SOURCE: The St. Petersburg Times
DATE: Issue #1519 (81), Tuesday, October 20, 2009
**************************************************************************


TITLE: University Scandal Gets Day 
In Court
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: A scandal is brewing at St. Petersburg State University, with its president suing the dean of one of the institution’s schools, along with a former dean, for libel and embezzlement.
The Dzerzhinsky District Court on Monday started reviewing the cases against Marina Shishkina, dean of the university’s journalism faculty, and Sergei Petrov, the former dean of the medical faculty. Shishkina is married to Petrov.
Both cases were filed by the university’s president Lyudmila Verbitskaya, who alleges that Petrov and Shishkina have made libelous statements discrediting one of Russia’s oldest and most respected academic institutions.
Petrov began the conflict by publishing a revealing, critical interview on a popular website, in which he accused the school’s management of authoritarian rule, rigid attitudes and the suppression of alternative opinions. Shishkina supported her husband’s crusade with a series of interviews in the media, where she drew a sobering picture of what she described as the university’s “murky and non-transparent decision-making process” and “oppressive rule of rector Nikolai Kropachev, who hides behind the facade of fighting corruption and instead uses all the administrative tools available to him to assert his personal power.”
Shishkina alleged that, having replaced Lyudmila Verbitskaya as the university’s rector in May 2008, Kropachev adopted a practice of launching vendettas against anyone who criticized his policies. The journalism dean said an atmosphere of fear and intimidation now reigns at the university, and she and her husband are paying the price for being among the very few who dared to offer resistance.
Both Shishkina and Petrov were stripped of monthly bonuses after they voted against Kropachev’s proposal to divide the philosophy and political science faculty into two separate faculties. Shortly afterwards, in April this year, Petrov was dismissed from his post as dean of the medical faculty.
To illustrate her accusations of Kropachev acting as an authoritarian leader, Shishkina in interviews recalled that the university’s rector had secured the right to personally dismiss any university staff, up to faculty deans, despite the fact that the position of dean is an elected post.
A criminal case against Shishkina was opened in September this year. The journalism dean faces charges of embezzling university funds and abusing her position. The investigation alleges that at least half a million rubles ($16,500) have been misappropriated. Shishkina argued that the prosecutors are trying to catch her out on a technicality, and that the real reasons behind the prosecution are entirely political.
“Formally speaking, the prosecutors are trying to sue me for the fact that I sign my own payslip as well as everyone else’s,” Shishkina said during an online news conference earlier this month. “But this practice is legal and fully transparent. Back in the early days of perestroika, the faculty received the right to earn itself extra-budgetary funds. The scheme for distributing these funds has not changed since its adoption and it has remained transparent. All the key financial decisions are taken twice a year by the faculty’s academic council.”
Kropachev, meanwhile, maintains that the dean’s work should be limited exclusively to creative and academic issues. “The dean’s position shouldn’t involve the distribution of funds,” Kropachev stressed at a news conference earlier this month.
Amid the rapidly escalating conflict, Shishkina, who has run the journalism faculty since 1996, claims that she is becoming increasingly isolated. In a recent interview, the dean recounted how she had arrived at a media lunch featuring Vladislav Piotrovsky, head of the city police, as the key guest speaker. Upon spotting Shishkina, St. Petersburg’s top policeman attempted a swift retreat, saying that he would not talk in front of Shishkina. “When I saw this, I simply got up and said I did not feel like ruining my colleagues’ lunch, and left. Nobody tried to stop me.”
Lyudmila Verbitskaya said in an interview with Novaya Gazeta in October that both deans had taken great liberties in the allocation of large sums of money which, she alleged, had tempted them.
Meanwhile, students and graduates of St. Petersburg State University are indulging in a gripping online discussion about the “Secrets and Lies” of the venerable institution. Stories of bribe-taking and intrigues abound on the Russian Internet. 
“A fierce and uncompromising war is going on at the university, with the top prize being full control over one of the country’s most prestigious schools,” wrote a blogger going by the name of mo3gan.

TITLE: Yabloko Leader’s Vote Not Counted
AUTHOR: By Nikolaus von Twickel and Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Yabloko leader Sergei Mitrokhin voted for his party when he cast his ballot on Oct. 11.
But when Moscow Polling Station No. 192 reported its results, Yabloko failed to receive a single vote, the party said.
“Probably, the leaders of the district [election] committee decided to show that I do not exist, either as a voter or as a citizen,” Mitrokhin said Friday.
“I have to disappoint them. Yabloko not only exists, but it also has the ability to ask law enforcement agencies to punish criminals who falsify elections,” he said in a statement.
Yabloko posted a copy of the voting results for Polling Station No. 192 on its web site, showing 904 votes for United Russia, 87 votes for the Communists, 29 votes for A Just Russia and zero votes for Yabloko, Patriots of Russia and the Liberal Democratic Party, or LDPR.
Yabloko’s latest claim came as evidence mounts of blatant falsifications in the elections, which were swept by United Russia and prompted a rare walkout in the State Duma last week.
Yet President Dmitry Medvedev has made no public comment on what is probably the biggest political scandal of his 18-month reign, and he has been coy about a demand by Duma rebels to discuss their grievances personally.
The president’s silence, meanwhile, has invited speculation about whether he fears a conflict with Prime Minister Vladimir Putin, his political mentor and predecessor and leader of United Russia.
Medvedev, who is not a member of United Russia, has repeatedly pledged to boost democracy in Russia. But on the day after the elections, he praised them as “well-organized” and said United Russia’s victory showed it had a “moral but also legal” right to run the regions — remarks that some analysts called hasty and difficult for him to retract now.
Kremlin spokesman Alexei Pavlov on Sunday attributed Medvedev’s silence to a belief that it would be wrong to react quickly to matters better left to the courts.
Putin also has suggested that those unhappy with the election results should go to court.
That is exactly what Yabloko and the Communist Party have vowed to do. The elections, held in 75 of the country’s 83 regions, brought big gains for United Russia, especially in the Moscow City Duma, where the party won 32 of the 35 seats. The Communists received the other three seats.
Yabloko on Saturday demanded that the vote be declared invalid, saying falsifications had sliced two-thirds off its total vote-count. “This was not a deprivation but a theft of votes,” Yabloko said in a statement.
The Moscow elections committee said Sunday that it was aware of Mitrokhin’s complaint about his vote not being counted, and his polling station would be among three that it would ask the Prosecutor General’s Office to investigate, Interfax reported.
In addition to falsifications, Yabloko, the Communist Party and independent election observers have reported violations such as the misuse of absentee ballots, the improper use of administrative resources and pressure on people to vote for United Russia.
The Communist Party has promised to hold nationwide protests this week. OMON riot police detained Red Youth Vanguard leader Sergei Udaltsov and about 10 other people holding an unsanctioned protest in Moscow over the election results Friday.
LDPR and A Just Russia have also complained that the vote was unfair, and their deputies stormed out of the Duma with Communist deputies Wednesday, the first such walkout in nine years. The Communists and LDPR also demanded that an Oct. 27 meeting scheduled with Medvedev be brought forward.
National media have suggested that Medvedev’s silence about meeting with the deputies showed that he was not ready for political action.
But Pavlov, the Kremlin spokesman, said the uncertainty surrounding the meeting boiled down to Medvedev’s timetable. “It is purely because of his schedule. As a very active leader, the president just has had no time to squeeze in that meeting,” he said.
Pavlov said Medvedev would probably meet with the three parties “after Wednesday.”
The Duma rebellion, meanwhile, weakened considerably Friday when LDPR and A Just Russia rejoined the parliament. Communist Deputy Viktor Ilyukhin said Sunday that his party would make a decision Tuesday on when to return to the Duma.
Apart from having little political clout in the face of United Russia’s crushing 70 percent majority in the Duma, the other factions have been accused to varying degrees of co-opting with the government. LDPR is infamous for voicing nationalistic policies before usually toeing the Kremlin line, and A Just Russia is widely seen as a Kremlin-founded left-wing project to steal votes from the Communists.
Sergei Markov, a senior United Russia deputy, said Medvedev should not speak on the subject or meet the deputies too soon in order to avoid a heated debate.
“He cannot do that as long as [the deputies’] demands are too radical and their talk is full of blackmail,” Markov told The Moscow Times.
Alexei Makarkin, an analyst with the Center for Political Technologies, said staying silent was the only thing Medvedev could do if he did not want to hurt United Russia, since he had already congratulated the party the day after the vote.
He said Medvedev would like to see “emotions subside” before the meeting so the talks would focus less on election results and more on other issues.
Some observers said the Duma walkout was orchestrated by the Kremlin to warn United Russia functionaries not to jeopardize the ruling party’s comfortably high ratings through unnecessary electoral violations.
“Medvedev wants to separate himself from Putin but is afraid and doesn’t want to make sharp statements that could strain their relations,” said Andrei Piontkovsky, a veteran political analyst and a member of the Institute for Systems Analysis in the Academy of Sciences.
He said the initiative had gone from the Kremlin to LDPR leader Vladimir Zhirinovsky, whose party has taken credit for initiating the boycott, and the other two fractions supported it.
His words echoed those of Stanislav Belkovsky, a one-time Kremlin spin doctor who described the walkout as part of a coordinated political show. Belkovsky told Ekho Moskvy radio that Vladislav Surkov, the Kremlin’s first deputy chief of staff, had wanted to warn regional leaders like Mayor Yury Luzhkov about excessive zeal in giving votes to United Russia.

TITLE: Staff at City’s National Channel Fear Mass Redundancies
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: More than one thousand employees of St. Petersburg’s federal TV station, Channel Five, have signed an open letter to President Dmitry Medvedev and Prime Minister Vladimir Putin warning them that the staff of the city’s main television channel are facing redundancies. 
The letter, which is also addressed to St. Petersburg Governor Valentina Matviyenko, State Duma Speaker Boris Gryzlov and the head of the Federation Council Sergei Mironov, is being circulated among Channel Five employees and a copy of it has been put up on the walls of the city’s Television Center on Ulitsa Chapygina, Fontanka.ru reported.
If the majority shareholders of the National Media Group, or NMG, implement their plans to restructure Channel Five, the staff reserve the right to carry out non-violent protest actions, the letter reads.
Information on the planned downsizing of Channel Five and REN TV, another NMG asset, appeared in an official NMG statement released on Friday. The statement also confirmed a series of new appointments at Channel Five, including the transfer of Natalya Nikonova from Russia’s leading broadcaster, Channel One, to Channel Five as its new general producer. 
The restructuring plans envisage the amalgamation of parts of Channel Five with other media assets owned by NMG, with unofficial reports that it will lead to a major reduction in Channel Five’s output, particularly where its news service is concerned, Fontanka.ru reported. 
The channel currently has a staff of 1,700, expenditures of $105 million a year and income of $20 million.
“At present, NMG is planning to entirely remove the St. Petersburg staff from the production of broadcasting content and even remove the word ‘Petersburg’ from the channel’s name. Television broadcasting will receive yet another commercial Moscow channel, and St. Petersburg will again lose its voice on the air,” the letter reads.
The employees admit in the letter that it is harder to produce high budget entertainment programs in St. Petersburg than in Moscow.
“Nevertheless, Channel Five has already proven that the television market can be captured not only through quantity but also through the quality of the audience… We only had to polish the unique St. Petersburg image of the channel. However, it seems the shareholders of the channel are indifferent to everything about the St. Petersburg style. 
“Everything that has been done during the last few years will be destroyed. The country’s third biggest television center, equipped with the latest technology, will cease to exist. Over a thousand professionals, including reporters, producers, cameramen and engineers will lose their jobs. We hope that you take note of the current situation and won’t allow the destruction of St. Petersburg television,” the letter says.
Lev  Lurye, director of the channel’s documentary broadcasting and a well-known St. Petersburg historian, said that he had signed the letter.
“I think the worries of the channel’s staff are well-grounded. If NMG thinks that this way it will reduce its costs — well, that is their position. I, in turn, am more worried about the social side of the issue, when about a thousand people will lose their jobs,” Lurye said, Interfax reported.
Tatyana Alexandrova, advisor to the channel’s general director, said that she also agrees with the letter’s authors.
“Firstly, I agree with it out of concern for the fate of hundreds of people who aren’t to blame for the fact that the creative search of the management hasn’t brought financial success to the shareholders. Besides, it’s a terrible mistake to deprive St. Petersburg of the right to broadcast,” Alexandrova said, Interfax reported.
However, she did not sign the letter because she personally “did not consider it appropriate to appeal to the country’s higher authorities with a request to put pressure on the owners of the channel in order to keep my job.”
NMG said on Monday that it was “not planning any large-scale layoffs.”
“During the last couple of months we have developed a strategy that will allow two big Russian television channels to develop a serious and effective business, to optimize the activities of both companies, and to make the restructuring beneficial for REN TV and Channel Five,” Vladimir Khanumyan, general director of NMG said in an interview with Ekho Moskvy radio station on Monday.
“The plan is aimed not only at keeping the television station and jobs in St. Petersburg, but also at opening up some new branches,” Khanumyan said.
Khanumyan said that in the next couple of days, the public and television channels’ staff will be informed of the management’s plans in detail.

TITLE: Lavrov, EU Leaders Focus on Bilaterial Ties
AUTHOR: By Slobodan Lekic
PUBLISHER: The Associated Press
TEXT: BRUSSELS — Talks between the European Union and Russia are on track to conclude a new partnership and cooperation agreement to replace the one that expired last year, Russian Foreign Minister Sergey Lavrov said Monday.
After meeting with EU foreign policy chief Javier Solana and Swedish Foreign Minister Carl Bildt — whose country currently holds the EU’s rotating presidency — Lavrov said efforts to reach a new “strategic partnership” deal with the EU were going well.
Lavrov said he and the EU officials had agreed to press negotiators “to seek compromises and solutions that would be based on a balance of interests.”
He said other issues discussed were Russia’s proposal for a binding trans-Atlantic security treaty.

TITLE: Analysts Interpret TV Attack on Skyscraper
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Opponents of the city’s planned Okhta Center project were given hope Sunday when Channel One, the biggest state-owned TV channel, aired a report that was highly critical of the project in its main evening news program. 
Part of Sunday’s Vremya program, the 10-minute segment, titled “Experts and St. Petersburg residents against Gazprom’s Okhta Center,” said the controversial project would result in the city becoming “a cross between Venice and Singapore.” 
Local residents opposed to Gazprom’s planned 400-meter skyscraper said they saw it as a positive sign but did not intend to cease their struggle against what they say is a threat to the city’s heritage and against legal violations surrounding the construction.
During the past two weeks the skyscraper, which was protested by thousands at a rally on Oct. 10, has been criticized by several politicians, including Sergei Mironov, chairman of the pro-Kremlin party A Just Russia. Russian Culture Minister Alexander Avdeyev launched legal action against City Hall over suspected violations of the law on Oct. 8.
Sergei Malkov, a deputy for the Communist party in the Legislative Assembly who was one of three members of the Land Use and Development Commission to vote against the skyscraper last month, said the events may reflect a change in the attitude toward the building in the Kremlin.
“When I spoke to some of the officials who were responsible for taking these decisions, in private conversations they expressed displeasure at Gazprom’s behavior, and, to put it mildly, were not entirely sure that the decisions taken were fully in accordance with the law,” Malkov said by phone on Monday.
“From those conversations I got the impression that all these decisions were taken under pressure from the top — I mean not the local top, but the federal top. It could be discerned from the officials’ real, unspoken attitude toward the tower.
“It looks like some contradictions have arisen over the project at a federal level. If something has changed, it has changed there.”
Maxim Reznik, leader of the local branch of the Yabloko Democratic Party, sees Channel One’s much-discussed attack on the building as a link in a chain of events starting with Avdeyev’s actions, as well as recent public criticism from pro-Kremlin figures such as film director Nikita Mikhalkov and author Alexander Prokhanov. Vladimir Zhirinovsky, leader of the Liberal Democratic Party (LDPR) followed suit with an anti-tower statement Monday.
“Zhirinovsky always keeps his ear to the ground, while Mikhalkov and Prokhanov never object to the authorities — there must be some struggle going on at the top around this subject,” Reznik said by phone Monday.
“But this struggle has been caused by the fact that civil protests in St. Petersburg have reached a level when they are simply impossible not to notice.”
Andrei Dmitriyev, leader of the local branch of Eduard Limonov’s banned National-Bolshevik Party (NBP), believes that Channel One’s program indicates that the decision to cancel the construction has already been taken.
“I think it’s further confirmation of my view that the decision to drop construction of the Okhta Center has been taken at the highest level,” Dmitriyev said.
“All the money has already been pocketed by those involved in the project, there’s a crisis now, and there’s not enough money for the construction itself — and perhaps there’s been a decision to stop it, but either President Dmitry Medvedev or Prime Minister Vladimir Putin will emerge as the savior of St. Petersburg. One of them will make a statement on television and announce that the tower shouldn’t be built, because the law is being broken and residents are protesting.
“It doesn’t mean that the protest activity should be stopped — quite the opposite; the pressure on the city authorities and Gazprom should be increased, and, through joint efforts, I think we’ll win. If Medvedev signs a decree canceling the construction, we can only say ‘thank you’ to him.”
Whatever the Kremlin’s message is, opponents of the Okhta Center should continue to work against the construction and legal violations surrounding it in court, said Tatyana Krasavina of Okhtinskaya Duga, the pressure group formed to oppose the skyscraper.
“I think if people are inclined to interpret ‘messages,’ if they are involved in spiritualism or fortune-telling, there is much to be said, starting with Avdeyev’s statement, because he is a friend of Putin. He’s a diplomat of the old Soviet school, who is naturally connected to the foreign intelligence service,” Krasavina said.
“Channel One created an objective review; it was positive and worthwhile. It was interesting to see it, like interpreting a message, no more than that. It doesn’t cancel all further action by the opposition, it doesn’t placate anybody. We will continue to act. 
“We think that we should continue to take action in court, to get whatever possible from our sleeping prosecutor’s office and the courts. We will do these things while continuing to monitor Channel One’s programs.”

TITLE: Garcia Arrives in Tbilisi To Play Georgian Premier
AUTHOR: By Helena Bedwell
PUBLISHER: Bloomberg
TEXT: MOSCOW — Actor Andy Garcia arrived in the Georgian capital Tbilisi on Monday to begin work on a film about the former Soviet republic’s August 2008 war with Russia, in which he will play Georgia’s president, Mikheil Saakashvili.
Garcia will be in Tbilisi for “several days to shoot his scenes in the movie,” said Tamar Liluashvili, a spokeswoman for Gold Invest LLC, which is handling logistics and public relations for the filmmakers in Georgia.
Renny Harlin, director of Die Hard 2: Die Harder and Nightmare on Elm Street 4, is making the film for Los Angeles-based Rexmedia, Liluashvili said. Rexmedia’s web site lists a movie titled Georgia directed by Harlin, though Liluashvili said the film didn’t yet have a title.
Russia routed Georgia’s U.S.-trained army in the five-day war over the separatist Georgian region of South Ossetia. Moscow later recognized the independence of South Ossetia and another breakaway region, Abkhazia, a move condemned by the U.S. and many European countries.
Eka Sharashidze, Saakashvili’s chief of staff, said permission had been given for filming in the presidential office and palace.
Saakashvili “appreciates that someone as popular as Andy Garcia is in Tbilisi and is playing the role,” Sharashidze said by telephone.

TITLE: Georgian TV Producer Seeks Asylum
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A Georgian television producer is seeking political asylum in Russia, complaining of harassment for his contacts with the Georgian opposition, RIA-Novosti reported Friday.
The producer, Badri Afanasyev, asked for asylum when he arrived at a Dagestani border checkpoint from Azerbaijan on Oct. 15, the report said, citing the Dagestani branch of the Federal Security Service.
Afanasyev, 53, worked at Imedi television and said he came under pressure back when tycoon Badri Patarkatsishvili, the Imedi owner who died in February 2008, was alive.
But Imedi denied that Afanasyev had faced pressure. “Afanasyev worked as a producer for one of the serials on Imedi, but he resigned about two years ago,” the channel told RIA-Novosti.
*?A military court in Rostov-on-Don jailed a soldier for nine years on Friday for passing secrets to Georgia between February and November 2008, Reuters reported.

TITLE: Italians to Make Meat for Macs
AUTHOR: By Alex Anishyuk
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Big Mac that you pick up at a local McDonald’s restaurant might soon contain meat from an Orenburg cow processed by an Italian plant in the Moscow region.
It’s all part of Italian businessman Luigi Cremonini’s strategy to tap into Russia’s “huge potential” by making “huge investments.”
Italy’s Cremonini Group will open a new meat-processing plant in the Moscow region to produce hamburgers for McDonald’s by year-end as it moves to build a full production chain in Russia, Cremonini told The St. Petersburg Times.
The founder of the Italian giant, one of the largest food companies in Europe, is not at all dismayed that the plant will cost twice as much as expected or that Russia’s cattle population is steadily declining.
“We strongly believe in the prospects of doing business in Russia, and this is why we decided to make a strong direct investment, 100 million euros [$148 million], to build the meat-processing plant in Odintsovo,” he said in an interview Wednesday.
“We are already a supplier of beef for McDonald’s restaurants across Europe and will now make hamburgers for the Russian branch of the international fast-food chain,” he said.
The Odintsovo plant, which will occupy 25,000 square meters, will initially produce 25,000 tons of meat products per year and increase in capacity to 50,000 tons in a few years, he said. Work on the plant started in 2007.
The plant will be operated by Cremonini’s local subsidiary, Marrusia.
McDonald’s, which is rapidly expanding worldwide and plans to open 30 new restaurants in Russia this year, has processed its own food needs but said it needed Cremonini to keep up with growing demand.
“Due to an extensive McDonald’s expansion in Russia, the decision was made to outsource the production facilities of ZAO Moscow-McDonald’s Food Processing Complex,” McDonald’s said in an e-mailed statement Thursday.
“Marrusia … will ensure production, storage and delivery of meat products for McDonald’s restaurants,” it said. “Supplies are planned to begin with the opening of the partner’s facility.”
The plant will provide 10,000 tons of meat to McDonald’s next year.
Cremonini said he saw the plant as a strategic investment and was cautious in predicting when it might break even.
“In normal conditions, you would expect to justify your expenses for a project like this in 10 years, but Russia is a country where it is kind of difficult to make this kind of precise calculation,” he said.
Cremonini stressed, however, that only major investments work in Russia and said his company has invested more here than in any other country outside Italy.
“This is a country with great perspectives, so the logic behind this is simple: huge potential, huge investments,” he said. “At the beginning, we of course made a business plan outlining a lot of unpredictable factors, so we are quite aware of what we got ourselves into.”
Cremonini Group was founded by Cremonini in 1963 and entered the Soviet market in 1985, supplying meat to the state-owned trade concern Prodintorg. The company started to target Russian consumers in the late 1980s and set up Marrusia in 1998. In 2008, the company reported turnover of 133 million euros in Russia, up 5 percent from the previous year. The group’s total consolidated revenues were 2.2 billion euros, an increase of 6.6 percent.
The new Odintsovo plant will become the final stage of a full-cycle production chain that the company intends to build over the next few years, starting with several small slaughterhouses in the Orenburg region.
“Our strong conviction is that if you want to succeed in this country, you have to produce and to process here. You cannot consider Russia just as an export market,” Cremonini said.

TITLE: Banks Begin to Ease Up Consumer Loan Terms
AUTHOR: By Alex Anishyuk
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — In a sign that the financial crunch might finally be easing, two of the nation’s largest lenders have relaxed terms for consumer loans and rival banks are following suit.
State-controlled Sberbank and VTB-24 have cut interest rates and down payment requirements as billions of dollars in government cash flood the banking system. Prime Minister Vladimir Putin had ordered the cash infusion to encourage borrowing, and he recently prodded banks to extend the money.
Consumer loans took off a few years before the crisis as banks offered money to buy everything from cheap cell phones to flat-screen TVs. The loans essentially filled a niche usually covered in the West by credit cards — and offered interest rates to match.
Sberbank, the country’s largest bank, has reduced down payments for consumer loans to 15 percent to 20 percent, from 30 percent, and increased the cap on the amount of money that individuals can borrow, Natalya Karasyova, director of Sberbank’s retail loan board, announced last week.
The moves came after Sberbank lowered interest rates on retail loans by 0.5 percent to 1 percent in July and resumed foreign currency loans in August.
VTB-24, the retail arm of VTB, the country’s second-largest bank, said it has reduced interest rates by 1 percent on ruble-denominated mortgages and by 1.5 percent on foreign currency mortgages from Oct. 7. The fixed interest rate for mortgages is now 14.1 percent for ruble loans and 9.6 percent for other currencies, the bank said in a statement.
Russian Standard, one of the pioneers in the Russian consumer loan market, has had a harder time competing with its state-controlled peers since last fall’s credit crunch. The bank told analysts this week that it would not publish first half results to international financial reporting standards, which it said would help cut costs.
“Saving isn’t big, but the profits are close to zero,” Commerzbank wrote in a research note, citing a source at Russian Standard. The bank is still maintaining its “anti-crisis strategy” of freezing car and consumer loans, as debts overdue for more than 90 days reached 3.2 percent to 5.5 percent of the bank’s portfolio.
Calls and e-mails to Russian Standard went unanswered, and other banks contacted for this report were reluctant to disclose their full lending policies.
Most commercial banks said, however, that they were closely monitoring the developments at Sberbank and VTB-24 and were jumping on the bandwagon.
“Our bank also has begun decreasing interest rates,” said Andrei Stepanenko, a board member at Raiffeisenbank.
He said the lender cut interest rates on ruble-denominated loans to 22.9 percent, a decrease of 3 percentage points, from Sept. 25. Raiffeisenbank had offered the loans at 17 percent when the crisis enveloped Russia in October 2008.
This month, the bank cut interest rates for ruble-denominated car loans by 4.5 percentage points, offering them at 18 percent to 23 percent, compared with 11 percent to 15 percent in October 2008, Stepanenko said.
The crisis has forced many banks to be more cautious in evaluating the solvency of their clients, a trend that continues.
Yury Andresov, a board member at Home Credit Bank, said the lender recently eased loan terms for “our steady and conscientious clients.”
“We lowered interest rates and increased the amount of the loans,” Andresov said in e-mailed comments, without providing figures.
Since the start of the year, Home Credit has capped the size of the loans that it offers and expanded the list of documents that clients are required to produce to prove their solvency. “We focused our efforts on toughening underwriting procedures, fraud prevention and processing overdue loans, which helped us to maintain the steady quality of our [loan] portfolio,” Andresov said.
The bank’s portfolio is now worth 71 billion rubles ($2.4 billion), compared with 76 billion rubles last year, he said.
Andresov touted the bank’s credit portfolio as well-diversified, saying 37 percent of it consisted of consumer loans, 30 percent was credit cards, 18 percent was cash loans and 15 percent was mortgages and car loans.
The bank reported a first-half profit of 920 million rubles, down from 1.29 billion rubles in the same period last year.
Promsvyazbank said it was planning to liberalize the terms for consumer loans within weeks and was considering branching out into mortgages and car loans.
“Sberbank has softened conditions on secured loans for car loans and mortgages, but we currently don’t offer these loans,” Yelena Makhota, a vice president of Promsvyazbank, said in e-mailed comments.
The lender will make a decision on whether to start offering mortgages and car loans next year, she said.
Promsvyazbank began easing its terms on consumer loans earlier this year and now lends up to 300,000 rubles without collateral, Makhota said. The bank currently offers three-year loans of 15,000 rubles to 600,000 rubles at interest rates of 24 percent to 25 percent.
Promsvyazbank hiked interest rates by 2 percentage points in fall 2008 and reduced the maximum amount for a consumer loan to 600,000 rubles, from the previous 1.5 million rubles. The bank also introduced restrictions on who could borrow. “We offered loans only to ‘tested’ clients, those who had already borrowed money from the bank and had a positive credit score,” Makhota said.
Banks might be growing more optimistic about lending, but the interest rate cuts are small and suggest that lenders remain worried about risk, analysts said.
“Many banks have been lowering interest rates recently, but the risks remain,” said Leonid Slipchenko, a banking analyst at UralSib. “It looks like a 1 to 2 percentage-point cut is quite realistic, but not more because banks are still being cautious.”
Slipchenko predicted that lending would slowly increase but that there would be no credit boom any time soon. “The recovery of the retail credit market will be gradual and will gather pace by year-end or in the first quarter of 2010,” he said.

TITLE: Carrefour to Leave Russia 4 Months After Opening
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Carrefour, Europe’s largest retailer, said late Thursday that it would leave Russia just four months after opening its first store because of an “absence of sufficient organic growth prospects.”
The surprise announcement came as the Paris-based retailer reported a third straight drop in quarterly sales and amid reports that it was under pressure from shareholders to sell assets in emerging markets.
“Carrefour has decided to sell its activities in Russia and pull out of the market, given the absence of sufficient organic growth prospects and acquisition opportunities in the short and medium term that would have allowed Carrefour to attain a position of leadership,” Carrefour said in a statement.
“This decision is consistent with the group’s strategy, which aims at building leadership positions that will ensure strong and lasting profitable growth,” the statement said.
Carrefour operates two hypermarkets, in Moscow and Krasnodar, and was planning to open a third, in Lipetsk, by the end of the year.
Carrefour will be looking for buyers for its Moscow and Krasnodar stores, a company spokeswoman said by telephone from Paris.
In Lipetsk, “Carrefour does not own the space, it is just renting the space, so it will be canceled,” she said.
The spokeswoman refused to provide figures for Carrefour’s Russia operations.
Carrefour Russia spokesman Alexei Shavenzov declined to comment, referring all questions to the French office.
Carrefour, a late entry into the Russian market, has invested millions of euros into its operations here, including 8 million euros ($11.1 million) into its first store, a 14,300-square-meter, two-story hypermarket that opened in a shopping mall in western Moscow on June 18.
“We were waiting for the best moment to enter the market,” Carrefour Group executive director Thierry Garnier said at the opening. “We are in Russia for the long term.”
Carrefour entered Russia after foreign chains like Auchan and Metro Cash and Carry were fully established.
The company invested 8 million euros ($11.3 million) into its Krasnodar hypermarket, which opened in a mall Sept. 10.
Carrefour last week denied reports that key shareholders were pressuring it to sell assets in emerging markets.

TITLE: GM Could Review Opel Sale
AUTHOR: By Jeff Green and Chris Reiter
PUBLISHER: Bloomberg
TEXT: General Motors could back off from a decision to sell a majority of its Opel unit to a group led by Canadian car-parts maker Magna International, according to a person familiar with the situation.
GM hasn’t ruled out reconsidering a September board recommendation to accept an offer from Magna and Russian partner Sberbank, said the person, who asked not to be identified because the company’s deliberations aren’t public. A decision hasn’t been made and GM may still pursue the sale as planned, the person said.
The European Union is challenging the deal, saying it’s concerned that that Germany may have influenced the outcome by agreeing to back Magna’s purchase with 4.5 billion euros ($6.7 billion) in loans and guarantees. Before accepting Magna’s bid, GM had also considered keeping Opel or allowing the Ruesselsheim, Germany-based carmaker to become insolvent.
Neelie Kroes, who oversees antitrust policy as European Union’s Competition Commissioner, said in a statement Friday that Germany should let GM reconsider other bids and specify that government aid was open to any suitor. A preliminary EU inquiry showed “significant indications” that Germany improperly favored Aurora, Ontario-based Magna, she said in a letter to Economy Minister Karl-Theodor zu Guttenberg.
Karin Kirchner, a spokeswoman for GM in Zurich, wasn’t immediately available for comment. Andreas Kroemer, a spokesman for Opel, declined to comment.
Detroit-based GM agreed to sell Opel to Magna in September after considering offers from RHJ International SA, a Brussels-based investment company, and Beijing Automotive Industry Holding Co. Fiat SpA, Italy’s biggest automaker, made a non-cash offer.
GM is close to completing a contract to sell a 55 percent stake in Opel and the U.K. Vauxhall brand to Magna and Sberbank, three people familiar with the situation said on Thursday. Contracts haven’t yet been signed, as unions are negotiating over job and wage cuts. Opel, surviving on a 1.5 billion-euro short-term loan from Germany, may run out of cash in January, according to government and company officials.
GM hasn’t contacted the German government-backed trust, which controls 65 percent of Opel, about any change in its position, a person familiar with the trust said. The trust approved the sale to Magna last month.

TITLE: ABB Rethinks Stance On Russia, Citing Challenges
PUBLISHER: Bloomberg
TEXT: ABB, the world’s biggest supplier of power grids, said it will assess its business in Russia after “questionable practices” forced the company to increase reserves to protect against possible charges.
“ABB has initiated an in depth-review of its Russian operations and various tax audits have been conducted by the local tax authorities,” ABB spokesman Thomas Schmidt said Monday, after the Zurich-based company reported it will increase charges related to “the challenges of doing business in Russia.” 
The changed stance contrasts with ABB’s more upbeat assessment of Russia in the past. Russia offers “tremendous opportunity” because the country is upgrading infrastructure, Chief Financial Officer Michel Demare said in April 2008. ABB generated revenue of $1 billion last year in Russia, where it sells mainly transformers and substations and operates a cable factory. In 2002, sales from Russia were $126 million.
“Reviewing the business model certainly goes in the direction of compliance,” said Richard Frei, an analyst at Zuercher Kantonalbank. Abandoning operations in the country outright is unlikely unless something “really very bad” occurs, he said.
ABB said it boosted reserves to a triple-digit-million dollar sum to cover the risk of “significant” tax adjustments, potential write-offs and other regulatory risks. The charge related to Russia may be as high as $200 million, according to Natixis Securities.

TITLE: Russian Stocks Rise on JPMorgan Upgrade
AUTHOR: By Michael Patterson
PUBLISHER: Bloomberg
TEXT: LONDON — Russian stocks, the best performers this year among the world’s biggest equity markets, were upgraded to “overweight” at JPMorgan Chase & Co. after surging oil prices improved the earnings prospects for energy companies.
Global emerging-market energy shares were also raised to “overweight” by JPMorgan’s chief Asian and emerging-market strategist Adrian Mowat, according to a research report Monday. Energy producers in Russia, the world’s largest fuel exporter, are trading at an “attractive” valuation of 6.7 times profit estimates, the Hong Kong-based strategist wrote.
Russia’s 30-company Micex has surged 116 percent this year as crude oil jumped to $78 a barrel from $44 on signs the global economy is emerging from its first recession since World War II. Strategists and investors from Goldman Sachs Group to UBS and Templeton Asset Management’s Mark Mobius have predicted in the past month that Russian shares will keep surging as higher commodity prices boost earnings and lift the economy from its sharpest contraction on record in the second quarter.
Russian and global energy stocks are “following the oil price higher,” JPMorgan’s Mowat wrote. “We acknowledge that the upgrade may be viewed as chasing a chart, but the growing influence of financial investors in commodity markets has changed them into leading indicators.”
An overweight recommendation means investors should hold more of the shares than are represented in benchmark indexes. JPMorgan didn’t name any companies in Monday’s report.
Russia’s Micex Index advanced 1.8 percent as of 3:05 p.m. Monday in Moscow as Lukoil, the nation’s second-largest oil company, climbed 1.5 percent. The ruble strengthened 0.5 percent against the dollar for the best performance among developing-nation currencies tracked by Bloomberg.
The MSCI Emerging Markets Index added 0.7 percent, led by energy shares including PetroChina of Beijing and Johannesburg-based Sasol on the JPMorgan upgrade and speculation a government report this week will show 
Shares rallied in 2009 after valuations fell to the cheapest levels among the world’s biggest equity markets. Russian stocks are the most-favored among global emerging-market investors, Bank of America wrote in a research report last week.

TITLE: Synergy Raises $80 Million in Share Sale to Pay Off Debt
PUBLISHER: Bloomberg
TEXT: MOSCOW — Synergy, the country’s only publicly traded distiller, on Friday raised $80 million in a share sale to help pay debt and expand at home.
The vodka maker offered 4 million new shares at $20 apiece, Synergy and Renaissance Capital, which organized the sale, said in a statement. The price was in the middle of a $19 to $21 range set by the company.
“We intend to employ the proceeds from the offering to continue our dynamic growth on the Russian spirits market,” chief executive Alexander Mechetin said in the statement. The liquor maker will use the money raised “to repay certain outstanding indebtedness as well as for general corporate purposes,” the statement said.
Synergy, the maker of Beluga vodka, had total debt of 6.78 billion rubles ($231 million) at the end of the first half, or 2.4 times earnings before interest, taxes, depreciation and amortization, said Maria Sulima, an analyst at Metropol. Short-term debt accounted for about 80 percent of Synergy’s total borrowings, Sulima said last week.
“This deal shows that there is a clear appetite from investors to keep investing in Russia” and the former Soviet states, said Peter Vanhecke, managing director at Renaissance Capital who worked on the sale. “Investors are also very selective and will invest in leading companies. For market leaders that are well managed, it will be possible to raise money, for the others it will still be difficult.”
Synergy was the country’s second-largest vodka producer in the first half of the year, with 7.7 percent of the market, according to researcher Business Analytica. Russian Alcohol Group, the maker of Zelyonaya Marka vodka, is the country’s biggest vodka maker, Business Analytica’s data show.
Synergy fell 8.97 rubles, or 1.5 percent, to 611.02 rubles in Moscow trading, its lowest close since Sept. 18. The shares have slid 46 percent in the past year, cutting the company’s market value to about 8.7 billion rubles.
The stock on offer is equivalent to 27.9 percent of Synergy’s outstanding shares before the sale. Synergy raised $190 million in November 2007 in an initial public offering by selling about 19 percent of its shares for $70 apiece.
The government’s campaign against excessive drinking in Russia “is expected to have a limited impact on Synergy,” said Renaissance’s Vanhecke. “Synergy as a company has always focused on responsible drinking habits. … The government’s efforts seem to target youth drinking and, hence, will have the most impact on the beer and mixed drinks categories,” he said.
President Dmitry Medvedev last month proposed banning the sale of half-liter bottles and cans of low-alcohol beverages to battle the country’s alcohol abuse. Russians drink about 18 liters of pure ethanol per year, or about twice the amount considered dangerous by the World Health Organization, according to the Kremlin.

TITLE: AvtoVAZ to Lay Off Nearly 22,000 Staff
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — AvtoVAZ plans to lay off as many as 21,773 workers until 2012, Interfax reported Monday, citing the carmaker’s president Igor Komarov.
The workers will be needed in 2012 when the Tolyatti-based plant starts making Renault-Nissan models and automobile components, Interfax reported. 
On Saturday, hundreds of AvtoVAZ workers rallied in Tolyatti to demand that the management be fired and the company nationalized, a day after managers promised to return the carmaker to profitability next year.
Police estimated that about 700 people participated in the sanctioned protest, which was organized by the independent Unity labor union, while estimates in local newspapers ranged up to 3,000. The carmaker employs more than 100,000 people.
The protesters presented a list of 13 demands, including for full-time production to resume on Nov. 1 and salaries to be raised to 25,000 rubles ($850) per month, RIA-Novosti reported.
“We all expect and fear layoffs. That’s all everyone is talking about,” one assembly worker told Interfax. “My salary and my husband’s are very low, about 7,000 rubles.”
Speakers reminded protesters that United Russia had campaigned on a promise of 25,000 ruble salaries ahead of the 2007 State Duma elections, Vedomosti reported on its web site.
Anatoly Ivanov, a United Russia deputy representing the Samara region in the Duma, told the rally that Prime Minister Vladimir Putin should be appointed to the helm of AvtoVAZ.
“We demand that Putin is appointed president of AvtoVAZ. Let him run the factory as a second job,” Ivanov said.
Layoffs and other measures will help AvtoVAZ stop operating at a loss starting next year, the plant’s vice president for strategy, Grigory Khvorostyanov, said Friday.
The plant expects to make 300,000 cars in 2009, while it needs to make and sell 600,000 to break even. Next year, the break-even point will be 445,000 cars and the plant’s goal is to produce that number of cars, he said.
Khvorostyanov also revealed ambitious plans for a new line of cars by 2012 that would require 240 million euros ($358 million) in investment, two-thirds of which would come from Renault-Nissan, which owns a 25 percent stake in AvtoVAZ. The models will include two AvtoVAZ brands, two Renault brands and one from Nissan, he said.
The plant would begin producing the two Renault models in the first half of 2012 and launch the Nissan model in the second half, he said.
Meanwhile, AvtoVAZ will launch a new budget model based on the Lada Kalina by 2012. The low-cost car would cost less than 300,000 rubles and be among three AvtoVAZ low-cost models, said Oleg Grunenkov, director of the budget car program at AvtoVAZ.
Renault, which received a warning from Putin earlier this month to invest in AvtoVAZ or risk seeing its stake diluted, said it had just started discussing the investment project and was not close to a deal. “We are still in talks,” spokeswoman Oksana Nazarova said Friday. “It’s true that we are discussing the possibilities for a new line of models, but the process only began last week.”

TITLE: Banks Pass on AvtoVAZ Stakes
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Sberbank and VTB said Thursday that they were not interested in taking stakes in AvtoVAZ in exchange for debt, depriving the loss-making carmaker of another channel for possible salvation.
On Monday, AvtoVAZ spokesman Alexander Shmygov said seeking protection from creditors is an option the carmaker would consider.
The bad news from the banks came just a week after First Deputy Prime Minister Igor Shuvalov, the government’s point man on the AvtoVAZ rescue, flew to Tolyatti to tour the factory, which he said had “good and realistic prospects” for the future. Rescue plans for the plant have largely revolved around additional share issues, either to state banks or current stakeholders.
Despite the vote of confidence, state banks were treating AvtoVAZ’s debt like a hot potato, and the Industry and Trade Ministry began dampening expectations that the company would be salvageable in its present form.
By January 2010, AvtoVAZ will have run up a debt of 76.32 billion rubles ($2.6 billion), not including 9.76 billion rubles that it owes to suppliers, the ministry said in a statement posted late Wednesday on its web site.
Sberbank president German Gref said Thursday that the bank was “not considering converting AvtoVAZ debt into shares.” VTB does not plan to exchange debt either, Bloomberg reported, citing the bank’s press service.
Vneshekonombank chief Vladimir Dmitriyev said Oct. 8 that the state development bank was considering buying up to 40 billion rubles in AvtoVAZ shares, but chances of that also appeared to be fading.
“Sberbank and VTB gave them the loans in sound mind, so let them deal with [AvtoVAZ],” a source in VEB said, Vedomosti reported Thursday. “It’s not fair to give us all of the AvtoVAZ debt. Then there needs to be an agency for bad debts. … We are a state bank, not an agency,” the source said.
With state banks apparently looking for a way out of the AvtoVAZ fiasco, attention has turned back to the carmaker’s current shareholders.
On Oct. 2, Prime Minister Vladimir Putin publicly called on Renault, which owns a 25 percent stake, to help with the bailout or have its holding diluted. The state owns 25 percent through Russian Technologies, while brokerage Troika Dialog also has a blocking stake.
Renault has said it will help with technology but has avoided a direct pledge to contribute additional funds.
But the Industry and Trade Ministry statement — signed by Deputy Minister Andrei Dementyev — put additional pressure on the French automaker, suggesting talks on the terms of its participation in a bailout were still being negotiated.
“Despite their declared wish to stay a strategic partner and readiness to provide technology, [Renault] is not giving access to the car models that are necessary to keep production at efficient levels,” Dementyev said.
He also said the government would treat AvtoVAZ as a model for coming problems in other single-industry towns that have been hit hard during the economic crisis.
In particular, he proposed creating special economic zones in the Samara region to help resolve AvtoVAZ’s problems.
“It’s possible that some production facilities that have gone through their life cycle need to be closed,” the statement said. “Success of the special economic zone project in Tolyatti will give us an answer of how to do this most effectively from an economic and social point of view.”
The government’s immediate concern is that snowballing debt from inefficient operations will lead to layoffs in Tolyatti, where most residents are directly or indirectly dependent on the plant.

TITLE: Gazprombank Plays Down $529M Losses
PUBLISHER: Vedomosti
TEXT: MOSCOW — Gazprombank reported losses of 15.5 billion rubles ($529 million) after the ruble strengthened in September, its worst month this year, but a spokesman said the damage was only on paper and that it has earned more than 24 billion rubles in 2009.
The results were the sixth time this year that Gazprombank has posted a monthly loss. The previous worst month was May, when the bank lost 8.4 billion rubles.
The lender’s losses are coming from currency deals, said Maxim Osadchy, an analyst at Bank of Corporate Financing. Gazprombank’s foreign-currency assets exceeded its foreign-currency liabilities by 392.6 billion rubles as of Oct. 1. According to official Central Bank exchange rates, the ruble strengthened against the dollar 1.1 percent in September and against the euro by 3.4 percent.
The September results are a consequence of the strengthening ruble, a bank spokesperson said. But the bank did not suffer any real losses since the changes were a result of exchange-rate shifts and related revaluations of foreign-currency assets — not expenses from currency operations.
Gazprombank suffered from exchange-rate changes last year as well. According to the bank’s full-year results to international financial reporting standards, it had a record loss of 68.2 billion rubles. The losses were from the bank’s futures contracts for currency, which were worth 96.9 billion rubles, according to the results, including 75.8 billion rubles in downward revaluations because of the ruble devaluation and falling securities prices.
At the time, a bank spokesman said the risks were hedged but that because of the way the figures for the cash transactions and futures contracts show up in its results, there was an accounting loss of 33 billion rubles under international financial reporting standards. Gazprom bank would have additional profit of the same amount in the following reporting period, he said.
In the first quarter of 2009, the bank made 8.1 billion rubles on currency operations, and a total of 16.5 billion rubles.
Gazprom owns 41.7 percent of the lender, while its pension fund, Gazfond, owns 50 percent. As of the first quarter of 2009, the lender was Russia’s third-largest, with assets of 2.05 trillion rubles.
All of Gazprombank’s operations are hedged now, as well, and the company doesn’t have currency risks, deputy chief Alexander Sobol said. These transactions, as well as the profit from them, are not included in the balance, he said.
The bank’s international financial reporting will be more telling, with a profit of 24 billion rubles in the first half and even more for the first nine months, the spokesman said. Even the company’s nine-month profit of 16 billion rubles under Russian reporting standards wasn’t bad, he said.
VTB Group, which is larger than Gazprombank by assets, had net profit of 7.9 billion rubles in the first nine months, while Sberbank gained 7.4 billion rubles in the first eight months of the year.

TITLE: Putin’s Proposed Reform Worries Drug Producers
PUBLISHER: Vedomosti
TEXT: MOSCOW — Prime Minister Vladimir Putin has promised to ban pharmaceutical makers from sending representatives to doctors’ offices, a practice they spend up to 50 percent of their revenue on and one of the last open channels for companies to promote prescription drugs.
“We should get rid of these so-called pharmaceuticals representatives working in medical institutions,” Putin said Oct. 9 at a meeting on the development of the drugs industry. In the past 10 years, Russia has seen the rise of “a clearly abnormal type of interaction” between medicine producers, particularly foreign companies, and parts of the medical community, he said.
It is impermissible to have “pharmaceutical holdings paying specialists to prescribe patients substances produced by these companies,” Putin said. “Producers sponsor corporate events, various seminars, including some with trips to warm beaches. Those are the sorts of events that thousands of Russia’s medical specialists are being caught up in.”
Pharmaceuticals or medical representatives are consultants who work for the producers and discuss the companies’ products with doctors, but they are not directly involved in sales, said Alexander Kuzin, chief executive of DSM Group, a marketing agency.
Visits by representatives are among the main ways that medicines are promoted here, especially those that require prescriptions, said David Melik-Guseinov, research director at PharmExpert. Under the law, prescription drugs can only be advertised in special publications, which not all doctors have access to. If pharmaceutical companies are banned from sending out representatives and organizing conferences, then it is unclear how new medicines will be introduced to the market, he said.
Drug makers are now spending between 10 percent and 15 percent of their revenue on representatives, roughly the same as their production costs, an executive at a Russian pharmaceuticals company said. For foreign companies not producing drugs in Russia, the figure can reach 40 percent to 50 percent, Melik-Guseinov said.
“Statements about bans, to put it mildly, are untimely,” said an executive at an international drug producer’s office in Russia.
Officials have already toughened the procedures for registering prices on vital medicines, which account for about 30 percent of pharmacies’ stock, and prosecutors have been investigating their pricing. Foreign companies have also had to deal with the ruble devaluation.
PharmExpert expects a minor fall in medicine use, both in ruble terms and in units — the first declines in the past 20 years.
The pharmaceuticals companies say their representatives are not doing anything unethical or illegal.
“Promoting prescription drugs is essential to providing medical workers with knowledge about the latest treatment methods and the constantly changing information about diseases, treatments and medicines,” said Fabio Landazabal, the head of GlaxoSmithKline in Russia. They also provide a reverse link for doctors to communicate with producers.
GlaxoSmithKline does not allow representatives to give doctors expensive presents or money, Landazabal said. They are also not allowed to hold cultural, entertainment or sports events.
Representatives from transnational companies are essentially working as sources of information; they explain when and to whom it is best to prescribe which medicine, said a representative from a European pharmaceuticals producer, who agreed to speak on condition of anonymity.
“We can give a doctor a bouquet and candy on Women’s Day, but we don’t offer money or a percentage of the sales, just like staff from the majority of other innovative producers,” she said. “I’ve heard of companies whose representatives offer doctors money, but hardly every doctor agrees to that.”
To evaluate the effectiveness of their work with doctors, she said, the company analyzes sales of the medicines they are promoting at pharmacies located on site. The representatives recommend which pharmacies to send patients to, so that the medicine is guaranteed to be available.
Kuzin, of DSM Group, agreed that there were only isolated cases where drug makers pay doctors. It would be easy to uncover a doctor’s financial interest since identifying information is on each prescription, he said.
After Putin’s statement, pharmaceutical companies were reluctant to discuss their representatives. Questions about their number and duties went unanswered by major corporations such as Sanofi-Aventis, Nycomed, Bayer-Schering Pharma and Novartis.
Each of the 20 largest pharmaceutical makers working in Russia has about 200 to 250 representatives, while the rest have fewer, the executive from the foreign company said. At the very least, there are some 7,000 to 8,000 such representatives.
According to HeadHunter, pharmaceuticals firms were offering an average monthly salary of $1,268 for representatives, plus social benefits. Additionally, 45 percent of firms are willing to provide a company car and 35 percent include a notebook computer.
Ten percent are willing to compensate employees for their promotion expenses. The vacancy notices do not clarify what those expenses might be.
The average monthly cost for a company to employ a representative is about 160,000 rubles ($5,450), including bonuses, auto expenses, promotional materials and unified social tax payments, said Melik-Guseinov, of PharmExpert.
Pharmaceuticals representatives rank second in Moscow as the most sought-after professionals, behind only insurance agents, said Mikhail Zhukov, chief of the HeadHunter group. There are 1.7 resumes for every vacancy in the field, whereas the figure for economists is 21, he said.

TITLE: Deripaska Willing to Give Testimony
PUBLISHER: The St. Petersburg Times
TEXT: Oleg Deripaska has not received any request from Spain for testimony in a money-laundering investigation and has told Russian law enforcement that he is willing to answer any questions they may have, his spokesman said Sunday in an e-mailed statement.
The spokesman said Deripaska never had any relation to the companies mentioned in the media reports. “We consider any concerns which the Spanish authorities might have to be misplaced and expect this matter to be resolved shortly,” the statement said.
Spanish daily El Mundo reported Sunday that Judge Baltasar Garzon would visit Moscow in early December to look into the alleged laundering of 4 million euros through Russian mafia in Spain from 2001 to 2004.

TITLE: Customs Union in Final Stretch
PUBLISHER: Vedomosti
TEXT: MOSCOW — The creation of a customs union for Russia, Belarus and Kazakhstan has entered the home stretch, with a deal to be signed in late November giving the countries a unified Customs Code, external borders and even import duties on cars.
The three countries’ presidents will sign a package of documents creating the customs union in Minsk on Nov. 27, including unified customs rules and one duty for products that fall under restrictions on import and export, said Igor Petrishenko, a Belarussian deputy foreign minister, Interfax reported Wednesday.
Under the plan, the union will begin operating Jan. 1, and customs points will be removed on the Russia-Belarus border. On July 1, 2011, the customs inspections will disappear on Russia’s border with Kazakhstan.
Kazakhstan will finish installing customs posts on its southern border by the end of 2010, Kazakh Prime Minister Karim Masimov promised Prime Minister Vladimir Putin. Earlier, two Russian officials involved in the negotiations told Vedomosti that the government was concerned by the lack of demarcation along Kazakhstan’s borders.
A source in the Russian government said the main questions about creating the union have been resolved and that they were “working feverishly.” On Wednesday, the union’s commission has a meeting planned, and “a colossal number of additional decisions need to be approved,” he said.
The unified customs rates from 2010 will reduce Russia’s annual revenue from tariffs by about 1 percent, said Deputy Economic Development Minister Andrei Slepnev. But there will be no changes on the country’s main tariffs, he said. Import tariffs on foreign cars, for example, will be leveled off at the Russian levels.
The fact that Russia was demanding to keep the high import tariffs on light vehicles was also announced by Anatoly Vaskov, chairman of the Eurasian Economic Community’s interparliamentary commission. “Tariffs are tariffs, but you need to protect your producers. For Russia that’s very important,” he said.
Russia’s import duty on new cars is currently 30 percent, but not less than 1.2 euros to 2.8 euros per cubic centimeter of engine capacity. For cars that are three to five years old, it is 35 percent but not less than 1.2 euros to 2.8 euros per cubic centimeter. For cars older than five years, the rate is 2.5 euros to 5.8 euros per cubic centimeter.
Belarus and Kazakhstan have lower import duties, Slepnev said, adding that it was possible that there would be a transition phase during which each state would keep its own duties on cars. The current tariffs in Russia will expire in mid-2010, and it is unclear what will happen after, he said.
The creation of the customs union won’t have much of an effect on trade ties among Russia, Kazakhstan and Belarus, which already have a free trade zone, said Sergei Prikhodko, managing director of the Institute for the Economy in Transition.
Russia has never particularly placed much value on real integration, political scientist Mikhail Vinogradov said. “Just look at our ‘friendly’ relations with Belarus lately. Every time the Russian authorities say the latest ‘yes’ on some matter, it means, in essence, ‘no.’”
Maxim Medvedkov, director of the Economic Development Ministry’s department for World Trade Organization accession, told Vedomosti that the three countries could announce a restart to entry talks Thursday.

TITLE: Hermitage Says New Tax Fraud Uncovered
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Hermitage Capital, once a leading portfolio investor in Russia, has alerted prosecutors and other government agencies of what could be eight new major tax frauds committed by the same group that it says damaged its business two years ago.
“It’s the duty of any citizen, both individual and corporate, to report a crime that they become aware of,” a Hermitage spokesman said Friday.
On behalf of Hermitage, London-based law firm Brown Rudnick sent letters about what it called fraud to the Prosecutor General’s Office, the Investigative Committee, the Central Bank, the Finance Ministry, the Federal Tax Service and the Audit Chamber on Friday, the Hermitage spokesman said.
Hermitage says a criminal group instigated a criminal case against it, prompting a police raid on its Moscow offices in June 2007. It says police seized company records, seals and tax certificates, which were later used to steal two Hermitage subsidiaries and defraud the government of 5.4 billion rubles ($183.5 million) in tax refunds.
Hermitage now says it has exposed two further companies, formerly owned by Renaissance Capital, that it said were used by the same group to defraud the government of 2.9 billion rubles in a similar tax refund sham.
The refunds were wired to Universal Savings Bank, which closed in June 2008, Hermitage said in the new letter to Russian officials.
The letter, copies of which were obtained by The St. Petersburg Times, also identifies the people whom Hermitage suspects of playing a role in the alleged fraud, including tax officials.
Hermitage said in the letter that it had become aware of at least eight other money transfers from the federal treasury to Universal Savings Bank in 2006 and 2007 worth nearly 3 billion rubles.
“The receipt of such large sums from the Russian treasury … raises the substantial suspicion that all such payments were the result of systemic tax frauds,” the letter says. “We request that you review our letter and the submissions made … and conduct a detailed investigation into the activities of the criminal group described above.”
Renaissance Capital has said it was not involved in the alleged fraud.
The Hermitage spokesman said the letters arrived at their destinations by FedEx express mail Friday.
None of the government agencies confirmed or denied receiving the letter Friday afternoon.
Audit Chamber chief Sergei Stepashin is unlikely to read the letter before Wednesday because he was in Moscow only in passing on Friday, going from one trip to another, said Alan Uzhegov, a spokesman for the government’s budgetary watchdog.
Upon reading the letter, Stepashin could assign an auditor to decide whether an audit is required, Uzhegov said. Such an audit, if any, is unlikely to happen this year, he said.
The other government agencies that were supposed to receive the letter declined immediate comment Friday.
The Hermitage spokesman said the affair has damaged Hermitage’s confidence in property rights and the rule of law in Russia and contributed to its decision to reduce its investment in the country to an “insignificant” amount.

TITLE: Plans for Joint WTO Bid Abandoned
PUBLISHER: Bloomberg
TEXT: MOSCOW — The Economic Development Ministry said Friday that it agreed to shelve Prime Minister Vladimir Putin’s plan to submit a joint membership bid to the World Trade Organization with Belarus and Kazakhstan after accepting the global trade arbiter’s accession rules.
The country will still seek to form a customs union with the countries, Maxim Medvedkov, the country’s chief negotiator on the WTO talks, said in a ministry statement Friday.
“The delegation of the customs union informed WTO members that de jure they will continue accession talks as sovereign states because any other approach would be linked with serious legal and procedural problems and could substantially delay concluding the talks,” Medvedkov said in the statement. “WTO rules do not preclude the creation of customs unions, but until now all customs unions were formed among WTO members.”
Putin had said in June that Moscow would try to join the WTO as a customs union with Minsk and Astana. He made joining the WTO a priority during his first presidential term, but Russia remains the largest economy outside the Geneva-based trade arbiter.
There is no precedent for negotiating a simultaneous WTO accession.
Putin last month called for trade concessions, including an “intensification” of WTO talks, following U.S. President Barack Obama’s decision to abandon a missile shield in Eastern Europe.
President Dmitry Medvedev said in July that Russia might join the WTO separately.
??Economic Development Minister Elvira Nabiullina told Interfax on Friday that there was “enormous potential” to increase trade with the U.S., according to a transcript on the ministry’s web site.

TITLE: Russia’s Tilt Toward China
AUTHOR: By Andrei P. Tsygankov
TEXT: Russia is increasingly unable to resist the charm of China’s economic and political influence. As Russia’s relatively low productivity translates into declining competitiveness, China’s ways of influencing the north continue to expand.
Even routine domestic economic decisions in Russia are increasingly made with a consideration for China. For instance, Beijing sent a delegation to Moscow in July to negotiate conditions of a large group of ethnic Chinese affected by the Moscow government’s decision to close the large Cherkizovsky Market following multiple violations of labor and immigration law. Headed by Beijing’s deputy trade minister, the delegation negotiated restoration of the trading area on condition of a Chinese $1 billion investment. 
But in recognition of the growing need for China’s investments and export markets, Russia was unwilling to press environmental claims against its neighbor when it polluted the Amur River.
Since the end of the Soviet Union, the China discourse has evolved from one dominated by the Westernizers to one largely controlled by the Sinophiles, who have supporters in the government, energy firms with ties to Asia and the military-industrial complex.
The general public has also grown more pro-China. A June poll revealed that the share of Russians viewing China as a strategic and economic partner had grown from 34 percent to 41 percent in recent years. In addition, 47 percent of the respondents voiced optimism regarding the future of relations with China.
The Sinophiles are pushing to strengthen relations with China based on Russia’s economic and security priorities. They insist that Russia would be better protected by closer economic and political ties with China rather than with the West. This is driven by influential leaders in the Defense Ministry, Foreign Ministry and military-industrial complex who want to prevent the United States from dominating global affairs. Creating a multipolar world is necessary to revive Russia’s superpower status. Pushing for a U.S. retreat from Eurasia in the next five years, the advocates of multipolarity call for a political, economic and military union along the lines of a Warsaw Pact with China, India, Iran and other non-Western nations.
In the area of economic relations, the pro-China position is often favored by energy producers and military enterprises in search of high-ticket defense contracts in Asia. Kremlin strategists believe that the country would be better off redirecting its oil and gas supplies toward Eurasian countries such as China and India because such a measure would assist the country in developing energy-intensive goods and transforming its current status as a raw materials appendage of Europe. As of now, Russia’s most commonly exported products to China are energy and weapons, whereas the most commonly imported products range from electronics to clothes. In addition, some state corporations have benefited from Chinese loans. For example, China’s $6 billion loan helped Rosneft purchase Yuganskneftegaz in a December 2004 auction. Notably, the chairman of Rosneft is Igor Sechin, who is a deputy prime minister and member of Prime Minister Vladimir Putin’s inner circle. As the key negotiator, Sechin is now applying the model of a recently signed oil deal with China to other areas including electricity, natural gas and atomic energy.
The prospect of a growing pro-China tilt in Russia’s foreign policy may force the West to alter its foreign policy course. Rather than trying to secure the 21st century as another American or Western century, Washington and Brussels will do well to prepare for the emergence of a post-Western world and reassess the role that Russia will play in this new structure.
Preventing a Moscow-Beijing axis means that the West has to strengthen its ties with Russia, while preserving strong relations with China. The objective should be not to marginalize or isolate China, but rather to strengthen Russia’s ability to choose its future partners in the post-Western world.

Andrei P. Tsygankov is a professor of international relations at San Francisco State University.

TITLE: Armenians First Want
Apology, Then Peace
AUTHOR: By Matthew Collin
TEXT: Did Armenian President Serzh Sargsyan grin too enthusiastically while watching his country being beaten by its old enemy, Turkey, at an international football match last week? Sargsyan’s trip to watch the game with his Turkish counterpart Wednesday followed the signing of historic accords to normalize relations and open the border between the two countries after decades of animosity. But his increasingly belligerent critics claim that his courteous applause for Turkey’s superior performance on the pitch was a public relations disaster for a leader who’s staked a lot of political capital on this controversial deal.
Divisions surrounding the agreement are becoming increasingly stark within Armenian society. On the day that the accords were signed, it was business as usual at a popular street market in Yerevan, where locals and tourists browsed the stalls for souvenir replicas of Mount Ararat, T-shirts bearing patriotic slogans and matryoshka dolls of President Dmitry Medvedev and Osama bin Laden, among other trinkets. But questions about the deal immediately invoked conflicting passions.
An antique carpet vendor said he had lost relatives during the mass killings of Armenians in Turkey during World War I, which Armenia wants the Turkish government to recognize as genocide. “How can we become friends when the genocide happened?” he demanded furiously.
Others also insisted that the Turks should seek forgiveness. “They should do what the Germans did for the Jews — apologize,” said a man selling Armenian flags. “First, they should recognize the genocide, and then we will talk. Our wounds still hurt.”
Nationalists have tried to rally support against the deal, but their campaign hasn’t yet inspired mass resistance. Some, however, are optimistic about the potential for a less-hostile relationship with Turkey. “It’s good for both sides,” said a woman selling handmade puppets. “The border must open, the conflict must be solved. I don’t think we can become friends with the Turks immediately, but gradually it will happen, and this is the start.”
To be sure, decades of mistrust have to be overcome. There may be serious obstacles ahead on the road to reconciliation. “Enemies don’t become friends at once,” another stall merchant noted. “First they have to find ways to establish relations with each other, and only then can they come to a mutual understanding.”

Matthew Collin is a journalist based in Tbilisi.

TITLE: Putin’s Coercive Energy Model
AUTHOR: By David Clark
TEXT: Russia has taken a significant step in its bid to become a dominant international energy supplier, one that has important implications for its relations with the European Union and its prospects of returning quickly to the high growth rates that have underpinned its national recovery in recent years. 
Monday marks the end of the 60-day notification period after which Russia’s provisional application of the Energy Charter Treaty, or ECT, will formally come to an end. Announced in August as Europeans headed for the beach, Russia’s repudiation of the ECT should be read as a clear signal of strategic intent. The Kremlin’s statist and highly politicized approach to the use of energy resources is here to stay, and any lingering European hope that Russia might be persuaded to accept an energy relationship based on commercial logic and multilateral rules can now be forgotten. Henceforth European energy security policy will have to take account of that fact. 
The ECT was drawn up in the early 1990s to protect the property rights of foreign energy investors in the former Soviet Union, guarantee transit rights to third-country suppliers and establish arbitration mechanisms to resolve bilateral disputes. It was already becoming clear toward the end of Vladimir Putin’s first presidential term that Russia was departing radically from these norms. Putin talked explicitly about using Russia’s natural resources to further the country’s geopolitical interests in the post-Soviet space and beyond. The energy sector was to be integrated within a strengthened “power vertical” under Kremlin control. Russia’s largest private energy company, Yukos, was forcibly dismantled and foreign investors, Shell and BP, were strong-armed into selling investments to the state at well below market price. 
The model established by Putin envisages Russia as an energy superpower able to convert its natural endowments of oil and gas into diplomatic leverage — if necessary by coercive means. There is no room in this vision for the niceties of international law or respect for property rights. Indeed, the possibility of a negative ruling by an arbitration tribunal looking into the Yukos case is widely believed to have prompted Russia’s withdrawal from the ECT, a futile gesture that merely confirms Russia’s provisional application of the treaty at the time of Yukos’ seizure. In its place, President Dmitry Medvedev has proposed a new international energy treaty notable for its lack of binding commitments or enforceable rules. 
This presents an obvious dilemma for European policymakers. Although existing European investments in the Russian energy sector will remain covered by the ECT for another 20 years, new investors will have to rely on the goodwill of a Russian state that has already demonstrated a considerable appetite for expropriation. At the same time, Russian investors in the EU market will continue to enjoy the safeguards and legal protections extended to all commercial operators under European law. Can the EU tolerate this double standard? Should it not use market access to insist on some measure of reciprocity or has European energy dependence tipped the scales too far in Russia’s favor? 
In fact, what appears to be a problem for the EU could turn out to be more of a problem for Russia in the long term. If rejecting a major international treaty was intended as a demonstration of unilateral Russian power, it may instead backfire and expose the underlying fragility of Russia’s national revival. As Medvedev himself acknowledged last month, in what was taken as an oblique criticism of his predecessor, the Russian economy remains dangerously lopsided in its dependence on energy-export revenues. Without the record energy prices of the past decade, Russia would have remained mired in post-Soviet decline. Yet even if prices now rebound as the world economy recovers, it is by no means certain that the country will be able to pick up from where it left off. A combination of internal and external factors is rendering the Putin model unsustainable. 
Within Russia itself, the failure of the cumbersome, state-centered energy sector to invest in new production is beginning to bite as existing fields reach exhaustion and replacements are not yet ready to be brought on stream. This problem is especially acute in the more strategically important gas sector. Russia possesses huge reserves of oil and gas, but according to the government’s own assessment, the country needs investments to the tune of $2 trillion over the next 20 years in order to access them and sustain current production. The already heavily indebted state energy companies, Gazprom and Rosneft, cannot generate the required funds, nor do they have the technology needed to drill in the icy waters and permafrost of the Arctic north where the future of Russian energy production lies. For this they need foreign investment and know-how — and plenty of it. 
In a tight energy market in which there is nowhere else to turn, it is just possible that investors might accept the rising political risks involved in dealing with the Russian government and part with the cash and technology required to gain a subordinate role in a major energy project. But the market for gas, in particular, is undergoing important changes that are likely to undercut Russia’s apparently dominant position. Some of this is a consequence of the EU’s drive to liberalize its energy market by forcing a separation of production and supply activities and by building the interconnectors needed to switch energy supplies rapidly across Europe. Properly implemented, these measures will neutralize Russian strategies of vertical integration and market segmentation while encouraging new suppliers to enter the market. 
In its zeal to recover lost global status, Russia has overplayed the energy card in a way that threatens to destroy demand for its own primary export. The second gas war with Ukraine earlier this year forced a widespread rethink about the level of European dependency on Russian supplies and accelerated the search for alternatives. After Russia’s rejection of the guarantees contained in the ECT, investors may now follow suit and look for less risky options for a return on their capital. If so, Russia’s potential as an energy superpower will remain unrealized, and it will pay a heavy economic penalty in lost revenues and flagging growth. The Putin model is broken, and sooner or later Russia will have to prove its worth as a reliable energy partner by signing up once again to the ECT or something very much like it. 

David Clark is chair of the Russia Foundation. From 1997 to 2001, he was special adviser to Robin Cook and the Foreign and Commonwealth Office, specializing in European affairs. This comment appeared in the Financial Times.

TITLE: Soviet Ghosts
AUTHOR: By Richard Lourie
TEXT: The Germans lucked out with Hitler. He was so evil, so destructive and so unsuccessful that it was easy to reject him completely. But the Russians were not so “lucky” with Stalin.
Tomes have been written comparing the two great dictators, but in the end what matters most are their differences. The main difference was that in World War II, Hitler lost and Stalin won. That meant suicide for Hitler and the Nuremberg trials for the country and its high command. For Stalin, it meant the spoils and honors that come with being the victor, and for the Soviet Union it meant securing a seat on the United Nations Security Council.
Stalin is part of a larger problem for the Russians — how to deal with the Soviet phase of their history, how shame and pride should be apportioned and what to accept with a neutral shrug. A perfect and permanent formulation will of course never be found. What matters more is the attempt that Russia is not making.
The Soviet ghosts emerge in the little details, often producing disproportionate effects. Recently a kebab restaurant on Leningradsky Prospekt decided to name itself Antisovetskaya, or AntiSoviet, after its location opposite the Sovetskaya Hotel. Nothing in the least political, this was just a well-known capitalist principle — cutesy names draw attention and business. Instead, a mini firestorm erupted.
Oleg Mitvol, prefect for the Northern Administrative District, pressured the restaurant to change its name, himself under pressure from veterans who found the name “insulting to the history of our country.” How an entire country can be insulted by a kebab restaurant’s name was never adequately explained nor was how that country got so touchy in the first place.
This bizarre bit of post-Soviet dialectics might have passed with a two-line mention in the newspapers were it not for journalist Alexander Podrabinek’s “Letter to Soviet Veterans,” published on a liberal Russian web site. Active in human rights since the early 1970s, Podrabinek helped expose the Soviet abuses of psychiatry in his book “Punitive Medicine,” which landed him two stretches in a Siberian prison.
It is worth remembering that nearly everything that he recounts in his book happened in the 36 years between the Bolshevik Revolution and Stalin’s death in 1953 as opposed to the period from 1954 to 1991. Life in that second period of Soviet history had aspects — stability, the cozy democracy of mutual poverty and superpower pride — for which many Russians are nostalgic today.
Podrabinek was picketed by Nashi and then, having received death threats, went into hiding, a sensible move in a country where pesky journalists are routinely mowed down.  
It seems to me that Russia’s own history has set two great tasks before it. One is to forge a new identity for itself, a new direction and a new shared set of values and goals. All the Russias of the past — Muscovite, tsarist, imperial and Soviet — were so definite in nature that they could be summed up by a single adjective. Eighteen years after the collapse of the Soviet Union, the same cannot be said of the new Russia.
The forging of that new identity will not be achieved without a successful integration of the Soviet past. And without creating that new sense of national self and purpose, Russia will be unable to deal with its other great task — the diversification of its economy away from its dangerous dependence on oil and gas. The results of that failure will be unpleasant to say the least.

 Richard Lourie is the author of “The Autobiography of Joseph Stalin” and “Sakharov: A Biography.”

TITLE: Visiting Tiraspol — A Soviet Theme Park
PUBLISHER: The Associated Press
TEXT: TIRASPOL, Moldova — Soaring statues of Vladimir Lenin, portraits of the city’s most productive workers adorning a square, red flags fluttering in the wind during a Communist demonstration.
Nowhere is Soviet-style communism as alive as in Transdnestr, Moldova’s tiny breakaway republic that dreams of joining Russia but is recognized by no one.
Come to this impoverished, bleak region and take a voyage to the past complete with hammer-and-sickle emblems, aging Soviet tanks and gloomy security officials who are likely to “accompany” foreigners wherever they go.
But don’t be fooled: the hamburgers, fashion boutiques and exotic travel agencies that you will also discover here could not be found in the Soviet times. Today, Transdnestr is a surreal mix of the communist regime and its mortal enemies: wild capitalism and Orthodox Christianity.
This sliver of land twice the size of Luxembourg is home to some 550,000 people — Russians, Ukrainians and Moldovans. It has proclaimed itself an independent republic, but is not recognized as such by anyone else, including Russia. The region dreams of being absorbed by Russia, even though it shares no border with it.
The mainly Russian-speaking province used to be part of Soviet Ukraine but became part of Moldova, a region that was annexed from Romania shortly before World War II. Fearful that Moldova would reunite with Romania after the Soviet collapse and clamp down on the use of the Russian language, Transdnestr broke away in 1992 in a war that killed some 1,500 people.
Transdnestr is a haven for weapons and drug smuggling, according to Western agencies. Local residents say anything is on sale here, from women who are then trafficked abroad and forced into prostitution to gasoline and cars exported from Romania and sold at a profit in Ukraine.
Some images here are straight from a communist theme park.
In a bow to a Soviet tradition, brides in heavy makeup and dazzling white gowns climb on top of a lonely green World War II Soviet tank on the city’s main square to pose for photos, paying tribute to their grandfathers’ victory in the war.
Tired women in headscarves clutching empty plastic bottles line up to buy farm milk on a street corner, while commuters return home from work on rusty trolleybuses.
Giant black-and-white portraits of the region’s best-performing workers, including the regional president and the mayor of Moscow, are hung on a main square to stimulate others for fruitful work. Portraits of President Igor Smirnov decorate the rooms of government officials and even private hotel receptions.
But some things are clearly surreal.
You can observe black-robed Orthodox priests bless a Soviet-style, red-bannered military parade marking the 1917 Revolution that launched an era of vicious, state-sponsored atheism.
Shop windows are filled with brand-name jeans, computers and state-of-the-art cell phones. Travel agencies offer tours to anywhere from Thailand to Egypt, while barely dressed models advertise mattresses and luxury cars from billboards.
A short walk from a huge statue of Lenin overlooking a main square in the capital, Tiraspol, impoverished pensioners sell old coats and potted plants to supplement their meager monthly pensions of about $70.
And if you miss Western-style fast food while you’re here, don’t worry. Right across the street from the pensioners, you can join better-off residents treating themselves to hamburgers and French fries at Andy’s Pizza.
??Getting There: You can get to Transdnestr either from Ukraine or from Moldova. Neither country requires short-stay visas for U.S. and European Union citizens. One option is to fly to the Ukrainian port city of Odessa and then take a bus or a cab to Tiraspol. The two-hour ride should cost you no more than $50. You can also fly to the Moldovan capital, Chisinau, and take a cab or bus into Transdnestr. The one-hour ride should cost about $10.
At the border: Officially, you don’t need a visa or a special invitation to travel to Transdnestr, since the country is not recognized by anyone. But customs and law enforcement officials, suspicious of rare Western tourists, might give you trouble at the border. Prepare to give them the address of the hotel where you’ll be staying or tell them of any other travel arrangements you have made to prove that you are not there to cause trouble. If they are still reluctant to let you in, $20 usually solves the problem.
Money: Make sure to bring enough cash with you. As Transdnestr is not officially recognized, local banks are unlikely to have ATMs or accept credit cards or traveler’s checks. The region has its own currency, the Transdnestr ruble, which is unrecognized internationally. A number of currency-exchange offices are available in the capital, Tiraspol, where you can exchange dollars, euros, Russian rubles or Moldovan lei. But those foreign currencies may also be acceptable to taxi drivers and small shops until you have a chance to exchange money.
Getting around: Young people tend to understand and speak some English, though you might have difficulties finding a common language with the older generation. But that is part of the fun, isn’t it?

TITLE: Putin Cartoon to Air on 2x2 Next Spring
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: Prime Minister Vladimir Putin will appear on Russian television next spring as the weapon-wielding interrogator of two U.S. comedy legends, an evil baby and a talking dog.
Cartoon channel 2x2 told The Moscow Times that it would air a new episode of the popular U.S. cartoon comedy “Family Guy,” known in Russia as “The Griffins,” despite having excised less-than-flattering portrayals of the former president in the past.
The episode plays heavily on stereotypes about Russia and Putin’s past as a KGB officer.
“It will be broadcast in the spring, the complete version. It was approved that its content does not violate any ethical requirements,” 2x2 spokesman Andrei Andreyev said.
He said all cartoons were checked with the company’s legal team before being aired.
Episode 4 of Season 7, which has been released in the United States and is available online, shows two regular characters — 1-year-old Stewie Griffin and the talking family dog, Brian — going to Moscow with comedians Dan Aykroyd and Chevy Chase. On their arrival, they see busy streets full of bears riding unicycles. Since the Americans stick out, they are quickly captured by armed men and delivered straight to Putin’s office as suspected U.S. spies.
Putin is sitting at his desk between two Russian flags and under portraits of Soviet leaders Vladimir Lenin and Josef Stalin. When the Americans come in, he makes a show of using weapons in a nonviolent way. Looking stern, the prime minister makes a coat hanger from what appears to be nunchucks. He then uses a rifle to shoot an arrow to hang his tie on the wall and lights a cigarette with a Kalashnikov. Putin isn’t known to smoke. “I know why you are here and I mean to help you,” Putin says to his guests and shows them a parody version of “Hedgehog in the Fog,” a world-famous Soviet cartoon from 1975.
And while it isn’t the first time that Putin has appeared in a U.S. cartoon, the “Family Guy” portrayal will be one of the few that makes it onto Russian screens.
“South Park,” another ribald U.S. comedy, aired an episode in 2005 depicting Putin, then president, as a greedy and desperate leader. But when the show appeared in July on 2x2, the scene mocking Putin was absent. The country’s broadcast regulator, the Federal Mass Media Inspection Service, said at the time that it knew nothing about the incident, and 2x2 declined to comment on why the clip was missing. Russian MTV had previously shown the episode with Putin. In August, a Moscow court threw out extremism charges against 2x2 for airing a different episode of “South Park.”

TITLE: Freed   Hostage Speaks Out
PUBLISHER: The Associated Press
TEXT: DUBLIN — A freed Irish aid worker held captive for three months in Darfur said Monday that her captors terrorized her and a Ugandan friend by repeatedly staging their mock executions using live gunfire.
Sharon Commins and colleague Hilda Kuwuki, who both worked for Irish aid agency GOAL, were abducted July 3 and freed without harm Sunday. Commins said they both might have died from broken spirits if not for the moral support they gave each other.
“You could die in there of sadness. You could just die if you didn’t lift your spirits,” Commins told Irish broadcasters RTE before her departure from the Sudanese capital, Khartoum, aboard Ireland’s government jet. “We definitely needed each other. We prayed together and tried to keep each other strong.”
Sudanese and Irish authorities say the bandits demanded a ransom but received no money. Commins and Kuwuki were held the longest of three groups of foreign aid workers kidnapped in Sudan’s war-torn western border since March. All were eventually freed.
Commins, 33, said she and the 42-year-old Kuwuki were held in the open in mountainous terrain, received two meals a day but little water, were allowed to bathe about every two weeks, and had to sleep on the ground with one blanket each. They were permitted to phone their families once as part of the kidnappers’ efforts to extract a reported $1 million ransom.
She said their captors, who numbered from a dozen to about 18 gunmen, amused themselves by pretending to shoot the pair.
“There were mock assassinations on a few occasions, so it was extremely scary. We were always anxious and stressed and upset until the minute we got out,” Commins said.
“We’d be told to kneel on our knees and they would shoot around us,” she said. “So obviously, the first time that happened, we thought we were actually going to be shot. And each (subsequent) time we would think: OK, I hope it’s a mock. But you never know.”
She said they both feared that their abductors might shoot them by accident, noting that none of them wore glasses and “you weren’t sure how accurate their sight is. So it was an extremely dangerous situation to be in.”
Commins said their kidnappers were motivated by poverty and greed, not politics.
“They would talk about nothing but money. They were extremely poor people trying to make a quick buck,” she said.
Sudan’s Arab-dominated government has been battling ethnic African rebels in Darfur since 2003. An estimated 300,000 people have died and 2.7 million have been driven from their homes.
Aid organizations in Darfur have tried to remain impartial by rejecting security support from both the Sudanese government and international peacekeepers.
Sudan kicked out 13 international aid agencies after the International Criminal Court in the Hague in March issued a warrant for the arrest of President Omar al-Bashir. He denies charges of orchestrating militia attacks in Darfur targeting the native African population.

TITLE: Iran Accuses U.S., Britain Over Bombing
AUTHOR: By Ali Akbar Dareini
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — The chief of Iran’s Revolutionary Guard on Monday accused the United States, Britain and Pakistan of having links with the Sunni militants responsible for a suicide bombing that killed five senior Guard commanders and 37 others.
Iran’s president said those behind Sunday’s bombing are hiding across the border in Pakistan, and in a phone call with his Pakistani counterpart on Monday he demanded their arrest.
A Sunni rebel group that has waged a low-level insurgency in southeastern Iran to protest what it says is government persecution of an ethnic minority in the region claimed responsibility for the attack. The claim was posted Monday on an Islamic Web site that usually publishes al-Qaida statements. Its authenticity could not be verified.
Jundallah has carried out sporadic kidnappings and attacks in recent years — including targeting the Revolutionary Guard and Shiite civilians. In Sunday’s attack, a suicide bomber with explosives strapped around his waist struck as the Guard commanders were entering a sports complex to meet tribal leaders to discuss Sunni-Shiite cooperation in the Pishin district near the Pakistani border.
Revolutionary Guard chief Gen. Mohammad Ali Jafari said Monday that the Sunni rebel group, known as Jundallah, or Soldiers of God, is at work to disrupt security in Iran and he vowed to deliver a “crushing” response.
“New evidence has been obtained proving the link between yesterday’s terrorist attack and the U.S., British and Pakistani intelligence services,” state TV quoted Jafari as saying. “Evidence shows that U.S., British and Pakistani intelligence supported the group.”
He said the attack was “undoubtedly” planned and ordered by the three nation’s intelligence services and that a delegation would soon travel to Pakistan to present evidence.
Iran often blames Western countries, especially the U.S., of stoking unrest among the country’s religious and ethnic minorities — allegations those nations have denied. Iran has also claimed that Jundallah receives support from al-Qaida and Taliban militants that operate across the border in Pakistan’s Baluchistan province, where Baluchi nationalists have been waging a militant campaign for independence from the Pakistani government.
Several analysts who have studied Jundallah say the group likely receives inspiration and material support from Baluchi nationalists in Pakistan. But they say there is little evidence of an operational relationship between Jundallah and militants, including al-Qaida and the Taliban, that operate across the border.
President Mahmoud Ahmadinejad had harsh words for his Pakistani counterpart, Asif Ali Zardari.
“The presence of terrorist elements in Pakistan is not justifiable and the Pakistani government needs to help arrest and punish the criminals as soon as possible,” state TV quoted Ahmadinejad as telling Zardari Monday.
“We’ve heard that some officers in Pakistan cooperate with the main elements behind such terrorist attacks and we consider it our right to demand these criminals from them,” he was quoted as saying.
Zardari telephoned Ahmadinejad to strongly condemn the suicide attack, said a statement from the Pakistani president’s office.
President Zardari said the incident was “gruesome and barbaric” and bore the “signatures of a cowardly enemy on the run.”
He said both Pakistan and Iran have deep historical ties and he assured that Pakistan will continue to support and cooperate with Iran in curbing militancy and fighting extremism and terrorism.
In a sign of how heated the situation has become, an Iranian lawmaker representing the capital of Iran’s southeastern Sistan-Baluchistan Province called on the Guard to carry out military operations inside Pakistan to root out militants. It’s unclear whether such an operation would be considered.
In the Internet claim of responsibility, a statement in the name of Jundallah said the attack was carried out in “retaliation for the Iranian regime’s crimes against the unarmed people of Baluchistan.”
He was referring to the area populated by ethnic Baluchi tribes, who follow the Sunni branch of Islam and are a minority in predominantly Shiite, Persian Iran. 
The statement also identified the man it said carried out the attack as Abdel-Wahed Mohammadi Sarawani, suggesting he is from the small town of Sarawan, 40 kilometers from the Pakistani border. 
The victims of Sunday's attack included the deputy commander of the Guard’s ground forces, Gen. Noor Ali Shooshtari, as well as a chief provincial Guard commander, Rajab Ali Mohammadzadeh. The others killed were Guard members or tribal leaders, it said.

TITLE: Maldives Cabinet Holds Underwater Meeting on Environmental Concerns
AUTHOR: By Olivia Lang
PUBLISHER: The Associated Press
TEXT: GIRIFUSHI, Maldives — Members of the Maldives’ Cabinet donned scuba gear and used hand signals Saturday at an underwater meeting staged to highlight the threat of global warming to the lowest-lying nation on earth.
President Mohammed Nasheed and 13 other government officials submerged and took their seats at a table on the sea floor — 20 feet (6 meters) below the surface of a lagoon off Girifushi, an island usually used for military training.
With a backdrop of coral, the meeting was a bid to draw attention to fears that rising sea levels caused by the melting of polar ice caps could swamp this Indian Ocean archipelago within a century. Its islands average seven feet (2.1 meters) above sea level.
“What we are trying to make people realize is that the Maldives is a frontline state. This is not merely an issue for the Maldives but for the world,” Nasheed said.
As bubbles floated up from their face masks, the president, vice president, Cabinet secretary and 11 ministers signed a document calling on all countries to cut their carbon dioxide emissions.
The issue has taken on urgency ahead of a major UN climate change conference scheduled for December in Copenhagen. At that meeting countries will negotiate a successor to the Kyoto Protocol with aims to cut the emission of greenhouse gases such as carbon dioxide that scientists blame for causing global warming by trapping heat in the atmosphere.
Wealthy nations want broad emissions cuts from all countries, while poorer ones say industrialized countries should carry most of the burden.
Dozens of Maldives soldiers guarded the event Saturday, but the only intruders were groupers and other fish.
Nasheed had already announced plans for a fund to buy a new homeland for his people if the 1,192 low-lying coral islands are submerged. He has promised to make the Maldives, with a population of 350,000, the world’s first carbon-neutral nation within a decade.
“We have to get the message across by being more imaginative, more creative and so this is what we are doing,” he said in an interview on a boat en route to the dive site.

TITLE: Afghan Officials Refuse To Accept Investigation Results
AUTHOR: By Heidi Vogt
PUBLISHER: The Associated Press
TEXT: KABUL — The Afghan electoral crisis intensified Monday as officials responsible for declaring final results from the August presidential ballot refused to accept findings of a UN-backed investigative panel that would force a runoff, those involved in the process said.
The Electoral Complaints Commission completed its investigation last week into allegations of ballot-stuffing and intimidation in the Aug. 20 vote.
Two international officials who have seen the results said enough votes for President Hamid Karzai were thrown out that his totals dropped below the 50 percent threshold needed to avoid a runoff with top challenger Abdullah Abdullah.
The officials spoke on condition of anonymity because the findings have not been released. One of them said the findings were “incontrovertible.”
However, the separate Independent Election Commission — which is dominated by Karzai allies — has rejected the data, the officials said. Karzai spokesman Waheed Omar said the president will not commit to accepting the findings until they are publicly released.
That has raised fears that Karzai may refuse to go along with a runoff even after the figures are announced — further delaying formation of a government that the U.S. believes is needed to help combat the growing Taliban insurgency.
A protracted crisis could also lead to political unrest. Hundreds of Karzai supporters protested in the south over the weekend, calling for the electoral commission to release results quickly and saying they will reject a second round.
They gathered in the main street of the southeastern city of Spin Boldak on Sunday, shouting, “We want the result!” and “Karzai is our leader!”
Ali Shah Khan, a tribal leader from the area, said the protesters believed the August vote was fair and that foreigners were delaying the results to unseat Karzai.
“We know they don’t want President Karzai because he is a strong leader and he is working only for the people of Afghanistan,” Khan said. “The foreign countries want a weak leader for Afghanistan. After that they can do whatever they want.”

TITLE: 58 Shows in 7 Days of Global Fashion in Moscow
AUTHOR: By Karina Aivazova
PUBLISHER: The St. Petersburg Times
TEXT: Russian Fashion Week takes over Moscow’s runways this week as Russian and foreign designers show off next year’s spring and summer collections.
The Congress Hall of the World Trade Center will transform into the biggest catwalk in Eastern Europe for the event. Leading Russian designers such as Sabina Gorelik, Dasha Gauser and Masha Kravtsova will be among the 58 shows.
“When we first started our work, Russian designers were not popular. Now they are celebrities. Today, many people are eager to buy clothes made in Russia,” said Alexander Shumsky, director of Russian Fashion Week. “Take Kira Plastinina, for instance. This young designer now has 80 stores all around Russia. Ten years ago, one couldn’t even dream about such success.”
Foreign designers from the United States, Malaysia and Italy will also be on show, as will a collection by Gulnara Karimova, the daughter of Uzbek President Islam Karimov.
“The main international project at this season’s Fashion Week will be ‘Italian Day,’” Shumsky said. Krizia, Ermanno Scervino, Costume National and La Perla — all from Milan — will show off their newest collections.
In keeping with tradition, veteran fashion designer Slava Zaitsev opened the festival with his latest collection.
Zaitsev said the fashion world had been affected by the global financial crisis.
“The crisis is not a time to surrender but a time to move to Russian material of a good quality and at a reasonable price. True, this means we have had to correct, simplify, lighten and, for a time, move away from luxury,” Zaitsev said before the opening Friday, Komsomolskaya Pravda reported.
The new, as well as the old, will be on show.
“We have to pay special attention to new designers such as Yulia Sarkisova, Alexander Abramov and St. Bessarion. They are the future,” Shumsky said.
The event opened with a preview of the new Russian Fashion Museum, set to open in 2010, which has put on an exhibit of 19th-century city clothes.
The most bizarre collection will undoubtedly be one from “Nasha Russia,” the Russian version of the British series “Little Britain,” which has among its characters two homeless men who pick luxury goods out of garbage bins in Rublyovka, the neighborhood of Moscow’s rich.
If you can’t make it to the shows, Respublika bookshops will sell books, notebooks and even pens that have been recommended by fashion designers.  
The restaurants Oblomov, Pavillion and Nabi will each have special fashion menus, featuring dishes that have been redesigned by local designers.

Russian Fashion Week runs to Oct. 23. Congress Hall, World Trade Center in Moscow. Entrance 4, 12 Krasnopresnenskaya Naberezhnaya. Tel. 495 232-1475, Rfw.ru. Invitations can be won at Fashion.ru or Nosorog.ru