and foreign investment since late 2008, reflecting China’s continued dependence on its 4 trillion yuan ($586 billion) stimulus to keep the economy expanding.
The government is trying to reduce reliance on exports by boosting domestic consumption with its plan to pump money into the economy through a massive scheme to build new airports and other public works.
Most of the money has gone to state-owned construction companies and suppliers of steel and concrete, but it is flowing into the private sector as those companies pay workers and buy other materials.
Rock Jin, chief economist for Sinolink Securities in Beijing, said 2.5 percentage points of the 7.9 percent quarterly growth came from stimulus-financed investment and the rest from production.
“If the investment-driven portion of GDP growth can be maintained around 2.5 percent, it will be no problem achieving the goal of 8 percent growth this year,” Jin said.
Consumer prices in June fell 1.7 percent from a year earlier, the statistics agency said, giving Beijing a freer hand to keep spending on its stimulus without a danger of adding to pressure for prices to rise.
Beijing’s stimulus aims to reduce reliance on exports through higher spending on public works.