SOURCE: The St. Petersburg Times
DATE: Issue #1508 (70), Friday, September 11, 2009
**************************************************************************
TITLE: Mystery Hangs Over September 1999 Blasts
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — In the early hours of Sept. 9, some 400 kilograms of explosives ripped apart a nine-story apartment building on Ulitsa Guryanova in southeastern Moscow, killing 94 people.
Five days later, another powerful blast destroyed an apartment building on Kashirskoye Shosse in southern Moscow, killing 124.
The bombings came after a blast outside a five-story apartment building in Buinaksk, Dagestan, killed 64 on Sept. 4, and were followed by a truck explosion outside a nine-story apartment building in Volgodonsk, in the Rostov region, that killed 17 on Sept. 16.
Ten years later, doubts linger about the official version of the atrocities, dubbed the “black September” of 1999.
Prosecutors blamed a group of Islamic militants from the North Caucasus republic of Karachayevo-Cherkessia for the attacks, saying that they acted on orders from Arab warlords hiding in Chechnya.
But judging from ongoing debates on the Internet, the attacks continue to offer fuel for conspiracy theorists.
The case came to the fore last week, when a U.S. media report suggested that the Conde Nast publishing house was actively suppressing an investigative article about the explosions by war journalist Scott Anderson. Conde Nast management decided not to distribute Scott Anderson’s article “Vladimir Putin’s Dark Rise to Power” to GQ magazine editions outside of the United States, NPR radio reported on its web site, citing an e-mail memo by a top lawyer for the publishing house.
The editor of GQ’s Russian edition refuted the notion of censorship. In an interview with Kommersant this week he said that he had decided himself not to publish the article because it contained nothing that had not been published already.
Critics of the official version say the bombs were planted by, or at least with the knowledge of, the Federal Security Service in order to blame Chechen rebels and fabricate a pretext for the second Chechen war, which began just weeks later.
Even though such a theory carries frightening implications for the respect for human life within the government, a significant number of Russians believe it. A survey released Tuesday by the state-controlled VTsIOM polling agency said 22 percent of Russians think that the security services were indeed involved in the blasts.
Nikolai Petrov, an analyst with the Carnegie Moscow Center, said this figure was extremely high. “The fact that more than a fifth believe this is evidence of how low trust in their own security apparatus is,” he said.
Petrov said the security service theory could not be proven, but there was ample evidence that the attacks were crucial to the political career of Putin, the hitherto little-known director of the Federal Security Service who was appointed prime minister in August 1999.
“Without the bombings, Putin’s rise would have never been possible,” Petrov said.
Putin has denied speculation that the FSB organized the bombings as “delirious nonsense.”
“The very allegation is immoral,” he told Kommersant shortly before his election as president in March 2000.
The main argument forwarded by critics has been the Ryazan sugar sack incident. Residents of an apartment block in the city southeast of Moscow reported on Sept. 23, 1999, that suspicious-looking men were carrying sacks into the basement of their building. Police then found a detonating device wired to the sacks, but said there was only sugar inside — correcting earlier reports that they contained hexogen, the explosive used in the other bombings.
Then-FSB director Nikolai Patrushev told the stunned public the next day that the incident had been an FSB training exercise with a dummy bomb.
Other critics pointed to apparent inconsistencies in the testimony of those accused in the attacks
Authorities presented three men as the core of an Islamic terror cell that planned and carried out the attacks — Achemez Gochiyayev, Denis Saitakov and Yusuf Krymshamkhalov.
Gochiyayev, an ethnic Karachai accused of setting up the group and renting shops in the Moscow apartment buildings, is still at large and on the FSB’s wanted list.
Saitakov, a native of Uzbekistan and a one-time student at an Islamic school in Tatarstan, was killed in action in Chechnya, according to the FSB web site. Nothing else is known about him.
Krymshamkhalov, another Karachai, was arrested in Georgia and extradited in December 2002. He is serving a life sentence in a prison in the Perm region.
Gochiyayev said in a statement released in July 2002 that a friend from his school days whom he believes to be an FSB agent advised him to rent the premises beneath the Moscow apartment buildings for commercial purposes.
Vladimir Pribilovsky, a political analyst who wrote about the bombings in his book “The Age of Assassins. The Rise and Rise of Vladimir Putin,” said there might be an explanation showing that both the men and the FSB were guilty. “Maybe they were double agents and maybe something went horribly wrong with them,” he said.
Petrov, from Carnegie, said he found it noteworthy that none of the main suspects were Chechens, which might indicate that the FSB wanted to avoid stirring up more ethnic hatred. “The Karachai do not have a place as a hostile people in the Russian conscience,” he said.
But Pribilovsky said the Karachai, a Turkic-speaking people numbering fewer than 200,000, did have massive historical grievances toward Moscow because they were deported during World War II. “That is why you might find people among them with enough anger against Russia,” he said.
For many, a major reason to discount the theories advanced against Putin and the FSB is that the theories have been mostly coordinated by Boris Berezovsky, who has lived in self-imposed exile in London since 2001 after falling out of favor with the Kremlin.
Berezovsky, who was not available for comment for this report, was a one-time associate of Alexander Litvinenko, the FSB dissident who was poisoned with radioactive polonium in London in 2006. The Kremlin has repeatedly denied any involvement in Litvinenko’s death.
Litvinenko published a book, “Blowing Up Russia: Terror from Within,” that claimed that the FSB was behind the bombings. It was also he who spread Gochiyayev’s statement to journalists in 2002.
Yury Felshtinsky, a Moscow-born author and historian who co-authored the book with Litvinenko, said Tuesday that no new evidence against his case had been released since the manuscript was written in 2001. “The Russian government has not forwarded a single new argument since then,” he told The St. Petersburg Times by telephone from Boston.
He also denied that Berezovsky’s endorsement made his arguments less credible. “This is completely irrelevant to my arguments,” he said.
Rather, Felshtinsky said, Litvinenko’s death added weight to the conspiracy theory.
TITLE: Graft, Red Tape Dent Russia's Ratings
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Despite regulatory reforms, Russia got poor marks in terms of competitiveness and the ease of doing business, with corruption considered the biggest problem, according to two global reports released Tuesday.
Russia ranks 120th in the World Bank’s annual “Doing Business” report, which evaluates laws and regulations that affect business activity in 183 countries.
Russia improved on three of the survey’s 10 indicators by easing the process of registering property, lowering the corporate income tax rate from 24 percent to 20 percent, and defining bankruptcy rules more clearly.
But it still slid overall because of tough competition in a year that saw countries introduce a record 20 percent more business-friendly reforms than in any other year since the report was first published in 2004, said one of the authors, Svetlana Bagaudinova.
“The splash of reform activity indicates a concerted effort to support business during the crisis,” Bagaudinova told The St. Petersburg Times.
The Russian government has proclaimed the development of small business as a key aspect of its anti-crisis program, allocating 10.5 billion rubles ($336 million) from the budget to the regions to support budding entrepreneurs this year.
Four of the 10 top reformers are former Soviet republics, Kyrgyzstan, Belarus, Tajikistan, and Moldova, according to the report. Russia beat Tajikistan, along with Ukraine and Uzbekistan, in the overall ranking, which is topped by Singapore, New Zealand, and Hong Kong.
At No. 4, the United States was not included in the top three for the first time.
Bureaucracy surrounding construction remains Russia’s weakest area because it takes 700 days, 54 procedures and more than 2,100 percent of per capita income to acquire permits for a project, the report said.
“Despite some attempts to improve the situation during the crisis and the introduction of a new Building Code, the process remains very difficult,” Bagaudinova said.
The World Bank surveyed about 50 experts at Russian law firms for the report, she said.
Meanwhile, Russia fell 12 places in the “Global Competitiveness Report,” published by the World Economic Forum, to 63rd out of 134 countries. It was ranked lower than Azerbaijan, which replaced Russia at No. 51, but higher than other CIS countries. Switzerland, the United States and Singapore topped the list.
Among the emerging economy BRIC countries, only Russia declined in performance. Its major structural weaknesses are a “perceived lack of government efficiency, ... little judicial independence in meting out justice,” and a lack of property rights, the report said.
Russia “depends a little too much on a few sectors that depend crucially on world prices,” while the economies of Brazil, India and China are more diverse, said the report’s co-author, Xavier Sala-i-Martin.
Russia’s performance is also hindered by its relatively low degree of financial sophistication and the weakness of its business environment, he said in remarks posted on the World Economic Forum’s web site.
Among Russia’s competitive advantages are its market size, relatively efficient labor market, good public health, and a high capacity of innovation, the report said.
Unlike the World Bank study, the report also includes perception-based data from a survey of business executives, who were asked to select the five most problematic factors out of a list of 15. Corruption is considered the biggest impediment to doing business in Russia, with 19 percent of respondents marking it, up from 18.8 percent last year, followed by access to financing and tax regulations, with 16.9 percent and 11.6 percent, respectively.
The report also included a survey on how the financial crisis will affect countries’ long-term competitiveness prospects. While economists said Brazil, India and China would be positively influenced by the crisis, their outlook for Russia was pessimistic because of factors such as “enhanced government intervention” and “nonoptimal allocation of resources to education and transportation infrastructure.”
TITLE: Plot Thickens Over Israeli PM's Secret Visit to Russia
AUTHOR: By Marius Schattner
PUBLISHER: Agence France Presse
TEXT: JERUSALEM — The plot thickened on Thursday over a secret trip by Israel’s prime minister, as his office admitted it had misled the public about his whereabouts but did not deny reports he had stolen away to Russia to discuss arms sales to Iran.
“The prime minister was busy with a confidential and classified activity,” Benjamin Netanyahu’s office said in a statement.
“Having had the best intentions, his military attache... acted to defend that activity and did this through an announcement to the media” that said he had spent the day at a security facility in Israel, it said.
But the statement did not deny media reports that Netanyahu had flown to Russia aboard a private plane on Monday to discuss Moscow’s arms sales to arch-foes Syria and Iran, whose controversial nuclear drive has Israel worried.
In Moscow, the Russian authorities said that the Israeli premier had met neither his counterpart Vladimir Putin nor President Dmitry Medvedev, but did not explicitly deny the trip itself.
But the respected Kommersant daily on Thursday said a senior Kremlin source confirmed to it that Netanyahu did indeed visit the Russian capital.
The mystery around the prime minister’s day-long disappearance from public view is unfolding alongside another — that the Arctic Sea cargo ship supposedly seized by pirates and later recovered by Russia was secretly carrying S-300 anti-aircraft missile systems bound for Iran (see related story on page 11).
Israel has for years tried to convince Russia not to sell S-300 surface-to-air missile systems to Iran, which the Jewish state fears Tehran could deploy around its controversial nuclear sites.
The deployment would make it more difficult for Israel to carry out a military strike on them — something the Jewish state has repeatedly refused to rule out amid its drive to stop Tehran’s atomic programme.
Russia reportedly agreed to sell the systems to Tehran several years ago. Following an August 18 visit, Israeli President Shimon Peres said that he had secured a promise from Medvedev that Russia would review its decision.
Widely considered to be the Middle East’s sole if undeclared nuclear power, Israel suspects Iran of trying to develop an atomic bomb under the guise of a civilian nuclear program, a charge Tehran denies.
TITLE: Alexandrinsky Theater To Get Second Stage
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The city’s Alexandrinsky Theater, which boasts one of the largest drama troupes in Europe, will be receiving a new, state-of-the-art second stage within the next few years, said Valery Fokin, the company’s artistic director.
Speaking at the Council for the Preservation of the Historical Legacy of St. Petersburg, Fokin said the construction of the second stage has been tentatively scheduled to begin in 2010. The venue will be equipped with a unique internet studio which will be the only one of its kind in Europe.
“With this new venue, we are really talking about a brand-new, modern cultural center,” Fokin told reporters on Thursday. “The stage itself will be able to transform itself dramatically to suit any production’s needs. We will be particularly proud to have the internet-theater which is going to be used to broadcast our shows, interviews and promotional videos on the internet.”
Fokin said that another important feature of the second stage will be a specially created arts school focusing on stage design, lighting technologies and various other aspects of the production process.
Fokin said the construction will be funded from the state coffers. “The funding amounts to 800 million rubles ($25.75 million), and we have already spent 50 million ($1.6 million),” Fokin said. “The budget for the next year is 400 million rubles.”
The Moscow architect Yury Zemtsov is to design the building. Speaking at the Council on Thursday, Zemtsov said all historical buildings around the new venue — which is to be located at 47-49 Fontanka Embankment — will be left untouched.
“According to the results of a historical and cultural survey carried out by the state, the maximum height for a building in the area is 26 meters,” Zemtsov added.
The new venue will occupy a site of 2,500 square meters of land and its auditorium will have seating for 350.
TITLE: Chavez Recognizes Breakaway Regions
AUTHOR: By Alex Anishyuk
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Venezuela will recognize Abkhazia and South Ossetia as independent states, President Hugo Chavez announced during a meeting with Dmitry Medvedev in Moscow on Thursday.
“Venezuela joins in recognizing the republics of Abkhazia and South Ossetia as independent states,” Chavez said. “We will recognize these two republics starting today.”
Abkhazian President Sergei Bagapsh expressed his thanks to Chavez on Thursday for recognizing the two republics.
“I would like to express my gratitude on behalf of the people of Abkhazia to the leader of Venezuela, Hugo Chavez, for recognizing the independence of Abkhazia and South Ossetia,” he said Thursday, Interfax reported. “We intend to develop close economic and political ties with Venezuela.”
Russia became the first country to recognize the independence of the two breakaway regions on Aug. 26 last year, following a five-day war in which Georgia moved troops into Tskhinvali, the capital of South Ossetia, in an attempt to restore the territorial integrity of the country.
The leftist Sandinista government of Nicaragua became the second country to recognize the republics on Sept. 5, 2008, but Nicaraguan President Daniel Ortega has so far been unable to clear the decision with his country’s parliament.
But Russian Foreign Ministry spokesman Andrei Nesterenko said last month that Nicaragua’s parliamentary protests mattered little, as recognition of new states was the sole prerogative of the president, according to the country’s constitution.
The Hamas government in Gaza had been the only other entity to recognize the independence of the two republics up to that point.
Belarussian President Alexander Lukashenko has also expressed support for Russia’s recognition of the republics but has not yet done so itself.
“Under the circumstances, Russia had no other moral choice but to support appeals of the South Ossetian and Abkhazian peoples on the recognition of their right for self-determination,” he said in September 2008.
Somalian Ambassador to Russia Mohamed Handule said in October that his country would recognize the two republics. Days later, however, the country’s Foreign Ministry said it had never questioned the territorial integrity of Georgia and that it would not recognize Abkhazia and South Ossetia as independent states.
Chavez said in August 2008 that Russia was right to support independence for the two regions, but he did not officially recognize them until Thursday.
Chavez announced the diplomatic coup during talks with Medvedev, during which they were scheduled to discuss loans to buy Russian arms.
Presidential aide Sergey Prikhodko said Wednesday that no specific military contracts would be signed during the visit, though he did not rule out that weapons supplies and loans for arms could be discussed.
The announcement should not be viewed as a quid pro quo, however, as the loan talks have been a long time in the making, Prikhodko said.
TITLE: Kadyrov's European Plans Cause Stir
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Chechen President Ramzan Kadyrov caused a stir in some European capitals on Wednesday after his press service announced that Chechnya would open representative offices in six European countries.
Chechnya’s Information Ministry later retracted the statement, saying the republic planned to open cultural centers abroad, not political representative offices, which it said would be unconstitutional.
The incident prompted some consternation among foreign diplomats and a wave of speculation about Kadyrov’s foreign policy ambitions.
Kadyrov’s press service said in a statement Tuesday that Chechnya would open representative offices in Germany, Austria, Belgium, Poland, France and Denmark after obtaining permission from Foreign Minister Sergei Lavrov.
“Kadyrov sent Lavrov a personal letter asking for permission to open representative offices in European countries. In a written reply, the ministry allowed the opening of representations on the territory of any European country,” Chechen Information Minister Shamsail Saraliyev said in the statement.
His deputy, Zelimkhan Dzhamaldinov, told The St. Petersburg Times on Wednesday that the statement was not correct and the Chechen government only planned to open cultural centers abroad.
“They did not get that quite right,” he said, refusing to elaborate on the Lavrov letter.
“We are a subject of the [Russian] Federation and can only act within its constitutional framework,” Dzhamaldinov said by telephone from Grozny.
Repeated calls to the Foreign Ministry went unanswered Wednesday.
Diplomats from countries named in the statement said it had caught them by surprise and that attempts to get confirmation from the Foreign Ministry had proved futile.
“We know nothing more than the press release, and the ministry would not tell us anything by telephone. So we sent them a letter,” a senior diplomat said on condition of anonymity, citing the sensitivity of the matter.
Chechnya, however, would not be the first of Russia’s more than 20 ethnic republics — which possess more pronounced symbols of statehood than other federal subjects — to have foreign representative offices.
Tatarstan, which in the 1990s negotiated wide-ranging autonomy from Moscow, has representative offices in more than 11 countries, according to the republic’s official web site, Tatar.ru.
Neighboring Bashkortostan has representative offices in Turkey, Kazakhstan and Austria, according to its web site, Bashkortostan.ru.
TITLE: Police Search for Pulkovo Airport Hoaxer
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: Police are searching for a person who made a hoax call to Pulkovo airport at around 9 a.m. on Thursday morning claiming that a plane was carrying a bomb as part of a planned terrorist attack.
In a subsequent call the hoaxer suggested that another bomb had been planted on the highway leading to Pulkovo airport. Bomb disposal experts who searched at the airport all morning found no explosive material on board the plane and prosecutors have opened a criminal investigation into the case.
The flight in question — UTAir flight no. 475 from St. Petersburg to Anapa, scheduled to depart at 10.40 a.m. — was delayed while searches were carried out.
The flight departed later in the day after the checks and safety procedures had been completed. “For the duration of the checks, passengers due to depart on flights to Anapa, Adler and Sochi, had to leave the planes and wait in the airport’s seating areas,” said Olga Antipova of Pulkovo airport’s press center. “We made sure the travelers’ discomfort was minimized and everyone was looked after.”
Also on Thursday, a hoax caller rang the police claiming a bomb had been planted at the Restoration School on Ulitsa Ushinskogo. The St. Petersburg police special task force is investigating the report.
TITLE: Tests of New H1N1 Swine Flu Vaccine Begin
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The St. Petersburg Scientific Flu Institute on Thursday began testing a vaccine against H1N1 flu that was developed in St. Petersburg.
On Thursday morning the Institute’s specialists selected 30 volunteers for testing of the vaccine, which was administered through the nose. For the next week the volunteers will remain in the Institute’s clinic for observation.
In a week’s time another group of 30 volunteers will continue the testing process.
The volunteers include teachers, doctors, workers and students, said Igor Nikanorov, a scientist at the Institute.
“Among our volunteers there are people who regularly take part in our testing. Some people do it because they want to get vaccinated earlier or because they are planning to go somewhere, and they also get financial compensation for their work,” Nikanorov said.
Immunity against a flu virus usually develops ten to 14 days after the vaccination, when the Institute’s experts will take blood tests from the volunteers, Nikanoforov said.
Several medical and scientific institutions in the country are currently working on developing a vaccine against the H1N1 virus.
Gennady Onischenko, Russia’s main sanitary doctor has said that vaccination of the population against H1N1 will begin in December of 2009.
As of Sept. 9, Russia had registered 320 cases of H1N1, Onischenko said, Interfax reported.
A total of 270,000 people worldwide have suffered from the H1N1 flu, with at least 3,400 fatalities.
TITLE: Lavrov Denies Missiles on Arctic Sea
PUBLISHER: The Associated Press
TEXT: MOSCOW — Foreign Minister Sergei Lavrov on Tuesday rejected speculation that the Arctic Sea freighter was carrying S-300 missiles possibly destined for Iran.
“The presence of S-300s on board the Arctic Sea cargo ship is a complete lie,” Lavrov said, RIA-Novosti reported.
Authorities say the cargo ship was seized by hijackers in the Baltic Sea in late July after leaving a Finnish port. Russian naval vessels intercepted the Maltese-flagged ship weeks later off Cape Verde, thousands of kilometers from the Algerian port where it was supposed to deliver a load of timber.
But an array of questions continue to cloud the incident. Some observers have suggested that the seizure of a ship in the crowded Baltic, especially one carrying a comparatively low-value cargo, was unlikely as an act of straightforward piracy. A Russian shipping expert and an EU anti-piracy official have speculated that the vessel was carrying a clandestine cargo, possibly S-300 surface-to-air missiles for Iran or Syria.
Lavrov said Maltese officials would be invited to take part in the inspection. “All this will be transparent and I hope that all will be convinced that the rumors you refer to are groundless,” he said.
Separately, the Investigative Committee said Tuesday that its inspectors had examined the ship and found no unauthorized cargo.
The government has signed a contract to sell S-300s to Iran. Israeli President Shimon Peres held talks in Moscow with President Dmitry Medvedev two days after the Arctic Sea was taken by the Navy. He said after the meeting that Medvedev had promised to reconsider selling S-300s to Iran.
TITLE: Young Drug Users Called Major Threat
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev on Tuesday called drug abuse among young people a threat to national security and ordered the government to craft a program against illegal drugs that would introduce tougher penalties for drug-related crimes.
The country’s top narcotics official, Viktor Ivanov, said he had several additional ideas for the new federal program, including compulsory drug tests on students and a ban on drug users from holding driver’s licenses.
Medvedev said the number of drug users has shot up by nearly 60 percent over the past decade to an estimated 2 million to 2.5 million, or 2 percent of the population. Two-thirds are under 30, he said at a Security Council meeting.
Medvedev called the young age of drug abusers a threat to national security and the “complicated demographic situation.” “On the whole, everybody agrees that we need a thought-out and unified state anti-drug policy,” Medvedev told a Security Council meeting, Interfax reported.
He said longer prison sentences should be handed down to people who deal drugs to minors, as well as for organized drug traffickers and corruption related to trafficking. “We need … to enhance penalties for any drug-related crimes, especially for the distribution of drugs in public places where teenagers and youth relax,” Medevedev said.
Ivanov, chief of the Federal Drug Control Service, told the meeting that his agency had come up with several ideas on how to fight the drug problem. Among these, he mentioned the compulsory testing of school and university students, a ban on drug abusers being allowed to occupy certain jobs and driving cars, and the compulsory treatment of drug users convicted of minor crimes.
Drug-related crime is growing across the country, with 10 percent of convicts having committed a drug-related crime, Ivanov said in an interview published in Rossiiskaya Gazeta on Tuesday. About 126,700 drug-related crimes were committed in Russia in the first six months of this year, the newspaper said.
Ivanov told reporters after the meeting that Medvedev supported the idea of drug tests for students but did not want them to be compulsory.
At the meeting, Ivanov also said the authorities had to use “police measures” to reduce the flow of illegal drugs and “unite the efforts of the entire society” — federal agencies and social, medical and education establishments — to curb demand for drugs.
Officially, about 550,000 people were registered as drug abusers in 2008, including more than 140,000 minors, Rossiiskaya Gazeta reported. More than 30,000 people die of drug-related diseases every year, it said. Ivanov called the figure comparable to the number of people who lose their driver’s licenses every year for driving while under the influence of drugs.
Security Council Secretary Nikolai Patrushev said after Tuesday’s meeting that a new drug control program would be drafted in the first half of next year.
TITLE: London's Lord Mayor Visits City
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: The Lord Mayor of the City of London, Alderman Ian Luder, is leading a business delegation visiting St. Petersburg this week with the aim of strengthening business and economic links between Russia and the U.K.
The 15-strong delegation, which began its visit to St. Petersburg on Thursday after spending three days in Moscow, includes representatives from major financial services sectors represented in London such as banking, legal services, accountancy and insurance.
“The City of London has become the location of choice for Russian companies looking to raise capital on international markets, so it is essential we work to maintain our strong business links,” said Luder.
The Lord Mayor began his visit on Thursday morning by visiting local branches of three British retail banks — HSBC, Barclays and Royal Bank of Scotland. During his visit, he is also due to attend seminars organized by City Hall on transport and the use of public private partnerships (PPPs) in infrastructure projects.
“St. Petersburg has a diverse economy with great potential,” said Luder. “Local business already has strong links with the City of London, which we are hoping to develop further, and the City of London is also strongly supportive of the St. Petersburg City Administration’s exciting and innovative PPP projects to help develop infrastructure.
“In terms of PPP, if you look at the headlines, the number of transactions done this year is down a third, but look at the value and it’s only down 10 percent,” he said. “What that says is that good quality projects, particularly larger ones, are being funded if the case made for them is right. We’re here to see if we can work with St. Petersburg in enhancing the case for them so that some of the projects that are stalled can get the go ahead.”
Some of the projects due to be discussed during the delegation’s visit include the four biggest PPPs currently planned for the city: the Western High-Speed Link Road, the redevelopment of Pulkovo Airport, the Orlovsky Tunnel under the River Neva, and the Overland Express.
The program of the local visit of the Lord Mayor, who also acts as the global ambassador for U.K.-based financial services, includes meetings with Yury Molchanov, Deputy Governor responsible for Transport, Infrastructure and Investment, where the meeting’s agenda is to include the issues involved in raising finance for infrastructure and transport projects.
Also on the agenda are meetings with the Governor of the Leningrad Oblast, Valery Serdyukov, as well as with senior representatives of major Russian and international businesses and financial institutions based in the region.
Bilateral trade with Russia has been growing steadily in recent years. The U.K. is the largest cumulative investor in Russia, and was the largest investor in St. Petersburg in 2008, according to information released by the British Consulate in St. Petersburg this week.
“One of the key aims of the Lord Mayor’s visit is to demonstrate that, particularly in these difficult economic times, it is vitally important that sound and lasting economic ties are maintained,” read a press release issued by the British Consulate.
The annual post of Lord Mayor of the City of London dates back to 1189. Not to be confused with the Mayor of London (an elected politician responsible for governing Greater London), the role of the Lord Mayor is apolitical and unpaid, and consists of participating in dialogue with companies working in the City and helping the Corporation of the City of London to work with the government in improving the financial services sector.
Luder expressed optimism over the financial situation in the U.K., saying he believed the decline is over.
“People are talking about coming out of recession,” he said. “The next 12 months are going to be much better than the last 12. There won’t be a return to boom over a 12- month period of course, but it’s going to be the beginning of a steady climb out.”
TITLE: GM Signs Off on Sale Of Opel Unit to Magna
AUTHOR: By Jeff Green, Chris Reiter and Andreas Cremer
PUBLISHER: Bloomberg
TEXT: DETROIT — General Motors agreed to sell its Opel unit to Magna International on Thursday, accepting the German government’s preference over a financial investor that the U.S. carmaker had favored.
Magna, Canada’s biggest auto-parts maker, and its Russian partner Sberbank will acquire a 55 percent stake in Opel, Detroit-based GM said in a statement. GM, Magna and Germany resolved disputes over Opel’s access to GM intellectual property and financing issues in the past two weeks, according to a person familiar with negotiations.
GM, having emerged from bankruptcy in July, had preferred a rival bid by Brussels-based RHJ International and considered keeping the money-losing unit. Chancellor Angela Merkel’s government, which offered 1.5 billion euros ($2.2 billion) in loans to keep Opel afloat, chose Magna and Moscow-based Sberbank as the preferred bidder in May to help preserve German jobs.
“I know that a difficult path still lies ahead for Opel,” Merkel said at a press conference in Berlin. The deal offers a model for how companies and workers can work together to “find ways out of a crisis affecting the entire auto industry.”
Merkel’s government, facing Sept. 27 federal elections, has a say in the decision because it offered 4.5 billion euros in loan guarantees to back Magna’s bid. Magna’s proposal foresees a linkup with GAZ, the Russian carmaker that said in May that it wants to produce 180,000 Opel cars at its main Russian site.
Opel and its sister Vauxhall brand in the U.K. have lost market share in Europe, accounting for 7.6 percent of industry sales in the region in the first half of 2009, compared with 8.5 percent in all of 2006.
Germany asked GM to cede a majority stake in Opel to outside investors earlier this year in exchange for loans the unit needed to survive. GM, which has run Ruesselsheim, Germany-based Opel since 1929, turned over control to the trust before filing for bankruptcy in June.
Opel’s trustees are scheduled to meet in Berlin this afternoon to review the transaction.
Magna rose as much as 5.6 percent to C$50 and traded at $49.33 as of 10:29 a.m. in Toronto. RHJ slid as much as 19 cents, or 3.7 percent, to 4.94 euros and traded at 5.06 euros in Brussels trading.
Federal and state governments in Germany provided the 1.5 billion-euro short-term loans for Opel when officials designated Magna as preferred bidder. About 1.05 billion euros of the lending had been used as of Aug. 27, a government report showed.
Labor unions in Germany also favored Magna’s bid over RHJ’s. Opel employs about 25,000 people in Germany, making up almost half of GM’s 55,000-strong European workforce, including the bankrupt Saab division that the U.S. carmaker is selling outright.
“GM needs to focus its resources on the areas it feels it can best benefit from economies of scale, and focus on those: Asia, South America and North America,” said Michael Robinet, a market analyst from CSM Worldwide in Northville, Michigan. GM can still be “active in the European market as an importer.”
John Smith, GM’s top negotiator on the Opel sale, had called RHJ’s offer a “simpler proposal.” GM had expressed concern that its intellectual property in Russia would be at risk under an earlier offer from Magna.
GM’s endorsement of Magna is a boon to Merkel, who has repeatedly said she prefers the car-parts maker’s plan. Merkel trusts that Magna will help save more of the Opel jobs in Europe’s biggest economy at a time when unemployment remains voters’ No. 1 concern.
The Chancellor’s handling of Opel, especially her refusal to consider alternative rescue plans, has earned her criticism from analysts. The government’s performance has been “anything but a showpiece of shrewd bargaining,” said Uwe Andersen, a politics professor at the University of Bochum, the western German city where Opel employs about 5,300 workers.
TITLE: By Jeff Green, Chris Reiter and Andreas Cremer
PUBLISHER: Combined Reports
TEXT: MOSCOW — The economy shrank the most on record in the second quarter as plunging capital investment triggered a slump in industrial production and companies struggled to raise funds, the State Statistics Service said Wednesday.
Gross domestic product fell 10.9 percent in the quarter from a year earlier, after a 9.8 contraction in the previous period.
“The economy seems to have finally reached the bottom,” said Vladimir Osakovsky, an economist at UniCredit. “We expect to see some improvement in the future as the high base effect fades and we see some improvement in month-on-month readings for industrial output and investment.”
Manufacturing contracted an annual 18.7 percent in the quarter compared with a 23.5 percent drop in the first quarter, according to the statistics service.
Construction dropped 20.5 percent in the period after a 20.9 percent annual decline in the first three months. The retail industry fell an annual 11.3 percent in the second quarter, more than twice the pace of its decline in the first quarter, when it shrank 4.9 percent.
GDP may slump as much as 8.5 percent for all of 2009, the government forecasts, after growing 5.6 percent in 2008 and 8.1 percent the year before.
The Economic Development Ministry revised up its forecast for expansion in 2010 to 1.6 percent from 1 percent, minister Elvira Nabiullina said on Wednesday at a government meeting. Industrial production will probably expand by 1.4 percent compared with a previous forecast of 0.8 percent, she said.
Manufacturing contracted last month at the slowest pace in 11 months as new business and output grew simultaneously for the first time since September, VTB Capital said on Sept. 1.
Even so, President Dmitry Medvedev said Wednesday at a government meeting that it was too early to speak of a “stable, positive dynamic” in the economy and too soon to halt economic stabilization measures.
“Anti-crisis policy should be still carried on,” Medvedev said. “But I propose to start looking at post-crisis development.”
The packet of anti-crisis measures the government approved last year was one of the biggest in the world, accounting for about 4.1 percent of gross domestic product this year, and 1.3 percent next year.
Economists said quarter-on-quarter growth of a nonseasonally adjusted figure of 7.4 percent, also reported Wednesday, was not a reliable indicator.
Nonseasonally adjusted figures are “not interesting,” Osakovsky said.
Also at the government meeting, Central Bank Chairman Sergei Ignatyev said the government would continue to ease its monetary policy in the near future.
“The refinancing rate will likely continue to be lowered in the near future,” Ignatyev told President Dmitry Medvedev at a meeting at the president’s residence.
The Central Bank has cut interest rates five times since April 2009 by a total of 225 basis points, taking advantage of easing inflation.
(Bloomberg, SPT)
TITLE: Billionaires Bet on Golf as Crisis Ravages Fortunes
AUTHOR: By Ilya Khrennikov
PUBLISHER: Bloomberg
TEXT: Oleg Deripaska isn’t letting $20 billion of debt handicap his golf game.
Like fellow billionaires Roman Abramovich and Vladimir Potanin, the 41-year-old golf enthusiast amassed and then lost billions of dollars on commodities. They now are turning to their hobbies as one way to help rebuild their fortunes.
Golf, snubbed by Communists as a sport for capitalists, wasn’t played in Russia until the twilight of the Soviet Union, and even now the country has just three 18-hole courses, one of which is owned by Deripaska. At least 40 more are either being built or funded as investors pour $500 million into the sport this year alone, according to the Russian Golf Association.
“Russia is now one of the hottest spots for golf development,” said Andrea Sartori, the Budapest-based head of KPMG International’s Golf Advisory Practice for Europe, the Middle East and Africa. “Golf is still perceived as an elitist sport and current supply is mainly tailored to the wealthy Russian upper class.”
The golf association reckons the number of regular Russian golfers will swell to 100,000 by 2014 from 16,000 now and 500 in 2003 as more courses open and it gets cheaper to play.
In Scotland, where the sport was started in the Middle Ages, the national golf union covers 630 clubs and 260,000 players in a country with roughly half the population of Moscow.
Deripaska opened the Tseleyevo golf, ski and polo resort in December. The complex is 50 kilometers north of Moscow, and its centerpiece, an 18-hole course designed by six-time U.S. Masters winner Jack Nicklaus, cost $30 million. Membership fees are $300,000.
The billionaire completed the project after losing $25 billion of his wealth by Forbes magazine’s count, forcing him to cede stakes in Hochtief, Germany’s biggest construction company, and Canadian car-parts maker Magna International.
“We consider golf to be a promising industry in Russia,” said Vadim Prasov, manager of Deripaska’s golf business.
Tseleyevo is forecast to “pay off” in six to 10 years, he said.
That’s not to say the record 10.9 percent economic contraction in the second quarter hasn’t had an effect. The Moscow Open, the only Russian event on the PGA European Tour, was canceled in the summer after lead sponsor Inteco, the development company of Mayor Yury Luzhkov’s billionaire wife Yelena Baturina, backed out.
The country’s biggest golf investor may be Federation Council Senator Andrei Komarov, the main shareholder of pipe maker ChTPZ Group and one of 55 Russians on Forbes’s 2008 list of billionaires. He did not make the cut this year. The 42-year-old is plowing ahead with a $600 million project to build a chain of 18-hole courses in three regions. ChTPZ, by contrast, fired 25 percent of its workforce, or about 5,000 people, last year as demand for its products slumped.
“We haven’t cut planned expenditures because of the crisis,” though work has slowed at separate golf projects near St. Petersburg and Yekaterinburg, said Oleg Kustikov, chief executive officer at Protcion, Komarov’s development company.
An “ambitious” course in Russia costs at least $100 million, including real estate, Kustikov said in an interview in the ornate clubhouse at Pestovo, Protcion’s 18-hole complex 30 kilometers north of Moscow. Pestovo, which opened in 2007, cost $120 million and increased the value of surrounding property as much as 20-fold, Kustikov said.
Protcion bought the land around Pestovo for about $50,000 a hectare four years ago and expects to sell some of it for $1 million per hectare after the complex is built.
Potanin, who lost $20 billion according to Forbes, is building the PGA National course 100 kilometers northwest of Moscow, where the Russian national team will be based. PGA National is on schedule and will be completed in 2012, Potanin’s Open Investments said in an e-mailed statement.
Abramovich, who lost $16 billion on his investments, is building a golf complex 2 kilometers from Moscow’s outer ring road, making it the closest 18-hole course to the capital, according to John Mann, spokesman for Millhouse Capital, the Chelsea football club owner’s holding company.
While most golf projects in Russia start with the course and then add marketable properties, luxury-home builder Aras Agalarov, another businessman stricken from the Forbes billionaire list, is doing the opposite. Agalarov decided last year to build a course at his Agalarov Estates northwest of Moscow, where homes cost as much as $20 million.
How fast the golf industry develops in Russia may depend on whether the International Olympic Committee includes the sport in its quadrennial event starting in 2016, said Yevgeny Kafelnikov, the former top-ranked tennis player who is now one of Russia’s best golfers, with a handicap of two.
The government will have to fund the development of golf for it to become an Olympic event, said Kafelnikov, who’s a member of Deripaska’s Tseleyevo club. The IOC’s Executive Board has recommended that golf and rugby sevens be added to the games. A final decision will be made next month in Copenhagen.
“I am very excited,” Kafelnikov said by telephone from his Moscow home. “I can’t wait for the October decision.”
TITLE: Study Says Roads Perfect Example of Corruption
PUBLISHER: The Associated Press
TEXT: Roads cost many times more to build in Moscow than in U.S. and European cities because of corruption, according to a new study compiled by opposition politician Boris Nemtsov.
Nemtsov, who presented the report this week, compiled facts and figures from open sources to shed light on the 17-year tenure of Mayor Yury Luzhkov.
“We’ll never solve the problem of traffic under Luzhkov, no matter how much money is allocated for road construction,” Nemtsov told journalists. “The exorbitant prices are directly linked to corruption and ties between road builders and authorities. Traffic jams are about corruption.”
Clogged roads are a major problem in Moscow, home to at least 10 million people, with another 10 million traveling into the city each day.
Road construction proceeds slowly, Nemtsov said, because the price is exorbitant compared to other countries.
Construction of Moscow’s new, fourth ring road is expected to cost 7.4 billion rubles ($237 million) per kilometer, his study revealed.
Road construction in China, the United States and Europe hovers between $3 million and $6 million per kilometer, according to his report.
The average cost of road construction in Washington, for comparison, was $6.1 million per kilometer in 2002, according to the U.S. capital’s transportation department.
City Hall said the high costs are because of the demolition of residential housing in areas adjacent to the new ring road. The city has budgeted 13 billion rubles for the demolition, with 25.5 billion rubles to be spent on the construction alone. This, however, still puts the cost of one kilometer at an exorbitant $209 million per kilometer.
Nemtsov blamed a lack of competition.
“We should hold tenders open to all road companies from around the globe,” he said. “The lack of competition leads to price hikes.”
A 2008 nationwide poll by the Public Opinion Foundation showed that Moscow is regarded as the most corrupt city in Russia, with 42 percent of Moscow residents polled admitting they had given bribes to public officials.
The anti-corruption watchdog Transparency International ranks Russia 147th out of 180 in its global corruption index.
President Dmitry Medvedev announced a drive against corruption earlier this year — but with little visible result.
Luzhkov, who has overseen a construction boom in the capital, has often been accused of corruption and of helping advance the business interests of his wife, billionaire Yelena Baturina.
Luzhkov has persistently denied allegations of wrongdoing and has successfully sued critics for libel.
TITLE: No More Grist for the Diploma Mills
AUTHOR: By Vladislav Inozemtsev
TEXT: For many years, the Soviet Union was considered one of the most educated countries in the world. In 1991, the United Nations Educational, Scientific and Cultural Organization, or UNESCO, ranked higher education in the Soviet Union as the third best. But by 2007, Russia had dropped to 27th place.
We are witnessing an alarming trend in the country’s educational system over the past decade. Strangely enough, a lack of financing is not the largest contributing factor. Russia spends 3.8 percent of its gross domestic product on education — higher than the 3.6 percent of GDP spent in Japan (but less than the 5.7 percent spent in the United States and 4.6 percent allocated in Germany.)
More important, however, is the educational system’s inability to keep pace with the sharp rise of students enrolled in universities. As of Sept. 1, there were 7.47 million students enrolled in higher educational institutions, compared to only 2.79 million in the mid-1990s. That represents a 270 percent increase. Meanwhile, there are only 340,000 professors and instructors. This 22:1 professor-to-student ratio is significantly higher than in the United States. It is clear that Russia has far too few professors to teach the rising number of students. And as long as the salaries paid to faculty remain as low as they are, Russia will have trouble attracting the necessary number of new professors.
The other problem is the subjects that students are studying. In 2008, 35.7 percent of the country’s GDP came from manufacturing, natural resource mining, agriculture, construction and housing and utilities. But only 14 percent of today’s students will major in engineering, 3.2 percent in geology and 2.9 percent in agriculture science. At the same time, 45 percent of students will choose business, management and law as their major focus of study. The problem is that Russia’s financial and legal sectors account for only about 8 percent of GDP. Clearly, there are not enough jobs for all of these students dreaming of becoming wealthy — or even middle-class — bankers and lawyers.
Moreover, higher education has lost much of its value. In Moscow in 2007 and 2008, 10 percent of university graduates — 90 percent of them women — did not work at all after graduating, and another 24 percent took jobs that did not require a higher education. Fewer than 50 percent started careers in their area of study. The situation is the reverse in the United States, where 94 percent of graduates holding degrees in business administration found jobs in their profession, 86 percent of engineers did likewise, as did 76 percent of those specializing in agriculture. What’s more, the percentages stayed the same for the first three years after graduation. If these statistics apply to Moscow — where an excessively high percentage of the country’s business activity and wealth are concentrated — just imagine how much worse the situation is in the regions.
Thus, Russia is churning out far more graduates than it needs, and they are trained in fields that are not in demand. With the current glut of students, the quality of the education they receive will inevitably suffer, and the significance of their degrees and titles will be diminished. According to the State Commission for Academic Degrees and Titles, the overall number of doctoral students more than doubled from 1996 to 2006. Of that number, the Central Federal District saw only a 70 percent increase in Ph.D.s, while the number of doctoral students in the Southern Federal District grew by almost 10 times. Today, that district produces more scholars than the Northwestern Federal District, which includes St. Petersburg.
Russia cannot modernize its economy without first modernizing its entire educational system — its universities, in particular. need to move away from the goal of “higher education for the masses” and restructure the system to train specialists who can help the country gain a strategic global position in manufacturing and innovation-driven sectors. One place to start is for colleges and universities to make their admission requirements stricter, which will lower the number of students accepted. This is the best way to move from high quantity to high quality.
Russian universities need to once again become world-renowned centers of academic research and learning, and not socialist diploma mills for the masses.
Vladislav Inozemtsev, the director of the Centre for Post-Industrial Research, is the publisher and editor-in-chief of Svobodnaya Mysl magazine. This comment appeared in Vedomosti.
TITLE: Infrastructure Bonds: A New Panacea?
AUTHOR: By Glenn Kolleeny and Natalia Diatlova
TEXT: Russia’s infrastructure problems are legendary. A few statistics can easily illustrate the problem. Canada, with barely 20 percent of the population, has three times more highways than Russia. Half of Russia’s railroad tracks were laid before 1916. Up to 80 percent of railcars and 70 percent of housing stock are decrepit.
But that is only half the problem. Upgrading infrastructure in Russia costs much more than in other countries. Paving one kilometer of highway in Russia costs at least four times more than in China and three times more than in Brazil. Despite abundant, high-quality coal deposits, generating electricity costs 40 percent more than in Germany. The reasons for the high cost of construction of public works are only too well known – corruption and monopolization.
With much fanfare Russia embarked on an ambitious program to modernize its transportation infrastructure with the adoption of the Law on Concessions in July 2005. Public-private partnerships were touted as a panacea that would permit Russia to finance the most lavish and expensive transportation projects in the world. Work was started on almost 30 major PPP projects. Unfortunately only three PPP projects are creeping forward, although the Transportation Ministry is planning tenders for new projects. Not one of the mega-projects has been redesigned to achieve cost savings, despite the enormous drop in the cost of construction materials and labor as a result of the crisis.
Rather than change the approach, state authorities who waived the PPP banner for four years, seem to have found a new panacea, Infrastructure Bonds, more typically known as municipal project bonds in the West. There is no doubt that like PPP, infrastructure bonds can play an important role in financing infrastructure development in Russia. International practice shows that infrastructure bonds can contribute as much as 15-20 percent of the cost of large transportation projects. But the key premise in the public debate on infrastructure bonds is that these bonds will be secure and attractive to investors because of state guarantees. One has the feeling of Alice in Wonderland. What about the exhaustion of the reserve fund and the huge budget deficit predicted for 2010? MinFin plans to cover the hole in the budget by the issuance of Eurobonds. However, most economists believe the deficit is unsustainable, and that Russia will not be able to issue a sufficient amount of Eurobonds to close the gap. How then can the federal government credibly guarantee billions of rubles of infrastructure bonds? And if the federal government is unable to issue guarantees, the regions and municipal entities are even less able to do so – particularly in light of falling tax revenues and reduced contributions from the federal budget.
But the beauty of infrastructure bonds is that they can be structured as limited recourse obligations without government guarantees, provided that the law that will be ultimately adopted will give a tight structure, and the bonds are used to finance economically viable projects. Traditionally a portion of the issuance proceeds are deposited in a reserve fund and revenues from the project go into a sinking fund to pay interest and principal on the bonds. Insurance is used to assure completion of the project, and can also be used to provide “credit enhancement”, i.e., guarantees that project revenues will be sufficient to repay the bonds.
This doesn’t mean that there is no need for government support. The traditional form of such support, however, is not a guarantee, but exemption from taxation of the income paid on the bonds to investors. This enables local governments to issue bonds at significantly lower rates, and reduce the overall cost of financing.
One can only hope that before Russia adopts legislation for infrastructure bonds, the Duma will take a fresh look at international experience, and will adopt legislation that does not depend on guarantees that are not likely to be forthcoming. And most importantly, that Russia will abandon the “mega-project complex” and focus instead on economically viable projects structured in the most cost-effective manner. In any case, infrastructure bonds can at best be a portion of the solution to financing Russia’s worn-out infrastructure. Otherwise chances are very high that in four years we will look back on the adoption of legislation for infrastructure bonds as just another wasted opportunity.
Glenn Kolleeny is a partner and Natalia Diatlova is a counsel at Salans, St. Petersburg.
TITLE: Voice of an exile
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: The contribution of record label owner and radio presenter Leo Feigin to bringing Soviet avant-garde jazz music to both international and Russian audiences cannot be overestimated.
Launched in 1979, his U.K.-based Leo Records label released more than 500 discs by highly innovative artists, including The Art Ensemble of Chicago, Sun Ra and Cecil Taylor, and it was through his label that such groundbreaking Soviet acts as the Ganelin Trio and the late Sergei Kuryokhin became available to the world.
Under the pseudonym Alexei Leonidov, Feigin, who was expelled from the Soviet Union in 1973, also presented an influential jazz program on the BBC Russian Service for more than 25 years.
With Leo Records marking its 30th anniversary this year, Feigin will come to St. Petersburg at the end of this month to present some of his new releases at the Aposition experimental music festival on Oct. 1. Now based in a village in Devon, U.K., he spoke to The St. Petersburg Times during a visit to his home town last year.
Q: How did you start Leo Records? Was it when you first heard the Ganelin Trio?
A: I have to say that by 1979 I was ready to launch my own label. Even if I hadn’t happened to have got hold of recordings from the Soviet Union, I would have launched it anyway. But the fact that I was sent the Ganelin Trio recordings from the Soviet Union — that was the tipping point.
But the truth is that when I heard that recording, I couldn’t believe what I was hearing. And everybody to whom I played the recording also reacted highly skeptically. They all said, “What kind of trio is that? Listen — you can hear about ten instruments playing simultaneously — it must be some kind of a trick.”
I showed this recording to many, many people. I played it to Steve Lake and Hans Wednl of the ECM label. And they simply didn’t believe it. That’s when I realized I would have to release it myself.
But the label actually began with me recording Keshavan Maslak, the Ukrainian saxophonist who was born in the U.S., but into a Ukrainian family. He lived in Holland. I recorded this record with him, [pianist] Misha Mengelberg and [drummer and percussionist] Han Bennink, who were already renowned avant-garde performers.
The first recording took place in October, and then I went to New York and recorded [U.S. vocalist and keyboard player] Amina Claudine Myers, and that’s what the label really sprang from.
It was a conscious, deliberate move, because I knew that if I launched the label by releasing Soviet recordings, few people would pay any attention to it. I don’t know how right my strategy was, but I think it was justified in the end.
In any case, Amina Claudine Myers was from Chicago, from AACM — the Association for the Advancement of Creative Musicians — she was well-known in Chicago. Her music couldn’t be compared to that of the Ganelin Trio; it was much weaker. But because Myers was well-known, it lent a certain weight to the label.
Q: What was the reaction to the Ganelin Trio when the record came out?
A: There were several reviews straight away. But the people who wrote the reviews were not the people whose reviews I wanted to see. And the people who could have written, the people whose names had authority, wrote nothing. You may ask why.
When I released the first group of records from the Soviet Union, I went to New York to promote them, and I met a great many good critics, and they all said the same thing to me: “We can’t write anything until we see them on stage.”
Of course, all of these critics valued their reputations too much to write reviews of music like that of the Ganelin Trio, where there are three musicians but you can hear 12 instruments at once — three saxophones simultaneously, because [Vladimir] Chekasin played them all [at the same time], [Vyacheslav] Ganelin played the piano, basset and electric guitar, and [Vladimir] Tarasov played drums and also had a block flute. So of course, the respectable critics refused to write about them.
But the people who wrote the reviews, who took it up straight away, wrote a load of nonsense, of course, which is always the case. But I can say that as time passed, the situation improved, and after two or three years my records by Soviet musicians were being taken seriously.
I remember that after the Ganelin Trio’s second record, “Con fuoco,” Kevin Whitehead, a highly respected critic, wrote, “Western musicians, be ever on the alert! The Ganelin Trio threatens your world superiority.”
Q: The first record by a Leningrad musician that you released was Sergei Kuryokhin’s “The Ways of Freedom.” There was once again a misunderstanding, when somebody couldn’t believe that Kuryokhin was playing so fast and wrote that the recording was “electronically sped-up.”
A: Yes, that was another stupid thing that I couldn’t understand. But the answer was very simple. I had to send blank tape to Russia, and I had very little money. I was stealing tape from the BBC, to put it bluntly. But it turned out later that the tape that I was “borrowing” from the BBC and sending to Russia was unfit for recording music. I mean, you could record music on it, because it was still magnetic tape, but it was designed for recording speaking voices and had slightly different properties.
I sent one big reel of that tape, which was called Racal Zonal, along with another, smaller Ampex reel that I bought. And I got it all back, recorded with music from start to finish. And I released “The Ways of Freedom” from the material recorded on Zonal. It was this recording that had an unusual effect when transferred onto vinyl that people mistook for speeding-up. But there was no speeding-up, because there was no sound distortion.
Later, when I was putting together the CD of “The Ways of Freedom,” I added the Ampex recordings and put them in a slightly different order, and it became absolutely clear that the tape had not been sped-up. The only thing is that Ampex sounds a little different, not so sharp. There’s not such a “metallic” effect, it sounds slightly duller.
That is the story, and actually, it is still going on — people still appear who have read what was written about it and talk, argue and write about it. Kuryokhin is no longer with us, but the argument continues.
Q: You put a disclaimer on the records by Soviet musicians that you released during the Soviet era that the musicians “do not bear responsibility for releasing this tape.” Did it help?
A: Yes, I thought it would protect them somehow. Maybe it did, I don’t know. In any case, no one suffered, and that’s what’s important. Authors who sent their work abroad suffered, but musicians didn’t.
They [the Soviet authorities] didn’t ruin anyone’s life, but they could have done. They could have said, “You’ve had your records released in the West, so you’re a traitor and an enemy of the people.” But it seems they didn’t touch anybody.
They didn’t even touch [clarinet player Anatoly] Vapirov, because Vapirov found himself in prison in 1981 due to some terrible case; either he bought some jeans or he resold them, some sort of nonsense… So I released a record [by the Anatoly Vapirov Trio featuring Kuryokhin] under the title “Sentenced to Silence” and wrote on the back cover that Vapirov had been imprisoned, and what kind of a musician he was… And I have to say, it didn’t create any problems for him — it didn’t stop him from being released from prison a year later, without doing another year. So in that sense, it was a happy ending.
Q: So the messages were in the titles? For instance, calling a record “The Ways of Freedom,” was a way of making a statement?
A: Absolutely. [Jazz critic and current BBC Russian Service journalist Alexander] Kan wrote about this instance [in his 2008 book, “Until Jazz Starts”]. When I was releasing the record, I didn’t know that it was [jazz critic and promoter] Yefim Barban who had chosen the titles. I thought they had come from Kuryokhin, because Kuryokhin wrote a letter to me in which he included the titles. Moreover, while he insisted that the titles should appear in the order they do on the record, he gave me permission to put the tracks themselves in whatever order I wanted.
Q: Do you mean that the track titles had no relation to the music?
A: No relation to the music. I was horrified by what he was doing, simply horrified. I wrote to him, “Seryozha, come to your senses! What are you doing?” The record was called “The Ways of Freedom,” and the compositions were called, as far as I remember, “The Inner Fear,” “Archipelago,” “No Exit” — they were like the stages that a dissident goes through in prison or during a KGB interrogation, it was absolutely obvious. But he was unrelenting; he was impossible to persuade and stood firm. And that was one of the reasons I started to put the disclaimer on the records.
Q: How did you receive the recordings from the Soviet Union?
A: There were people who smuggled the tapes, often in the clothes they were wearing. We often had a laugh about it. There is a woman in London who later became my close friend, Felicity Cave. An amazing expert in the Russian language! She smuggled the tapes on her person a few times. She would tie them to her back with a scarf, put on her sheepskin coat and go through passport control. Then she admitted that she had been sweating with fear, and when we got the box, I would show it to everybody at the BBC, we’d sniff it and say, “Felicity!” I put the initials of those people I couldn’t name openly on the records — “Special thanks to F.C.” — Felicity Cave.
There was also a remarkable man in Moscow, Terry Sandell, who was Great Britain’s cultural attache, an absolutely unique character. We managed to send tapes as diplomatic mail several times, in his bag. Felicity went to his office and brought him the tapes, and Terry Sandell pointed to the ceiling at once, because he knew that their rooms were bugged. So she wrote him a note and he showed her that everything was OK. Then he put it in a diplomatic bag and it was sent. I got it eventually.
Q: In an interview you described Willis Conover (1920-1996), a jazz broadcaster on the Voice of America for over 40 years, as one of the five people who destroyed the Soviet Union.
A: I am deeply convinced of it.
Q: So jazz was such a strong force?
A: Yes, at least for us, for everybody I knew. For everybody who held the same views as I did, it was the most effective weapon. People like Willis Conover played an absolutely incredible role in changing this society.
We had the following timetable at that time. The BBC’s Finnish Service broadcasted a jazz program on Saturdays, from 1 p.m. to 1:30 p.m. It was received perfectly; they didn’t jam it in any way. There was a very good DJ at the BBC’s Finnish Service, and he played amazing music. We used to gather in big groups to listen to the show, and when it finished, we would go out onto Nevsky to discuss it. And of course in the evening, from 11 p.m. it was Willis Conover — that was the rule.
Willis Conover was a traditional man, but from time to time he would play something like Ornette Coleman. And people sold these names — the name of Ornette Coleman went for five rubles and was passed from one person to another.
Q: You later became involved with avant-garde jazz, or New Music. I understand it was a totally different scene from the traditional jazz scene, since the latter was even hostile to the former. Is that correct?
A: Exactly. A few days ago I was at a concert by David Goloshchokin here. He was an enemy of avant-garde music then, and he has remained so. It was a concert celebrating the 100th birthday of Lionel Hampton. He spoke a lot, and he said some absolutely terrifying things. Just terrifying.
I don’t think people should say such things from the stage. He spoke disapprovingly about avant-garde, very disapprovingly. He was stressing that the main thing for him was melody, and that he played it better than everybody else. Alas.
Q: Mainstream or traditional jazz was being played on the television in the 1970s, there wasn’t anything rebellious about it anymore.
A: Yes, sure. In retrospect, even the concerts promoted by the Kvadrat Jazz Club before I left — it was difficult for them to organize them and everything, but they took place quite peacefully. Yes, they played mainstream, but there was no defiance, nothing special about it. Of course, when New Music emerged, the attitude changed. Kuryokhin’s concerts, for example, took place in a totally different way.
Q: You once said that radicalism in jazz was important to you, that it shouldn’t be polished and had always had “dirty tones.”
A: I’ll tell you where it comes from. I love jazz, I grew up on jazz and I’ve listened to it all my life. I remember how I started my record collection — I swapped Marcel Proust’s “In the Shadow of Young Girls in Flower” for an Ahmad Jamal record, which was offensive in itself. How could one compare Ahmad Jamal to a book by Marcel Proust — and what a book at that!
I like jazz a lot and still listen to it. But I think that one of the main criteria of genuine art is originality. Because if music is not original, it turns into banality, eventually. Jazz might turn into entertainment, Mozart’s music turned into pop music long ago. My opinion might be too radical, but that’s how I see it myself.
That’s why the only and main criterion of the authenticity of art is originality, uniqueness, the singularity of what a musician does. That’s what I strive for. I try to find such musicians. I think I have found a few.
Q: How did you leave the Soviet Union?
A: All my troubles in the Soviet Union stemmed from meeting with Willis Conover. He came in 1967, and brought the Charles Lloyd Quartet, which featured the young Keith Jarrett, Jack DeJohnette and Ron McClure, and they performed at the Tallinn Jazz Festival. It was simply a revelation for many.
Keith Jarrett stroked the piano strings with a comb a few times, and everybody was absolutely amazed! Nobody imagined it was possible to do that.
From there they came to Leningrad, where they were due to play at the Molodyozhnoye Cafe on Ulitsa Mayorova [now Voznesensky Prospekt], but the cafe’s manager got so scared that he banned it. They didn’t play in Leningrad.
But Yefim Barban got acquainted with Conover in Tallinn. They came to Leningrad after the jazz festival, and Yefim invited him to dinner. But since Yefim Barban’s wife worked at a major defense institute, we realized that Yefim should remain in the shadows, so as not to endanger her.
To cut a long story short, Yefim asked me to go and meet Willis Conover at the Astoria Hotel and take him to my house for dinner. That’s what I did, though I knew very well that he was followed 24 hours a day. There were six of us: Yefim and his wife, Willis Conover and his wife, and my wife and I.
That’s when my problems began. They were completely unbelievable. For instance, a local policeman called me in and said, “We have received complaints about you.” What kind of complaints? “Drunken debauchery in your apartment.” Then I started to get fired. I would get a job, and after three or four months they would fire me, with no explanation.
But I didn’t want to leave, because of a dictionary I had compiled and a few books that I had translated into English that were about to be published. But eventually, I was summoned to the Bolshoi Dom [the Leningrad headquarters of the KGB] and was told — it sounded ominous — “Leonid Samuilovich, if you decide to leave, there will be no obstacles. If you decide to stay, your fate will change considerably.”
Q: How did you get your radio pseudonym, Alexei Leonidov?
A: I compiled my jazz program and went to the studio, to the microphone. There was a wonderful poet working there, Yasha Berger, and he said, “Leonid, how should I introduce you?” And I realized with horror that I didn’t know what to do. My mother and brother were still in Russia, they would all have suffered. I said, “I don’t know, Yasha.” He said, “It’s very simple, what do your friends call you?” “Everybody calls me Lyosha.” “Great! Alexei Leonidov at the microphone!” That’s how I got my pseudonym.
It was funny how I turned into Leo Feigin from Leonid Feigin. I came to England during [Leonid] Brezhnev’s stagnation period. When I said that my name was Leonid, everybody in England would ask me, “Are you related to Brezhnev?” The English had such associations. I got tired of explaining to everybody that we were not related, that it was a coincidence, and I cut the second part of my name off and turned it into Leo. And it solved everything — everything was fine after that.
Q: What were your meetings with the Ganelin Trio like when they were allowed to travel abroad?
A: My meetings with the Ganelin Trio, especially the first two or three, could have come straight out of a detective novel. Especially the first meeting in [West] Berlin, when the Soviet trio went to the West for the first time. There were three front rows occupied by KGB men in black coats, the Embassy and some “youth representatives” at their concert. That’s when I saw them for the first time.
Of course, I had arranged to stay in the same hotel as them, and I managed to whisper to Ganelin that I would leave the door to my room open. At two in the morning, the door quietly opened, Tarasov entered, and we sat in the room writing questions and answers to each other. Not speaking, but writing! Isn’t that really something?
Leo Feigin spoke to Sergey Chernov in Russian.
TITLE: Mini Mishap
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: Cafe Mini must be one of the few dining spots in St. Petersburg where, if you get carried away, you can run up a bill of tens of thousands of euros. The temptation comes not from a superlative wine list or luxury fare, but from the shiny Mini Cooper automobiles on display — and available to buy — in the showroom in which the caf? is located.
And proud new owners of a stylish, compact Mini wanting to obmyvat their new wheels — a Russian tradition of drinking to celebrate an important new purchase such as a car — can do so without even leaving the showroom.
The cheeky Minis in a variety of dazzling colors parked inside the entrance to this bizarre showroom-restaurant on Sadovaya Ulitsa are the most appealing part of its design. The rest of the interior is dominated by white plastic and bright lime green upholstery, which is not so easy on the eye — one diner went as far as to describe it as “sickly.”
The harsh surroundings, techno music and large screen showing some kind of particularly energetic music channel were not really offset by the large posters of meditating people, especially when the large glitter ball was switched on, but the atmosphere can be explained by the fact that Mini Caf? transforms into a club during the evening. The lime green sofas filling one section of the caf? are pushed back to the walls, and the white tables and chairs of the other half are cleared away — though quite how is a mystery, given their weighty concrete bases. There is an entry charge on Friday and Saturday nights, when DJs entertain revelers.
Even without splurging on a convertible Mini Cooper, visitors to Mini Caf? are likely to leave with a lighter wallet than when they entered.
The first warning sign was the lack of Russian mineral water, leaving the option of a small bottle of Perrier for an eye-watering 150 rubles ($5). Standard Bon Aqua was on the menu but was buried among the fizzy drinks, not with its snobbish cousins, and that it had “run out” arose suspicions that it isn’t actually ever available. Those wanting to quench their thirst with anything stronger will have to fork out a whopping 250 rubles ($8) for half a liter of Russia-made Heinken.
The menu encompasses Japanese, European and Russian cuisine, with nods to the racy automobile-inspired surroundings in the form of subheadings such as “Start” for starters and “Finish” for desserts. The food at first glance appeared to be better value than the beverages, with maki rolls with avocado — a little on the mini side, but enjoyably firm and fresh — coming in at 100 rubles ($3.20.)
A salad of Mozzarella with cherry tomatoes and arugula was pricier, at 310 rubles ($10). The salad was attractively presented with a drizzling of balsamic sauce, and the portion of Mozzarella was generous, but the dish was dramatically let down by the disproportionate ratio of tomato accompanying it (half a small cherry tomato per large slab of cheese). Even the luxury of arugula could not save the day.
A chicken fillet with roast vegetables (380 rubles, $12) looked highly impressive and was well presented. The chicken was glazed with Dijon mustard and looked fantastic, but shockingly turned out to be fatty, tasteless and even undercooked.
Spaghetti Carbonara (340 rubles, $11) was also a disappointment. The toddler-sized portion contained virtually no meat, was over salted, and the egg yolk that traditionally garnishes this dish was notable by its absence.
The highlight in a desultory meal was, unexpectedly, dessert, for there was plenty of room as a result of the miniscule portions of the preceding courses. The cheesecake, at 240 rubles ($7.70), was not too sweet, just the right consistency, and complemented delightfully by a raspberry sauce. Unfortunately, like just about everything else, it was on the small side — more of a sliver than a slice.
It seems that everything at Mini Caf? is indeed mini — except the prices.