SOURCE: The St. Petersburg Times
DATE: Issue #1539 (101), Monday, December 28, 2009
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TITLE: Shoppers To Spend $275 On Presents
AUTHOR: By Irina Filatova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — From the crowds in Okhotny Ryad in Moscow, you’d never know it was a workday. On a recent afternoon, people were strolling past shop windows decorated with garlands, artificial Christmas trees and fashionably dressed mannequins sporting Santa Claus caps.
As the New Year’s shopping season entered its frantic last week, most customers said they hadn’t changed their plans much since last year, while store mangers seemed buoyed by sales after a sleepy November.
Tatyana, a 55-year-old teacher who came to Moscow a few days ago from the Zabaikalsky region in Siberia, looked confused as she stood at the balustrade of the mall’s second level. She has no idea what to give her son.
“He said I shouldn’t get him anything, but I can’t leave him without a present. It’s always so hard to find something for a young man. At the very least I’ll buy him cologne,” she said.
Many of the people in Okhotny Ryad, one of the largest malls in downtown Moscow, did not want to give their names. Most said they were looking for traditional ?presents again this year — especially cosmetics and candy.
Irina Litvinenko, a corporate clients manager, complained that it was because there aren’t many affordable options in Russia.
“I’ll give traditional presents to my friends, such as perfume and cosmetics kits. Something original is too expensive, and these things are affordable and always necessary, especially for ladies,” said Litvinenko, 33.
The average Russian will buy up to a dozen New Year’s presents this year, spending a total of 8,400 rubles ($275), consulting company Deloitte said in a survey released earlier this month. Total spending for the country’s biggest holiday — including presents, food and entertainment — will average 16,700 rubles this season, the report said.
Last year, the total for holiday spending was 19,800 rubles, the report said, without giving a breakdown. It did say, however, that 49 percent of people wanted to be given money this year, up from 36 percent in 2008.
Store mangers said the amount of money that customers were ready to spend varied enormously, but most said it was shaping up to be a decent holiday season.
“People will pay anywhere from 100 rubles to 10,000 rubles and more at a time,” said a manger at souvenir shop Krasny Kub, or Red Cube, who did not want to be identified because she was not authorized to talk to the media.
She said people were buying everything, “from cups to disco balls,” and sales at the shop had increased twofold in December from the same month last year.
“Our sales have jumped by at least 50 percent this month compared with November,” said Anna Ledovskaya, a manager at L’Occitane, which sells French hair- and body-care products. “The customer flow increased starting from Dec. 16. People are buying presents for relatives. Parents are buying little things for their kids’ teachers and nannies,” she said.
Most customers at Okhotny Ryad, which caters to a middle-class clientele, said their spending on presents wouldn’t be more than 10,000 rubles and many complained that another year of high inflation was partly responsible for higher spending.
“I’m planning to spend up to 10,000 rubles on presents this year. That’ll be more than I spent last year because the prices have increased by 20 to 30 percent, I think,” said Dragan Markovich, 48, a Serb who has been living in Moscow for the last six years.
The government expects inflation to reach about 9 percent for the year, and the State Statistics Service said Wednesday that prices had risen 0.2 percent in the week ending Monday.
Analysts said there had been no changes in consumer behavior ahead of the holidays, because presents are one of the last things that people stop buying in a crisis.
“It’s beyond belief for people not to buy presents. Even in a crisis, they want to please their nearest,” said Anna Romanova, a research director at Synovate Russia, a market research company. “Most people buy customary things — cosmetics, shirts, ties. There’s a traditional boom in the perfumery and household appliance sectors now.”
Managers at some souvenir shops argued that those gifts were banal and boring, while people wanted to get something unconventional and interesting.
“The most popular item people buy at our store as a present is a telescopic fork, which is 62 centimeters long,” said Vladlen Azaryev, an administrator at novelty items shop Le Futur. “It may be very useful for a lady who wants to give her boyfriend something delicious to try from her plate if he’s sitting far away,” he said jokingly.
But only young shoppers seemed to be looking for something out of the ordinary.
Ksenia Sleptsova, a 19-year-old law student, said she wanted to find a meaningful gift for her father, an officer in the paratroops. “My dad collects souvenirs related to the armed forces, and I want to get him something special,” she said. “I’ve heard there’s a kitchenware kit at one of the shops. Even though it’s not customary to give kitchenware to men, I’m sure he’ll understand when he gets a herring dish in the form of an assault rifle from me.”

TITLE: Ukraine Facing ‘Serious Problems’ Paying for Gas
PUBLISHER: Agence France Presse
TEXT: MOSCOW — The head of Russian gas giant Gazprom said Friday that Ukraine had cut back on purchases of Russian gas since mid-December and appeared to be facing serious cash problems.
“Ukraine is experiencing serious problems with payment,” Alexei Miller said on the Vesti channel in comments carried by the Ria-Novosti news agency.
Ukraine has until January 11 to pay for gas, according to Gazprom, which has cut off supplies to the country over unpaid bills repeatedly in the past.
“We are hearing and seeing that Ukraine is experiencing very, very serious problems in paying for supplies of Russian gas for December,” Miller said.
“We estimate the situation with the payment for December supplies of the gas as very serious,” Miller added.
Gazprom spokesman Sergei Kupriyanov, speaking to AFP, said Ukraine would find it hard to cover its next gas bill after the International Monetary Fund turned down its request for a new loan tranche of 3.8 billion dollars.
Asked what will happen if Ukraine fails to meet the January 11 deadline, Kupriyanov said Gazprom would act “in accordance with the contract,” a phrase the company has used in the past when turning off supplies.
“At the current moment there are no objective reasons for a new crisis,” Kupriyanov added.
Ukraine’s energy company Naftogaz declined immediate comment.
In January, a pricing dispute between the two countries resulted in Russian gas being cut to much of Europe for two weeks as winter temperatures plunged.
Prime Minister Vladimir Putin has repeatedly said that Russia will cut gas supplies to Ukraine again if the struggling ex-Soviet nation fails to pay for its energy supplies. If Gazprom acts on its warning, the cuts would come amid intense campaigning for Ukraine’s presidential election on January 17.
Last month, Putin and his Ukrainian counterpart Yulia Tymoshenko vowed at a meeting in the Ukrainian resort town of Yalta that there would be no repeat of the gas crisis in 2010.
Ukraine has been hard hit by the global economic crisis which triggered a massive slump in its export-dependent heavy industrial sector. 
The IMF extended a 16.4-billion-dollar credit in November 2008 to help Ukraine weather the downturn, by far the country’s biggest source of foreign income in 2009.
So far the government has received a total of 10.6 billion dollars but the IMF is withholding the next tranche of 3.8 billion dollars due to concerns over political infighting in the run-up to the presidential election.

TITLE: Record Levels Of Snowfall Hit City
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: More than 3,000 people have been recruited by City Hall to clear the snow as Governor Valentina Matviyenko said that St. Petersburg stands on the verge of collapse.
Around 1,000 civilians and more than 2,000 soldiers have been out on the streets on a round-the-clock basis saving the city from what some have described as a snow siege. According to the State Meteorological Center, over the past weekend St. Petersburg experienced its heaviest snowfall in 130 years. In some parts of the city there were over 35 centimeters of snowfall. 
In most parts of the city parking was severely restricted, while traffic jams almost brought the city to a standstill. Average speeds on city roads since Friday have been under 30 kilometers per hour according to the traffic police. Many dual-carriageway streets have in effect been turned into single-carriageway thoroughfares as a result of the massive piles of snow on each side.
Traffic police have been penalizing drivers who have resorted to parking their cars illegally as a result of the disappearance of parking spaces under mounds of snow. 
“I spent two hours this morning with my shovel clearing a track for my car so that I could get out of my building’s courtyard,” said St. Petersburg driver Mikhail Novikov, a musician.
Although owners of restaurants and shops are obliged to clear the snow from the entranceways to their parking facilities, many have failed to do so. Even the larger supermarkets have struggled to clear the slip roads leading to their car parks, let alone the parking spaces themselves. 
Matviyenko officially announced on Saturday that restaurant and shop owners who fail to clear the snow in front of their establishments will be fined. 
City Hall’s City and Road Maintenance Committee said that it had been forced to tow away vehicles preventing the cleaning of streets, particularly in the center of the city. 
So far, the 2,000 army officers and recruits have been doing most of the work.
“I have asked the Emergencies Situations Ministry to send their staff to help rescue the city from the snow,” Matviyenko told reporters on Saturday. “I have also asked the chief commander of the Leningrad Military District to send recruits.”
Yury Klyonov, head of the information service of the Leningrad Military District, said the military authorities had created an emergency group to coordinate the snow clearing works. “Nikolai Bogdanovsky, the district’s commander-in-chief, is personally monitoring the situation,” Klyonov said.
The governor said the city is utilizing all available resources — both technical and human — to cope with the snowfall.
There have been some delays of several hours for arrivals of both domestic and international flights because of the harsh weather conditions, the Pulkovo airport press-office said. At least 15 flights arrived behind schedule on Saturday. The departures schedule has not been affected. 
All train stations have reported problems. Trains arriving in the city are for the most part behind schedule. Some trains departing from the Ladozhsky Train Station have also been delayed or rerouted to depart from the Moskovsky Station.

TITLE: Transport Fares To Go Up on New Year’s Day
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Public transport fares in St. Petersburg will be increased from Jan. 1, following the third round of price hikes in the last two years. Metro fares will be raised from 20 to 22 rubles ($0.68) and over-ground transport (buses, trolleybuses and trams) from 18 to 19 rubles ($0.64) per journey.
St. Petersburg Governor Valentina Matviyenko, who signed the City Hall decree on the prices rises last month, described the increases as “small.”
“I don’t think it’s a high price for a comfortable metro system with new stations and new capabilities,” she said at the official opening of Zvenigorodskaya Metro station on Saturday, Baltinfo reported.
“The metro was, is and will be subsidized, but we won’t be able to cope without raising fares.” 
The most popular form of public transport in St. Petersburg, serving 829.8 million passengers per year in 2007, the metro has been affected by the economic recession over the past year.
The number of passengers has fallen by 12 percent since Oct. 2008, Izvestiya quoted St. Petersburg Metro Chief Vladimir Garyugin as saying last week.
The metro fare, which was 14 rubles in Jan. 2008, has been raised twice since then. Privately owned “marshrutka” or “route” minibuses followed by raising their fares as well. The most recent fare rise was met with public protests.
Maxim Reznik, the local leader of the oppositional democratic party Yabloko, argued that the rise is only appears to be small, though the small sums add up to “a huge amount of money.” According to him, the main problem is the lack of transparency.
“We think that such things can’t be done without auditing and analyzing what is incorporated in the price,” Reznik said by phone on Sunday.
“The authorities do it unilaterally. benefiting from the lack of an independent parliament in the city, which would analyze the price and find out what the actual value of the ride is and how much goes to bureaucracy or anything else.”

TITLE: Reactor Shutdown Opens Door for Russian Plans
AUTHOR: By Gary Peach
PUBLISHER: The Associated Press
TEXT: VISAGINAS, Lithuania — To the European Union, Lithuania’s Soviet-built nuclear power plant is a gigantic safety hazard that needs to finally shut down this New Year’s Eve.
To Lithuanians, however, the twin concrete reactor blocks of the Ignalina plant, rising amid lakes and oak forests near the country’s eastern border, have been a symbol of energy independence since the small Baltic country regained its freedom after the 1991 Soviet collapse.
That is why the EU-ordered shutdown of the plant’s last working reactor — considered too similar to the one that exploded at Chernobyl in 1986 — is making Lithuanians uneasy. They now face the prospect of importing energy from Russia, considered an unreliable energy partner by many after its state-owned gas company shut off supplies through Ukraine last year and in 2006 over price disputes.
Lithuania will wake up Jan. 1 with 40 percent less generating capacity, a gap that has set off a race to build new, safer nuclear plants to supply electricity to the Baltics and Eastern Europe, a race Moscow is trying mightily to win.
On top of that, Lithuanians will pay more for electricity at a time when their economy is in a deep recession.
“We’ll have to pay two or three times more for energy, and our competitiveness in European markets will be damaged,” said Bronislovas Lubys, CEO of the Achema Group, a chemical consortium. The country’s central bank says the loss of the plant will cost the economy an additional 1 percent a year.
In the eastern town of Visaginas, where the Ignalia plant is located, the mood is grim. Some 80 percent of of the town’s residents are Russian speakers who moved there in the 1980s to build the hulking twin concrete reactor blocks.
“Lithuania’s economy and energy industry are not prepared to live without a nuclear power plant,” plant chief Viktor Shevaldin told The Associated Press. “Prices for consumers will increase starting in 2010, and this will undoubtedly affect the population’s standard of living, industry and the economy as a whole.”
The shutdown comes even as the EU seeks more energy independence from Russia, though it refused Lithuanian efforts to revisit the Ignalina shutdown.
The EU wanted the 1980s plant shut down as a condition of EU membership because the two RBMK-1500 model reactors are too similar to the RBMK-1000 version that exploded at Chernobyl on April 26, 1986, casting a radioactive cloud over Europe. Ignalina’s first reactor was shut down in 2004, while the second will be disconnected from the power grid an hour before midnight Dec. 31.
Come Jan. 1, the country will cover the shortfall by buying kilowatts on the open market — from Estonia, Belarus, Ukraine and Russia. By 2013 it hopes to build a new natural-gas power plant, but that would fall short of meeting its own energy needs.
Russia is ready to fill the gap, and is gearing up to build a two-reactor nuclear plant just 10 miles from the Lithuanian border in Russia’s exclave of Kaliningrad, wedged between Poland and Lithuania.
The planned $5 billion Baltic Nuclear Power Plant, to be built near town of Sovetsk, would be overkill for Kaliningrad, a region of 1 million people whose future energy are already taken care of by a planned a planned gas-fired power plant to be built by 2012.
“We’ll export all the output from the nuclear power plant ... we’ve never concealed that fact,” Kaliningrad’s regional governor, Georgy Boos, told The Associated Press in his office in the exclave. “By 2016, when we launch the first reactor, there will be a huge energy shortage” throughout the Baltic Sea region, he said.
To assuage European fears about reliance on Russian kilowatts, Russia is offering foreign investors a minority stake in the new plant.
The problem is, Lithuania is essentially courting the same pool of investors for its own planned new plant in Visaginas. If Russian plant is already established, Lithuania will be hard pressed for a market for its own future plant.
Because Lithuania still functions on the old Soviet power grid, it is isolated from Europe’s — though the EU is working over the long term on building new connections to change that.
Lithuania is pinning its hopes on two possible alternatives: a euro600 million underwater power cable with Sweden, and a euro1.1 billion grid connection beween Alytas, Lithuania and Elk in northern Poland.
But the link with Sweden will require eight years, and the one with Poland a decade, according to a new EU study. This is why Ignalina plant boss Shevaldin thinks Lithuania’s chances of finding investors “aren’t very good.”
“Russia has the advantage since it already knows what kind of reactor it will build. In this sense they’ll build their station quicker than Lithuania,” Shevaldin, a native Russian who moved to Lithuania in the 1980s.
Belarus is also eager to join the competition and have Russia’s Rosatom build its first nuclear plant, which would go up not far across the border from the Lithuanian capital of Vilnius. Russia has expressed willingness not only to build the plant but also to help with finance.
Still, the Russian plans face obstacles. There are no grid connections between Poland and Kaliningrad, and those that exist between Kaliningrad and Lithuania will need to be upgraded. Given their distrust of Russia, the Poles and Lithuanians might not cooperate.
Public opinion in Kaliningrad is against the project, says Alexandra Koroleyva, who heads the region’s branch of Eco-Defense, an environmental group opposed to nuclear energy. “There’s a lot of people who moved here from Chernobyl, so you’ll rarely meet someone on the street who’ll say they want an atomic power plant,” said Alexandra Koroleva.

TITLE: Kandinsky Very Bland After 2008 ‘Fascist’ Scandal
AUTHOR: By Max Seddon
PUBLISHER: The St. Petersburg Times
TEXT: The Kandinsky Prize, Russia’s most financially generous contemporary art award, marked its third year with its safest choice and blandest ceremony yet. Vadim Zakharov, self-anointed archivist of the Moscow conceptualist school, beat out ersatz land artist Nikolai Polissky and fellow conceptualist Pavel Pepperstein for the 40,000 euro ($58,300) grand prize with his “St. Sebastian Furniture Set and Porridge,” an installation mixing iconography, the Russian avant-garde and — yes — porridge oats in a skewed look at the history of Russian art.
Zakharov was also nominated for the media art prize, which went to the long-standing “creative electronics production company, media art gallery and artist collective” Electroboutique. Tuva native Yevgeny Antufiyev was named young artist of the year for his confessional-style mixed media project, “Defensive Objects.” They receive 10,000 and 7,000 euros, respectively.
Judging by the dream that Antufiyev claimed to have had the night before, his victory must have seemed anticlimactic. “I saw the ceremony taking place back home in Tuva,” he said while accepting the award, which was “awarded to me by Vladimir Vladimirovich Putin himself!” And indeed, Zakharov’s unsurprising victory rounded off a thoroughly unspectacular ceremony — as notable for its absence of intrigue as the previous year’s was for a surfeit.
Last year’s three-hour show at Winzavod married the nouveau-riche extroversion that has recently become a staple of the Russian scene with the petty, quasi-political cliquism that has plagued it for decades. This worked to nobody’s advantage except for surprise winner Alexei Belyayev-Guintovt, whose glossy nationalism goes some way toward combining the two.
Evidently wary of the accusations of “fascism” and scandalous outbursts that marred the Kandinsky Prize last year, organizers elected to put their foot firmly in the elitist camp. An expert council was appointed to supervise the jury in the nomination process. The ceremony left the industrial environs of Winzavod for the decidedly more upmarket Barvikha Luxury Village concert hall. Entertainment sacrificed edgy big names, like last year’s performance artists the Gao Brothers and Marina Abramovich, for sloppy video-art montages and an ethno-jazz duo. Previous hosts the Blue Noses, the self-described “most banned artists in Russia,” were replaced by the far-less controversial television presenter Leonid Parfenov.
Robert Storr, dean of the Yale School of Art and director of the 2007 Venice Biennale, opened proceedings with a 10-minute Russian-art-for-beginners lecture evidently aimed at the likes of It Girl Ksenia Sobchak in the audience. So too was the on-screen Russian translation, omitting references to Marx and anti-capitalism in the original.
The speech on behalf of the jury from Guggenheim Museum curator Valerie Higgins that followed was as diplomatic and banal as the occasion befitted, enlivened only by a spectacularly inept Russian translator, who often contradicted what Higgins had just said (and most of the audience had understood). On a few occasions he surrendered, and whole parts of her speech went untranslated. Shalva Breus, director of the ArtChronika foundation that organizes the prize and publishes the magazine of the same name, was later overheard to joke outside the hall that he was in fact a performance artist hired to spice up the proceedings.
Bar the chanting demonstrators outside and screams of “Disgrace!” from the wings that the 2008 ceremony is remembered for, there was little at all to stem the growing tide of guests heading for the exit, whether to grumble about the ceremony over a cigarette or to simply go home. Even Zakharov himself seemed somewhat underwhelmed for a man who had just won 40,000 euros.
His acceptance speech proved the only sign of life all evening. Zakharov claimed that the prize should have gone to conceptualist ideologue Andrei Monastyrsky, 60 this year. “Three Moscow Biennales have gone by, and Monastyrsky wasn’t invited to any of them. Iosif [Bakshtein, Biennale commissioner], my dear, doesn’t that seem odd to you?” Zakharov went on to berate the entire Russian art community for neglecting its heritage in Soviet-era nonconformism and its accused predilection for money. “I speak from the position of an artist with power. Recently it’s as if people have forgotten what that is. I’ll have you know, it still exists.”

TITLE: In the Spotlight: Russia’s It-Girl Sobchak
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: Last week, the Afisha listings magazine relaxed its hipster sensibilities and put It Girl Ksenia Sobchak on the cover of what it called its “money issue.”
A prolific author, columnist and television host, Sobchak has made a career out of playing up to her image as a spoiled little rich girl. She talked to Afisha for an issue that was about the cost of entertainment in Russia, from computer games to Madonna concerts and Zenit footballers.
Rather meanly, Afisha printed her earnings on the cover: $30,214 for hosting a corporate party, $100,000 per book (she has published three so far: two style guides and a manual on how to marry a millionaire), plus $400,000 per year for her television work. That’s not the kind of money to impress your average aluminum or fertilizer magnate, but it’s not bad for a 28-year-old.
It’s unclear how rich she really is, as the daughter of Anatoly Sobchak, a popular St. Petersburg politician and one-time mentor of Vladimir Putin who died in 2000, and Federation Council senator Lyudmila Narusova.
Her television work includes her own reality show, “The Blonde in Chocolate,” which follows her hectic schedule of ghastly-looking corporate events and photo shoots, punctuated by her eye-wateringly rude comments to shop assistants and cringing stylists.
This week, the show filmed her working as a compere at a wedding in Kiev of a couple whom she had never even met before. “And now the couple will have their first dance as man and wife,” she shouted enthusiastically, wearing a pink tasseled dress. She later ventured into a local boutique, which she loudly described as “smelly” and a “Chinese market.”
Until recently, she hosted the trashy “win a house by falling in love” reality show “Dom-2,” which is generally considered the nadir of Russian television by critics, although it has plenty of secret fans, even among Afisha readers.
Sobchak posed in bling gold jewelry and sparkly high heels for Afisha and talked frankly about why she likes men to spend money on her.
She gets a lot of flak for swearing a blue streak on her show — even though it’s beeped out — and for flashing plenty of bare flesh. But she didn’t come across as much of a rebel in the interview.
More likely, she simply lives in a world where being rude to the little people and swearing like a sailor is the norm — rather like certain members of the British upper classes.
She explained her taste for the kind of shiny, ludicrously expensive watch flashed by oligarchs and city officials, saying she is a sucker for whatever the other rich people want, even though she uses her cell phone to tell the time.
“I like to play a game, study the rules and win,” she said. “If I have a watch, it has to be the best one that exists.”
She takes a similar approach to romance. Men can try to impress her with tear-stained love poetry, she said, but “what I want to know is, will he invite me to Graff [jewelry store], or not? That explains everything.”
What’s important is not the jewelry itself, but finding out whether the man is prepared to make a grand gesture with his hard-earned cash, she said.
“The best thing is when you push someone to do it,” she said. “Even an oligarch might tell you: “Listen, I psychologically can’t buy something that costs more than a certain amount.”
She herself has some way to go on this path to spiritual freedom, she said. “I’m not sure that I can overcome myself and buy a bottle of wine for $30,000. Especially since I don’t like wine.”

TITLE: Wanted: A Festive Tree Or Cash Bribe for a Traffic Cop
AUTHOR: By Kevin O’Flynn
PUBLISHER: The St. Petersburg Times
TEXT: The man pulled open the car door and said “Give me 3,000 rubles [$100], or I’ll give them the yolka.”
It’s never nice to be confronted by a man fearful of losing his driver’s license, but there was no way that I was giving up that yolka, a wrapped up Christmas tree picked from the barren wasteland of the north of Russia, i.e. the Khimki IKEA.
“Do they know it’s Christmas?”
But these weren’t the kind of people who donated money to the starving in Africa.
Right was technically on their side. There was the sad matter of the no-entry signs recently put up and stalked by traffic cops. The driver had gone through two new ones and was on for a hat trick before being stopped by a man who could see that his fairy lights were not going to waste this year.
The situation could have been very different if it wasn’t for Prince Albert. He and his consort sort helped spread the Christmas tree throughout Europe in the 19th century, and Russia, which until then had been moaning its luck that it was covered in bad luck trees — the fir tree had been seen for centuries as an unlucky omen — fell into line.
There was a brief blip when Lenin banned Christmas trees because he had never got any presents — Santa knows a bad kid when he sees one.
There had been the choice of buying from Yekaterina, who is advertising Christmas trees for a very reasonable 300 rubles, about a sixth of the normal price in Moscow unless you are handy with a saw and a getaway car.
They come all the way from Bryansk and can be delivered anywhere in Moscow, she said passing on a Bryansk mobile number and explaining the code: “Mikhail will answer, but ask for Sergei.”
Then she said the minimum purchase is 100 trees, plenty enough to set up your own street selling scam but a bit cramped in most Moscow apartments. A page down on
Izrukvruki.ru, Sergei sells his Udmurtian trees for 250 rubles, with a minimum purchase order of only 50.
To the north then. Having almost completed their mission to ensure that the whole country has the same furniture as in the old days, Ironia Sudby 2.0, the Swedish company now has an offer where you buy a tree and get just over half your money back to spend in the store if you bring back the remains of the tree, an environmentally friendly move that obviously makes up for the carbon debt built up importing Danish trees to Russia.
There was the thought for a brief second to let the cops have it just to see them place it in the back of the patrol car, but the Christmas spirit won out and the driver bargained them down to 1,000 rubles.

TITLE: Life Is Not Fair
AUTHOR: By Anders Aaslund
TEXT: One of the great heroes of our time, Yegor Gaidar, has passed away. In November 1991, after being appointed by President Boris Yeltsin as deputy prime minister, later acting prime minister and head of his reform team, Gaidar was responsible for transforming Soviet Russia into a market economy. He accomplished this Herculean task, and he did it peacefully. He belongs to history as one of Russia’s greatest reformers.
In 1991, Russia was bankrupt. Yeltsin and Gaidar appealed to the West for financial assistance, but the West offered no support (except for humanitarian aid) for the country’s market reform and democracy. This proved to be a moment of great folly in the West’s policy that later alienated Russia. Gaidar and his team of reformers had to fight completely on their own.
Gaidar led the reform charge with intelligence and determination. His three main policies were radical price liberalization, fiscal stabilization and privatization. The price liberalization in January 1992 was preceded by tremendous social tension. People thought that the sky was the limit for deregulated prices because of the huge monetary overhang. The authorities feared a popular explosion. But no public protest occurred, although prices rose instantly by 250 percent. Gradually, shortages diminished, and goods that had not been seen for years reappeared in shops. A market economy slowly but surely was taking shape. In addition, Gaidar daringly cut military procurement by 85 percent, swiftly reducing the military-industrial complex that until then had been seen as a sacred cow in the federal budget.
Gaidar was firm in his principles. He justified his radical early price deregulation: “There were no reserves to ease the hardships that would be caused by setting the economic mechanism in motion. It was impossible to put off liberalization of the economy until low structural reforms were enacted. If we did not act decisively, in two or three months we would have an economic and political catastrophe, total collapse and civil war,” he said in December 1991.
His problem, however, was that the reformers never gained control over the Central Bank, which pursued an extremely loose monetary policy, blocking all financial stabilization. Prices rose by 2,500 percent in 1992. Strangely, Gaidar was accused of strict monetarism, when the Central Bank’s opposition to monetary constraint was the problem.
After less than half a year, a motley crew of communists and nationalists mobilized in resistance. They blocked Gaidar’s reforms, and in early December 1992 they rallied in the Congress of People’s Deputies to have him ousted as acting prime minister. As a result, the reforms that Gaidar had started were put on hold. Russia completed its fiscal stabilization only after the financial crash of 1998, which was caused by loose fiscal policy long after Gaidar’s departure. When Russia’s budget deficit finally was eliminated, an average growth of 7 percent a year followed for almost a decade — from 1999 until 2008.
Life is not fair. Many Russians have blamed Gaidar’s “shock therapy” for economic misery, seemingly unaware that the Soviet Union and its economy had collapsed before he initiated reforms. The same people praise Vladimir Putin for the great economic growth since 1999, forgetting that growth started long before his first presidential term. Cause precedes effect. After major transformations, time — in Russia’s case several years — is needed before the effect is seen.
Gaidar rose to prominence in 1986 as the best and most erudite economist in the country. He set up his own Institute of Economic Policy in Moscow, where he had gathered the best and the brightest of Russia’s young economists. Like Gaidar, they were the children of the pre-eminent Soviet intelligentsia. When I visited his institute in June 1991, it was evident that Gaidar had gathered the best Russian economic team possible to take over the government.
In September 1991, Yeltsin understood that Gaidar was the man that the country needed to lead its economic reforms and appointed many members of Gaidar’s team to his government. Yeltsin later wrote: “It was high time to bring in an economist with his own original concept, possibly with his own team of people. Determined action was long overdue in the economy.”
Gaidar was actually the only Russian economist able to conceptualize a viable economic policy in this total crisis. He was greatly inspired by his good friend Leszek Balcerowicz’s radical market reforms in Poland in 1990. Soviet economics were ruefully backward, and even during the perestroika years it still clung to anachronistic elements of Marxism-Leninism.
No other economist came up with a comprehensive program. Neither ordinary Russians nor the elite had a clue what a market economy was. They preferred cherry-picking and did not understand the need for a consistent system. Without Gaidar, Russia could have easily ended up as Belarus with a Soviet-like economy (minus Soviet ideology).
At the time, Jeffrey Sachs, David Lipton and I had the privilege of assisting Gaidar as his economic advisers. We went to Moscow in September 1991 and met with different groups of economists who were competing to join Yeltsin’s government. Gaidar’s team was head and shoulders above the others. He welcomed all the help he could get. It was a chaotic time when everyone was working around the clock, but Gaidar and his friends did what it took in a desperate situation.
In 1993, Gaidar briefly returned to the government. After forming the liberal political party Democratic Choice of Russia, he was elected to the State Duma for two years. He was elected to the Duma again from 1999 to 2003 as a member of the Union of Right Forces.
In the end, however, he was more of an intellectual and brilliant economist than a politician. His passion was to sit at his dacha and write books. In one of Gaidar’s best books, “Collapse of an Empire,” he analyzed how the Soviet Union had fallen apart. His greatest work, however, is “Dolgoye Vremya,” a book about long-term economic growth that will soon be published in English. But he remained a prominent elder statesman as long as Yeltsin stayed in power. He was always a much-demanded speaker at prominent international conferences.
In Putin’s increasingly authoritarian and corrupt Russia, however, Gaidar felt deeply uncomfortable and frustrated. Even many years after he left the government, he was still attacked as a villain by the official media, leading Communists and nationalists. Labeled as a liberal and a democrat from the “ruinous 1990s,” Gaidar was no longer allowed to appear on government-controlled television to defend himself. He was essentially beaten with his hands bound behind his back.
Yet as a prominent intellectual and member of the establishment, open opposition to the government was alien to him. Gaidar considered crudeness beneath contempt. Always kind, he had many loyal friends and a large family. During Putin’s two presidential terms, the economic establishment paid close attention to Gaidar’s advice, but few of his reforms were ever instituted.
After Gaider left public service in 2003, he quietly wasted away. As a true Russian patriot, he had no thoughts of emigration, but he suffered every day. I last saw him in November. His pessimism about Russia’s future was profound. Although only 53 years old, Gaidar was a marked man.

Anders Aaslund is a senior fellow at the Peterson Institute for International Economics and author of “Russia’s Capitalist Revolution.”

TITLE: A Nation of Swindlers
AUTHOR: By Alexei Bayer
TEXT: After great tragedies, when people are most moved by compassion, crooks often set up fake charities claiming to collect money for the victims and their families. It happened after Sept. 11 and after the Beslan hostage tragedy. The deadly fire in Perm in early December, which killed 150 people, has similarly been followed by reports about fraudulent collections of funds on the Internet.
It may be a petty crime, but there is something particularly base about it, as though the moral degradation involved puts its perpetrators beyond the human race. But in the case of the Perm fire, it has been the authorities charged with preventing such tragedies — namely fire safety inspectors — who are making the biggest and quickest bucks off the pain and suffering of others.
Over the past decade, Russian officials have been rarely dismissed for incompetence or neglect in some of the country’s worst tragedies. Even in the few cases when punishment was meted out, the offending bureaucrat was likely to pop up in some other position.
President Dmitry Medvedev believes that things can’t go on like this. In Perm, heads rolled even at a relatively high level, and the inspector who had signed permits for the unfortunate Khromaya Loshad (Lame Horse) nightclub may be charged with a criminal offense.
This has jolted other municipal officials and fire inspectors — especially ahead of an intense two-week partying period starting with New Year’s Eve.
Activity has been particularly frantic in Moscow, where a slew of inspections have been announced and many clubs are expected to be shut down.
Russia’s culture for basic fire safety is woefully primitive. Many public spaces in Russia lack adequate safety provisions, such as marked fire exits, smoke alarms and sprinklers. Windows are often barred and doors locked in order to make crowd control easier. Nevertheless, all have signed, stamped and updated fire safety certificates on file. How does this happen? The old-fashioned Russian way, of course: bribing the inspectors.
Now, new inspections are uncovering a long list of violations, not because standards have been tightened after Perm, but because old rules are finally being applied. Most club managers sincerely want to implement safety measures. Nobody wants to see people die or follow Khromaya Loshad’s proprietors to jail. The paradox is that fire safety rules are apparently nowhere to be found. That’s because the bureaucracy always makes the institute of taking bribes far too easy and unpunishable. When official rules are unknown, fire inspectors can apply arbitrary ones — and collect bribes. Now, however, they are themselves in a bind. They can’t suddenly shut down a place for gross violations that they had overlooked in the past.
As a result, both sides fall back on the old practice of citing clubs for minor violations and taking bribes — now on a far greater scale — for ignoring major ones.
Russia’s fire inspectors are no better than those despicable swindlers on the Internet. But they are only one link in a long line of officials — big and small — who extort Russian businesses for bribes and who can’t carry out their direct functions.
The Perm tragedy once again reminds us that the government is incapable of performing its basic duties of protecting its citizens. This is particularly worrisome as the world enters a second full year of economic uncertainty, when the people rely on the federal government more than ever to mitigate the crisis.

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

TITLE: Scientists Target a Colleague With Great Contacts
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Leading Russian chemist Vladimir Novotortsev calls him a modern Thomas Edison. The now-defunct Nuclear Power Ministry nominated him for a Nobel Prize. And former U.S. President George W. Bush sought his advice on purifying water.
Furthermore, he and State Duma Speaker Boris Gryzlov co-own a patent for a filter to clean radioactive water, and he holds a separate patent for a water filter that could reap millions of dollars in sales next year after winning a United Russia contest.
The little-known scientist, Viktor Petrik, touts these achievements on his web site, together with a resume that says he holds a doctorate in applied sciences, works as a professor, and belongs to three scientific academies.
Yet you will be hard-pressed to find a single scientific paper authored by Petrik — or any scientific paper that cites his work. A search on the Scientific Citation Index, an online tool that tracks scientific publications worldwide, comes up with zero results.
The lack of a scientific paper trail — as well as a series of patents for things like the secret behind Stradivarius violins and instructions on how to construct an Egyptian pyramid — has prompted a group of scientists and journalists to denounce the wispy white-haired Petrik, 63, as a “charlatan” and demand a thorough investigation of his work by the scientific community.
“When scientists publicly endorse a charlatan, they are not only becoming a part of his coterie but are also destroying the last weak trust in science itself,” the scientists and journalists said in a Dec. 14 letter addressed to members of the Russian Academy of Sciences.
But Petrik, who served a prison term for fraud and extortion in the 1980s, is unfazed by the outcry and said he would welcome a peer review of his work.
“I’m not really worried because I am an inventor, not a theorist,” he told The Moscow Times in a telephone interview from his home outside St. Petersburg.
Petrik might have good reason to be unconcerned. What sets him apart from self-styled scientists accused of quackery is the fact that he has friends in high places, including Gryzlov and Rosatom chief Sergei Kiriyenko, and his companies are involved in high-tech government projects worth hundreds of millions of dollars.
Petrik’s inventions, some of which are listed on his web site Goldformula.ru, look ripe for scrutiny. In addition to the Stradivarius violins and pyramids, the list includes a murky technology developed by Petrik to obtain extra-pure samples of the osmium-187 isotope used to build lasers and the well-timed patent for a technology to create nanotubes for the superfast computers of the future.
“There is a need to stop Russian science from falling into disgrace,” said Alexander Kostinsky, a science journalist and one of the authors of the Dec. 14 letter. “There are always a lot of charlatans, but not many of them are supported by serious academicians and the ruling authorities.”
Vladimir Zakharov, head of the department of mathematical physics at the Academy of Sciences’ Lebedev Institute of Physics and a math professor at the University of Arizona, said no serious scientist would endorse the claims on Petrik’s web site.
“If you visit his site, you will understand that you are facing a fake scientist who is publishing complete rubbish,” said Zakharov, who also signed the letter.
Zakharov told a meeting of the Academy of Sciences last week that a proposal by Petrik to harness electricity from atmospheric heat was nonsense.
Eduard Kruglyakov, who chairs the academy’s commission against bogus science, said that while some of Petrik’s achievements might have value, they were first invented by other scientists. As an example, he mentioned a graphite absorbent used to clean up oil spills that Petrik patented in 2002. A nearly identical absorbent was patented by a group of scientists in 1995, he said.
Petrik called Kruglyakov’s accusations a “lie” and said nobody had challenged his patents. “If someone believes that I am copying other people’s inventions, he should write a letter to patent officials. But nobody has done anything of the sort,” he said.
Petrik has found support among some respected scientists. “He is a man from all walks of life who can concentrate on various fields,” Aziz Muzafarov, a chemist and a member of the Academy of Sciences, said in a video praising Petrik’s achievements that was posted on Petrik’s web site. “Viktor Ivanovich [Petrik] is like a special forces officer.”

Fame in Smuggling Case
A psychologist by training, Petrik first gained widespread attention in 1993 when the authorities detained a man for trying to smuggle several grams of osmium, an expensive metal of the platinum family, across the Russian-Finnish border. The osmium was subsequently traced to Lev Savenkov, a deputy to then-St. Petersburg Mayor Anatoly Sobchak. Savenkov said he had gotten the precious metal from Petrik.
Savenkov was sentenced to five years in prison for smuggling in 1997, while Petrik walked free. News reports at the time said Petrik had been sentenced to 11 years in prison in 1984 for several crimes, including fraud, extortion and attempted robbery.
Petrik mentions his imprisonment briefly on his web site, without going into details. A statement on the web site says Petrik used his time behind bars to construct a robot “able to replace 20 workers.”
After the trial, Petrik kept a low profile until 2007, when his company Golden Formula won a competition arranged by United Russia for a water filter system.
“We have the world’s best technologies, and we are hiding them underground,” Gryzlov, a United Russia leader, said at the time. He said he was ready to make a wager with anybody that Petrik’s filters “might win any competition.”
Curiously, another Petrik company, Zashitniye Technologies, won second place in the United Russia contest.
Petrik offered a vague explanation for why he had entered two of his companies in the contest, saying, “I only used it [the second company] to avoid paperwork and because this company controls the necessary equipment.”
Perhaps Petrik’s biggest claim to fame is a second water filter, which he and Gryzlov, an engineer by training, filed a patent for in 2007 and say turns radioactive water into pure drinking water.
In November 2007, Petrik demonstrated the filter to Kiriyenko and Gryzlov at the St. Petersburg-based Khlopin Radium Institute in a presentation shown on NTV television.
“A technology like this uses nanomaterials that do not exist in the world. This is an original technology,” the institute’s director, Valery Romanovsky, told NTV during the demonstration.
Igor Maslennikov, who has since replaced Romanovsky at the institute in an appointment overseen by Kiriyenko, declined a request by The Moscow Times to provide information about Petrik’s research and his involvement with the institute.
Another senior scientist with the institute, however, expressed discomfort with Petrik’s work. “I don’t want this name associated with our institute,” he said, asking not be identified because he was not authorized to speak with the media.
Several scientists conceded that the filter removes radiation from water, but they said it does not work as well as Petrik claims.

Petrik’s Bush Link
Petrik said the filter caught George W. Bush’s attention in 2005, and the U.S. president asked him for help purifying water containing the chemical MTBE, which has been added to gasoline since the late 1970s and has contaminated drinking water in many U.S. states.
He said on his web site that he patented a water filter to remove MTBE in the United States in 2006.
Jennifer Rankin Byrne, public affairs officer at the U.S. Patent and Trademark Office, confirmed that Petrik’s patent was registered Oct. 31, 2006.
Bush officials were not immediately available for comment for this article Tuesday.
Petrik said in the interview that he enjoys “a friendly relationship with all of the Bush family” and pointed to a photograph on his web site of him posing with former President George H.W. Bush in 2006. The circumstances of their meeting were not immediately clear.
Petrik’s web site also features photos of him with Defense Minister Anatoly Serdyukov, Health Minister Tatyana Golikova and Rusnano chief Anatoly Chubais.
Petrik sells his other filter — the one that won the United Russia contest — in the United States through a Florida-based company called BDnP Technologies LLC. Petrik’s son Timofei Petrik is a vice president of BDnP.

Cleaning Russia’s Water
Back at home, the filter has become part of a United Russia program to clean water around the country. Filters produced by Golden Formula have been installed in most public schools in the city of Novgorod under the supervision of Federation Council Deputy Speaker Svetlana Orlova, who is also a senior United Russia official. According to the regional government, about 3 million rubles ($100,000) was spent to install the filters in schools around the city this year.
Golden Formula saw a turnover of $1 million in 2008, according to Interfax’s Spark database on Russian businesses.
A school official said the filters were installed in her school less than a year ago and seemed to be working well. “They were installed in both the nurse’s office and in the school canteen. There have been no complaints, and everyone is drinking it,” said Lyudmila Stepanova, an educator at a Novgorod school.
A more lucrative contract may be in the pipeline for Petrik as United Russia’s clean water project expands into a federal program with a budget of up to 10 billion rubles ($330 million) a year, Orlova’s aide Alexander Katkov told The Moscow Times.
Katkov said the program is currently being examined by the Economic Development Ministry and might win the Duma’s approval in early 2010.
He said a decision on whether to include Petrik’s companies into the federal program might depend on a review of his other inventions by the scientific community.
Petrik said he was ready to bid for government contacts if tenders were announced for water filters.
He added that he was already busy with another project that has received the blessing of Rusnano, the state technology corporation headed by Anatoly Chubais. He plans to build a plant in St. Petersburg to separate rhenium, one of the rarest elements in the Earth’s crust, from scrap metal. Petrik said he had an investor lined up to finance it.
“This will be the first plant like it in the world,” Petrik said.
Rusnano has approved a $6 million rhenium project, but company spokesman Mikhail Popov said Petrik was not involved in it. “Viktor Petrik is not listed as a co-investor or the head of any companies involved in the project, nor is he among the intellectual property holders or involved in any other capacity,” he said in e-mailed comments.
But according to the Spark database, Petrik’s Zashitniye Technologies owns the Adron company, which controls 85 percent of the project with an obscure company called the Center of Nuclear Therapy, which has the same mailing address as Adron. The other 15 percent belongs to the Khlopin Radium Institute, where Petrik showed off his water filter in 2007.