SOURCE: The St. Petersburg Times
DATE: Issue #1521 (83), Tuesday, October 27, 2009
**************************************************************************


TITLE: Putin 
Predicts Inflation Near 8%
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prime Minister Vladimir Putin on Sunday predicted that inflation this year would be just over 8 percent, a post-Soviet low, as the strengthening ruble helps cut prices and the faltering economy slows demand.
Double-digit inflation was a constant headache during Putin’s presidency, angering politically active pensioners who saw rising consumer prices hammering their fixed incomes. Prices rose 13.3 percent last year, and inflation was running at an annual rate of 15 percent before the economy began contracting.
The prime minister’s estimate is dramatically lower than the most optimistic forecasts from his government and the Central Bank. But analysts said the goal was reachable, as prices have not risen for the past nine weeks and year-to-date inflation is at 8.1 percent.
“We are working on lowering inflation to 9 percent to 8 percent,” Putin said at the third Russian-Finnish Forum in St. Petersburg. “This year it will be just over 8 percent,” he said. “I hope we will reach 6 and 5 percent later. It is a possibility in the next three to four years.”
The country’s lowest full-year inflation rate was in 2006, when prices increased 9 percent. The Economic Development Ministry’s official 2009 forecast is for 11 percent to 12 percent ?inflation, although it now also expects a figure closer to 10 percent.
Russia’s consumer price index has risen 2.6 percent since April, Troika Dialog wrote in a note Thursday. “Inflation has obviously decreased, as the year-to-date tally from the same period a year ago was 11.2 percent,” the bank said.
VTB Capital said Thursday that the most recent inflation data “increased the downside risks” to its 10.6 percent annual forecast for 2009. The Central Bank has room for at least another rate cut of 50 basis points, the state bank said.
The Central Bank estimates that a 1 percent appreciation in the ruble reduces inflation by 0.3 percentage points. The ruble has gained more than 7 percent against its trading basket since September (Story, Page 9).
The lowest figure previously floated was from Central Bank First Deputy Chairman Alexei Ulyukayev, who said Friday that 2009 inflation would not be higher than 10 percent. As a result, the regulator will be able to continue lowering its benchmark refinancing rate, he said.
Ulyukayev’s outlook for 2010 was even more optimistic. “If the inflation rate next year isn’t more than 9 percent, then the refinancing rate may go down to at least that same level,” he said. There is also a chance for inflation to be “much lower” than the conservative prediction of 9 percent to 10 percent next year.
The Central Bank has been reducing the refinancing rate since March by half and quarter percentage points, bringing it down from 13 percent to the current 10 percent. 
The government hopes that the rate cuts will lead to a boost in lending and spur on the real economy, although cutting the rate too fast could also create inflationary pressure through the creation of an increase in the money supply.
The M2 money supply — a broad measure that includes cash, deposits and money market funds — will grow by 4 percent or 5 percent by the end of this year, compared with last year, Ulyukayev told a banking conference Friday. The measure shrank by 1.4 percent from January to August.
Putin’s prognosis is optimistic but not impossible, said Natalya Orlova, chief economist at Alfa Bank, as government policies to keep the budget deficit in check have helped attain low inflation.
“If the government financed 8 or 9 percent of the deficit, inflation would be much higher,” she said. “[But] low inflation also reflects low business activity. As soon as companies see demand on the rise, they may start raising prices.”
Gokhran, the state depository for gems and precious metals, is planning to sell at least 200 tons of gold this year to help plug a federal deficit, Reuters reported Friday (Story, Page 9).
Putin’s comments will be welcomed by the public, which historically has ranked inflation as one of Russia’s biggest problems.
Muscovites asked to name their five biggest concerns earlier this month placed high consumer prices and increasing utilities bills as their first and second choices, with 49 percent of respondents and 44 percent, respectively. The poll of 1,000 people, released Oct. 6, had a margin of error of 5.2 percentage points.

TITLE: Apartments Seized in Dispute Over Debt
PUBLISHER: Vedomosti
TEXT: For the first time ever, court marshals have begun seizing several hundred apartments that have already been sold, along with other assets, after Baltiisky Bank filed a lawsuit against St. Petersburg developer Stroimontazh.
Court marshals want to seize the 8,500-square-meter Monblan business center and 1,700 apartments belonging to Stroimontazh clients, the developer said last week. Dmitry Bogolyubov, a spokesman for the builder, said the information was from enforcement proceedings that it had seen.
Courts sided with the bank three times in its lawsuit seeking 250 million rubles ($8.6 million) in debt from Stroimontazh. Marshals are currently carrying out the court’s order and working to seize property on the builder’s balance sheet, Baltiisky Bank spokeswoman Yelena Sanarova said.
According to Stroimontazh data, the apartments were on average 50 square meters and cost 60,000 rubles per square meter, meaning that the value of just the 1,700 apartments would be no less than 5 billion rubles ($172 million). The Monblan business center is probably worth another 560 million rubles to 600 million rubles, said Alexander Filippov, director of NAI Becar’s appraisal department.
Stroimontazh prepared a written protest over the property arrests. The document says all of the apartments sought by the bank actually belong to individuals who signed contracts with Stroimontazh and have fully paid. The company signed preliminary purchase agreements for the apartments, which is why some of them still belong to the developer, Bogolyubov said.
He declined to say how many apartments Stroimontazh still owns, but a source in the company said there were “several hundred.”
If Stroimontazh was operating in accordance with the law on equity construction — which lets future homeowners buy a share in a building being constructed — then apartments that have already been sold should not be on the firm’s balance sheet, said Sanarova, of Baltiisky Bank.
In May, the builder announced that it had finished all construction and handed all of the apartments over to their owners. In July, Stroimontazh filed to enter bankruptcy with arbitration courts in St. Petersburg and the surrounding Leningrad region. The courts have yet to rule on those requests.
Not including an outstanding bond for 1.3 billion rubles, Stroimontazh had debt in April of 2.3 billion rubles, although company representatives say they have agreed on restructuring with all of their creditors except Baltiisky Bank.
The creditors have real cause for concern. Last week, the main shareholders of Stroimontazh, Stroimontazh Corporation, decided to liquidate the company. The corporation guaranteed 2.1 billion rubles in loans to the developer: 1.5 billion rubles from Sberbank, 300 million rubles from Svyaz-Bank, $3 million from Credit Europe Bank and the 250 million rubles from Baltiisky Bank.
Stroimontazh, founded in 1994, is 90 percent owned by Artur Kirilenko, while Mirax Group owner Sergei Polonsky owns the remaining 10 percent. The company had a full-year loss of 90 million rubles in 2008, according to Interfax’s SPARK database.
This is the first major bankruptcy of a developer that has resulted in an attempt to seize apartments, said Yegor Noskov, managing partner at Duvernoix Legal. Until Stroimontazh goes into administration, the bank can have apartments arrested that were not sold under the law on equity construction, although the developer remains responsible for ultimately providing the apartments to its clients, he said.
If Stroimontazh enters bankruptcy, the apartment buyers will have to wait with other creditors to collect their debt. If the company doesn’t have a lot of property left, they will have little chance of collecting, Noskov said.
The bank and builder are likely just playing hardball with each other, said one of the apartment owners. If the apartments really are handed over to the bank, it is unlikely that the lender would try to force out the residents, which would lead to major protests, he said.
“Our building was finished in July, but the majority of contracts still haven’t been registered,” he said. “The builder made us sign an agreement for a middleman to prepare the deeds, which cost 23,000 rubles, and they wouldn’t give us the purchase agreement until we paid. That’s why people weren’t able to register the property themselves.”
The press service for the Federal Court Marshals Service declined comment.

TITLE: Experts Puzzled by UNESCO Tolerance Prize for City
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The city’s human rights community had a mixed reaction to the news that St. Petersburg has been awarded the UNESCO Tolerance Prize for what the United Nation’s cultural wing regards as a major achievement in promoting tolerance.
“The UNESCO decision came as an even bigger surprise than the news about Obama winning the Nobel Peace Prize,” said Alexander Vinnikov, St. Petersburg coordinator of the Russia Without Racism movement. “Neither winners have done anything to deserve the prize, which means the awards were given for political reasons, unfortunately.”
Koichiro Matsuura, the Director-General of UNESCO, said the St. Petersburg government program on tolerance had been honored for its “constructive efforts to inculcate mutual respect and tolerance in a multi-cultural and multi-ethnic society and to prevent and eradicate all forms of discrimination.”
St. Petersburg was officially nominated for the prize by Russia’s Foreign Affairs Ministry. The most visible evidence of the government program has been the distribution on the St. Petersburg metro of flyers with quotations on the theme of tolerance from Russia’s greatest writers and cultural luminaries.
UNESCO’s decision has left people across the political spectrum perplexed. Liberals and nationalists alike spoke about the award with surprise bordering on astonishment.
“I have not noticed any breakthrough in terms of tolerance,” Vinnikov said. “On the contrary, the level of xenophobia in the city remains exceptionally high, which is most alarming.”
Human rights advocates say that many people in government agencies across Russia are xenophobic in various ways and manifest their xenophobia in the course of their official duties. For example, the Police University in St. Petersburg approved and adopted an explicitly anti-semitic textbook of contemporary Russian history. The textbook was banned from classrooms after a high-profile scandal necessitating intervention by President Dmitry Medvedev. 
In March this year, the 15-day Xenophobii.NET (No to Xenophobia) campaign ended in arrests when viewers leaving a screening at Rodina film theater in the center of St. Petersburg were dispersed by the police. A group of film-goers, mostly anarchists and members of the antifascist movement, were heading to a metro station after watching the film when the police attacked the group, detained around 20 of them and drove them to a police station, while the rest managed to escape. 
In an interview with the BaltInfo news agency, Andrei Kuznetsov, a public relations coordinator for the St. Petersburg branch of the ultra right wing Movement Against Illegal Migration (DPNI), said UNESCO’s experts had made a superficial judgment. 
“What they may have seen in the city center is nothing more than nice packaging; to see the ugly truth that hides inside you need to travel to the outskirts of the city,” Kuznetsov said. “Go to Rybatskoye, Obukhovo or Komendantsky Prospekt, and you feel the difference immediately: there are very few police, there is cheap housing and a tough attitude toward everything that is alien. Unless the government adopts a decent migration policy, nothing is going to change, however much effort is made and however many prizes are awarded for that effort.” 
The UNESCO Tolerance Prize was established in 1995 and is awarded biannually to individuals and organizations for their contribution to the promotion of tolerance.
The prestigious prize will be awarded in Paris on Nov. 16, 2009, when International Tolerance Day is celebrated.
Russia suffers from excessively high levels of xenophobia, said Yury Chaika, Prosecutor General of the Russian Federation in a meeting with journalists earlier this year. “In Russia we do have problems with extremism, international relations and xenophobia. We see it and acknowledge it,” he said. 
According to statistics collected by the Moscow Bureau of Human Rights, in 2008, 122 people were victims of xenophobia. 
According to a 2009 report compiled by the Moscow-based SOVA center, the development of xenophobia in Russia is fueled by the rhetoric of large numbers of law enforcement officials and the mass media, and also by the activities of pro-governmental youth movements. 
“The war in Georgia definitely contributed to ethnic xenophobia, even though we should emphasize that the authorities had made every effort to prevent the military confrontation from growing into a widescale campaign against ethnic Georgians,” reads the SOVA center report.
“The new trend has been particularly obvious since the autumn of 2008, as Russia becomes increasingly affected by the global economic crisis. Anti-immigration propaganda has increased dramatically, and false reports are being spread of allegedly soaring rates of crimes committed by immigrants,” the report continues.

TITLE: Russia Calls for ‘Maximum Patience’ on Iran
PUBLISHER: Agence France Presse
TEXT: MOSCOW — World powers should show maximum patience in the Iranian nuclear crisis, a top Russian foreign ministry official said Monday, in the latest sign of Moscow’s unwillingness to give Tehran ultimatums.
Deputy Foreign Minister Sergei Ryabkov, speaking in a newspaper interview, hailed a UN plan for Iranian uranium to be further enriched abroad in states including Russia as a way to “cool down emotions”.
“We should not give the impression that everything has stayed as it was,” he told the Vremya Novostei daily. “On the contrary, we need to give the Iranians positive stimuli.”
“And will it be possible to do this if it is presumed that the Iranians are wasting time?”
Ryabkov refused to be drawn on whether Russia has a deadline for Iran to answer the remaining questions on its nuclear drive. Some Western powers have suggested Tehran has until December.
“Everyone must demonstrate maximum patience and concentrate on the dynamics that have built up thanks to the efforts of the six” world powers seeking to resolve the uranium nuclear crisis and Iran itself, he said.
The United States has in recent weeks been seeking a concrete commitment from Moscow to tough sanctions against Tehran should the current diplomacy fail, but Russia has yet to make such a statement.

TITLE: New Planning Proposal Angers Preservationists
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Critics warn the planned transfer of the power to allow exemptions on height regulations from Governor Valentina Matviyenko to a city committee might make the regulations unworkable and lead to the widescale construction of skyscrapers. 
The final decision on exemptions will in future be taken by the Town-Planning and Architecture Committee (KGA), rather than by St. Petersburg’s governor, according to the city’s chief architect Yury Mityuryov, Interfax reported Friday. “The relevant order will be issued in the immediate future,” the Russian news agency quoted Mityuryov as saying.
However, City Hall’s decree extending the right to approve exemptions in height regulations to the committee was in fact issued without any publicity on Oct. 12, according to Fontanka.ru.
So far, the only high-rise project to be granted exemption from city height regulations has been the Okhta Center, the planned headquarters for Gazprom Neft. Matviyenko signed the document granting permission for the so-called Gazprom Tower on Oct. 6. But when Culture Minister Alexander Avdeyev took legal action against City Hall two days later by sending a report by state heritage watchdog Rosokhrankultura to the Prosecutor’s Office stating that she had violated the law in issuing the permit, Matviyenko took a step backward by announcing on Oct. 15 that the decision on the construction of the controversial 400-meter skyscraper had “not yet been taken.”
Matviyenko wants to rid herself of responsibility for allowing the exemption from height regulations while retaining control of them, Yulia Minutina, the coordinator of preservationist organization Living City, said by phone on Monday. 
“If she takes the final decision about the exemption, as she should do by law, she realizes that she is responsible, and it’s clear that in the event of legal violations (such as now), she will be held responsible. At the KGA, on the other hand, there are replaceable figures,” Minutina said.
“It’s natural that she is trying to rid herself of responsibility — it’s clear that she will still influence the decisions.”
Living City will demand the cancellation of the move, she said. 
“It’s totally unacceptable; every branch of authority has its own functions. The administration is supposed to have a broader view on the problem than the Town-Planning and Architecture Committee, it can evaluate ecological and economic factors and all the other aspects of planning issues, and it’s only natural that it should be its decision. It’s beyond [Matviyenko’s] powers to do this and we’ll push for its cancellation.”
If Okhta Center’s exemption from the height regulations is not revoked, it will be much easier for developers to obtain permission in the future, Minutina warned.
“Any developer can claim that the construction site is not suitable for a building that conforms to the law, as Gazprom in fact did,” she said.
“If these are considered sufficient grounds for exemption, it renders the law pointless. But if the situation is reversed now, it will help the law to prevail, and getting an exemption permit will be not be an easy matter.”
Exemption from height limits was also granted late last month by the Land Use and Construction Committee to Donk construction company, which is planning to build a multi-functional complex including two 140-meter-tall buildings on Prospekt Bolshevikov in the south-east of St. Petersburg, where the current law on land use and construction allows building heights of 110 meters. Donk was ordered to hold a public hearing, which it did on Monday, before receiving approval from the Town-Planning and Architecture Committee.
According to City Hall, 23 more projects have applied for exemption from height regulations, Vedomosti reported last week (see related story, page 4.)

TITLE: Ingush Opposition Leader Killed
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A leading Ingush opposition activist was shot dead in his car Sunday in the North Caucasus region of Kabardino-Balkaria, investigators said.
Unknown gunmen fired about 60 shots at his Lada Priora at about 10 a.m. on the Kavkaz highway, killing Maksharip Aushev and badly injuring a woman passenger, the Investigative Committee said in a statement.
Aushev died on the spot, while the woman, whose name wasn’t released, was rushed to the hospital. A preliminary inquiry revealed that the attackers had used two types of guns and fled in a silver-colored VAZ, the statement said.
Opposition web site Ingushetia.org reported that the woman was Aushev’s cousin.
Tatyana Lokshina, who was acquainted with Aushev as deputy director of Human Rights Watch, said he became involved in rights activities after his son and nephew were abducted in 2007. Aushev later got them released.
“He started working in human rights in Ingushetia and tried to combat abductions. He was a very brave man,” Lokshina said.
“Civil activities, human rights and opposition activities have virtually become a form of suicide” in the North Caucasus, she added.
Aushev had worked with opposition journalist and lawyer Magomed Yevloyev, who owned the opposition web site now known as Ingushetia.org. Yevloyev was detained and killed in Ingush police custody in August 2008. Police said he was shot when he tried to grab a weapon from one of the arresting officers. A court later ruled that his arrest was illegal.
Aushev took over Ingushetia.org after Yevloyev’s death, but resigned after the Kremlin dismissed Ingush President Murat Zyazikov, the main object of the opposition’s wrath, and became a businessman.
Ingush President Yunus-Bek Yevkurov, who replaced Zyazikov and survived an assassination attempt in June, promised Sunday to do everything possible to track down Aushev’s killers.
“Maksharip was a famous and well-respected person in the republic,” Yevkurov said in a statement, adding that the killing was aimed at destabilizing the situation in the region.
Prosecutor General Yury Chaika has taken the investigation under his personal control, the Prosecutor General’s Office said.
In September, a group of unknown people tried to kidnap Aushev, Interfax said.
Ingushetia.org appealed for relatives and friends to gather near Aushev’s house. “Anyone who dared to speak against the authorities or tell the truth faces the same fate as Magomed and Maksharip,” it said.

TITLE: In Brief
TEXT: <strong>Okhta Conflict</strong>
ST. PETERSBURG (SPT) — Activists will sue Fort-S, the security firm in charge of the Okhta Center construction site, for severely beating two activists during a protest on Friday, Andrei Dmitriyev, the local leader of Eduard Limonov’s banned National Bolshevik Party (NBP), said by phone on Friday. 
Activists Sergei Chikunov and Oleg Mironov received multiple head injuries and were hospitalized after the police arrived at the site, he said. Mironov was discharged from hospital on Monday, while Chikunov was expected to spend several more days there. Dmitriyev said Chikunov had suffered internal bruising and had to have six stitches.
About 20 NBP activists held a protest near the construction site of the controversial 400-meter Gazprom Tower at 6 p.m. on Friday to protest at remnants of the medieval Swedish Fortress of Nien, located on the site, having been damaged by a bulldozer earlier this month.
Chikunov and Mironov were attacked by the guards when they broke into the Okhta Center’s territory and climbed the scaffolding in an attempt to unveil a banner reading “[Gazprom head Alexei] Miller, hands off Nien!” while the other activists were protesting outside.  
“The guards threw them off the scaffolding, kicked them brutally with their boots against the asphalt and then handed them over to the police, who called an ambulance, telling the medics that they had fallen from the scaffolding,” Dmitriyev said. 
Lawsuits against Fort-S and possibly against ODTs Okhta, Gazprom’s company overseeing the construction, will be filed when the activists have received all the necessary medical documentation. 
“There were men wearing suits on the site who were directing the beatings without taking part, apparently representatives of the Okhta Center,” Dmitriyev said.

<strong>Tuva Police Chief Fired </strong>
MOSCOW (SPT) — President Dmitry Medvedev has dismissed the chief of the Tuva region’s police force, Viktor Lesnik, after a local policeman killed a fellow officer and then shot himself, the Kremlin said Sunday.
The shooting occurred when the policeman, Lieutenant Ayab Pavlov, failed to show up for duty in the city of Kyzyl, and his superiors ordered a search for him, Interfax reported, citing the Interior Ministry.
The traffic police detained Pavlov two hours later, heavily intoxicated in his car. Pavlov refused to go with the officers to the hospital for an examination, firing two shots that killed one officer and injured another.
The incident is the latest in a series of embarrassments with the police. Last week, the chief of the Buryatia republic’s police force was arrested on smuggling charges. Medvedev fired Moscow’s police chief in April after a policeman went on a shooting killing three.

TITLE: New Regulations Hit Construction Project
AUTHOR: By Nadezhda Zaitseva and Anatoly Tyomkin
PUBLISHER: Vedomosti
TEXT: New urban planning regulations in St. Petersburg have forced Raiffeisen Evolution, a development company established by Raiffeisen Bank and Strabag, to downscale its project for a multi-purpose complex by one-third.
San Gally Park Center was due to comprise 118,000 square meters of construction, including a class-A business center covering 58,000 square meters, a four-star hotel with 230 rooms, and 7,000 square meters of retail space. The center is due to be built on a two-hectare site on the former Bummash factory premises at 60 Ligovsky Prospekt.
The project is being handled by Park Tsentr, a company belonging to Raiffeisen Evolution and the former owner of Bummash, said Harold Shaller, project development director for Raiffeisen Evolution. He said that due to new rules for land use and real estate development introduced in St. Petersburg at the beginning of the year, new buildings cannot exceed 27 meters in height, but the San Gally project was planned for 42 meters. The partners decided to downsize the project by 30 percent, and investments will decrease accordingly, said Shaller. 
Plans for a hotel have been canceled, since it demands the most investment and gives slow returns. The complex’s ranking may be lowered as well, said a source close to the project’s Russian partner. He said the company would try to change the height regulation and would make a request for exemption from the regulations next week.
Buildings in the given area should not exceed 28 meters in their fa?ade and 33 meters within the block, said a City Hall official.
This is not the first case of its kind. Okhta, a daughter company of Gazprom, was the first company to go through the process of requesting exemption from height regulations in St. Petersburg, having obtained permission to depart from an allowed 100 meters to 403 meters for the planned Okhta Center skyscraper. Twenty-three companies are already hoping to do the same, said the City Hall representative.
In the case of the Okhta Center, City Hall made the final decision, but last week it changed the procedure for diverging from maximum height allowances. Now, after holding public hearings and with the approval of the city’s commission on land use and real estate development, the decision is up to the commission on urban development and architecture. The procedure remains the same; all that has changed is the type of document that confirms the commission’s decision, said the press office for Deputy Governor Roman Filimonov. 
The law allows departures from the regulations only in exceptional cases. Park Tsentr will need to prove that its plot of land justifies exemption from the law, said Alexander Karpov, general director of the Ekom center.

TITLE: Georgia Courts Mideast Investors
PUBLISHER: Bloomberg
TEXT: TBILISI, Georgia — Georgian President Mikheil Saakashvili is turning to the Middle East to revive foreign investment, which has all but evaporated as the county struggles to recover from a war with Russia and the global slump.
Saakashvili visited the United Arab Emirates several times this year, netting as much as $1 billion “within the next two to three years,” he said in an interview Saturday. He returned recently from Kuwait and goes next to Qatar.
Rakeen, a developer owned by the Gulf emirate of Ras al-Khaimah, will begin “in a few months” to build “the biggest airport in the Caucasus” at the Black Sea port of Poti, which it acquired in December, Saakashvili said. “That will be a major hub for the region. Consider also that it’s midway between most of the Gulf destinations and Europe.”
Georgia’s $12.8 billion economy suffered about $1 billion in damage when Russia routed its army in the August 2008 war over South Ossetia. Growth may resume this quarter, though 2009 foreign investment will not exceed $1 billion, compared with $2 billion initially forecast by the government, Finance Minister Kakha Baindurashvili said Oct. 6.
The International Monetary Fund said in May that Georgia’s economic performance this year largely depended on donor money. The government forecasts a contraction of 1.5 percent for gross domestic product in 2009 and 2 percent growth in 2010.
The country won pledges of $4.55 billion in international aid in the wake of the conflict, including a two-year $1 billion offer by the United States.
Saakashvili said the government’s 2010 growth forecast was conservative, and that the economy might grow as much as 6 percent when his Economic Liberty Act, which includes caps on budget deficits and state spending and debt, takes effect. Foreign investment may also rise as a result, he said.
The president said he planned to turn Georgia into a center for financial services and commerce, similar to Dubai and Singapore, along with tourism and energy transit.
In addition to the development at Poti, Saakashvili said the government was seeking investors to develop a port at Anaklia, “the deepest natural port” in the Black Sea area, which would provide “the shortest way from China to most European destinations.”
A delegation of Iranian investors arrived in Tbilisi on Friday to pursue about $300 million of possible projects in infrastructure, tourism and banking, Economic Development Ministry spokeswoman Nino Daraseli said by telephone.
Sophie Mamardashvili, a Tbilisi-based Rakeen spokeswoman, said the company was completing plans for the Poti airport and “the project will go ahead in the near future.”
Rakeen paid $65 million for 49 percent of the Poti port after previously winning a government tender to develop the port and acquiring a 51 percent stake.
Saakashvili opened the country’s first special economic zone at Poti in April 2008.
The company also has two development projects in Tbilisi, including a 72,800-square-meter residential and office complex on the outskirts of Tbilisi, according to its web site.

TITLE: South Stream Pipeline May Open Before Nord Stream
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia may start gas supplies to Europe through a Black Sea pipeline before westbound deliveries will flow under the Baltic Sea, Prime Minister Vladimir Putin said in a surprise announcement Thursday.
Gazprom and Italian energy company Eni have planned to complete the South Stream pipeline under the Black Sea by the end of 2014, three years after Gazprom and its other foreign partners want to start the Baltic Sea pipeline, Nord Stream.
Putin’s statement that the southern project — worth at least 19 billion euros ($28 billion) — may move ahead of schedule comes less than three months before presidential elections in Ukraine, which could end up losing its key transit role and substantial revenues because of the new pipeline.
Moscow has blamed Ukrainian President Viktor Yushchenko for derailing bilateral ties and has laid hopes for improvement on his replacement.
The South Stream “has a good chance of being implemented earlier than a similar project in the Baltics, Nord Stream,” Putin said in a meeting with his Italian counterpart Silvio Berlusconi in St. Petersburg.
Later in the day, the two leaders held a conference call with Turkish Prime Minister Recep Tayyip Erdogan in which Putin said Berlusconi was the driving force behind the project’s acceleration.
“Silvio sets a very difficult task for our companies regarding the South Stream,” Putin said. “He says the South Stream must be constructed sooner that the Nord Stream.”
Berlusconi stepped in to say, “It’s a challenge that we must accept.”
Putin continued, saying, “We can, in fact, accept it.”
A stretch of the South Stream will pass through Turkish waters — a snub to Ukraine whose waters were the alternative option — and requires Turkey’s consent. Turkey has given permission to Gazprom and Eni to start a feasibility study in the area.
Russia and Ukraine frequently haggle over gas trade, suspending transit to Europe in the process, most recently for three weeks in January.
Putin, Berlusconi and Erdogan gave no indication of exactly when South Stream, which could carry up to 63 billion cubic meters of gas from Russia to Bulgaria and on to southeastern Europe, could start operating.
Calls to Gazprom spokesman Sergei Kupriyanov went unanswered Thursday afternoon. Gazprom issued a statement Thursday, saying its chief Alexei Miller met with Eni chief Paolo Scaroni earlier in the day to discuss the southern pipeline as a way to increase Europe’s energy security.
Irina Vasilyeva, a spokeswoman for Nord Stream AG, the company set up to build the Baltic pipeline, said it was on schedule to start construction next year and complete it by the end of 2011.
Alexander Nazarov, a gas analyst at Metropol, said he thought Nord Stream would start operating in 2014. There is potential to bring the South Stream on line in 2013, he said.
Even so, he said Putin’s announcement about the South Stream had more to do with the election campaign in Ukraine because it would likely stir debate there about the sour bilateral relations.

TITLE: Kvas Maker Considers Sale of 25 Percent Stake
PUBLISHER: Bloomberg
TEXT: MOSCOW — Deka, the country’s second-largest maker of the traditional soft drink kvas, may sell a stake of about 25 percent as it fights inroads by Coca-Cola and Carlsberg’s Baltika Breweries in the local market.
Deka is playing on patriotism and increased beer taxes to lure customers to its Nikola brand of the fermented beverage. Kvas is made from bread or malt and can be flavored with sugar, birch sap and fruit. It is naturally bubbly and contains negligible amounts of alcohol.
“Our goal is leadership in this highly competitive market,” chairman Andrei Mansky, who is also Deka’s co-owner, said in an interview. “Coca-Cola and Baltika have big potential, and if they would be ready to spend big money, they could achieve some meaningful market share.”
Russian sales of kvas are expected to rise about 15 percent annually over the next five years to more than $1 billion in 2015, Mansky said. Carlsberg, the nation’s biggest brewer, diversified away from its Baltika beer brand by starting kvas production this year. Coca-Cola began making the brew under the name Kruzhka i Bochka, or Mug and Barrel, in April 2008.
Deka has 31 percent of the market, compared with 37 percent for Ochakovo. Coca-Cola, the world’s largest soft-drink company, and Baltika have a combined 10 percent.
Investment would most likely come from “some wealthy individual, rather than a private equity fund,” said Irina Yarotskaya, an analyst at Otkritie. “Private equity funds usually buy stakes to be able to sell them back later at a higher price. It’s not for sure they’ll be able to do it with a kvas producer.”
Nikola was the fifth most-recognized carbonated-drink brand in Russia last year, after Coca-Cola, Pepsi, Fanta and Sprite, the company says. Deka came up with the name “to oppose imported drinks such as Coca-Cola,” Mansky said.
The company uses the slogan “Kvas Is Not Cola, Drink Nikola.”
“Kvas is Russia’s national drink and has been produced for at least 1,000 years,” Mansky said. “Everyone has a memory of kvas being made in their family.”
Deka was founded in 1992 when the 19th-century brewery in Novgorod was privatized. Mansky and partner Konstantin Barinov bought control of the company in 2001. They took full control in 2004 and started producing kvas the next year. The company continues to make beer, which accounts for about 25 percent of its revenue.
Russia has proposed tripling the beer tax and banning the sale of beer in kiosks and outdoor retail markets to curb what President Dmitry Medvedev calls the country’s “colossal” alcohol consumption.
“Considering the government is conducting an anti-alcohol campaign, including against beer consumption, it’s possible that some of those nonheavy drinkers may switch to kvas,” said Maria Sulima, an analyst at Metropol. “It’s a very Russian product and quite a popular one.”
Deka would use some of the money raised in a stake sale to boost advertising, improve distribution and pay down debt, Mansky said. He did not say how much the company might raise.
Deka is rebuilding its sales network after some distributors went out of business in the credit crunch. Revenue may fall 20 percent to 1.5 billion rubles ($51 million) this year because of the disruption, he said. The beverage maker has started selling directly to retailers to recover lost revenue.
“We are at the initial stage of the kvas market development,” he said. “Russians consume just 4 liters of kvas per person per year.”
In 2010, Deka forecasts that sales will rise 35 percent to 2.02 billion rubles, helped by the “market’s recovery” and its purchase of the Stepan Timofeyevich brand from Heineken in September, Mansky said.
Sulima estimates that sales will rise 20 percent to 22 percent next year, calling the 35 percent forecast too optimistic.
“To achieve that, they would have to raise production volumes by at least 10 percent and raise prices by about 20 percent, which is quite a lot.”

TITLE: Putin Extends Timber Duty Freeze
PUBLISHER: Agence France Presse
TEXT: Russia will not raise its export duties on timber in 2010, Prime Minister Vladimir Putin said Sunday at talks with his Finnish counterpart amid a trade row with Finland over the taxes.
“The Russian government already took the decision to delay the next round of tax increases on round wood. Today, I can say that this moratorium will be extended to next year,” Putin told Finnish Premier Matti Vanhanen at a forestry summit in St. Petersburg.
He added that Moscow’s decision came as a result of a “sharp fall” in export demand for timber amid the global financial crisis.
Exports have been hit badly since Russia started gradually ratcheting up export duties in 2006. But Moscow views the duties on round wood exports as a means of encouraging investment in developing its own timber processing sector.
Vanhanen sharply criticized the tariffs as protectionist, saying Moscow should speed accession talks to join the World Trade Organization.
“We think that the cancelling of protective export duties on timber could be an answer to the problem of developing the timber processing industry. We have differing views on this question,” he said.
“As far as the WTO is concerned, Finland sees Russia’s place as part of the WTO.”
Meanwhile, Russian officials at the weekend summit loudly complained that Finnish companies were not investing enough in Russia’s timber sector, pushing for more projects in Russia’s Far East.
“Finnish capital is largely invested in Russia’s northwest and the Moscow Region. But Finnish investors are also present in China. It may interest them to also be present in the Far East,” Industry and Trade Minister Viktor Khristenko said.
His deputy minister, Andrei Dementyev added: “Unfortunately, we see that our Finnish colleagues are not investing enough in Russia.”
According to Finnish officials, over one billion euros (1.5 billion dollars) was invested by Finnish business in the Russian timber industry over the last 15 years.
Finland’s Minister of Economic Affairs Mauri Pekkarinen admitted there was “still a lot of untapped potential” for investment in Russia, but added: “Russian duties have a negative influence both in Finland and in Russia.”
Finnish paper companies, which rely heavily on cheap Russian wood, have threatened to close mills and cut jobs if the timber row is not resolved, but negotiations between the European Union and Russia have so far failed to strike a deal.
Russia, the only major economic power still outside the WTO, began negotiations to join in 1993, but talks have been marked by growing expressions of Russian frustration over the entry process.
Moscow surprised the trade body this year with an unorthodox request to join the WTO as part of a joint customs union with ex-Soviet neighbours Belarus and Kazakhstan.

TITLE: Recovery Seen in Vodka
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian Standard vodka’s billionaire owner, Rustam Tariko, said the liquor maker was seeing a “strong and unexpected” recovery in domestic sales on a rebound in consumer confidence.
“All consumers believe that the crisis is over,” Tariko said in an interview. “We have just an incredible sales increase, for example 25 percent to 40 percent to 50 percent on some of our products” during September and October, he said.
The company bills itself as Russia’s biggest producer of so-called premium vodka, defined as costing at least 200 rubles ($6.90) per 0.75 liter bottle.
Domestic sales are down about 25 percent since the start of 2009 and may decline 15 percent to 20 percent for the year, Tariko said. In 2010, “if it’s going like now, sales will be far higher than in 2008 and in 2009 because the recovery is so strong,” he said.
Russian Standard sells its vodka in more than 70 countries and expects sales to increase 30 percent to 50 percent this year as it introduces its brand in new markets.  The distiller has plans to enter China, India and Brazil, Tariko said. Exports will account for about 70 percent to 75 percent of total revenue this year.

TITLE: Banks Get Pigs As  Collateral
AUTHOR: By Paul Abelsky and Alex Nicholson
PUBLISHER: Bloomberg
TEXT: MOSCOW — When Russian billionaire Alexander Lebedev’s National Reserve Bank seized collateral offered against a loan from a cash-strapped borrower, a health quarantine was slapped on the security: 40,450 pigs.
“We had a court decision to take away the collateral, which is the pigs,” Lebedev, 49, said in an interview in Moscow. The borrower, a farm near Samara on the Volga river, agreed “with the local authorities to establish a quarantine” against African swine fever. The former KGB officer is still waiting to collect the pigs offered against a loan of 100 million rubles ($3.5 million). A kilogram of live pig costs an average of 78.4 rubles, the National Meat Association says.
Russian lenders are seeking to recoup losses by accepting a range of collateral, including stakes in Wild Orchid, a lingerie retailer, and food store Mosmart. The banks have been hit by a surge in non-performing loans, which Moody’s Investors Service estimates may rise to 20 percent of the total by year-end. The bad debt threatens to stall bank lending and may jeopardize a recovery in Russia’s economy, which grew 0.6 percent in the third quarter from the second, the Economy Ministry says.
“It is not a viable strategy for a bank because banks aren’t doing their core business there,” Eugene Tarzimanov, assistant vice president and banking analyst at Moody’s in Moscow, said. “They could be stuck with those assets for a number of years.”
Russian banks are characterized by “very high risk on a global comparison,” Standard & Poor’s said in a Sept. 28 report. The share of “problem loans” may jump to $110 billion by year-end and account for 25 percent of total lending by the end of 2010, compared with 11 percent in the middle of this year, Moody’s estimates.
“We have no idea how to build roads, milk cows or pour metal,” said Vladimir Tatarchuk, co-head of corporate finance at Alfa Bank, told reporters in Moscow on Friday. “We’re finance professionals, that’s what we do. We have no plans to develop other businesses. If we have an opportunity to sell immediately” assets taken as collateral, “we’ll do it, even if we lose some potential upside just so we can recover our money.”
Lebedev says loans secured with “strange assets” make up five percent of his bank’s total portfolio and as much as 20 percent of loan books at the country’s biggest state banks.
The banks are resorting to the “strange” collateral as their only alternative to cash as companies struggle to keep up with payments. The state-run banks, which include Russia’s two biggest lenders, Sberbank and VTB Group, have “less leeway” to pressure borrowers to service debt, said Tarzimanov.
“They are obviously controlled by the government, and they have a social mandate and fewer options when there is a difficult situation,” he said.
The list of unorthodox collateral filling up banks’ balance sheets is long. Sberbank received a holding of 50 percent plus one share in Wild Orchid. Russia’s biggest lingerie retailer pledged the stake as it seeks to restructure 1.6 billion rubles of debt owed to Sberbank, Anton Sergeyev, a spokesman at Wild Orchid, said by phone.

TITLE: 1998 Financial Crisis Brings Tinkov Profits in 2009
AUTHOR: By Alex Anishyuk
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — When the stock market soured last year and banks were scrambling to meet margin calls on their outsized loans, one recent entrant to the Russian credit market managed to escape unscathed.
Oleg Tinkov, the flamboyant founder of Tinkoff restaurants and owner of Tinkoff Credit Systems bank, said his lending business was booming amid the recession and expects large profits this year. The recipe is simple — cost reduction and a responsible debt policy — but it’s a formula he learned the hard way, barely scraping through the 1998 financial collapse.
“We’ll earn a lot this year,” Tinkov said in an interview with The Moscow Times. “I think Tinkoff Credit Systems’ profits to international financial reporting standards will top $18 million to $20 million this year, and our revenue is roughly $120 million.”
The lender, which previously has only released results to Russian financial reporting standards, has issued 100,000 credit cards since October 2008, bringing its total to 400,000 since it began operating in August 2007. But Tinkov almost immediately began bracing for recession after a debt issue that year largely fell flat.
“We experienced the crisis right from the very beginning, when most Russian bankers were ignoring the signs of the deepening global recession and our leaders were calling Russia ‘an island of stability,’” he said. “When we started to float our ruble bonds in 2007, we barely managed to place 20 percent of them, and that was when we realized that the global economy was going down.”
Finance Minister Alexei Kudrin first called Russia “an island of stability” in January 2008, saying interest in the country’s economy would be on the rise as the United States faltered and growth slowed in developed markets. The phrase was later picked up by other politicians, including President Dmitry Medvedev.
Tinkoff Credit Systems had assets of 5.64 billion rubles ($194 million) as of the second quarter, according to the Interfax-100 bank rankings, making it Russia’s 244th largest lender. The bank prides itself on its relatively small size, which Tinkov said allows it to keep management efficient and costs low.
“I recently ran into a colleague of mine, a banker, who said he was paying $9 million a month for offices,” he said. “Our costs are several times lower, even though our revenue is quite comparable.”
Tinkov says running a “small business” like his is the best opportunity to earn in a crisis-hit economy. “Women often think it’s bad when your size is small,” he said. “But when it comes to doing business, being small is cool and sexy because it’s profitable.”
He also blamed other banks’ woes on less responsible lending practices.
“You should, of course, take loans, but do it responsibly. The debt-to-profit ratio is what matters,” he said. “It’s not right when my colleagues borrowed at 10 times EBITDA.”
The reliance on EBITDA — or earnings before interest, taxes, depreciation and amortization — doesn’t sit well with Tinkov, both for economic and personal reasons. “I wouldn’t consider EBITDA, it’s not right. You should consider net profit,” he said. “A debt equal to two or three times net profit is good, but calculations using EBITDA are not precise. Besides, EBITDA sounds like foul language to me.”
EBITDA, if pronounced by Russian speaker, sounds similar to one of the language’s most obscene words.
Tinkov traces the start of his business career to Petrosib, a St. Petersburg-based home appliances retailer. In 1998 he founded Daria, a frozen-food producer that focused on pelmeni, the ubiquitous Russian dumpling.
“I really suffered in 1998, lost tons of money. And I remember hiding from some gangsters in St. Petersburg, who literally wanted to kick some debts out of me,” he said. “Since then, I decided never to spend too much and always to be in a savings mode, so to speak. That’s one of the reasons why I’m still driving my six-year-old Range Rover.”
He sold off Daria to a holding controlled by Roman Abramovich in 2001 to concentrate on his newest projects: eponymous breweries and a restaurant chain.
The company began as one St. Petersburg microbrewery in 1998, but eventually expanded to include beer bottling for retail and a national restaurant chain. He sold the main brewery operations to Sun InBev for $201 million in 2005 and would have sold the restaurants too, if it wanted them. “They simply didn’t need them,” he said.
Last month, Tinkov finally sold his 75 percent stake in the restaurant chain to Mint Capital, a Scandinavian private equity firm that paid $10 million for a 25 percent stake in August 2008. “I’m an extremely irrational businessman, if I were rational, I would be rich. But now I’m just well off,” he said. “I was working on the Tinkoff restaurant business for 11 years, but if you look at my track record, you’ll see that I always built and sold each of my businesses within three to five years. I got stuck a little bit with the restaurant business.
He finally decided to leave because of differences of opinion with his partners and had left management of the company to his partners recently. He declined to discuss the exact terms of the deal, saying he was not at liberty to discuss the sale and would in any event be “ashamed” to disclose the sum.
“Imagine, they bought 25 percent for $10 million in 2008, and now they bought 75 percent for an even smaller amount,” he said. “Well, I don’t think that’s a big problem. It makes no difference to me, whether I’ve got a million more or a million less in my pocket. But it wasn’t a super deal.”
Tinkov said he would also be selling his banking business in the future — as soon as it was developed enough. The lender is focused on credit cards and has no brick-and-mortar branches.
“This is a project that’s for sale, and I’ll sell it within five years from today, maybe even three, we’ll see,” he said. “I already have people who are interested in it. Even now with the recession in progress somebody’s calling and asking me to sell it. But I won’t for now, as my business hasn’t gained volume yet.”
He said Goldman Sachs, which owns a 15 percent stake in Tinkoff Credit Systems, fully agreed that it was too early to sell the business. Goldman Sachs declined comment.
But Tinkov — whose web site says he is “the Russian Richard Branson,” after the colorful Virgin billionaire — says his days of industry hopping are largely over. “I was selling home appliances, pelmeni, beer, I used to open restaurants. But money was always a small part of my business,” he said. “In this sector, money is 100 percent of my business, and I’m loving it. It’s so sexy to enter a bank’s armored vault and see all these loads of cash piled on the floor.”

TITLE: Petersburg Senator Tapped as Avtodor Chairman
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Sergei Tarasov, a senator from St. Petersburg in the Federation Council, has been appointed to head Avtodor, the new state road construction company. 
Prime Minister Vladimir Putin signed the decree appointing Tarasov as chairman of the company’s board last week, according to a statement posted on the government web site. 
Tarasov has represented St. Petersburg in the Federation Council since May 2008. Before that, he was a deputy governor of St. Petersburg for five years, overseeing culture, science and education policy. 
“He didn’t stand out as having any remarkable achievements, but there were not any failures either,” said Mikhail Amosov, who worked with Tarasov in the St. Petersburg legislative assembly before 2003. 
Tarasov “likes cars, and he likes driving them over good roads,” but he has never dealt with transportation or infrastructure issues, Amosov said. 
He probably knows Putin from when he was speaker of the legislative assembly from 1998 to 2002, Amosov added. 
Sergei Shishkaryov, who heads the State Duma’s Transportation Committee and is on Avtodor’s advisory board, said Tarasov would “have to do the impossible” of forming a strategy for the company while budget cuts have left “negligible” funds for roads. 
The priority for the post was finding a good manager rather than someone with specific experience in road infrastructure, said Shishkaryov, who discussed Tarasov’s candidacy with Transportation Minister Igor Levitin.

TITLE: Expert Advice on Jobhunting During the Recession
AUTHOR: By Elmira Alieva
PUBLISHER: The St. Petersburg Times
TEXT: The Russian labor market has shrunk significantly since a year ago, with many companies having reduced their staff and completely stopped recruiting new personnel. The decrease in vacancies and increase in demand for jobs has raised competitiveness among candidates and made it more difficult to find a job. That is not to say, however, that it is impossible to find a job right now.
Recruitment agency experts offer a range of advice regarding job hunting techniques during the economic crisis.

Be active
According to statistical data, HR departments receive hundreds of CVs per day in response to a new position. To remain competitive in these conditions, candidates must triple their efforts to search for career opportunities on the market. 
“These days you cannot expect a dream job to land in your lap while you are sitting in a chair and just wishing for that job to fall from the sky and be offered to you by a search firm,” said Yury Mikhailov, managing partner of Consort St. Petersburg. “You have to use as wide a set of means to find a job as possible to target companies, reaching them by phone, email, on the web or through newspaper ads,” he said.
“The essential condition in searching for a job is to be active,” said Lyubov Andreyeva, a consultant at Consort. “You shouldn’t wait passively for phone calls; you should regularly look through new vacancies, update your CV at recruitment agencies or even contact companies you are interested in directly. Moreover, you shouldn’t refuse to consider a vacancy that doesn’t really appeal to you. First of all, interview experience is always useful. And secondly, even if this vacancy doesn’t suit you, perhaps in the future you’ll be able to find the offer that you are looking for,” she added.
   
Develop your strategy
Job hunting could be compared to sales. Candidates have to develop their own strategy in order to successfully advertise and sell themselves to employers. 
“What am I looking for?” is the first question that a candidate should identify. “First of all you should determine what kind of vacancies and companies you are interested in,” said Tatyana Tangisheva, business development director for HPS Group. “For example, if I look for a position as an HR manager, it is necessary to choose whether it should be a large or small company, international or Russian. I should also outline the tasks I would like or wouldn’t like to perform, and also for what kind of duties I’m competent. A targeted CV could significantly ease the hunt for a job,” she added.
Market research is step number two, when a candidate assesses the trends on the labor market in order to adjust their preferences and CV. Important methods of researching vacancies and salaries include job hunting web sites, newspaper ads, recruitment agencies, social networks and personal contacts. 
“Search firms are still a major source for finding a challenging and well-paid job with larger Russian companies or western firms,” said Mikhailov. “With fewer positions to fill, recruiters can now spend more time looking deeper into the market and produce larger pools of applicants.”
It could be also useful to compare trends in different professional areas. Despite the recession, there are still some industries with a steady flow of jobs. “The tobacco, pharmaceutical and beauty/skincare products industries are still looking for personnel and qualified specialists,” said Liudmila Gordeyeva, a consultant at Consort. “Construction and automotive companies are hardly recruiting new employees at the moment.” 
The choice of city is of no small importance. “Moscow’s HR market has always been more dynamic, aggressive and demanding, so you have to possess those qualities in your personal style to be successful there,” said Mikhailov. “When I talk to my Moscow clients they say for the most part St. Petersburg has a more laid-back atmosphere.”
Contacting companies is the next step, including sending CVs and letters, making phone calls and attending interviews. 
“It is vitally important not only to post one’s CV, but to apply for various vacancies and include a cover letter,” said Darina Kalinina, business development manager at BusinessLink Personnel. “Choose the vacancies and make a call to the potential employer: make sure they received the CV, confirm the suitability of your experience to the requirements of the position, and clarify further actions,” she added.
   
Young and inexperienced
Mikhailov said there was a misconception that has become obvious during the past year. “The number of highly competent professionals has not increased much even though staff reductions were very serious last year and this past spring. The newcomers into the market are university graduates,” he said.
Specialists advise professionals with no work experience to participate in free trainee programs, internships in big companies and look at part-time jobs. “Doing an internship at a big company can greatly enrich one’s CV and ease employment,” said Kalinina. “There are universities, institutes and specialized secondary educational establishments that cooperate with big companies. These companies take on the best students for trainee programs with the potential for future employment. Accordingly, the student has a good opportunity to show their skills while they are studying, and get a job at a good company,” she said. 
   
don't panic
Young or old, experienced or not, candidates should try not to panic during interviews. The fear of not getting a job or the interview going badly can cause problems.
“You have to be aware that the HR manager or company recruiter may also be stressed, and you should never react in a negative manner,” advised Mikhailov. “Be polite and tactful, demonstrate your understanding and seek to establish common grounds.” 
While every vacancy has its own specific requirements, there are still some general qualities required to find a job, such as resisting stress and having confidence in one’s ability. “You have to use your self-assertion skills in the right way to project the image of a confident person who would be an asset to a prospective employer, even if you have been out of work for a couple of months,” said Mikhailov.

TITLE: Benefits Packages Fall Victim to Crisis
AUTHOR: By Olga Kalashnikova
PUBLISHER: The St. Petersburg Times
TEXT: The economic crisis has brought waves of redundancies to many large companies in Russia this year, with thousands of people losing their jobs. Many of those who were lucky enough to keep their jobs have been faced with salary cuts or a reduced working day or week, and benefits packages in many organizations have become an unaffordable luxury. 
“With the crisis, employers had to review their outgoings, and in most cases the reduction of social benefits packages was one of the most widespread optimization measures,” said Svetlana Lavrinenko, head of the recruitment department at Ancor.
“In many cases, cutting down on benefits allowed companies to keep jobs and avoid mass redundancies.”
Most of the employees who suffered from such measures work for Russian companies. Before the onset of the crisis, the economy was booming and potential for success seemed limitless. Many organizations introduced a transparent payroll scheme and began to introduce additional options into the benefits package. 
“The crisis has put everything in its place,” said Tatyana Tangisheva, business development director at HPS Group. 
 “The first victims were the insurance companies, as Russian organizations stopped providing medical insurance, and also reduced mobile phone expenses.”  
According to the results of a survey published by Antal Russia Recruitment, middle-ranking and senior managers identified three aspects of social packages that they considered to be most important: Medical insurance (cited as “very significant” for 48 percent of respondents), accident insurance (19 percent) and a corporate car or allowance (17 percent). These factors play a role in choosing an employer. 
The same survey showed that employees are mostly indifferent to options such as free or discounted company products or corporate transport to an inconveniently located office. A third of those surveyed said they expected cell phone expenditures to be covered by their employer.
“The first thing on which employers started saving money during the downturn was expensive training and development programs, along with fitness,” says Galina Nemtchenko, partner at Antal Russia. “Companies reviewed their insurance packages, and tried to cut costs on cell phones and lunch allowance. If the companies used to offer corporate cars, now they are mostly only offered to managers who really need one in their daily work.” 
Russian companies have never been renowned for the variety of social benefits on offer, tending instead to offer higher salaries and regular bonuses, but for international companies the social benefits remain an integral part of the compensation package for employees and reflect the level of the company. 
“If large international companies started reducing their benefits package, it would be reflected in the employee’s loyalty and efficiency of their work, which is extremely important within the context of a decline in general sales volumes,” said Tangisheva.
“A global freeze on hiring and restrictions in working with staff recruitment firms, training and evaluation are the most typical ways of economizing.”
The return of pre-crisis work conditions depends not only on the stability of the economic situation, but on the will of the individual company. The crisis has even enabled companies that have not suffered seriously from it to make cutbacks.  
“There are a lot of examples in which companies intentionally do not show money, reduce expenses and cut benefits and compensation packages,” said Tangisheva. “The general situation at other companies justifies such decisions, so there is an opportunity to economize without decreasing efficiency.” 
Companies will first bring back the most essential benefits. As every employer has their own tasks and requirements, the decisions will of course be made on an individual basis. The situation with salaries is similar. In an employers’ market, employees will have to really prove they are worth the salary they want.
“Salaries are a serious expenditure,” said Tangisheva. “They can be increased only when really necessary. Consequently, it will take far more time for things to be restored than that needed to destroy them.”
For employees, pay cuts and reductions in the working week are invariably painful, especially if the company policy is not transparent and staff do not know whether or when to expect further decisions from their employers. It is essential that staff understand why such measures are necessary, say HR specialists. 
Generally, people who like and respect their company not only as a result of their salary are prepared to go without some benefits in order to help their company to survive. 
“[Such measures] should only be for a specific period of time, because every limitation should be justified by plans, tasks and their realization,” said Tangisheva. “If terms are not followed or are not even discussed beforehand, a feeling of dissatisfaction will grow.”
This autumn will see movement toward stability, according to Ancor’s specialists. 
“Most companies have an annual budget, so it is impossible to talk about the full restoration of all benefits this year,” said Lavrinenko. “Some employers, however, plan to increase salaries and restore benefits from the beginning of next year.” 
Many companies have returned to a full working week, and sales and consumption in some spheres are once again approaching pre-crisis levels. Organizations have implemented effective anti-crisis programs that have allowed them to return to work.
Economists however warn that talk of a recovery from the recession is an illusion. 
“The situation in most companies is really very bad. They are in serious difficulties,” said Mikhail Romanovsky, head of the finances sub-faculty of the St. Petersburg State University of Economics and Finance and chairman of the board of directors of the Institute of Independent Social and Economic Research. 
Romanovsky identified different patterns depending on the source of income. Employees who receive their salary from the federal budget will not see it increased, while those who are paid from the St. Petersburg budget will see their wages increased next year in two stages, increasing them by 14 percent compared to their current level, he said. Salary recovery is highly individual in every company.
“If a company is developing its business and feels a lack of employees, it will change its salary policy,” said Romanovsky. “It aims to retain its staff and will not expand it during a crisis period.” 
A one percent decrease in company revenue can mean as much as a five percent decrease in profit. 
“Moreover, there will probably be an increase in social payments,” said Romanovsky. “So if the company increases an employee’s salary, it will pay taxes of not 26 percent, but approximately 36 percent from Jan. 1, 2011. Every ruble of the salary will be more expensive to the employer.
“Companies take this into account. It is easy to increase salaries, but it is much more difficult to reduce them.”
Economists predict that companies will increase salaries very selectively. The lucky ones will be categories of workers in which there is a lack of qualified personnel.
“People shouldn’t wait for manna from heaven,” said Romanovsky. “The crisis is serious and long-lasting. We will be coming out of the recession for two or three years.” He said it would only be possible to talk about salary increases in two years’ time.

TITLE: Employers Cut Back On Staff Education Programs
AUTHOR: By Olga Kalashnikova
PUBLISHER: The St. Petersburg Times
TEXT: According to a new survey carried out by Antal Russia recruitment company, 36 percent of managers regard training and educational programs as a major incentive when accepting job offers. Respondents said that 8 percent of them would prefer their employer to focus such programs on the teaching of a foreign language, while 7 percent said that they would prefer to receive an MBA. 
The crisis, however, has led companies to drastically reduce their outgoings, and one of the budget items hardest hit is spending on personnel development. Employers have been quick to save money on educational programs. 
Experts from the Vlerick Leuven Gent Management School note a significant decrease in the number of students getting their MBAs paid for by their employers. This is especially noticeable among part-time MBA students who are attempting to obtain their degrees without taking a break from their careers. 
Similarly, in the wake of the crisis, language courses are no longer obligatory or even a priority. During the last year, the Extra Class Language Center has lost four large companies whose employees previously studied foreign languages.
“Some companies even drop language courses for their employees before dropping corporate events,” said Stanislav Chernyshov, director of the Extra Class Language Center.
“Since the beginning of this crisis we have seen some major multinationals pulling out their expatriate staff at very short notice,” said Walter Denz, co-founder of the Liden & Denz language center. “Some students came in and told their teachers that this was their last lesson and that they were being sent home the next day.” 
With the coming of the crisis, the situation on the labor market has changed considerably, mostly to the advantage of employers, according to experts from Manpower CIS. And this, first and foremost, is reflected in the corporate training sector. Previously, educational programs such as MBAs and language or computer courses were, primarily, a resource for corporate growth. Companies with an interest in their own development organized the training of their employees. 
“Today, companies can cut expenditure on educational programs, as a great number of candidates have appeared on the market with good experience and qualifications,” said Denis Gorbatyuk, director of the St. Petersburg office of Manpower CIS.
“Now, one can pick and choose and the company can hire qualified professionals for salaries that aren’t excessively high.”
Companies now need people who can quickly make the right decisions in unstable times of stress, according to the experts at Manpower CIS. The provision of new knowledge or skills is not simply a matter of prestige or a bonus for employees anymore. It is a necessity, with educational programs having become resources for personal and professional development.  
“People are starting to invest in themselves and in their education in an attempt to improve their competitiveness on the labor market. Employees need to meet the demands of the modern market,” said Gorbatyuk.
“This tendency has been observed by our experts as they look through hundreds of resumes every day. There are more candidates who are getting a second or even third higher education, or studying a third foreign language,” he said.
Instead of corporate clients, language courses now have more individuals who are ready to pay for themselves. 
“They regard studying a foreign language as a good opportunity to get a job at a foreign company in Russia. It also helps employees to keep their jobs and avoid being made redundant,” said Chernyshov. 
Budget cuts in this sphere can be a source of controversy. If languages are essential in order for the company to function, reducing or doing away with language education programs for employees can be a mistake.
“Employers often think that they can get by with the services of interpreters,” said Chernyshov. “Yet that takes up a lot of time. Moreover, the quality of their translations isn’t high enough nowadays. This profession demands a good education, painstaking work and talent, but it is very poorly paid. Most people who work as interpreters or translators are not professionals,” he added.
“At the same time, there has also been widespread application of a new approach, whereby employees, especially from provincial cities, are enrolled on foreign language courses as a bonus for good work. It’s an opportunity to visit St. Petersburg and also to study a language.”
Language training and educational programs are often regarded as part of the “social package” offered and are a good opportunity for both employees and employers alike.
“I think educational programs differ from other benefits. They unite staff and are excellent for team-building,” said Chernyshov.
Despite the general trend observed, there are organizations that have not cut back on educational programs. This is predominantly the case with international firms. 
“Companies which have maintained stable positions continue to spend money on training and development, especially where it concerns those employees who are responsible for bringing in money, such as sales managers, for example,” said Galina Nemtchenko, partner at Antal Russia. 
On the up are bookings from NGOs, embassies, consulates and other governmental organizations that have not been hit as hard by the crisis, says Denz.
“The corporate segment has really suffered, demand has fallen by over 40 percent, but the private segment, as a tool for training, has really been winning out,” said Gorbatyuk.

TITLE: Nokian Tyres Completes Housing for Plant Workers
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: The Finnish company Nokian Tyres on Wednesday unveiled Hakkapeliitta Village, a brand new housing complex built for workers of the company’s local factory.
Four five-story buildings containing 167 apartments with a total area of 10,300 square meters have been constructed 10 kilometers from the Nokian Tyres plant in Vsevolozhsk in the Leningrad Oblast. In exchange for working for the company for a minimum of seven years, the plant’s employees can purchase an apartment in the complex for significantly less than the average market price. The aim of the housing program is to attract and retain qualified personnel, the company, which has invested more than 10 million euros in the project, said in a press release.
“A factory is all about the people who work there, and this complex has been built for them,” Kim Gran, the president and CEO of Nokian Tyres, said at the opening ceremony of the housing complex on Wednesday.
“We need qualified, professional personnel, and this complex is one of the main factors in attracting and retaining personnel. We hope they will view us accordingly,” he said.
Workers who are employed on permanent contracts at the local Nokian Tyres plant, have a good work record and have been recommended by their supervisors are eligible for the housing scheme.
The average cost of an apartment in Hakkapeliitta Village is 41,000 rubles ($1,400) per square meter, said Andrei Pantyukhov, general director of Nokian Tyres in Russia. Participants of the scheme can obtain a mortgage issued in rubles with an interest rate of 7.3 percent per year over a period of seven to 20 years. This figure is also considerably lower than the average mortgage interest rate, which currently stands at 13.1 percent, according to a report published by Vedomosti last week.
Three more blocks of flats are planned for the complex, which will eventually be able to house about 600 employees and has its own boiler, CCTV and security guard, as well as parking spaces for each apartment and a children’s play area. A bus service will run between the compound and the Nokian Tyres factory — a fifteen-minute journey — every day, and in true Finnish style, there are several covered bike racks in the grounds. 
Plant employee Andrei Bogdanov, who will be moving into the new housing at the beginning of next month along with his wife Yelena and their toddler twins, said he was “very happy” with his new accommodation.
“Previously, we lived in a wooden building in Vsevolozhsk,” he said. “The conditions here are much better.” He said they would sell their previous property, for which they had taken out a mortgage on less agreeable terms.
Bogdanov, who is originally from Kirov, said he did not think difficulties would arise among the residents from living and working together.
“Our team is a friendly one, so I don’t think that will be a problem,” he said.
Bogdanov said he would send his children to the village’s nursery school, which is due to open on the first floor of one of the buildings next year. 
Both local authorities and HR specialists were positive about the project and its implications.
 “This project was born out of negotiations between the authorities and an enterprise,” said Igor Samokhin, head of the Vsevolozhsk district municipal administration. “It is a social project, and shows how a partnership between the state and a private enterprise can play a role in the development of a territory and the realization of social housing programs.
“I think this idea should be continued, especially at a time when the construction of private housing has stopped to some extent, and I think these ‘mono-villages’ for enterprises in the Vsevolozhsk area should appear. There is enough land.”
Samokhin added that it was worth thinking about how to improve the engineering infrastructure of the area.
“We often hear about social responsibility, here we have a clear example of it,” said Anatoly Katalevich, chairman of the construction committee of the LenOblast. “It’s a very positive example, and must be continued.”
Katalevich said he believed that knowing that they had good, comfortable accommodation would make people work more efficiently at the plant.
Yury Mikhailov, managing partner at Consort St. Petersburg recruitment agency, said he believed the housing project was the first and perhaps only one of its kind in St. Petersburg and the LenOblast, and a pilot project for western companies who have started manufacturing operations here.
“The housing project is likely targeting mid-level management and qualified personnel who either have no property in St. Petersburg and have to rent something there — since the apartment market in Vsevolozhsk is quite limited — which entails traveling to the tire plant every day by car or company shuttle bus, or those specialists who have been recruited outside of the northwest region,” he said.
Mikhailov said the project could be considered an effective way to ensure staff loyalty. “I think that solving the accommodation issues of their personnel can be viewed as a novel way of approaching motivation policy, which can give a competitive advantage to the company first in attracting and then retaining the best people,” he said.
He said he did not foresee serious problems caused by the staff living in the same building, but said there might be an issue with infrastructure. “People will have to travel for the most part to St. Petersburg for major entertainment over the weekend,” he said.
Nokian Tyres opened its plant in the Leningrad Oblast in September 2005. More than 60 percent of the company’s tires are now made there, Kim Gran, president and CEO of Nokian Tyres, said Wednesday.

TITLE: Jobless Rate Drops to 7.6%
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s unemployment rate fell in September as seasonal demand for labor in the farming and construction industries picked up.
The jobless rate fell to 7.6 percent, or 5.8 million people, from 7.8 percent in August, the Moscow-based Federal Statistics Service said in an e-mailed statement last week. The figures aren’t adjusted for seasonal swings.
While unemployment has fallen from an eight-year peak of 9.5 percent in February, the jobless rate remains “a clear challenge,” President Dmitry Medvedev said in a television interview on Oct. 11. The decline in September doesn’t reflect the real trend in the labor market, economists said.
“You tend to have a decline in August, September, given seasonality issues regarding agriculture,” said Peter Westin, chief strategist at Moscow-based brokerage Aton LLC. The rate will probably rise to 9.7 percent in December and fall to 8.7 percent in 2010, he said.

TITLE: Medvedev Has Platform That Won’t Win Voters
AUTHOR: By Vladimir Frolov
TEXT: President Dmitry Medvedev may have decided to make modernization his platform for re-election in 2012, provided he gets the approval to run from Prime Minister Vladimir Putin.
Medvedev is investing a tremendous amount of political capital in promoting a vision of Russia as an innovation-driven economy, where knowledge, intellect and a desire for experimentation will create more wealth for ordinary Russians, as opposed to exports of hydrocarbons and metals that enrich only a handful of oligarchs today.
His biggest risk is, of course, that this vision is so abstract that ordinary Russians are unlikely to see the signs — much less enjoy the benefits — of his modernization program before his 2012 presidential run. He is already running out of policy instruments to either stimulate or impose innovation, as his top economic aide, Arkady Dvorkovich, has recently suggested.
He has tried pretty much everything — a rule by a special presidential commission to shortcut government channels, meetings with innovators and entrepreneurs, threats to oligarchs and online appeals for public support for his cause. 
So far, however, there is little to show for it apart from a government program to provide incentives to the domestic pharmaceutical industry to produce generic drugs. In addition, the Magna-Sberbank acquisition of Opel — if it works out — could turn into a nice modernization coup.
But Medvedev’s modernization program runs the risk of repeating the sad fate of Mikhail Gorbachev’s perestroika. The president is expected to roll out a roadmap for building an innovative Russia — or “Russia 2.0” as some have dubbed it — in his second state-of-the-nation address early next month. It would be the first innovation program that includes input from thousands of ordinary Russians who responded to Medvedev’s call to reply to his “Go, Russia!” article.
If Medvedev’s proposals yield results, they will do so only after his term expires in 2012. Now, there is an innovative theory that explains how Medvedev could still rule, were his campaign for a second term to fizzle out. He could become the ruler of “Russia 2.0,” the leader of choice for the most dynamic segment of society — the “innovation class.” Putin would continue to be a leader of “traditional Russia,” with its energy-based economy.
But as Somerset Maughamy observed: “It is a perfect theory. It has but one defect: It is unbelievable.”

Vladimir Frolov is president of LEFF Group, a government-relations and PR company.

TITLE: Dickering Over Uranium
AUTHOR: THE WALL STREET JOURNAL
TEXT: One sign that an adversary isn’t serious about negotiating is when it rejects even your concessions. That seemed to be the case Friday when Iran gave signs it may turn down an offer from Russia, Europe and the U.S. to let Tehran enrich its uranium under foreign supervision outside the country. The mullahs so far won’t take yes for an answer.
Tehran had previously looked set to accept the deal, which is hardly an obstacle to its nuclear program. A Democratic foreign policy shop called the National Security Network heralded the expected pact in a blast email this week as “Engagement Paying Dividends on Iran.” But now Tehran may be holding out for even more concessions, as Iranian news reports suggest Iran wants to be able to buy more enriched uranium from a third country to use in a research reactor for medical use—as opposed to shipping its uranium to Russia for a roundtrip.
This may merely be the equivalent of last-minute haggling over the price of a Persian carpet, because the West’s enrichment offer is already a good one for Mahmoud Ahmadinejad. Iran would give up one bomb’s worth—about 2,600 pounds—of uranium enriched at its facility in Natanz to the low level of 3.5%. Russia would then enrich the uranium further to 19.75% and someone, most likely France, would put the uranium into fuel rods for transfer back to Iran for ostensible use in a civilian nuclear reactor. Western officials say this would delay Iran’s efforts to get a bomb.
There are a couple of problems with this theory. With the exception of the regime, no one knows for sure how much uranium Iran possesses. Given Iran’s long history of lying to the world and the discovery of covert enrichment facilities (most recently in Qom) that need uranium from somewhere, a fair guess would be that Iran has more than the 3,500 pounds it has declared to U.N. inspectors.
Meanwhile, Iran insists it won’t stop enriching uranium on its own, in violation of Security Council resolutions. Aside from rewarding Iran for past misbehavior by letting it use illegally enriched uranium, this deal fails to solve the problem it is intended to solve. That’s because as long as the Natanz facility continues to enrich uranium at its current rate of about 132 pounds a month, Iran will produce enough low-enriched uranium within the year for a bomb. Make Natanz more efficient and the time could be cut in half.
Claims by Western officials that Iran can’t convert the uranium enriched abroad for military use are less than reassuring. 
Though encased in a fuel rod in France, the more highly-enriched uranium returned to Iran would be simple to extract, using something as basic as a tin snipper to force open the fuel cladding, and enrich further.
“With 19.75 enriched feed”—as opposed to the 3.5% that Iran now manages— “the level of effort or time Iran would need to make weapons grade uranium would drop very significantly,” from roughly five months today “down to something slightly less than four weeks,” says Henry Sokolski of the Nonproliferation Policy Education Center.
Iran may also welcome the Russian-enriched uranium because its own technology is less advanced. The October 8 edition of the trade journal Nucleonics Week reports that Iran’s low-enriched uranium appears to have “impurities” that “could cause centrifuges to fail” if Iran itself tried to enrich uranium to weapons-grade—which would mean above 20% and ideally up to 90%. In this scenario, the West would be decontaminating the uranium for Iran. Along the way, Iranian scientists may also pick up clues on how to do it better themselves.
The mullahs know that President Obama is eager to show diplomatic gains from his engagement strategy, and they are going to exploit that eagerness to get every possible concession. 
The one thing Iran has shown no desire to bargain over is its intention to become a nuclear power.

This comment appeared as an editorial in The Wal Street Journal

TITLE: Moscow’s Carousel Elections
AUTHOR: By Sergei Mitrokhin
TEXT: The level of falsifications in the Oct. 11 Moscow City Duma elections was unprecedented in modern Russian history. Officials did everything in their power to prevent opposition candidates from registering, and Yabloko was obstructed by local authorities and siloviki structures as early on as the signature collection stage.
On Oct. 10, the eve of the elections, almost every electoral district had run out of ballots. According to Yabloko representatives, the Strogino election committee handed out a total of only 149 ballots for the entire district. Instead, we witnessed the so-called “carousel” system — busloads of passengers who travel from district to district to cast their votes repeatedly.
We received reports of large-scale ballot stuffing across the city. Buses filled with dozens of passengers pulled up to polling stations. After they presented their passports, election officials gave them huge stacks of absentee ballots. Later, signatures would magically appear on the polling station’s voter lists alongside the names of so-called “dead souls” — people who hadn’t voted for years or who had died long ago. A Yabloko observer at a Tagansky polling station caught a glimpse of one such list with marks made beside about 60 names.
In the Arbat district, all of the teachers from one of the local schools used absentee ballots to vote, meaning that 82 people from various districts of Moscow converged on the polling station within the walls of their own school to cast their votes.
Various municipal and social workers were also compelled to spend their Sunday at the polling stations where, in violation of the law, they served as election officials. Social workers were also eager to make “house calls,” giving people the opportunity to vote at home. Social workers even “helped” pensioners to vote at polling stations.
At one polling station in the Otradnoye district, workers handed pensioners ballots with the United Russia candidates already selected. When observers at the scene requested that they stop violating the rules, members of the district election committee replied that the elderly people were suffering from poor eyesight and had specifically requested the assistance.
At some polling stations, people stuffed bundles of ballots into ballot boxes with opposition observers and policemen watching them. At one polling station in the Akademichesky district, a Yabloko candidate for the City Duma, Sergei Markov, caught two young people stuffing a ballot box, but the policeman on duty initially refused to detain them. Only after Markov insisted and spoke to the policeman’s commander did the officer finally intervene.
Among the more curious incidents was the discovery in the Smolenskaya Naberezhnaya district of a “reserve” voting district not found anywhere on the Moscow election committee’s official list. There was also an incident in the Severnoye Medvedkovo district where private security agents closed a polling station to all voters between 8 a.m. and 9.30 a.m. What happened inside the building during those 90 minutes is anybody’s guess. Similarly, it is unclear what happened at a polling station in the Meshchansky district after the election committee ordered the police to evict all Yabloko observers — and even election candidates who were present — from the premises.
After the votes were counted at the polling stations, the chairs of the various neighborhood election committees met at a district election committee, and this is where the main instances of falsification took place. Yabloko observer Vitaly Reznikov witnessed how the vote tallies from the individual neighborhoods were “corrected” according to the instructions of the ranking election authority. Reznikov recounts seeing the chairs of the district committees go into the office of their superiors and only afterward were their vote tallies entered into the general database. Marina Ivannikova, a member of Yabloko and the Levoberezhny district election committee, saw entirely new tallies “drawn up” at their meeting.
Blatant falsification could be the only explanation for the discrepancy between a notarized copy of the vote tally from District 1,702 that Yabloko obtained and the official figures announced for the same district — a discrepancy of 550 votes in United Russia’s favor. Only falsifiers in the district election committee could have “shifted” 20 of 25 votes received by Yabloko into the United Russia column at District 1,701.
The most ludicrous example of falsification occurred at District 192, where my family and I are registered and where we cast our votes on election day. Video footage on Ren-TV clearly showed me placing my own vote on Oct. 11, but after the polls closed the official election returns showed the figure “0” for the Yabloko party in my district.
One exception to the falsification was the polling station where Prime Minister Vladimir Putin voted. Here, a command was apparently handed down not to falsify in a district directly associated with Putin. As a result, Yabloko garnered 18 percent of the vote there.
You might ask why the current authoritarian regime resorted to bringing in busloads of voters to stuff ballot boxes. The answer is that the authorities want very much to look like it is a democracy to the outside world. The more autocratic Russia becomes, the more Russia has to falsify its fragile democratic institutions.
Equally important, the authorities want to create the impression that the Russian people overwhelmingly support United Russia and its candidates. The problem is that this farce is becoming increasing difficult to pull off with each successive falsification.

Sergei Mitrokhin, who served as a State Duma deputy from 1994 to 2003 and a Moscow City Duma deputy from 2005 to 2009, is chairman of the Yabloko party.

TITLE: My Home Is My Cesspool
AUTHOR: By Alexei Bayer
TEXT: In Russia, neglect of all things public is notorious. Some blame the government, while others believe that Russians were so fed up with Soviet collectivism that they have withdrawn into private life, ignoring awful highways, corruption, electoral fraud and other public indignities.
But the issue is more complex, and looking at Moscow real estate may help to analyze the problem. Moscow apartment prices are stratospheric. In desirable neighborhoods, a two-room apartment costs from $500,000 to $600,000. For many Muscovites, an apartment is their sole asset and source of income.
After prices came down a bit in the crisis, apartments cost roughly as much as they do in New York. But what you get for your money is very different. Let’s face it, the bulk of Soviet-era housing stock, even in the center of Moscow and established outskirts such as the southwest part of the city, would be classified as slums even in gritty New York.
The buildings bear all the hallmarks of shoddy communist enterprise: ugly design, poor construction, substandard materials and inconvenient planning. Their low ceilings and thin walls are worse than in New York’s municipal housing built for the poor in the 1960s. And forget about amenities like laundry rooms, playrooms, garages or doormen.
A typical steel front door would be better suited for a jail or a warehouse. Once you enter the podyezd, or main corridor, that is in fact exactly what it looks like. The stairwell features a bank of rusty mailboxes, a paint-splattered tile floor and a creaky, cramped elevator. Some stairwells, even in good neighborhoods, smell of urine, and if the building has an incinerator it reeks of trash as well.
But judging by the expensive cars densely parked near such buildings — making it hard to get out of your prison-like front door or pass on the sidewalk — the residents are far from poor.
The sad condition of apartment buildings is not the fault of municipal authorities. In New York, apartment owners form independent co-op boards that collect maintenance fees and use the money to manage the buildings and make repairs. They also regulate the use of common spaces in and around their buildings. Service on co-op boards is voluntary and unpaid. Nothing like that seems conceivable in Russia.
But in New York, the real estate situation wasn’t always as rosy as it is today. In the mid-1970s, the city was in crisis. Crime was on the rise, and social services deteriorated. The middle class fled to the suburbs and their “I couldn’t care less” attitude infected those who stayed in the five boroughs of New York.
The same attitude has plagued Russia since the 1917 Revolution, but on a larger scale. While promising to create the ultimate workers’ paradise, it destroyed the country’s sense of continuity and unleashed unprecedented social and political turmoil. Even when the situation stabilized, uncertainty and deracination permeated Soviet society for eight decades.
For all of the vaunted stability of the current regime, Russians still don’t believe in the permanence of their system enough to invest in their society — even in the place they call home. Last year, a public opinion survey found that 8 percent of Russians want to emigrate. The press rejoiced because 80 percent said they didn’t want to live anywhere else. But the percentage of those who wanted to leave was actually huge by the standards of most other nations: The total number of potential emigrants exceeded 11 million.       

Alexei Bayer, a native Muscovite, is a New York-based economist.

TITLE: In the Spotlight
AUTHOR: By Anna Malpas
TEXT: Last week, TNT television lost an appeal and was forced to shift its long-running reality show “Dom-2” to an 11 p.m. slot because it has been officially classed as “erotic.”
The show is nominally about young people working together to build a house, which will then be the prize for a couple that falls in love on the show. However, it’s fair to say that the contestants do not have the gnarled hands and sunburn of people who actually work on a construction site.
The romantic aspect of the show means that contestants can be voted out if they don’t have a partner, although this isn’t a hard-and-fast rule. What the show is really like is an hour-long ride on a school bus, as the contestants lounge about and endlessly discuss what he said and she said and whether Roman likes Vika.
The verdict came after three people from various Russian regions went to court, saying the show falls under the vague “erotica” category in a media law. At least two of the people are members of a conservative group called the All-Russia Parents’ Meeting, which doesn’t like sex education in schools.
Two groups of experts watched the show with a legal eye and ruled on whether it is erotic — one said no, another said yes. The judge ruled that the show is erotic and so can’t be shown in its normal daytime and 9 p.m. slots.
Strangely, the show has been running for five years without anyone spotting its erotic nature, although it has prompted regular spoutings of outrage from Duma deputies and even the chief of police.
On Wednesday night, the censors ensured that our morals were uncorrupted by replacing the 9 p.m. showing with Bruce Willis in “The Whole Ten Yards.”
The main problem with watching “Dom-2” if you’re not a devotee is that there are dozens of contestants, linked to each other in an intricate web of quarrels, kisses and bitching sessions, none of which is ever explained to the fairweather viewer. There are just terse subtitles to each scene, such as “Dasha and Katya in the girls’ dormitory.”
The main topic on Wednesday’s show was an incident in which Dasha turned up uninvited to Zhenya’s birthday with a bunch of flowers and the birthday girl walked off in a huff. This was discussed in minute detail on Thursday — although I still have no idea what the two girls had quarreled about.
In another strand, the contestants discussed a blonde girl, Ira, who kissed a boy on the roof. She said they did it on purpose because they realized two girls were watching them through a window. Ira described the voyeurs as her “best friends,” although she added a disclaimer that “I have a lot of best friends.”
The most dramatic episode came after a curly-haired girl called Veronika went to dinner with a former boyfriend called Rustam. They ended up kissing, and the girl’s new flame, Misha, was none too pleased. In a showdown, the girl said she wanted to go back to Rustam, but he wasn’t so keen. “I’d like you to leave the show, that would be best for all of us,” he said in a parting shot.
There were a few kisses, but everyone kept their clothes on. The girls did a lot of lying about on beds with their latest best friends, which might be erotic in a boarding school dormitory kind of way. But the male contestants tend to relax in flip-flops and hideous T-shirts and fall far short of Mr. Darcy standards.
Erotic or not, the main problem with the new 11 p.m. slot for me was that I couldn’t keep my eyes open.

TITLE: Security Stepped Up After Blasts in Iraq Kill 155
AUTHOR: By Barbara Surk and Hamid Ahmed
PUBLISHER: The Associated Press
TEXT: BAGHDAD — Iraqi security forces blocked streets around the capital Monday and conducted intense searches at checkpoints as authorities investigated the massive security failure that allowed two truck bombs to strike what was supposed to be one of the city’s safest areas and kill 155 people.
The country’s worst attacks in more than two years on Sunday targeted the Justice Ministry and Baghdad Provincial Administration in the heart of the capital, calling into question Iraq’s ability to protect itself as it prepares for January elections and the U.S. military withdrawal.
Fear of more deadly attacks, especially in the run-up to crucial January elections, turned into anger over the government’s failure to keep the country secure.
“Today, we came to work despite the fear inside us,” said Siham Abdul-Karim, 49, an employee of the Culture Ministry located near the site of the bombings and surrounded by police checkpoints on Monday. “We all wonder how could car bombs could reach these institutions.”
There have been no claims of responsibility, but massive car bombs have been the hallmark of Sunni insurgents seeking to overthrow the country’s Shiite-dominated government. It was the second deadly bombing targeting government offices in the area since August, when coordinated blasts against two ministries killed more than 100 people.
The death toll rose to 155 on Monday as Baghdad residents buried the dead. About 500 people were injured, authorities said.
The initial investigation suggested the vehicles, each packed with thousands of pounds of explosives, might have passed through some security checkpoints before hitting their destination, said Maj. Gen. Qassim al-Moussawi, a spokesman for the city’s operations command center. Authorities have said they are also checking security cameras in the area.
Interior Minister Jawad al-Bolani said 76 people have been arrested so far, but he did not provide information on who they were or how they are believed to be connected to the horrific crimes, which took place just hundreds of yards from the heavily fortified Green Zone.
“This is a terrorist act,” al-Bolani said. He called on all the political forces to cooperate and assist the Iraqi security forces.
The street where the blasts occurred had just been reopened to vehicle traffic six months ago. Shortly after, blast walls were repositioned to allow traffic closer to the government buildings — all measures hailed by Prime Minister Nouri al-Maliki as a sign that safety was returning to the city.
Al-Maliki has staked his political reputation and re-election bid on his ability to bring peace to the country but as grief turned into anger on Monday people questioned the government’s recent security policies — ominous signs for al-Maliki’s re-election bid.
“This explosion made people furious,” said Ahmed Hassan, an employee at the Ministry of Education. “People will not re-elect this government.”
The pickup truck that exploded near the Justice Ministry was carrying 2,205 pounds (1,000 kilograms) of explosives, the initial investigation found. The second pickup truck that went off near the Baghdad Provincial Administration building, was carrying 1,543 pounds (700 kilograms) of explosives.
The explosives were attached to the vehicles and hidden below the seats, al-Moussawi said.
Iraqi health and security officials confirmed the death toll. They spoke on condition of anonymity because they were not authorized to release information to the media.
The coordinated bombings were the deadliest since a series of massive truck bombs in northern Iraq killed nearly 500 villagers from the minority Yazidi sect in August 2007. In Baghdad itself, it was the worst attack since a series of suicide bombings against Shiite neighborhoods in April 2007 killed 183.
Also Monday, a car bomb at a police checkpoint near the holy city of Karbala in southern Iraq killed at least four people, Iraqi security officials said on condition of anonymity because they were not authorized to speak to the media.

TITLE: Chopper Crashes Kill 
14 Americans 
In Afghanistan
AUTHOR: By Heidi Vogt
PUBLISHER: The Associated Press
TEXT: KABUL — Helicopter crashes killed 14 Americans on Monday in the deadliest day for the U.S. mission in Afghanistan in more than four years. The deaths came as President Barack Obama prepared to meet his national security team for a sixth full-scale conference on the future of the troubled war.
In the first crash, a helicopter went down in the west of the country after leaving the scene of a firefight with insurgents, killing 10 Americans — seven troops and three civilians working for the government. Eleven American troops, one U.S. civilian and 14 Afghans were also injured.
In a separate incident in the south, two other U.S. choppers collided while in flight, killing four American troops and wounding two more, the military said.
It was the heaviest single-day loss of life since June 28, 2005, when 16 U.S. troops on a special forces helicopter died when their MH-47 Chinook helicopter was shot down by insurgents.
U.S. authorities have ruled out hostile fire in the collision but have not given a cause for the other fatal crash in the west. Taliban spokesman Qari Yusuf Ahmedi claimed Taliban fighters shot down a helicopter in northwest Badghis province’s Darabam district. It was impossible to verify the claim and unclear if he was referring to the same incident.
U.S. forces also reported the death of two other American troops a day earlier: one in a bomb attack in the east, and another who died of wounds sustained in an insurgent attack in the same region. The deaths bring to at least 46 the number of U.S. troops who have been killed in October.
This has been the deadliest year for international and U.S. forces since the 2001 invasion to oust the Taliban. Fighting spiked around the presidential vote in August, and 51 U.S. soldiers died that month — the deadliest for American forces in the eight-year war.
The Obama administration is debating whether to send tens of thousands more troops to the country, while the Afghan government is rushing to hold a Nov. 7 runoff election between President Hamid Karzai and challenger Abdullah Abdullah after it was determined that the August election depended on fraudulent votes.
The Obama administration is hoping the runoff will produce a legitimate government. In Washington, Obama was to meet with his national security team Monday in what was to be the sixth full-scale Afghanistan conference in the White House Situation Room.
Abdullah on Monday called for election commission chairman Azizullah Lodin to be replaced within five days, saying he has “no credibility.”
Lodin has denied accusations he is biased in favor of Karzai, and the election commission’s spokesman has already said Lodin cannot be replaced by either side.

TITLE: Karadzic Boycotts Opening of Hague Trial
AUTHOR: By Mike Cordor
PUBLISHER: The Associated Press
TEXT: THE HAGUE, Netherlands — Radovan Karadzic boycotted the opening day of his war crimes trial Monday and sent no lawyer to defend himself, forcing judges to adjourn the hearing. Judges then vowed the trial would begin Tuesday with or without the former Bosnian Serb leader.
The suspension brought cries of anger and anguish from the small public gallery full of survivors of Bosnia’s 1992-1995 war, which left more than 100,000 people dead, most of them victims of Bosnian Serb attacks.
Many survivors had traveled by bus from Bosnia to see Karadzic finally face justice. A small group briefly refused to leave the courtroom after the adjournment and one woman threatened a hunger strike.
Admira Fazlic, who was imprisoned in Bosnian Serb-run camps during the conflict, shook her head as she left the courtroom.
“We are shocked,” she said. “Radovan Karadzic is making the world and justice ridiculous. He is joking with everybody.”
Karadzic, one of the central figures of the Balkan wars triggered by the breakup of Yugoslavia, faces two counts of genocide and nine other charges or war crimes and crimes against humanity. His trial — the most important war crimes case since the uncompleted trial of his mentor, Slobodan Milosevic — is seen as a chance for the court to redeem itself after allowing Milosevic to highjack his own war crimes trial.
The former Yugoslav president died of a heart attack in 2006 after dragging out his defense for more than four years.
Survivors revile Karadzic as the man whose political dream of creating an ethnically pure “Greater Serbia” triggered the Srebrenica massacre — Europe’s worst bloodbath since World War II — and the notorious campaign of sniping and shelling that turned Bosnia’s picturesque capital Sarajevo into a killing field.
His genocide charges stem from the 1995 murder of 8,000 Muslim men and boys in Srebrenica and from the Bosnian Serb campaign of ethnic cleansing against the country’s Muslim and Croat populations.
Karadzic, who evaded capture for 13 years, has repeatedly refused to enter pleas, but insists he is innocent. He faces a maximum life sentence if convicted.
He stayed away from Monday’s hearing, claiming he has not had enough time to prepare, despite being in custody and working on his defense since his arrest on a Belgrade bus in July 2008.
Judge O-Gon Kwon said in the absence of Karadzic, who was defending himself, or any lawyer representing him, he was suspending the case until Tuesday afternoon, when the prosecution would begin its opening statement.
Court spokeswoman Nerma Jelacic said the delay was to give Karadzic time to reconsider his boycott.
Judges “have figured out what they are going to do: They are going to start with or without him,” she said.
In a letter dated Friday and released after the proceedings began Monday, Karadzic again pleaded for more time.
“I would and never will boycott my trial, but if I am not prepared that would not be a trial at all,” he wrote. “There must be a fair solution.”
Prosecutor Hildegard Uertz-Retzlaff urged judges to appoint a defense attorney to represent Karadzic whether he likes it or not, saying he should not be able to deliberately hold up the trial.
The only sign of Karadzic in the courtroom was a pair of headphones lying on the desk where he has sat during pretrial proceedings.

TITLE: Israeli Police Fight With Palestinians Over Holy Site
AUTHOR: By Matti Friedman
PUBLISHER: The Associated Press
TEXT: JERUSALEM – Israeli police firing stun grenades faced off Sunday against masked Palestinian protesters hurling stones and plastic chairs outside the Holy Land’s most volatile shrine, where past violence has escalated into prolonged conflict.
A wall of Israeli riot police behind plexiglass shields marched toward young men who were covering their faces with T-shirts and scarves, sending many of them running for cover into the Al-Aqsa mosque, one of the Islamic structures in the compound known to Jews as the Temple Mount and to Muslims as the Noble Sanctuary.
They remained holed up in the mosque with police outside for several hours until dispersing before nightfall. Eighteen protesters were arrested, and no serious injuries were reported. But even mild troubles at the disputed compound in Jerusalem’s Old City can quickly ignite widespread unrest, and police remained on high alert.