SOURCE: The St. Petersburg Times
DATE: Issue #1497 (59), Tuesday, August 4, 2009
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TITLE: 2010 Budget Plans Huge Cuts In Expenditure
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The government last week approved a draft budget for 2010 that sees deep cuts in key areas while dramatically boosting social spending.
In total, a list of 56 federal programs received 30 percent cut in funding, including a 57 percent decrease in a program for transportation infrastructure and a 70 percent cut in spending on rural development.
Instead, the government will focus on social spending, devoting a whopping 70 percent of the budget to welfare programs. And a planned 36 percent increase in pensions will mark the biggest rise in retirement subsidies in the country’s history.
“We chose to increase the deficit rather than cut expenses, as it would, first of all, lead to a sharp drop in the level of social support for Russians, as well as the suspension of anti-crisis measures and development programs,” Prime Minister Vladimir Putin said at the Cabinet meeting Thursday.
The 2010 draft budget foresees a deficit of 3.2 trillion rubles ($100 billion) in 2010, or 7.5 percent of gross domestic product. The figure is expected to drop to 4.3 percent in 2011 and down to 3 percent the next year.
“A deficit at this level will not do any harm to the country’s macroeconomic stability,” Putin said of next year’s budget. Budget revenues will total 6.6 trillion rubles, while expenditures will amount to 9.8 trillion rubles.
To cover the deficit in 2010, 1.7 trillion rubles will be taken from the Reserve Fund, which will almost exhaust it, and 681.7 billion rubles will be taken from the National Welfare Fund. The Finance Ministry also plans to borrow 844.1 billion rubles in Russia and issue 649.7 billion rubles of eurobonds next year.
Among key new budget priorities are federal programs for the development of nuclear technologies, digital television and the economy of Ingushetia, Putin said. “The Ingush economy and social sphere need our additional support,” he said, singling out no other region.
Putin demonstrated his support for the republic on Thursday by visiting the convalescing leader of the region, Yunus-Bek Yevkurov, in the hospital, where he wished the Ingush president a happy birthday and gifted him a ceremonial dagger.
“Here’s a gift for you. True, it wasn’t made in the Caucuses, but it’s a pretty thing,” Putin said at the hospital. Yevkurov was wounded in an assassination attempt in Ingushetia, a restive southern region plagued by terrorist bombings and kidnappings.
Overall expenses in federal programs, which are designed to spur development in socially important sectors, fell to 700 billion rubles from the 1 trillion rubles previously planned. Funds for the federal transportation program fell to 219.6 billion rubles from 507 billion rubles, and spending on rural development programs dropped to 7.7 billion rubles from 24.1 billion rubles.
Education saw one of the most severe cuts, with spending on the sector set to be cut 40 percent to 16 billion rubles from 27.1 billion rubles this year.
“The expenses on national defense and security remain almost in full as planned,” Putin said at the Cabinet meeting. The budget for federal security programs, however, has been cut by 14 percent to 81.8 billion rubles, the government said on its web site.
“A few hundred billion rubles will be spent on anti-crisis measures next year, “Finance Minister Alexei Kudrin told reporters after the Cabinet meeting. The government reserved 250 billion rubles for bank capital injections, and another 10 billion rubles for loans to single-factory towns. But overall funding of anti-crisis measures will account for 0.8 percent of spending, down from 9.1 percent, according to the draft budget.
Oil will continue to fund a large part of expenses, standing at 30.1 percent of spending in 2010, which is expected to increase to 36.4 percent in 2012.
State coffers will also benefit from additional revenues of 96.1 billion rubles from increased excise taxes and duties, including 63.8 billion rubles from excise duties on beer.
The Finance Ministry will be negotiating all the budget expenses in detail for the next two months. By Oct. 1, it has to submit the budget to the government.
Putin told all ministries on Thursday to present their optimization programs to the government before Nov. 1.
TITLE: Crashes Spur Talk, But Road Threat Remains
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A series of horrific accidents has pushed road safety high on the political agenda, sending lawmakers and bureaucrats scrambling to suggest solutions, but experts said the reaction has been more about PR than improving the situation on the country’s dangerous highways.
Two prominent State Duma deputies from United Russia on Thursday called for another tightening of sanctions for motorists breaking the rules of the road and said they would submit a bill in the fall.
The chairman of the Duma’s Constitution and State Affairs Committee, Vladimir Pligin, and his first deputy, Alexander Moskalets, proposed a lifetime driving ban for motorists who are repeatedly convicted of serious violations, including speeding, drunk driving or running red lights, Vedomosti reported.
Pligin argued that last year’s changes — which included increasing the fine for not wearing a seat belt to 500 rubles (about $16) from 100 rubles — helped save “a few thousand lives.”
Meanwhile, an emergency meeting Thursday of regional leaders and transportation officials in the Public Chamber brought few tangible results.
Prominent pediatrician Leonid Roshal proposed introducing a special fleet of helicopters and airplanes to rush paramedics to the scene of accidents. Russia is the only member of the G8 that does not use helicopters to rescue accident victims, Roshal said.
Vyacheslav Lysakov, head of the Free Choice Motorists’ Movement, told the meeting that the country needed new, quality roads and a safety awareness campaign on state TV.
“We need a carrot-and-stick policy. … A 30-second clip about road safety will yield a result. There is no need to show naked women and beer,” Lysakov was quoted as saying by Interfax.
The country’s chief traffic policeman, Viktor Kiryanov, said it would be wrong to blame the police and that road safety policies initiated some years ago were heading in the right direction.
“I want a normal dialogue and not just accusations against us, so that together we can decide what must be done,” he said, Interfax reported.
The series of accidents has seemingly electrified the country’s leadership from the top.
Last week, two bus crashes in the Rostov and Novosibirsk regions killed 29 people and injured more than 40.
The news prompted President Dmitry Medvedev to call the situation on the country’s roads “monstrous.” Speaking at a Security Council meeting, Medvedev urged traffic police and other law enforcement agencies to work harder to bring order to the country’s chaotic roads.
Yet the accidents did not stop. On Monday, 11 people were killed in Dagestan when three Ladas piled up after a car sped into oncoming traffic.
Anatoly Kucherena, head of the Public Chamber’s commission on law enforcement oversight and judicial reform, said Tuesday that more than 200 people had died in car accidents just in the last three days. Official statistics put the figure at just over 300.
Interior Minister Rashid Nurgaliyev on Wednesday sought to reduce dangerous driving among the police by ordering all staff to re-pass driving tests within a month.
Sergei Kanayev, head of the Moscow branch of the Federation of Russian Car Owners, said any tightening of sanctions would only increase rampant corruption, however.
“This will not have the slightest positive effect,” he told The Moscow Times.
Kanayev said the deputies’ proposals were just a political game and that real improvement would come only from rooting out corruption and further restricting the use of migalki, the flashing blue lights popular with state officials to avoid traffic jams.
Yevgeny Gontmakher, director of the Russian Academy of Sciences’ Center for Social Policy, said the proposals were a ploy to detract from the economic crisis.
“Everybody understands and will be in favor of improving road safety and increasing fines,” he said in an interview.
Mikhail Vinogradov, head of the Center of Current Politics, a think tank, said recent political actions would be short-lived. “We won’t hear much of this in a few weeks time,” he said.
Vinogradov argued that many of the attempts were futile as long as no serious reform of traffic police is initiated. The police, he said, are more interested in fines than in increasing safety for motorists and pedestrians.
“Such technical and administrative steps are no solution as long as corruption remains unsolved,” he said.
Last year, 29,936 people died in road accidents, or almost 83 per day. More than 270,000 were injured, according to official police statistics.
While nationwide, roughly 10 percent of accident victims died, the most dangerous place for drivers was Chechnya, which had a fatality rate of 30 percent last year.
A recent World Health Organization report, based on data for 2007, found that the death rate on Russian roads was 25.2 fatalities per 100,000, about double the U.S. rate of 13.9 and five times higher than in Britain, which has 5.4 and one of the best safety records in Europe.
The survey also found that an extremely high percentage of victims on the roads — 36 percent — are pedestrians. The share of pedestrian fatalities in the United States is only 11 percent.
Experts blame drivers’ widespread disrespect for even basic traffic safety rules, coupled with soaring vehicle ownership and poorly maintained roads and cars.
But despite the spate of multi-victim crashes, the safety statistics have actually improved somewhat this year. The number of road deaths was 10,277 in the first six months of 2009, 10 percent lower than last year. The number of injured fell 7.3 percent, and the number of accidents was down 6.6 percent, the traffic police said in a statement on its web site.
TITLE: Lukashenko Holds Out on Creation of Joint Task Force
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Belarussian President Alexander Lukashenko refused to sign an agreement Saturday that would create a rapid-reaction security force, casting doubt on Moscow’s plans to form a post-Soviet military alliance and suggesting that a serious rift in relations with Minsk continues.
Lukashenko attended a Collective Security Treaty Organization summit in the Kyrgyz resort of Choplon-Ata with other heads of state from the seven-member body, but he made no public comments. He boycotted the last CSTO summit, held in Moscow in June, where Belarus was supposed to assume its rotating presidency.
In a sign that Minsk was unrepentant for the slight, Moscow said it would continue to act in lieu of Belarus. We will hold “the CSTO’s technical presidency until Belarus is ready to take on this function fully,” Foreign Minister Sergei Lavrov said Saturday, Interfax reported.
On a more positive note for the Kremlin, Kyrgyzstan agreed to let Russia bolster its troops in the country by opening a joint military training center, according to a memorandum published on the Kremlin’s web site.
Kyrgyzstan has said the facility will be located at an abandoned Soviet-era military base near the southern city of Osh, close to the Uzbek border.
The memorandum allows Russia to locate “up to a battalion” of new troops in the country and station them at a training center. By Nov. 1, the sides will sign an agreement on a “united Russian military base” that would include “all Russian military sites in the Republic of Kyrgyzstan, including the Russian air base in Kant.”
Kyrgyzstan had previously denied that it would allow for a second Russian base, which could be seen as disturbing the balance of foreign powers there. The United States operates an air base in Manas, which it won permission to keep in June after promising more money.
Lavrov suggested on Saturday that the terms of the deal — including the number of new Russian troops — could change by November.
“All questions regarding the geographic parameters of the new Russian military presence and the financial details will be discussed. … The overall number will be determined by military specialists depending on the security needs of the region,” he said, Interfax reported.
The Kyrgyz training center was initially envisioned as a part of the CSTO rapid-response force, which was proposed in February to bolster military capability in energy-rich Central Asia, a Muslim region sensitive for Moscow’s security interests. It has also been described as boosting the military dimension of the alliance, which has served primarily as a forum for security consultations.
The CSTO currently has a rapid-reaction force of about 3,000 but without a unified command. Belarus and Uzbekistan have refused to join, leaving remaining members Russia, Armenia, Kazakhstan, Kyrgyzstan and Tajikistan to the task.
Uzbekistan, which experts believe has the strongest military capacity in the area, has veered from the regional tradition of Kremlin-friendly policies after Russia refused in November to side with Uzbekistan in Central Asia’s ongoing debate over water use.
Relations with Belarus, once Russia’s closest ally, have deteriorated significantly in recent months.
Minsk initiated unprecedented steps to achieve better ties with the European Union earlier this year, winning membership in the 27-member bloc’s Eastern Partnership program, which was duly criticized by Moscow.
When Lukashenko snubbed the CSTO summit in June, an angry President Dmitry Medvedev complained that he had not even called to explain why. Lukashenko also skipped an informal Commonwealth of Independent States gathering in Moscow last month.
Lukashenko’s stance is seen as a delicate balancing act between Moscow and the West, as his country is on the verge of bankruptcy. Belarus this year received $1.5 billion loans each from Russia and the International Monetary Fund.
Russia has delayed another $500 million tranche, saying the country could go bankrupt as early as next year — a claim Lukashenko hotly denied.
Alexei Malashenko, an analyst with the Carnegie Moscow Center, said the summit showed that the Belarussian president was just interested in garnering more bargaining power.
“He will sign only if he gets something for it, first and foremost loans. For now, he is just using it as a lever against Russia,” he said.
Malashenko argued that the rapid-reaction force was not worth much without Belarus.
“It is just Russia, some Central Asian republics plus Armenia. That is not Moscow’s vision for this,” he said.
He also warned that if Uzbekistan opted to leave the Collective Security Treaty Organization, it might view the Russian base in Kyrgyzstan in a different light. “This might then be a threat to Uzbekistan’s security,” he said.
Vladimir Zharikhin, deputy director of the Moscow-based CIS Institute, a think tank, said it was understandable that Belarus was not very interested in a rapid-reaction force in Central Asia.
“[Lukashenko] does not see any particular danger for his country, which lies in a totally different area,” he said.
Zharikhin added that the rapid-reaction force, which he described as “a security guarantee against terrorist actions in participating countries,” could probably do just as well without Belarussian participation.
TITLE: State Weapons Firm Executive Shot Dead
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — An unknown gunman shot and killed a manager at state-owned air-defense manufacturer Almaz-Antei late Thursday in what was the city’s third high-profile contract killing in three days.
Andrei Barabenkov was shot in the head at close range and died on the spot, investigators said Friday.
The attack took place at 6:45 p.m. in full daylight on the city’s southern Lomonosovky Prospekt. National media reported that quite a few people were present in the courtyard between a school and apartment buildings when the shot was fired.
Investigators said the killer met the victim just after Barabenkov parked his car, a Citro?n C5 sedan. Photos from the crime scene showed a middle-aged man lying on the pavement with traces of blood on his head.
Detectives were questioning more than six witnesses, Investigative Committee spokesman Anatoly Bagmet told Interfax. He said an empty cartridge from a TT pistol was found at the crime site.
The motive was not immediately clear.
The Investigative Committee identified the victim just as a staff member of Almaz-Antei. The company later confirmed Barabenko’s death but stressed that his killing could not be linked to his job, because he had worked in the marketing department.
“[Barabenkov] had nothing to do with commercial projects — he specialized in informational-analytical work,” company spokesman Yury Baikov said, RIA-Novosti reported.
But national media reported over the weekend that Barabenkov had been responsible for Almaz-Antei’s considerable real estate holdings.
Barabenkov had headed the real estate department of the company’s marketing division, the dailies Moskovsky Komsomolets and Izvestia reported on their web sites.
Reports also suggested that the victim was engaged in a conversation with his murderer or an accomplice just before he was shot.
Eyewitnesses said they saw as many as four people running away after the shooting. The victim’s briefcase was found in a courtyard near the crime scene Friday morning, the reports said.
It is not the first time that Almaz-Antei has been hit by a killing. In 2003, one year after the air-defense conglomerate was amalgamated from two former Soviet manufacturers, Almaz and Antei, its CEO Igor Klimov was gunned down in Moscow.
That same day, Sergei Shchitko, a commercial director at a subsidiary, was also killed.
Investigators later blamed the murders on infighting for control of the firm. Two men, Konstantin Bratchikov and Stanislav Tyurin, were tried for ordering the killings but were acquitted twice by Moscow City Court, most recently in November 2008.
Almaz-Antei is the biggest Russian defense company and was ranked the 16th largest among global arms producers last year by the U.S. publication Defense News. Last year, the company’s revenue exceeded $4.6 billion.
The shooting of Barabenkov comes just two days after separate assassination attempts on a reputed crime boss and Isa Yamadayev, an opponent of Chechen President Ramzan Kadyrov.
Vyacheslav Ivankov, who has been called the godfather of the Russian mafia, was badly injured when a sniper shot him in the stomach Tuesday evening.
Ivankov was rushed to the hospital where he underwent emergency surgery.
TITLE: Prime Minister Says Lake Baikal Not Under Threat
AUTHOR: By Stuart Williams
PUBLISHER: Agence France Presse
TEXT: MOSCOW — Prime Minister Vladimir Putin on Saturday dived to the bottom of the world’s deepest lake aboard a mini-submarine, in a highly mediatized stunt unusual even by the standards of the Russian hardman.
Putin, wearing special thermal blue overalls, was able to examine the unique flora and fauna of Lake Baikal in Siberia during his four-hour journey underwater aboard the Mir-1 submarine.
“I’ve never experienced anything like it in my life,” the prime minister, who served eight years as Russian president, told state television aboard the support ship after resurfacing.
“It’s a special feeling. What I saw impressed me because with my own eyes I could see how Baikal is, in all its grandeur, in all its greatness,” he added.
The lake’s mythological beauty has always held a special place in the heart of Russians and its fresh waters are home to a variety of endemic species, most notably the Baikal seal.
“The dive is going perfectly, there is a perfect view with the lights,” Putin told Russian journalists from the depths of the lake on a crackling radio link-up during the dive.
However he expressed some surprise about how murky the water was in the lake, which contains around a fifth of the world’s freshwater reserves.
“The water, of course, is clean from an ecological point of view but in fact it’s a plankton soup, or so I called it,” he said.
The Mir-1 is the same mini-submarine that in 2008 set a world record for the deepest dive in a lake by diving to 1,680 meters.
Russian news agencies said Putin had dived to a depth of around 1,400 meters — the deepest point in the lake’s southern part — and safely returned to the surface after four hours underwater.
Excited Russian journalists even asked Putin on his return if he now intended to visit the International Space Station (ISS) for his next exploit, but he played down this idea.
“On earth there is a lot of work to do,” the RIA Novosti news agency quoted Putin as saying.
Judo-mad Putin, 56, prides himself on keeping a peak physical condition and has raised eyebrows with a series of adventures over the last years.
Just the day earlier, he clipped a radio transmitter onto a beluga whale named Dasha in Russia’s Far East.
Famous official pictures taken during his 2000-2008 presidency showed him fishing with a muscular naked torso that would impress any fitness fanatic while last year he fired a tranquilizing dart at a tiger in the Far East.
But imagemakers have clearly been at pains to promote a softer side and the last months have seen him in unexpected situations ranging from singing in a classroom to denouncing the hunting of baby seals.
Back in his offices in Moscow, Putin has taken a front line role in fighting the economic crisis, which has ended several years of dynamic growth in Russia and threatens to impact its economy for years to come.
Putin has in the past also sailed on military submarines and even co-piloted a fighter jet. But RIA Novosti commented: “The dive on Mir-1 is one of the prime minister’s most exotic experiments.”
TITLE: Crime Among Police Rises 10%
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Top law enforcement officials continued their pledges to sniff out corruption and crime among their ranks Thursday, saying police had committed 10 percent more offenses this year and were the country’s biggest source of graft.
The head of the Interior Ministry’s internal investigation department, Oleg Goncharov, said Thursday that police officers committed 2,500 crimes in the first half of this year, or 10 percent more than a year earlier, Interfax reported.
Of the offenses committed on duty, 22 percent were bribe-taking, Goncharov said at a news conference to discuss the work of the internal investigation service. He also called for police chiefs to declare their income and property.
Speaking at the conference, Interior Minister Rashid Nurgaliyev referred to the supermarket shootings by police major Denis Yevsyukov in April, calling them a “tragedy,” Interfax reported.
Earlier this week, he said those recommending people for senior police posts would be held responsible for their actions.
Nurgaliyev also mentioned the arrest earlier this month of a senior Interior Ministry consultant, Alexander Zharkov, who is accused of receiving an $850,000 bribe “on the street outside the ministry” to halt an investigation.
“It’s an unprecedented example of betraying the interests of the service,” he said.
Goncharov complained that police convicted of crimes were not receiving adequate sentences. “Even though the majority commit crimes classified by lawmakers as serious, fewer than half of the officers convicted are sentenced to real imprisonment,” he said.
In an interview with Vedomosti published Thursday, Investigative Committee head Alexander Bastrykin said policemen were by far the most often charged with corruption, followed by doctors and teachers.
“Statistics show that the most corrupt spheres are the security services (3,329 people were charged in 2008), public health (433 people) and education (378 people),” Bastrykin said.
He said, however, that he “treats such statements with skepticism,” calling corruption “quite latent.”
He also criticized the legislation on corruption, saying it does not include a clear definition of what constitutes a crime. He called for investigators to be given up to 30 days to investigate corruption before pressing charges.
In the first quarter of this year, 4,155 corruption investigations were opened, up 19 percent year on year, he said. In 2008, there were 10,000 criminal investigations into corruption, an increase of 1.6 percent from 2007.
Bastrykin also called for the confiscation of assets belonging to people convicted of economic crimes, even if they signed them over to relatives. “Let’s say we proved that an official stole and with the loot built a big estate, signed to his mother-in-law. That means we should evict the mother-in-law from her dacha and give the estate to the state,” he told Vedomosti.
The Justice Ministry earlier this month announced a competition for experts to come up with ways of fighting corruption among state officials on the web site Zakupki.gov.ru. It asks experts to come up with methods to cut corruption by at least 50 percent. The tender is worth 1.6 million rubles (about $50,000) and experts have until Oct. 10 to submit their recommendations.
TITLE: President Unveils Power Plant in Tajikistan
PUBLISHER: The Associated Press
TEXT: President Dmitry Medvedev unveiled a huge hydropower plant on Friday in the impoverished nation of Tajikistan that Moscow hopes will help further boost its economic clout across Central Asia.
The Russian government owns a 75 percent stake in Sangtuda-1, which was built in a river valley about 90 kilometers north of Afghanistan.
During Friday’s opening ceremony, Medvedev and his Tajik counterpart, Emomali Rakhmon, turned a key to light up a grid illustrating areas of the country to be supplied by the plant. When it reaches its designed capacity, the $720 million power plant is due to account for 12 percent of the electricity output in Tajikistan, which suffers from chronic power shortages in the winter.
Tajikistan, with its economy ruined by civil war in the mid-1990s, has pinned its hopes on new hydropower plants built with financial and technical assistance from Russia. Authorities believe that new facilities could eventually enable Tajikistan to satisfy its own energy demands and also allow the sale of power to nearby countries, including Afghanistan and Pakistan.
“With this hydroelectric power station, electricity generation in the country will be increased by 8 million kilowatt hours daily, which will contribute to a partial solution to electricity shortages,” Rakhmon said.
As the main stakeholder in Sangtuda-1 and the financial backer for other proposed energy projects, Russia stands to be the primary beneficiary of the development and sale of hydropower in the region.
At a meeting with his Pakistani, Afghan and Tajik counterparts Thursday, Medvedev spoke in support of energy projects as a way to boost economic development in Afghanistan and surrounding countries.
TITLE: Moscow, Kiev Avoid Use of Tit-for-Tat Expulsions
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Moscow and Kiev have tempered their retribution in the latest diplomatic spat, apparently agreeing to expel just one representative each and allow two consul generals to remain at work.
Ukraine’s Foreign Ministry said Friday that it would not insist on expelling the Russian consul general in Odessa, Alexander Grachyov.
“That doesn’t mean that Ukraine made a mistake or that the Ukrainian Foreign Ministry no longer believes that Grachyov’s activities go beyond the bounds of his diplomatic status,” a Ukrainian Embassy representative told Interfax.
On Wednesday, Moscow had proposed that Kiev recall its consul general in St. Petersburg, Natalya Prokopovich, although it later suspended the proposal.
Two other diplomats were not as lucky, however.
Moscow expelled Igor Beryozkin, identified by Kommersant Ukraine as head of the embassy’s political section, while Kiev last week ordered out Vladimir Lysenko, an adviser at the Russian Embassy in Kiev.
Beryozkin reportedly oversaw political ties, including the status of Russia’s Black Sea Fleet base in Sevastopol.
TITLE: In Brief
TEXT: Phone Voting in 2010
MOSCOW (SPT) — Voters may be able to cast their ballots by cell phone as early as March 2010, Vladimir Churov, the country’s top elections official, said at the Seliger youth camp on Sunday.
“I think that in March next year we’ll begin using electronic voting methods, and the citizens of our country will be able to make their choice using mobile phones,” Churov said, Interfax reported.
“The less of a human element there is, the fewer mistakes are made,” Churov told the news agency. “If you stick a coin in a soda vending machine, you can’t start arguing with the waitress. This is the same idea,” he said, apparently referring to widespread complaints of voting irregularities in recent elections, including local and regional campaigns in March.
Gennady Raikov, the Central Elections Commission’s official overseeing electronic voting, told Interfax that a law would be passed by the end of the year to allow electronic voting. He said the technical aspects of the system were already developed.
TITLE: AvtoVAZ Workers Prepare for Protest
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: AvtoVAZ workers are set to begin protests this week after the carmaking giant halted production for a month on Friday because of overflowing inventories and flagging demand.
Yedinstvo, an independent labor union, will hold a rally on Thursday to appeal to the federal government to “create favorable living and working conditions in Tolyatti,” where AvtoVAZ employs more than 100,000 people.
“Only the government can fulfill these demands,” union coordinator Pyotr Zolotaryov said.
The government has been quick to act upon signs of social unrest. After 400 unpaid factory workers blocked a highway outside the Leningrad region town of Pikalyovo, Prime Minister Vladimir Putin made a lightening visit to the town, where he rebuked the factory’s owner, Oleg Deripaska, and ordered him to reopen the plant.
President Dmitry Medvedev followed up a week later by threatening to fire governors who failed to cope with unemployment and wage arrears.
AvtoVAZ has said that by halting its assembly line it hopes to bring production volumes back in line with demand and cut costs while retaining jobs. Workers will be paid two-thirds of their average salary during the stoppage.
But when the plant opens again in September, production will switch to a 20-hour week with a corresponding salary reduction. Yedinstvo estimates that the average salary of 12,000 rubles ($380) per month will be effectively cut to 6,000 rubles ($190), Zolotaryov said.
“The atmosphere at the plant is very tense, because people don’t know anything about their future, and AvtoVAZ management hides their intentions and plans about company operations,” Zolotaryov said.
But the firm’s travails may have repercussions that extend beyond its own factory workers. Parts makers are also finding their future dependent upon that of AvtoVAZ. Plastik, which makes steering wheels and bumpers for Lada cars, will not be working during August because of the stoppage. It will instead send most of its 5,000 employees on unpaid leave, said a source in the Syzran-based company who requested anonymity in line with company policy.
While no one was available for official comment at Balakovoresinotekhnika, which makes rubber components for AvtoVAZ, a person who answered the phone said the plant, which employs about 10,000 people, has been stopped for the past two weeks.
Yegorshinsky Radio Plant, another AvtoVAZ supplier in the Sverdlovsk region, filed for bankruptcy last month.
The shutdowns come amid worries that AvtoVAZ may lay off one-fourth of its work force. Acting president Igor Komarov is considering firing 27,000 workers, Interfax cited a source as saying last week. Komarov has headed the company while president Boris Alyoshin has been on vacation. AvtoVAZ has denied that plans for a layoff exist. Zolotaryov said employees had not yet been notified of any layoffs.
TITLE: In Brief
TEXT: Moscow Comes Closer
ST. PETERSBURG (Bloomberg) — Russian Railways, the country’s railroad monopoly, said its new high-speed Sapsan trains manufactured by Siemens will halve travel time between Moscow and St. Petersburg, the country’s two biggest cities.
The train completed its first test run Thursday, reaching an average speed of 160 kilometers to 250 kilometers per hour, allowing it to cut travel time between the two cities to 3 hours 45 minutes from as long as 8 hours, the Moscow-based company said Thursday in an e-mailed statement.
Russian Railways plans to begin operating the new link in December. In May 2006, the state-run monopoly signed a 276 million-euro ($388.4 million) contract with Siemens, Europe’s biggest engineering company, for eight high-speed trains and agreed the following April to pay 354.1 million euros to receive technical support for 30 years, according to the statement.
Ikea to Complete Mall
MOSCOW (Bloomberg) — Russia’s government said it and Ikea, the world’s biggest home-furnishings retailer, reached a pact to complete a mall development after agreeing to correct “deficiencies” in construction.
Russian officials and Ikea managers have agreed to come up with a plan by Aug. 14 that would rectify construction problems and allow the mall in the city of Samara to open, the Economy Ministry said in an e-mailed statement Thursday.
Ikea in March said it may halt expansion in Russia after the authorities balked at granting approval for the mall. Ikea has faced at least four disputes with authorities while opening 12 stores since first entering Russia in March 2000.
Libel Case Settled
MOSCOW (Vedomosti) — Gunvor co-owner Gennady Timchenko and The Economist reached a settlement in London’s High Court on Tuesday over a libel suit filed in January.
Timchenko sued the magazine over an article from November 2008 that linked the rise of his oil trading company in 2003 and 2004 to his acquaintance with then-President Vladimir Putin. He demanded undisclosed damages for libel and a ban on the publication from publishing similar statements.
A joint statement from The Economist and Timchenko will be published in the next issue, a spokeswoman for the magazine said, declining to elaborate.
Oligarch Faces U.K. Trial
LONDON (Bloomberg) — Oleg Deripaska, one of Russia’s wealthiest men, can be sued in the U.K. by a former business partner who is seeking at least $3 billion, a London court ruled.
A three-judge panel at the Court of Appeal in London said Friday that a U.K. court could hear the case, upholding a lower court’s ruling. Lawyers for Deripaska argued in earlier hearings that Russia was the proper jurisdiction.
Cherney, a Russian-born businessman, claimed Deripaska failed to honor an agreement concerning stakes in two aluminum companies. He contends Deripaska reneged on an agreement to exchange part of Siberian Aluminium for a future interest in Russian Aluminium, according to court documents.
Assets Laws Reviewed
ST. PETERSBURG (Bloomberg) — Russia’s investigative committee of the prosecutor general’s office wants to extend punitive measures for economic crimes by confiscating assets even if they were transferred to others, Vedomosti reported.
The state should be able to recover ill-gained property or funds by seizing them from relatives and associates of those convicted of crimes such as embezzlement, the newspaper said, citing an interview with Alexander Bastrykin, head of the investigative committee.
Current legislation, which already allows for confiscating assets, is only applied in 10 out of 100 cases, Bastrykin told Vedomosti. Those convicted of economic crimes may be able to escape prison terms by compensating the state with money or property, he added.
Bad Loans On the Rise
ST. PETERSBURG (Bloomberg) — Russian nonperforming bank loans reached 5 percent of total loans in June, up from 4.6 percent a month earlier, according to Bloomberg calculations based on data posted on the central bank’s web site Thursday.
Overdue corporate loans rose to 4.8 percent in June from 4.4 percent in May, while delinquent consumer loans increased to 5.7 percent from 5.5 percent.
Agriculture May Slump
MOSCOW (Bloomberg) — Russian agricultural production may shrink 1.7 percent this year, compared with an earlier forecast for a 3.9 percent expansion, Kommersant reported, citing an Agriculture Ministry report.
Crop production may decline 4.5 percent this year, the newspaper said. Russia imported $35.2 billion of food in 2008 and exported $9.4 billion, Kommersant said.
TITLE: Controversial Musician Prepares for Local Debut
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Amanda Palmer, who came to fame as the frontwoman of The Dresden Dolls, Boston’s self-described “Brechtian cabaret-punk” band, does not fit in with today’s declining and increasingly boring music industry. The big-voiced singer, who also plays piano, harmonica and ukulele and is in town this week for a joint concert with Jason Webley, is set to crush barriers, twist meanings, challenge audiences — and maybe provoke thought, although she insists that her approach to songwriting is generally spontaneous.
“I never know; I write what comes into my head and it’s always different,” Palmer said in an email on Sunday.
“Lately I’ve been writing weird swirly pop songs, but that always changes. It can depend on what I’m hearing outside.”
But Palmer, who defies categorizing as an artist, is notorious for either taking unlikely subjects for her songs, which are normally permeated with dark irony, or dealing with them in unlikely ways. “Astronaut,” the opening track on her first solo album “Who Killed Amanda Palmer?” (a reference to “Twin Peaks,”) is an ode to a spaceman “crashing in the name of science.” “Just my luck they found your upper half / it’s a very nice reminder,” goes the song.
In “Strength Through Music,” which refers to the Columbine High School massacre, a character hangs his Walkman around his neck before embarking on a killing spree — in order to have a soundtrack to the murders he is going to commit. “It is so simple / the way they fall / no bang or whimper / no sound at all,” she sings in the song.
But to her surprise, it was the song “Oasis” that caused the biggest controversy in the U.K. earlier this year, where many broadcasting media including MTV U.K. and NME TV refused to play it. (BBC6 did play it, however.)
“Oasis” is a catchy pop song sung from the perspective of a girl who goes through a date rape and abortion, but is overjoyed, because when she returns home, there is a signed photograph of the British band Oasis in her mailbox. Palmer famously described herself as “pro-choice but anti-stupid” when commenting on the song.
“It was shunned in the U.K. because of the content,” Palmer said in her email.
“The radio and video outlets thought I was ‘making light’ of rape and abortion. Some people do not understand irony and sacrcasm as a healing tool.”
Another controversy arose when her record label, Roadrunner Records, thought her solo album, produced by singer-songwriter Ben Folds (who also played on the record) and released in September, was not commercial enough and chose not to invest in promoting it.
Moreover, the label asked her to edit some frames from her “Leeds United” video, because, the company felt, she did not look slim enough in them.
As soon as Palmer published the story on her blog, saying that perhaps they had mistaken her for Britney Spears, her fans responded with a Rebellyon campaign, launching a website where they uploaded photographs of their naked stomachs with the word “Rebellion” written on them.
It’s little surprise then that Palmer believes that the Internet is a better medium for maverick artists like her to communicate with their audiences than the narrow-minded record industry.
“I think it’s becoming more and more liberating as audiences are becoming empowered through the Internet,” she said.
“The old model is busted and people are starting to find what they love, not what they’ve been fed.”
Formed in Boston in 2001, The Dresden Dolls, the band responsible for such cabaret-punk classics as “Girl Anachronism” and “Coin-Operated Boy,” has been put on hold since September, although there has been talk of some concerts in 2010. The band’s other member, Brian Viglione, is now touring Europe with a New York musical collective called The World/Inferno Friendship Society.
“We don’t have any plans right now, we’re both very happy with the separate projects we have going on. But never say never,” Palmer said.
Coming to St. Petersburg for the first time, Palmer will share the bill with singer-songwriter Jason Webley, her friend, collaborator and a frequent sight in Russia. The musicians first met at the Adelaide Fringe Festival in Australia in 2000. “It was art-love at first sight,” she said.
Both were street performers at that time, according to Webley.
“I was playing accordion and she was a human statue,” he wrote in an email last week.
“This was before the Dresden Dolls started and more than a year before my first trip to Russia.”
Webley said he is enthusiastic about Palmer’s songwriting and stage presence.
“I really respect and admire her songwriting, she is one of the strongest songwriters I know,” he said.
“She also has a focus and energy on stage that makes the audience feel very comfortable and close with her, which is, I think, a bit similar but also different from the way I relate to the audience. I think when she plays, most of the room is a bit in love with her, which is quite a powerful, magical thing.
“Mainly, I admire that she is thoughtful and hard working, when we are writing songs together she is always the one who says, ‘No, let’s get this figured out right now’ when there is some problem, rather than waiting to figure it out later.”
The two have collaborated for the past few years, starting when The Dresden Dolls were in their active phase.
“The seeds of it began when we first played some shows together,” Webley said.
“I think that was in 2004 or 2005. I don’t remember exactly, we were joking and some ideas came out that later found their way into some of the songs we’ve written together. I have a project I am currently working on in which I am making eleven collaboration records with different musician friends around the world, so I asked her if she’d like to try and write a few songs together.”
Palmer said she found it natural to work with Webley. “We simply fit together, hand in glove,” she said.
According to Webley, most of the show will be his and Palmer’s individual sets, with a couple of songs performed together at some point. Webley will be backed by the same group of Russian musicians with whom he played on his Russian tour last year — Vladimir “Big” Glushko on drums, Roman Bubnov on double bass and Maria Logofet on violin. The band will also join Palmer for a few songs.
“I’ll be playing a mix of Dresden Dolls and solo stuff, and I always throw in some bizarr-o covers,” Palmer said.
“I’ve been playing some Michael Jackson lately (of course). Jason and I will play a bunch of songs together too — we love doing that.”
Amanda Palmer and Jason Webley will perform at 7 p.m. on Thursday at Glavclub, located at 2 Kremenchugskaya Ulitsa, Tel.: 905-7555. Metro Ploshchad Vosstaniya.
TITLE: Hackers Steal Passwords Of 1000s of Vkontakte.ru Users
AUTHOR: By Lidia Okorokova
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — The country’s most popular social network, Vkontakte.ru, has been hacked, and the logins and passwords of nearly 135,000 users were distributed on the Internet.
A “phishing” web site was primarily responsible for the release of Vkontakte.ru user details, according to Russian anti-virus company Kaspersky Lab. Users were redirected to a web site with a similar-looking interface and asked to sign into their accounts after using an infected application on the site.
The hackers had installed a trojan program on the Vkontakte.ru computers, which changed the host’s files and resulted in the massive information theft, Kaspersky spokesman Mikhail Vasin said Friday.
Vedomosti cited the company’s managing director, Lev Leviyev, as saying Vkontakte.ru was investigating. It was not possible to reach anyone at Vkontakte.ru for comment Friday.
Kaspersky said it detected the trojan on Tuesday, and two days later it found a database with more than 130,000 Vkontakte.ru logins and passwords on several forums and web sites.
Vkontakte.ru gets about 14.3 million visitors per day, or twice as many as closest rival Odnoklassniki.ru, according to Comscore.com Internet statistics portal. The site has 35 million registered users.
Vasin warned users to be wary of schemes seeking to take advantage of the data. “The criminals could ask users to send an SMS message, which would cost $10 or more, to reactivate an account. Then they might get access to one’s personal information, such as bank account details,” Vasin said.
It’s not clear whether a group of hackers carried out the attack or whether it was a single person.