SOURCE: The St. Petersburg Times
DATE: Issue #1546 (7), Tuesday, February 9, 2010
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TITLE: Provider Blocks Sites Of Political Activists
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Opposition activists say one of the leading Russian Internet providers is practicing “political censorship” by denying access to oppositional web sites for its clients.
Clients of the Internet provider Beeline, the trademark of the Moscow-based VimpelCom group of companies, have been denied access to the web sites of oppositional politician and author Eduard Limonov and his banned National-Bolshevik Party (NBP) since last week.
VimpelCom said that the web sites had been blocked by a court order, but the sites in question are not listed as banned in the Ministry of Justice’s Federal Register of Extremist Materials.
Speaking on Monday, Limonov’s spokesman Alexander Averin said that Beeline clients have been experiencing problems opening the web sites www.limonov2012.ru and www.nazbol.ru since Feb. 2.
“By Friday it had become clear that it was a purposeful and planned action; people started writing about it in their blogs, and users were told by the support service that the web sites had been ‘banned on orders from above,’” said Averin, speaking by phone from Moscow.
“I’d like to point out that none of these sites has been declared as ‘extremist’ by a court in Russia, so it’s obvious that it is political censorship.”
VimpelCom’s press officer Ksenia Korneyeva said a court had ordered that access to the web sites be denied.
“These web sites have been blocked as extremist in accordance with a court order,” Korneyeva said by phone from Moscow.
Korneyeva failed to specify the number of the order, or which court had taken the decision and when.
“This is normal practice,” she said.
“When a court or a prosecutor’s office declares some web sites extremist, we block access to those sites.”
However, the Federal Register of Extremist Materials, which lists materials, including web sites, that have been banned by court as extremist, and is available from the Ministry of Justice’s official web sites, does not list www.limonov2012.ru and www.nazbol.ru.
When asked why other Internet providers, including the state-owned North-West Telecom, St. Petersburg’s largest operator, were offering full access to both sites on Monday and all last week, Korneyeva said: “This is a question for the providers and for those who make the orders — it’s definitely not a question for VimpelCom.”
Earlier on Monday, Beeline’s technical support service failed to offer any explanation. A technical specialist who did not introduce himself said he could not open the sites either and asked this journalist to hold. Fifty-nine minutes into the call, it was disconnected by Beeline.
Averin suggested that the sites had been blocked in the wake of the recent protests that were part of the Strategy 31 campaign initiated by Limonov last year. Limonov proposed a schedule of events by which protesters would go to Triumfalnaya Ploshchad in Moscow on the 31st day of each month containing 31 days to defend the right to assembly, which is guaranteed by Article 31 of the Russian Constitution.
“We are linking this to the success of the Jan. 31 protests in Moscow and St. Petersburg, because these [sites] are the resources that played a role in promoting [the protests] and reporting what was happening,” said Averin.
The peaceful Strategy 31 protests, which were expanded to St. Petersburg and several other cities on Jan. 31, were dispersed in Moscow and St. Petersburg by the OMON special-task police force, with dozens of activists being arrested. Limonov and the NBP were joined in the protests by human rights activists such as Lyudmila Alexeyeva, chairwoman of the Moscow Helsinki Group, and oppositional leaders such as former deputy prime minister Boris Nemtsov.
In November, Limonov was sentenced to 10 days in custody for taking part in the Oct. 31 protest.
VimpelCom, which owns the Beeline brand, was the third most popular home Internet provider with 979,600 clients in Russia during the first 10 months of 2009, according to a report by ACM-Consulting. In St. Petersburg it is the fourth biggest provider, with 119,000 clients.
TITLE: Yanukovych Retains Lead in Election
AUTHOR: By Simon Shuster
PUBLISHER: The Associated Press
TEXT: KIEV, Ukraine — International monitors on Monday hailed Ukraine’s presidential election as “professional, transparent and honest,” increasing pressure on Prime Minister Yulia Tymoshenko to concede to opposition leader Viktor Yanukovych.
Yanukovych held a 2.7 percentage point lead with all but 1.7 percent of the ballots cast Sunday counted.
But Tymoshenko, who has alleged fraud and manipulation of the vote, has signaled she will challenge the outcome in the courts. She canceled two news conferences Monday, apparently weighing her options.
A Yanukovych victory would close a chapter in the country’s political history by ousting the pro-Western leadership of the past five years, which foundered due to internal divisions, fierce opposition from Russian-speaking eastern Ukraine and the collapse of the economy.
As president, Yanukovych would try to balance relations with Moscow against Europe, tilting to Moscow where his Orange Revolution predecessors tilted West.
But his narrow mandate, Ukraine’s deeply divided society and moribund economy will limit his ability to implement desperately needed political reforms.
The international monitors issued a joint statement saying “the professional, transparent and honest voting and counting should serve as a solid foundation for a peaceful transition of power.”
Joao Soares — head of the observation mission from the Organization for Security and Cooperation in Europe’s Parliamentary Assembly — said the vote was an impressive display of a democratic election and a victory for the people of Ukraine. In comments apparently directed at Tymoshenko, he urged Ukraine’s politicians to heed the official vote tally.
“It is now time for the country’s political leaders to listen to the people’s verdict and make sure that the transition of power is peaceful and constructive,” Soares said.
Yanukovych’s apparent victory marks a dramatic comeback. He was initially declared the winner of the 2004 presidential contest. But evidence of widespread voting fraud sent hundreds of thousands of Ukrainians into the streets, demanding the results be overturned, in what came to be known as the Orange Revolution.
The Supreme Court later threw out the results, and Yanukovych lost the rematch to Viktor Yushchenko.
In Sunday’s election, vote monitors said the high turnout and the efficient performance of election officials dispelled fears of large-scale fraud.
The election commission projected the turnout among Ukraine’s 37 million voters at just under 70 percent, 3.2 percentage points higher than the first-round vote on Jan. 17, in which 18 candidates competed. Yanukovych won that round with a 10 percentage point lead.
“The Ukrainian people, who have shown their commitment to a democratic electoral process, now deserve a peaceful transition of power,” said Assen Agov, head of the delegation of the NATO Parliamentary Assembly.
Yanukovych has claimed victory and his team kicked off festivities by calling on the prime minister to admit defeat.
“She should remember her own democratic slogans and recognize the results of the elections,” said Anna German, deputy chairwoman of Yanukovych’s Party of Regions.
Around 5,000 Yanukovych supporters assembled Monday morning near a stage in Kiev adorned with the slogan “Ukrainians for a Fair Election,” claiming to defend the results of the election.
Supporters danced in heavy winter coats in front of the Central Election Commission as a series of daylong concerts got under way, despite frigid temperatures and flurries of snow. Hundreds waved Yanukovych’s signature blue campaign pennants and some draped flags over their shoulders, readily admitting they were there to forestall attempts by the Tymoshenko camp to organize large-scale protests.
But Tymoshenko has not called her supporters out onto the streets. Even the lone tent that had stood outside the Central Election Commission on Friday was gone.
Tymoshenko and outgoing President Yushchenko fell out after leading the Orange Revolution protests in 2004, and the bad blood between them has caused political gridlock in recent years and deepened Ukraine’s economic malaise. Most voters are now keen to see a united leadership take power.
“It finally seems like these five years of pointless bickering are coming to an end,” said Vladislav Kuprinchuk, 63, a retired veteran who wore a plastic Yanukovych poncho at Monday’s rally. “I came out here to make sure Yulia doesn’t steal our victory.”
TITLE: Film, Theater Star Samokhina Dies Aged 47
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: Anna Samokhina, one of Russia’s most admired film and theater actresses, who was sometimes referred to as the Russian Marilyn Monroe, died of stomach cancer in a St. Petersburg hospice in the early hours of Monday. She was 47.
“We spoke at 7 p.m. last night, and everything seemed normal,” Samokhina’s close friend, St. Petersburg actor Nikolai Pozdeyev, told reporters on Monday. “She died at 2 a.m. on Monday.”
Samokhina’s diagnosis with a late-stage stomach cancer was a deep shock for her millions of admirers, colleagues and friends, as well as for members of her family and the actress herself.
Despite the discouraging news from doctors, the actress and those closest to her continued to fight what many people around her saw as a hopeless cause. Samokhina had sent her test results to some of the world’s top oncology centers, and was awaiting a response. Her friends had also been investigating the possibility of alternative medicine as a treatment for the actress, Pozdeyev said.
Samokhina had been planning a vacation to Goa in November last year when she began experiencing severe stomach pains. A subsequent endoscopy revealed a large stomach tumor on which surgeons in the most respected clinics in Russia, Germany and Israel said it was impossible to operate.
Born on Jan. 14, 1963 in the Kemerovo region in Siberia, Samokhina graduated from the Yaroslavl Theater School. The young actress achieved fame immediately after the release of her first film, Georgy Yungvald-Khilkevich’s “The Prisoner of If Castle” in 1988, in which she played Mercedes.
Her next major success was the role of Rita in the 1988 Soviet classic “The Kings of Crime,” the first attempt by Russian filmmakers during perestroika to explore the phenomenon of Soviet mobsters. Filmmaker Yury Kara, who directed the film, told RIA-Novosti news agency on Monday that Samokhina was “a self-made-woman.”
“In the beginning, for example, when she attended the casting for ‘The Kings of Crime,’ a lot of people in the industry refused to recognize a talent in an up-and-coming provincial actress, yet she won through and asserted herself most impressively,” Kara recalled. “Anna was a symbol of the evolution of Russian filmmaking, of its transition from the Soviet-era peasant-worker heroines to the modern poignant and more sophisticated characters. I am deeply sorry that I won’t be able to work with her anymore.”
Some of Samokhina’s most remarkable roles included princess Tarakanova in “The Tsar’s Hunt” (1990), Zinaida Voloshina in “The Chinese Tea-Set” (1999), Anzhelika Kudrina in “Angelica’s Passion” (1993), and Ada Zakharzhevskaya in the TV series “The Black Crow” (2001).
“Although it was the roles of adventurous women that gained me recognition, I have to say I have nothing in common with them; if someone were to make a film about me, people would probably find me boring,” the actress said in a 2009 interview. “I am a quiet person, quite shy and deeply religious. I stay away from crowds.”
“Many women in my profession say that they have no choice but to become bitchy — I cannot agree with that,” Samokhina said. “There is always a choice. It is not in my nature to humiliate people and let them down, so I would rather leave the profession than adopt that kind of attitude.”
Throughout her career, the actress was continually voted for by industry magazines as one of the most beautiful and elegant actresses in Russia, renowned for her charm and style. The owner of popular St. Petersburg restaurants Graf Suvorov (Count Suvorov) and Poruchik Rzhevsky (Lieutenant Rzhevsky), she was a favorite with the country’s premier lifestyle and beauty magazines, in which she frequently gave beauty and dietary recommendations.
On Feb. 4, Russia’s Culture Minister Alexander Avdeyev signed a decree awarding Samokhina the title of Honored Artist of Russia. St. Petersburg actors Yevgeny Dyatlov, Mikhail Boyarsky, Georgy Shtil, Yevgeny Alexandrov, Yevgeny Leonov-Gladyshev and others had planned a charity concert for Feb. 7 to raise funds for Samokhina’s treatment, but the actress had asked her colleagues to cancel the event as she sought to downplay the attention being paid to her personal drama.
“Anna had a lot of stamina and was determined to fight her illness until the very end,” Pozdeyev said.
A civil farewell ceremony is tentatively scheduled for this Wednesday. The actress will be buried at the city’s Smolenskoye cemetery.
TITLE: Latvian Ghost Town Sold for $3.1 Million
PUBLISHER: The Associated Press
TEXT: SKRUNDA, Latvia — Latvia sold a deserted town built around a Soviet-era radar station to a Russian investor who bid $3.1 million at an unusual auction Friday, officials said.
The town formerly known as Skrunda-1 housed about 5,000 people during the Cold War but was abandoned over a decade ago after the Russian military withdrew from Latvia following the Soviet collapse.
A representative of a Russian investor won the bidding contest in Riga, with an offer of 1.55 million lats ($3.1 million), said Anete Fridensteina-Bridina, a spokeswoman for the country’s privatization agency. She said the buyer was Aleksejevskoje-Serviss, a Russia-based firm, though she could not provide details.
It was not immediately clear what plans the buyer had for the 45 hectare property, which is located in western Latvia about 150 kilometers from Riga. The town contains about 70 dilapidated buildings, including apartment blocks, a school, barracks and an officers’ club.
Built in the 1980s, Skrunda-1 was a secret settlement not marked on Soviet maps because of the two enormous radar installations that listened to objects in space and monitored the skies for a U.S. nuclear missile attack. Like all clandestine towns in the Soviet Union, it was given a code-name — which usually consisted of a number and the name of a nearby city.
After the Soviet Union fractured in 1991, Latvia was eager to scuttle all Soviet military bases and expel Russian troops. Russia’s Defense Ministry, however, continued to rely on Skrunda’s early warning system, and as a result the radar base was for years used as a negotiation tool between Washington and Moscow.
One of the radar buildings — dubbed Pechora — was enormous, soaring 60 meters. In May 1995, it was ceremoniously blown up by a U.S. demolition firm using more than a ton of dynamite.
Finally, in 1998 the last residents of Skrunda-1 departed, leaving behind hundreds of vacant apartments and dozens of buildings. Talk about transforming the town into a recreational area went nowhere, and finally two years ago Latvia’s government decided to put the entire settlement on the auction block.
Sarmite Stradniece, a resident of Skrunda, which is five kilometers south of Skrunda-1, praised the idea to sell the former military base. “They need to restore that place and let some people live there,” she said.
The fact that the town was sold to a Russian investor is bound to bother nationalists in Latvia, who are leery of Russian capital buying real estate in the tiny Baltic state, but privatizations officials insisted that the sale was a success.
“It fetched 10 times the starting price,” Fridensteina-Bridina said, “and finally something can be done with the town.”
TITLE: Health Official Fired Over Disagreement
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prime Minister Vladimir Putin dismissed Nikolai Yurgel, head of the Federal Health and Social Development Inspection Service, from his post on Saturday because of a public disagreement with the government on new legislation to regulate the pharmaceutical market.
“Yurgel sided with experts rather than taking the position of the government” on the legislation, a representative of the Health and Social Development Ministry said, RIA-Novosti reported.
The law in question, which was passed by the State Duma in its first reading late January, is strongly criticized by pharmaceutical companies.
Yurgel appeared to side with some of the critics of the legislation after it was discussed at a Duma meeting last Thursday. “The fears expressed by the pharmaceutical industry representatives regarding the new law are not exaggerated,” he said in an interview with Vzglyad. “Lawmakers must listen to their concerns.”
Last Friday, Putin stressed the importance of passing the law quickly despite its controversial nature. “I know there are sharp debates, including within the government. I want you to pay attention, however, to the fact that the Health and Social Development Ministry has decided on its position, which is supported by the government, and any deviations from this position will be suppressed, including by making staff changes,” he said at a meeting with key United Russia party officials. “I want you to keep this in mind on the legislative level,” Putin said. While the warning was made to party officials, the prime minister does not have the authority to fire Duma deputies under the constitution.
The law on the sale of pharmaceuticals is intended to regulate the market, including by setting prices on 5,500 pharmaceuticals, or about a third of the market, which are considered especially important.
Health and Social Development Minister Tatyana Golikova praised the legislation after its passage in a first reading. “This legislation makes the market equally accessible for domestic and foreign producers” and will create “a completely new structure detailing every stage in the sale of pharmaceuticals,” she said.
Pharmaceutical companies have asked the Duma to hold off on passing the law, claiming that it currently does not clearly spell out the rules for licensing, registering and deregistering new drugs and requires a disproportionately large fee for registering drugs. Drugs companies say the measures will drive up prices and put smaller companies out of business. Experts discussing the law on Thursday advised the Duma to postpone adoption of the law until Jan. 1, 2011.
TITLE: Lavrov Says NATO, OSCE Are Ineffective
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Foreign Minister Sergei Lavrov lambasted the present state of European security on Saturday, calling it ineffective and outdated, but he failed to rally significant support for a new security treaty.
The criticism came a day after the Foreign Ministry expressed its concern over Romania’s decision to host U.S. interceptor missiles as part of a European anti-missile shield that has been a sticking point in relations with Washington.
“European security has become undermined on all parameters over the past 20 years,” Lavrov said during his speech at the Munich security conference.
The Organization for Security and Cooperation in Europe has become “atrophied,” and its role has been reduced to supporting “the politics of expanding NATO,” he said, Interfax reported.
TITLE: Blood on Sofa Proved to Be Pushkin’s
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: St. Petersburg’s forensic experts have confirmed that the bloodstains found on the sofa on which the famed 19th-century Russian poet and author Alexander Pushkin is said to have died in 1837 were indeed left by the poet.
“The results of our medical research allow us to state that it is the poet’s blood on this historic sofa,” Yury Molin, deputy head of the Leningrad Oblast legal and medical department, said at a press conference in the city’s Pushkin Apartment Museum on Monday.
The painstaking year-long research proved firstly that the blood on the sofa was located on the exact spot where Pushkin’s wound would have been bleeding.
“For that purpose the researchers put a paper model of Pushkin’s body on the sofa, and then put the waistcoat Pushkin was wearing during his fatal duel on the model. The bloodstains on the waistcoat matched the place where the bloodstains were found on the sofa,” said Molin.
Secondly, experts ascertained that the blood on the sofa and the waistcoat came from a male belonging to blood group A (the second group, according to the Russian system,) and that both bloodstains had been there for many decades.
Molin said the scientists had also tried to conduct more detailed analysis of the bloodstains, including DNA and spectrum tests. However, the condition of the blood and need to treat the samples very carefully due to their historical value made the additional tests impossible.
“For instance, we could cut out a piece of the sofa to conduct a thorough analysis in a special lab, but neither we nor the museum would treat a historical relic like that,” Molin said.
“Nor could we do much to the waistcoat, so we just put a compress on it to absorb some blood from it in order to at least establish the blood group,” he said.
Molin said the results of the research could be seen as “indirect” due to the absence of DNA results, but that the overall results from the available methods proved that it was the blood of one of Russia’s best-loved historic figures.
The other aim of the analysis, according to Molin, was to establish whether or not the medical treatment given to Pushkin at his home was appropriate and whether he would have survived had he been taken to hospital, Interfax reported.
Molin said the results of the tests proved that taking Pushkin to hospital would not have saved his life, because the level of help that the hospital doctors could have offered the poet was no higher than that provided by the family doctors.
Galina Sedova, head of the Pushkin Apartment Museum, said that staff at the museum “were first struck when Pushkin’s blood was found on the sofa at their museum,” and then “deeply impressed by the results and the work of the forensic experts that amounted to a historical sensation.”
Sedova had previously proved the historical authenticity of the sofa itself.
The experts also concluded that the locks of hair kept at the museum had the same morphological characteristics as the blood, allowing them to confirm that the hair samples really did belong to Pushkin.
Pushkin died in St. Petersburg on Feb. 10, 1837, at the age of 37, as the result of a duel with the French-born Georges Dantes. Pushkin was shot in the stomach and died two days later at his home on the River Moika.
The leather sofa at the center of the current tests has been on display in Pushkin’s study for more than 70 years. Guides giving tours around the museum would invariably say that it was where Pushkin died, though some of the museum’s staff have expressed doubts as to whether or not it was the actual sofa on which the poet passed away.
The museum was given the sofa by the State Hermitage Museum in 1937. Earlier still, it had belonged to the Filosofov family, who received it as a gift from the wife of Pushkin’s youngest son, Grigory.
Pushkin is considered to be one of Russia’s greatest poets, and something of a national hero. The author’s rich language, ingenious rhymes and liberal politics awed not only his contemporaries but following generations, too. Pushkin’s epic poems such as “Yevgeny Onegin,” “The Bronze Horseman” and “Boris Godunov,” as well as his prose and poetic fairytales, have become much-loved classics of Russian literature.
An eternal romantic, Pushkin was also known for having a number of love affairs, many of which inspired his striking love poetry. His wife Natalya Goncharova, with whom he had four children, was reputed to be one of the most beautiful young women in Moscow and had many admirers. Pushkin challenged Dantes to a duel after the latter’s attentions toward the poet’s wife became the subject of public rumor. The Frenchman was also wounded in the duel, but made a full recovery.
TITLE: Deputy Charged With Sex Crimes
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The St. Petersburg prosecutor’s office has opened a criminal investigation into a 50-year-old former history teacher and deputy of the city’s Primorsky district municipal authority suspected of numerous charges of pedophilia.
Andrei Smirnov, who also headed a children’s society called Tsarskoye Selo, has been arrested and charged under article 132 part 3 of the Russian Criminal Code (violent actions of a sexual nature committed against an underage person,) according to the web site of the St. Petersburg prosecutor’s investigative department.
Smirnov has been charged with having committed sexual acts with a teenage boy in 2004-2005. He is alleged to have committed the acts on the premises of a school and a children’s arts center. The case materials prove that the teenage boy was regularly subjected to sexual abuse by Smirnov, the prosecutor’s office alleges.
The boy, who is now 18, only recently reported the case to the police.
During a search at Smirnov’s home, investigators found a large number of photographic and video materials of a pornographic nature featuring minors, according to the site.
The Tsarskoye Selo children’s society, where Smirnov had worked for 25 years, had more than 200 members, whom Smirnov regularly took hiking and on trips abroad during a period of several years.
The investigation is currently checking reports about Smirnov and other individuals, including foreign citizens, which allege that they committed a range of sexual crimes against minors, the prosecution said.
The prosecutor’s office has also opened a criminal case against a teacher at the Tsarskoye society, Vyacheslav Ivshukov, who has been charged under articles 134 and 135 of the Russian Criminal Code (sexual contact with a person under 16 years old; indecent behavior.)
Smirnov became a municipal deputy in the spring of 2009. He ran for the position on the United Russia party list, though he was only a supporter of the party and not actually a member of it, Ekho Peterburga radio station reported, citing a statement from the St. Petersburg branch of United Russia.
Smirnov’s case requires additional investigation, Ekho Peterburga quoted a representative of the local branch of United Russia as saying.
TITLE: Two Property Officials Arrested
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Two former senior officials with the Federal Property Agency have been arrested on suspicion of extorting a $340,000 bribe from a Moscow university official, the Investigative Committee said Monday.
Sergei Korchagin, former head of the agency’s Moscow branch, and Dmitry Knyazev, head of the branch’s property registration department, are suspected of extorting 10.5 million rubles ($344,000) from a deputy dean of the Moscow State Academy of Water Transport in December, the committee said in a statement.
The suspects purportedly demanded the money in exchange for registering real estate used by the academy and threatened to confiscate property from the institute if the academy official did not pay the bribe, the Investigative Committee said.
TITLE: Putin Warns United Russia to Hear the People
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prime Minister Vladimir Putin on Friday called on United Russia leaders to stay in touch with the people and warned the party against bamboozling voters by making promises it cannot keep, a week after a massive anti-government protest in Kaliningrad.
“You must not promise everything to everybody all at once,” Putin told top officials of the country’s ruling party, which he chairs, at a meeting at his Novo-Ogaryovo residence.
“You mustn’t become ‘promise makers,’ who just make promises to throw dust in peoples’ eyes so that you can get into power and start settling your own personal problems,” he said, according to a transcript on the government web site.
Putin added that the party should also admit its mistakes, which requires feedback and contact with the people. “Otherwise, any political work leads to a dead end,” he said.
Neither Putin nor State Duma Speaker Boris Gryzlov, head of the party’s faction in the Duma, mentioned Kaliningrad in their remarks. Vyacheslav Volodin, United Russia’s secretary general, told reporters after the meeting that the Jan. 30 protests were not discussed.
Most observers, however, saw Putin’s comments as a reaction to the rally, where some 10,000 protested against higher taxes and the regional and national leadership. The largely unexpected protest in the western exclave, the largest to hit the country in years, sent shivers through United Russia, which boasts a crushing 70 percent majority in the State Duma and similar strength in regional legislatures.
Gryzlov said at the meeting that United Russia hoped to field candidates for 90 percent of the regional and municipal seats available in the March 14 elections. He also said the other parties with factions in the Duma were essentially setting themselves up for defeat in the next federal elections because they had candidates for no more than 10 percent of the races.
Voters will select regional lawmakers in eight regions and mayors to five regional capitals, Gryzlov said, adding that voting would take place in 76 regions.
But analysts have said United Russia appears worried ahead of the vote and that a sudden dispute with A Just Russia, the country’s other main pro-Kremlin party, appeared to be an attempt to distract attention from the Kaliningrad protest.
United Russia officials have been firing a barrage of criticism at Just Russia leader Sergei Mironov after he offered some mild criticism of Putin on Feb. 1, saying he disagreed with the government’s 2010 budget and some of its anti-crisis measures.
Among the most outspoken was Volodin, who demanded that Mironov, a long-standing Putin loyalist, be ousted as Federation Council speaker. He and other United Russia leaders suggested reforming the Federation Council so that senators could build factions along party lines.
The upper house of parliament now has two representatives for each of the country’s more than 80 regions. Because most regions are dominated by United Russia, introducing factions would give the ruling party more dominance in the chamber, including a possible impeachment of its speaker, which is impossible under current regulations.
Mironov said Friday that such a reform could only happen once senators are popularly elected. The council’s members are now appointed by regional legislatures and executives. He also fired back at United Russia officials, who had compared him to Koshchei the Immortal, an evil character in Slavic myths.
“I would like to tell those Ivan-the-Fools they do not need to wait,” he told reporters, Interfax reported.
Putin did not mention the dispute Friday, and Volodin refused to say whether the prime minister supported the party line.
A United Russia spokeswoman told The Moscow Times before the talks that the issue was not on the agenda. Participants would discuss party projects, the regional elections and the situation in the country’s single-industry towns, the spokeswoman said, who requested anonymity because she did not have authorization to speak to the press.
TITLE: Pro-Kremlin Spin Doctors Admit to Smear Campaign
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A group of former United Russia political operatives in the Saratov region have claimed responsibility for smear campaigns targeting political enemies of State Duma Deputy Vyacheslav Volodin, a senior party leader.
The editors and writers of the web site Conspirology.org told a news conference Thursday that they had been hired by Duma Deputy Nikolai Pankov of United Russia to organize surreptitious media campaigns and stunts to discredit various regional and federal officials at odds with Volodin.
On Pankov’s orders, the men behind the web site disseminated hatchet pieces about selected targets in the regional media, Igor Osovin, a writer for the site, said by telephone Friday.
Targets included Saratov Governor Pavel Ipatov and several regional and federal lawmakers, Osovin said.
A fellow collaborator on the site, Alexei Smirnov, said he and his colleagues had a crisis of conscience about their work that prompted them to go public.
Both federal and regional elections are commonly polluted with dirty campaign tactics, some of which can be quite elaborate and esoteric. One common stunt is to hire groups of scruffy homeless people to stage a rally supporting an opposing candidate, thus reflecting poorly on the candidate’s base.
Curiously, Pankov said the accusations that he ordered the smear campaigns against Volodin’s critics are in fact part of a campaign to discredit him, the Regnum news agency reported Friday.
Both Osovin and Smirnov said Friday that they were prepared to prove the veracity of their claims in court.
Pankov did not respond to a request for comment left with his aide at the Duma on Friday. Repeated calls to Volodin’s spokeswoman went unanswered Friday afternoon.
TITLE: Police Chief Assassinated in Makhachkala
PUBLISHER: Combined Reports
TEXT: MOSCOW — The police chief of Makhachkala, the capital of Dagestan, was shot dead in his car Friday, one of 16 people killed in a string of attacks in the North Caucasus.
At least six insurgents and five Russian troops were killed in gunbattles in the mountains of Chechnya, while five people were killed in attacks in Makhachkala, officials said.
President Dmitry Medvedev has called the violence Russia’s biggest domestic political problem and last month appointed Krasnoyarsk Governor Alexander Khloponin, a former businessman, as his envoy to the newly created North Caucasus Federal District to tackle underlying causes such as unemployment and corruption.
City police chief Akhmed Magomedov was killed along with his driver and two bodyguards when gunmen opened fire on his car in Makhachkala. He died on the way to a hospital, police spokesman Mark Tolchinsky said.
Magomedov met with Russia’s Interior Minister in the aftermath of a Jan. 6 suicide bombing that killed five police officers and wounded 18, giving assurances that those responsible would be caught. A spokesman for the Investigative Committee told Interfax that Magomedov had survived an assassination attempt in the same area in 2005.
The head of a police counterterrorism department in one of Dagestan’s districts was killed earlier in the day when a bomb planted beneath his car exploded, the federal Investigative Committee said.
In Chechnya, forces controlled by Chechen President Ramzan Kadyrov battled rebels in the forested Caucasus Mountain foothills southwest of Grozny.
Five federal servicemen were killed in fighting that began Thursday and persisted Friday, said Maryam Nalayeva, an official in Chechnya’s Investigative Committee. Six insurgents were killed Thursday in fighting nearby, Kadyrov’s office said.
(AP, SPT)
TITLE: Developer Accused of Damaging Ecology of Neva Bay
AUTHOR: By Maria Kiselyova
PUBLISHER: The St. Petersburg Times
TEXT: Local scientists are claiming that the Marine Facade project and other construction on reclaimed land is a threat to the ecological situation in the Neva Bay.
In December, the Federation Council approved the enlargement of the territory of St. Petersburg by 400 hectares of reclaimed land between the town of Sestroretsk and the Lisy Nos headland. A group of scientists who have studied the ecological situation in the Gulf of Finland organized a press conference last month to express their position on the project, based on research into the impact of recent construction. The scientists argue that future construction on reclaimed land is a threat to the ecological situation in the Neva Bay.
The research was mainly focused on work carried out by the Marine Facade company, which carried out dredging and building on reclaimed land in order to construct a new passenger port terminal off Vasilyevsky Island. Other projects examined were building work on St. Petersburg’s flood barrier, and the construction of a new stadium on Krestovsky Island. The evaluation of the damage is mostly based on images of the bay taken by satellites and studied in the State Research Institute of Cosmoaerogeology.
Images shown to journalists at the press conference mostly dated back to 2006 and 2007, when according to Leontina Sukhachyova, senior researcher at the Institute of Cosmoaerogeology, the ecological situation in the Neva Bay was at its worst.
In the images, soil was shown to have dissolved in water, creating areas of muddy water. Sukhachyova said that according to international regulations during dredging, a maximum of 5 percent of the seabed soil should dissolve into the water. If the percentage is any bigger, work should be stopped and addition environmental protection measures should be taken. The scientists say that their research into the Marine Facade project showed that the rate of dissolving soil was up to 50 percent, but no measures were taken.
According to experts, such water pollution is harmful for the flora and fauna of the Neva Bay. Georgy Noskov, director of the Ladozhskaya ornithological laboratory of the biology institute at St. Petersburg State University, says the destruction of shoal water areas is a major problem, as they are home to many unique species of fish and birds. Water pollution affects the plankton that is the main source of food for most fish. When the disturbed soil settles on the bottom, it destroys aquatic plants — another source of food for marine inhabitants. As a result, Noskov said, some areas of the Neva Bay are already “dead.”
The number of fish being caught there has been decreasing dramatically since the 1970s, but according to ecology experts, the situation will get even worse in two or three years when the generation of fish that has grown up in muddied waters reaches adulthood.
According to Sukhachyova, the situation could improve in the future if construction firms make the results of environmental monitoring public — currently, it is often classified commercial information. She also said that the areas monitored should be bigger and go beyond the area of construction.
Alexander Ribalko, chief researcher at the Sevmorgeo monitoring center, said control over developers was not sufficient. “You know the way it is done here — for example, a truck takes away the soil, but petrol costs money, so the truck leaves it somewhere on the way to its destination,” he said.
The ecologists said an attempt had been made by scientists to create two protected areas off the north and south coasts of the bay. They were included in the St. Petersburg General Plan law, but the idea was spiked by a federal law that declared all areas of water to be federal property and free from protection. Experts are currently trying to solve this legal collision.
Alexander Shemberg, head of PR for Marine Facade, told The St. Petersburg Times that construction is now complete and was carried out in keeping with the plan, which was in turn developed in accordance with the law. Commenting on the scientists’ claims, he said, “It might be a personal point of view and might just be that they are offended that they were not hired to carry out the [official] examination.”
“Some sinister trucks that are said to take away dust at night are simply more interesting,” said Igor Merkulov, head of the permitting department at Marine Facade. “More interesting than ordinary construction going on.”
TITLE: Opening of Shtokman Pushed Back by 3 Years
AUTHOR: By Anna Shiryaevskaya
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom and its partners have delayed the planned start of natural-gas output at the Arctic Shtokman field by three years as global fuel supply outweighs demand.
Shtokman Development, the joint venture that operates the first phase of the project, intends to start gas output in 2016 and begin processing the fuel into liquefied natural gas in 2017, the partners said Friday in an e-mailed statement.
“Acknowledging changes in the market situation and particularly in the LNG market,” Shtokman Development will make a final investment decision on gas production first and later decide on LNG, according to the statement. The partners had previously planned to agree on both at the same time.
While majority partner Gazprom intends to send Shtokman gas to Europe and North America, demand for the fuel in both markets has waned amid the economic slowdown. Europe may be oversupplied with gas until 2015 as new LNG projects around the world come on stream, while U.S. shale-gas output is also set to grow, according to the International Energy Agency.
The Shtokman venture, which also includes Statoil and Total, will make an investment decision on gas production in March 2011 and on LNG output before the end of that year, the partners said after the board met in Zurich on Friday. Gazprom is a 51 percent shareholder, Total 25 percent and Statoil 24 percent.
“It’s a very challenging project technologically,” Ola Morten Aanestad, a spokesman for Statoil, said Friday by telephone. “We have a positive view on the gas market and the competitiveness of gas in the long term, but that the gas market is weak at the moment is a well-known fact.”
Project delays have been widely anticipated as the partners have several times pushed back an investment decision. Total Chief Executive Officer Christophe de Margerie said in October that output may start in 2015.
“Taking into consideration a global drop in gas demand and growing competition between LNG and shale gas on the U.S. market, it is quite obvious that the timing of many greenfield LNG projects will be reviewed,” Maria Radina, a Moscow-based analyst at Nomura International, said in an e-mail. “In the environment of market turmoil, Gazprom can just do ‘cherry picking’ and choose more profitable projects.”
The developers of Shtokman, located in the Barents Sea, must contend with icebergs and storms to extract the gas. The field holds an estimated 3.9 trillion cubic meters of the fuel, making it one of the largest deposits in the world.
It’s unclear whether Shtokman’s marketing plan, under which about half the gas would be turned into LNG, has been changed. LNG is natural gas that’s been chilled to a liquid for transportation by ship rather than by pipeline.
“What’s most important for us is to bring this project to the stage where we can make an investment decision and have a project that is profitable,” Statoil’s Aanestad said. “For the time being we haven’t made an investment decision on the natural-gas part of the project, nor the LNG part.”
TITLE: In Brief
TEXT: Bavarian Business
ST. PETERSBURG (SPT) — The Days of Bavarian Economics in St. Petersburg will take place this week from Wednesday to Friday. A delegation of Bavarian businessmen headed by Martin Zeil, Bavaria’s economics minister and deputy prime minister, will come to the city to forge contacts with local companies and organizations.
In a statement, Zeil said that the best opportunities for cooperation are in the automobile industry, energy-efficient construction, the adoption of resource-saving production methods and innovative methods of waste recycling, modern medical technology and the development of efficient traffic control systems.
Bilateral trade between Russia and Bavaria totaled 10.9 billion euros in 2008, but dropped by 40 percent last year due to the global economic crisis. This week’s event aims to overcome the negative effects of the crisis and to strengthen bilateral trade cooperation.
Kremlin in Paris
MOSCOW (Bloomberg) — The Kremlin said it won a French auction for a plot of land in central Paris on which it will build a Russian “cultural-spiritual center.”
Viktor Khrekov, an official in the Kremlin Property Department, said said by phone from Moscow on Monday that details of the development plans might be made public later that day. He declined to comment on the financial details of the project.
Trade Surplus Shrinks
MOSCOW (Bloomberg) — Russia’s trade surplus narrowed 33 percent last year to $134.3 billion from $200.5 billion in 2008, the Federal Customs Service said.
The value of exports fell 36 percent to $301.6 billion while imports declined 37 percent to $167.4 billion, the service said in an e-mailed statement Monday.
Energy, including oil and natural gas, accounted for 69.5 percent of exports to the Baltic states and countries outside the former Soviet Union, the Customs Service said. That compares with 72.6 percent in 2008.
Machinery and other manufactured equipment accounted for 46 percent of imports in the period, according to the statement.
Interest Cuts ‘Possible’
MOSCOW (Bloomberg) — Russia’s central bank may continue cutting interest rates from record lows as inflation ebbs, said Alexei Simanovsky, head of Bank Rossii’s banking regulations and supervision department.
The inflation rate has slowed to 8.1 percent and may reach 7 percent, making further rate cuts “theoretically possible,” Simanovsky told reporters in Moscow on Monday.
VEB Sees Returns
MOSCOW (Bloomberg) — VEB, Russia’s state development bank, made 100 billion rubles ($3.3 billion) from investing money from one of the country’s two sovereign wealth funds, RIA Novosti reported, citing Chief Executive Officer Vladimir Dmitriev.
The bank got 175 billion rubles from the National Wellbeing Fund in 2008 and will use the returns to support mortgage lending, infrastructure projects and “investors,” Dmitriev said at a meeting with President Dmitry Medvedev, according to the Moscow-based news service.
TITLE: Stocks Fall on Foreign Fears
AUTHOR: By Rachel Nielsen
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — World markets took a beating last week as problems in several European economies and U.S. jobs data spooked investors, but despite the bad news from abroad, Russian equities are well-poised for recovery.
On Friday, the ruble-denominated MICEX posted its biggest single-day drop in more than two months. The index fell 2.9 percent to 1355.64, which followed a 2.5 percent drop Thursday. All in all, the index lost 4.5 percent for the week.
The dollar-denominated RTS did even worse on Friday, tumbling 3.6 percent to 1411.14, leaving the index down 4.3 percent for the week.
“It’s nothing Russia-specific,” Vladimir Savov, head of research for Otkritie Investment Bank, said of the sell-off. That’s the case for both big losses and large rallies in general on Moscow’s bourses, he added.
Indeed, it appears as though the country’s own domestic economic situation is the only thing not affecting its stock markets.
U.S. stocks fell sharply on Thursday, with the Dow Jones Industrial Average losing 2.6 percent and dropping below the 10,000 mark on mounting fears that south European countries — Greece, Portugal and Spain — may not be able to bring their debt levels under control.
The crisis of the moment is in Greece, which has accrued mountainous debt from social-program spending, a condition worsened by a claim from the European Commission that Greece gave false budget data to its public and to the commission. The options for Greece are a bailout by Germany or other better-off European countries, a bailout by the International Monetary Fund or — what would be most traumatic for the European Union — a default on Greece’s debt.
Debt pileups in Spain and Portugal also undercut the euro and threatened the economic stability of the European Union, also shaking the markets in Russia last week.
Global markets were also hard-hit toward the end of the week by an unexpected jump in U.S. jobless claims, which rose to a seasonally adjusted 480,000. That fall was tempered, however, on Friday, on a better than expected jobs report that said the U.S. unemployment rate fell to 9.7 percent from 10 percent in December.
Worldwide, investors fled from risk with a huge sell-off of oil, Russia’s biggest export. Oil dropped 2.7 percent to $71.19 on Friday on the New York Mercantile Exchange, bringing the total three-day decline for the commodity to 8 percent.
“In global markets, the fundamentals are not that great,” said Philip Townsend, head of research and senior analyst with IFC Metropol. Because Russia has small market capitalization — relative to the U.S. or other stock giants — it will be overinfluenced by outside markets, Townsend said.
Despite the contagion spilling over onto Russian equity markets, the country seems to have its own house in order. The government is venturing back into international credit markets with a proposed sovereign eurobond issue just as fears are mounting about the Greek budget crisis and possible default.
And just as the government is in a position to capitalize on its own position of relative fiscal strength, the Russian consumer is well-placed to drive the economy to growth.
Real disposable income grew 1.9 percent in January year on year. Despite the still-high unemployment level of 6.2 million and a 2009 jobless rate averaging 8.4 percent, Russians managed to protect their savings by buying foreign currencies as the ruble was devalued in late 2008 and early 2009, UralSib chief economist Vladimir Tikhomirov said. Increased public sector wages and pensions also contributed to the trend.
The disposable-income uptick “is a very important factor that should support the economy going forward,” Tikhomirov said.
In the short term, Russian equities are poised to take advantage of the better-than-expected U.S. jobs figures released Friday. American Depositary Receipts of Russian firms trading in New York all gained by the end of the day on Friday, with VimpelCom adding 4.5 percent to its daily low to finish down 1.7 percent and Mechel putting on 6.6 percent to close down only 1.7 percent for the day.
And in the medium term, Russia should be able to hold its own — especially as compared with other emerging markets.
“The consensus optimism that Russia is likely to be one of the better investments in 2010 remains intact, and investors are clearly reluctant to sell out of good assets,” Chris Weafer, chief strategist at UralSib, said in a note. “Russia’s economy is on a recovery path, assets are amongst the least expensive in the world, and they are underowned by international investment funds.”
TITLE: Chigirinsky Loses Moscow Hotel Lawsuit
AUTHOR: By Irina Filatova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Moscow Arbitration Court on Friday dismissed a lawsuit against City Hall filed by exiled tycoon Shalva Chigirinsky’s ST Development, which demanded 4 billion rubles ($132 million) for breaking an agreement on reconstruction of the Hotel Rossiya.
The decision comes as a separate suit filed by Chigirinsky concerning a dispute over a stake in Sibir Energy was halted in London after the sides agreed to come to a peaceful settlement.
ST Development, an investor in the project to demolish and reconstruct the Hotel Rossiya, formerly located across from the Kremlin, was forced to halt construction on the project in 2008 after demolition because the company fell into deep financial straits.
The developer filed lawsuits in December against Mayor Yury Luzhkov and his deputies, Vladimir Resin and Vladimir Silkin, alleging that the company hadn’t been adequately compensated for work done on the Rossiya project.
The Moscow court on Friday rejected the suit after turning down a request by Chigirinsky to delay consideration of the case. The businessman’s lawyers said Friday that City Hall hadn’t provided a number of documents needed for the case to be considered, including a memo from the City Hall’s road and bridge department, which specified the volume of expenditures.
City Hall’s lawyers claimed that the company hadn’t completed the work agreed to in its contract.
“Since the defendant acquired neither goods nor services under the terms of this deal, the defendant didn’t receive the results of the work,” a City Hall representative told the court, RIA-Novosti reported.
Lawyers of both City Hall and ST Development declined to comment on the issue. City Hall’s construction department wasn’t available for comment Friday.
Meanwhile, Kommersant reported Friday that Chigirinsky was working out a peaceful settlement for a dispute with Ruslan Baisarov over a 23.35 percent stake in Sibir Energy.
Chigirinsky formerly owned the stake along with his partner, Igor Kesayev. But when Chigirinsky had financial problems in 2008, Kesayev got a $250 million loan from Sberbank to assist his partner, and in exchange received Chigirinsky’s stake as collateral.
After Chigirinsky stopped paying interest on the loan, the rights to it were sold on to Baisarov’s Bronson Partners.
At the same time, Gazprom Neft started buying out all other major shareholders in Sibir Energy, with the exception of City Hall, which owns about 18 percent. When the Sberbank loan came due in October, Gazprom Neft paid up, in exchange for Chigirinsky’s former stake as collateral.
Chigirinsky is contesting the transfer to Baisarov of his stake in Sibir, a stake that is now held as collateral by Gazprom Neft.
Lawyers from both sides have not commented on any deal.
TITLE: Credit Risks, Bubbles Named as Main Threats
AUTHOR: By Paul Abelsky and Maria Levitov
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s central bank views credit risks and the possibility of an equity market bubble as the main threats to the economy, the central bank’s head of bank regulation and supervision said.
Delinquent loans at the country’s lenders, not including Russia’s biggest bank Sberbank, stood at 5.4 percent of the total as of Jan. 1, Alexei Simanovsky, who heads Bank Rossii’s financial regulation division, told reporters in Moscow on Monday. Bad debt probably won’t rise by the end of June, he said.
Non-performing loans in the world’s biggest energy exporter may climb to 20 percent of total lending this year, based on international definitions, Deutsche Bank analyst Bob Kommers said on Jan. 28. Investors are “underestimating” the risks and may expect too strong a recovery, he said. Banks have held back on lending, even after 10 central bank rate cuts, on concern borrowers may be unable to service their debt.
“The overall trend is toward a decline in bad loans,” Simanovsky said.
At the same time, last year’s 83 percent surge in crude oil has spurred gains in the country’s benchmark equity index. Russia’s RTS index of the country’s 50 most-traded stocks soared 129 percent last year and is up 12 percent since the end of September.
Finance Minister Alexei Kudrin warned on Nov. 25 that “speculative capital” may lead to an overheated equity market. The government wants to wean the economy off its commodity reliance and is trying to generate more sustainable growth in the domestic economy, where a revival of bank lending is needed to restore demand.
Retail lending fell 0.4 percent in January, Simanovsky said, citing preliminary data that excluded Sberbank. Corporate loans fell 0.3 percent in the month, he said.
TITLE: Ruble Hits 7-Week Low Against Dollar on Oil
PUBLISHER: Bloomberg
TEXT: MOSCOW — The ruble weakened to a seven-week low versus the dollar Monday as oil traded near $71 a barrel.
The Russian currency depreciated 0.5 percent to 30.4838 per dollar by 11.15 a.m. in Moscow, heading for its weakest close since Dec. 22. It was little changed per euro, declining less than 0.l percent, to 41.6844.
Oil prices have risen from as low as $33.98 a barrel in February to as high as $83.95 on Jan. 11, boosting the revenue prospects for the world’s biggest energy exporter. Crude for March delivery was 2 cents lower at $71.17 in New York.
The movements against the dollar and the euro left the ruble at 35.5325 against the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters.
The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged Jan. 22 to defend.
TITLE: Troika’s Top Economist on What to Expect in 2010
AUTHOR: By Olga Kalashnikova
PUBLISHER: The St. Petersburg Times
TEXT: With 2009 — a year of fluctuating currency rates, sagging stock markets and virtually non-existent credit — safely behind us, financial analysts are making predictions for 2010 and even finding a silver lining in the cloud of the global economic crisis. Yevgeny Gavrilenkov, managing director and chief economist of Troika Dialog, the oldest and largest private investment bank in the CIS, talked to The St. Petersburg Times during a recent visit to the city about economic trends, the areas that have suffered the most from the crisis, and whether it is in fact really a crisis.
How do you rate the way in which Russia has dealt with the economic crisis?
I always say it was not a crisis; it was a healthy correction. Everything that we had observed during previous years — volumes of consumption, growth rate — was artificially inflated by loans. The production of construction materials and cars, the demand for which was supported by readily available loans — all these areas plummeted. But, for example, nothing happened to the production of basic food products. People continue to eat, and the food industry has even gained during the crisis. The amount of imported foods has decreased and been replaced by domestic production. So, first of all, the crisis affected those areas and companies in which demand for their products had been artificially inflated by loans.
What is your opinion on the anti-crisis measures taken?
The situation in Russia was aggravated by the slow devaluation of the ruble controlled by the authorities. Six months passed from the emergence of the problem on Sept. 15 2008, when the global financial services firm Lehman Brothers Holdings filed for bankruptcy and the crisis entered a critical stage, until the devaluation was complete. During the first two months nothing was done, the authorities simply watched everything plunge. There were only discussions on how to survive. The main problem in my opinion is that reality changes far more rapidly than can be comprehended — not only by the authorities, but also by people and the market. The slow devaluation led to the rapid increase of interest rates, credit dried up and currency speculation became the only point of business. As soon as the devaluation was complete and the intervention on the currency market stopped, everything began to recover, the ruble mass began to grow — during the devaluation rubles were exchanged for other currencies — and it became an indicator of the resumption of economic activity.
Is it possible to talk about the return of pre-crisis economic growth?
No, it is not pre-crisis growth. The crisis has taken us into a calmer trajectory. Before the crisis, the economy was accelerating rapidly. Just take the last 10 years — after the 1998 default, export became the locomotive of the economy. Then free production capacity disappeared and as a result export stopped. Nowadays there cannot be such a capital inflow and there is no free capacity, so we are looking for another model that will be more balanced. It is one of the main consequences of the crisis. Money is regaining its normal value. Many things were being produced that were not absolutely necessary. For example, we produced 20 percent more cars annually. I am not sure it was a good idea, especially when they were bought on credit. I do not think people should change their car every two years. Another positive consequence is low inflation. It is the first time a low level of inflation has been possible for the coming year. And following that, interest rates will decline, and that makes credit more accessible. There will be natural economic growth.
Is there any risk of the emergence of a bubble in the economy — when businesses grow very fast, the price of shares and homes rises and employment increases — as was the case from 2005 to 2008?
Bubbles will always exist; it is the nature of the market, of the economy. Mini-bubbles are normal, and mega-bubbles, like the last one, emerge when it is easy to make money. I hope there will not be another on such a scale. Financial policy should return to a normal basis.
Last year, inflation averaged 8.4 percent. Can we sum up the results of 2009? How has inflation been characterized? What forecasts can be made for this year?
Inflation turned out to be lower than predicted. According to government data, it was expected to reach up to 13 to 14 percent. It was so high before because everything in Russia was growing by 30 to 40 percent per year — salaries and loans. But manufacturing cannot grow at such a speed. All of this pushed up inflation. Now there are no such rates. Salaries are growing by 5 to 8 percent. The only thing that continues to increase is budget expenses. And the next year will be the first when those expenses are not increased. So there will be no free budget money in the economy, and there is a chance that inflation this year will be 4 to 6 percent.
Which sectors are the most profitable right now?
This year, it will be the stock market — choosing which shares to buy, sell or hold and when. It does not depend on the sector. We are expecting low inflation, so it will be impossible to make a profit by increasing prices. People should look at those companies that would be able to provide growth in manufacturing volumes. This could be both importers and companies oriented on the local market. The main thing is the potential of volumes to increase.
What other consequences will low inflation have?
When inflation was high, it was more profitable for people to consume than to invest. Moreover, it was a time of constant loss of money and distrust of banks. Many of them disappeared or became insolvent. And when inflation comes down, interest rates become higher and people start saving up money. I would not be surprised if even pensioners start saving money. It brings the financial system into a normal state of affairs. But it cannot happen soon; years will pass before we start saving money.
What is the most profitable sector for investments? Do people feel confident dealing in securities?
As most people still do not save money, only a small proportion of people are ready to invest in securities. In my opinion, the most interesting area now is bonds. This market is expanding now, and the stock market is limited by the number of shares.
Is it fair to say that the crisis revealed the low level of financial competence of people in Russia?
We have consumer competence. People behave intuitively in the right way — if they have money, they need to spend it. They cannot save when interest rates are lower than inflation. People felt this, and behaved accordingly.
TITLE: The Innovation Myth
AUTHOR: By Boris Kagarlitsky
TEXT: The other day my daughter asked me an unexpected question: “What is innovation?” How can we understand this word so often repeated by Russia’s politicians and economists?
The innovation economy that they are talking about does not offer solutions to the problems that the country faces. It does nothing for overcoming the environmental crisis, for freeing people from exploitation and alienation, easing the burden of the working class or for promoting the democratization of social relations. What’s more, nowhere is it written that something “new” will necessarily satisfy a pre-existing, unfulfilled demand. Once that new practice or product ceases to be a surprise or something unexpected, it will no longer be a newsmaker and will lose its ability to spur the creation of a new market.
There is also no law proving that innovation is necessarily beneficial to society or to consumers. Subprime mortgages are a good example. First introduced to the public as an innovative banking practice, their widespread use helped trigger the global financial crisis. What’s more, innovations are not always new. Sometimes they are nothing but the reworking of an old idea, method or technology that has been forgotten or has fallen out of fashion. Again, the subprime is a case in point. It is essentially a financial scheme dreamed up in the 15th century by two Englishmen —soldier Sir John Fastolf and businessman Richard Whittington. After the Battle of Agincourt, the English took a great many French aristocrats prisoner and expected large ransom payments for their release. The problem is that ransoming people is not an easy business. The prisoner can run away or die, his relatives might not have the money to pay up or, worse, they might simply refuse to reclaim the loved one. The shrewd Englishmen thought up a scheme to divide the French knights into shares, sell them “in parts,” and form what would now be called an “investment package” that could be sold to a third party. In contrast to the hapless financiers of the 21st century, Fastolf and Whittington not only got rich on the scheme but became famous as well. One was immortalized by the Shakespearean character of Sir John Falstaff, and the other became a hero of children’s fairy tales.
Invention and discovery in science and technology are not the fruits of cunning imagination or the results of attempts to cash in without long, painstaking effort and difficult work. They are the result of extended, focused, intelligent and collective effort. Society identifies a problem and searches for the solution. Eventually someone appears who surpasses everyone else thanks to his or her nonstandard approach. But innovative work is valuable precisely because it provides a solution to a very real and meaningful challenge earlier formulated by society.
By contrast, the principle of an innovative economy suggests an endless flow of answers to questions that don’t actually exist. Scores of improved or original ideas might demonstrate the limitless imaginations and mental adroitness of their authors, but they leave us, as before, face to face with our unresolved and collective problems.
Unfortunately, technical gadgetry is no substitute for meaningful scientific breakthroughs, and private initiative cannot replace qualitative social change.
Only when society can collectively express its will through democratic processes and formulate the challenges that it faces will we see the appearance of something not only new but also necessary and useful.
Boris Kagarlitsky is director of the Institute of Globalization Studies.
TITLE: The Yanukovych Wild Card
AUTHOR: By Yevgeny Kiselyov
TEXT: Although the official results of the second round of Ukraine’s presidential election have not been announced, it is clear that the country’s next president will be Viktor Yanukovych. Over the past three weeks, Yulia Tymoshenko failed to close the 10-point lead Yanukovych has held since the first round of voting. Every attempt to convince voters that as president she would take the country along a new path of development didn’t convince people who asked themselves, “If Tymoshenko wasn’t able to move the country in the right direction after being prime minister for two years, how will she be able to do any better as president?”
Tymoshenko’s failure proved that it is impossible to win a presidential race after serving as prime minister of a country that was hit harder by the crisis than any other nation in Europe. Since the crisis started, the budget deficit, inflation and the government debt have soared to dangerously high levels, and the standard of living of Ukrainians plummeted.
According to Ukrainian law, public opinion polls cannot publish their results less than two weeks before an election, but in private conversation, several well-respected pollsters have told me that they expect Yanukovych’s lead to actually increase prior to the final vote. If the spread is greater than 5 percentage points, it will be difficult for Tymoshenko to challenge the results and demand a recount as she did back in 2004, which stripped Yanukovych of his self-proclaimed “victory.”
One of the biggest factors that crippled Tymoshenko’s ability to close the gap in the past three weeks was her failure to win the support of Sergei Tigipko, a successful businessman and former Central Bank chairman who came in third place in the first round with 13 percent of the vote. In the major cities of Kiev, Dnepropetrovsk, Kharkov and Odessa, Tigipko actually received the second-highest number of votes. It was clear that supporting Tymoshenko or Yanukovych was not an option for Tigipko. Ukrainians voted for Tigipko because they were fed up with both Yanukovych and Tymoshenko, and Tigipko campaigned as an alternative to both of these candidates. If Tigipko now supports either of his main opponents, his legitimacy will be compromised in the minds of his supporters.
Tigipko also put little faith in Tymoshenko’s “promise” to make him prime minister if she won the presidential race. After all, only the ruling coalition in the parliament has the right to appoint the prime minister, and that coalition is now on the verge of collapsing. Tigipko was unwilling to trade his voter base for an uncertain shot at the prime minister spot. His failure to nibble at Tymoshenko’s bait put the final nail in the coffin of her presidential campaign.
And what a bizarre campaign it was. The presidential candidates never focused on the most urgent problems facing the country. There was very little discussion about how to overcome the crisis and little attention was paid to the issue of reforming the constitution, making Ukraine the only country where the ruling power is shared simultaneously by the president, the parliament and the Cabinet. Keeping this terribly unwieldy political arrangement in place guarantees that the government will be crippled by political infighting, chaos and an inability to carry out its basic functions. But instead of focusing on what Ukraine needs the most, the candidates engaged in a mud-slinging fest, accusing each other of everything from hypocrisy, lying and corruption to betraying Ukraine’s national interests.
One of Tymoshenko’s campaign strategies was to try to portray Yanukovych as Moscow’s puppet. But Yanukovych countered by making a number of statements toward the close of the campaign that were clearly intended to show that he is willing to stand up to Moscow by demanding lower prices in gas contracts and opposing the South Stream pipeline project, which will bypass Ukraine. More important, however, Yanukovych went further by questioning the sacrosanct issue of Russia’s Black Sea Fleet based in Sevastopol, saying the current rental price for the base is far too low.
Are these just empty words intended to deflect accusations by the opposition that Yanukovych was too pro-Russian, or is there a real chance that he means what he says? Once Yanukovych becomes president, we will be able to answer this question.
Yevgeny Kiselyov is a political analyst and hosts a political talk show on Inter television in Ukraine.
TITLE: Russia Is No Longer Cool
AUTHOR: By Alexei Bayer
TEXT: Four years ago during the 20th Winter Olympics, the Russia House was by far the hottest party venue in Turin. It even had an open-air ice skating rink on the roof, where skaters were treated to free shots of vodka and an unending parade of scantily clad young women. There were plenty of brutish middle-aged men, too, but they somehow seemed less scary — and therefore more fascinating — since then President Vladimir Putin had curbed the excesses of Russia’s wild capitalism.
The New York Times ran the headline “In Parties as Well as Podiums, Russia is Red-Hot.” The red-and-white apparel designed by the Italian-sounding but thoroughly Russian label Bosco di Ciliegi (rather ugly, in my view) was ubiquitous that year in Piedmont, and envious Swedes and Norwegians, abandoning their Nordic restraint, accosted Russian fans in the street and begged them for the coveted tickets to those all-night Russia House parties. It was the height of Russia’s worldwide popularity.
Unlike its far larger summer cousin, the Winter Olympics is a cozy affair held not during the season of mass tourism but in February, when only the rich and the idle can come out to play. By definition, it takes place at upscale, exclusive winter resorts. People going in for downhill skiing or figure skating are mainly upper class.
This makes the Winter Olympics an exclusive rich men’s club, the sports equivalent of the Group of Seven. It was quite a coup for Russia to be acknowledged as the unofficial social center in Turin. It seems that it was after the Turin Games in 2006 that Putin became obsessed with bringing the 2014 Olympics to Sochi.
I don’t know what kind of party scene there will be in Vancouver. But Russia, despite hosting the next Winter Games, is unlikely to be the focus of attention and admiration. Far fewer people will party with Russians in 2010. Today, Russia is no longer cool.
This has very little to do with the economic crisis or lower oil prices. It is not the question of money, glamour or beautiful girls. The problem is that Putin’s Russia has not fulfilled the promise it held out as recently as in 2006. It failed to become a normal, responsible member of the international community. Since then, there has been Russia’s petulant and inconsistent foreign policy, with Putin behaving like a spiteful adolescent on the world stage.
There have been stories of massive, widespread corruption and clear evidence of it in the form of overfed Russian bureaucrats buying every overpriced object at airport duty-free shops around the world. There have been contract killings of independent journalists, political activists and regime opponents, including Putin’s critic Alexander Litvinenko in the heart of London. There has been police brutality, suppression of dissent and a steady Sovietization of Russian society.
The world’s perception of Russia has changed. Russia’s attraction as a wild, fun-loving and anything-goes country is wearing off. In its place: a dreary, corrupt, uncouth and threatening mass. Against this background, even well-deserved victories by Russian athletes will hark back to the Soviet era when they were exploited to stir up a jingoist fever.
No matter how wildly the Russians party next month in Vancouver, a ticket to such events won’t be as hot an item as it was in Turin.
Alexei Bayer, a native Muscovite, is a New York-based economist.
TITLE: Afghan Escape Film ‘Kandahar’ Pulls in Crowds
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: “Kandahar,” a new blockbuster that looks at an almost forgotten escape from captivity in the heart of Afghanistan, is packing in crowds at cinemas all over the country.
The film, which stars a trio of the country’s most famous actors, Vladimir Mashkov, Andrei Panin and Alexander Baluyev, is based on the true story of seven Russian Il-76 pilots who were captured by the Taliban in August 1995 while delivering arms to a Russian ally in Kabul. After spending more than a year in grim conditions in Taliban-controlled Kandahar, the pilots managed to escape by flying their own plane out.
The crew, even though a Taliban jet was sent after them, avoided recapture, and upon their return, two of them were awarded “Hero of Russia” medals.
While several films, most famously Fyodor Bondarchuk’s “The 9th Company,” have looked at the Soviet war in Afghanistan, the film by young director Andrei Kavun is the first one to look at Russia’s more recent history in Afghanistan.
The film’s script is based on a diary written in captivity by the crew’s captain, Vladimir Sharpatov, played by Baluyev, and focuses on their time in captivity and on the growing tensions between the group and especially between Baluyev’s character and Mashkov’s. A number of changes from the real-life story were made, with five crew in the film instead of the original seven and one of the crew crying at one point — something that Sharpatov is reported to have said would never have happened.
“It is a film about individuality, about personalities and not about a team. Their cooperation, arguments, clashes are the main part of the dramatic conflict in ‘Kandahar.’ I hope that this film will help fairness win out. In real life, there were seven, but only two became ‘Heroes of Russia.’ I think that is not fair,” Mashkov told Komsomolskaya Pravda.
Three of the original crew could not make the premiere of the film as they had flown out to earthquake stricken Haiti to deliver humanitarian aid.
Although some have accused the $7 million movie of attempting to match Hollywood war movies with its gung ho attitude, Kavun says the film is more about society than patriotism or bravery.
“I don’t understand the modern meaning of the word patriotism,” Kavun said in a telephone interview. “All these words like patriotism and motherland have lost their meaning. … My film is about the fact that it is possible to love your country, regardless of its attitude toward you.”
He has previously said that you can’t call a film patriotic when the main part of it is the failure of the state to rescue your heroes.
Critics have met the film with mixed reviews. Kommersant critic Lidia Maslova said that despite attempts to film a psychological drama, the film still falls into the trap of the typical thriller “about terrorists and real men who can resist them.”
Still, one fan is Dmitry Rogozin, a former nationalist politician and current ambassador to NATO in Brussels who tweeted, “I hope the film ‘Kandahar’ about pilot-heroes who dared to hijack a military transport plane right from the Taliban will be a great success,” even though in a previous tweet about the film he had written, “Nothing like watching Tarantino nonsense!”
The film’s pace is down to Italian editor Gabriella Cristiani, who won an Oscar for her editing of Bernardo Bertolucci’s “The Last Emperor.”
TITLE: Historian Robert Service Selects Top 5 Books on Totalitarianism
AUTHOR: By Daisy Banks
PUBLISHER: Special to The St. Petersburg Times
TEXT: Robert Service is professor of Russian studies at St. Antony’s College, Oxford. His research interests cover Russian history from the late 19th century to the present day, and he has written numerous books on the subject. He talks about the books that led to his passion and the importance of analyzing the causes and outcomes of political processes.
“1984” — George Orwell. I read this, like most people do, when I was in my midteens. At that stage I was a classicist, and I had no thought of doing anything about Russian history. I think, looking back, this was the book which influenced me more than any other when I came to take up historical study, because of its astonishing insight into totalitarian regimes. And I think that one of the great things about Orwell’s account of totalitarianism is not just the tremendous power that 20th-century dictatorships have exercised, but also how sordid and squalid the living conditions are for many of the people there. And I’m impressed by how individuals, with any independence of mind, still managed to survive those conditions. In other words, the book looks at how order and disorder co-habit. And I think Orwell, without ever having gone to the U.S.S.R., really did understand it from the outside brilliantly.
When I read depictions of what a perfect communist order would look like, written by communists, all of the nasty underbelly of communism is kept back. But, over the 1960s and 1970s, more and more accounts came out of the U.S.S.R. concerning this picture that Orwell drew. People lived cheek by jowl with each other, and there was this extraordinary central power along with sordid demoralizing social conditions. Most notably, Alexander Solzhenitsyn’s book “The Gulag Archipelago” went in the same direction. This almost became the main theme of Soviet literature.
“History of the Peloponnesian War” — Thucydides. Thucydides wrote the classic account of the war between Athens and Sparta in the 5th century B.C. It was a war that took place over many years, and it brought Athens to its knees. It was the trauma of Thucydides’ lifetime, and in the book he sought to explain why the war had gone on so long and why Athens lost it. Reading Thucydides was just a magical experience because of the way he attends to causation. I love the attention he gives to supplying the reader with all manner of possible explanations before going for the one that he prefers. He has an almost surgical precision in the way he weighs up one factor against another. He is one of the most original historians.
I think that while I have a very strong set of guidelines for understanding the 20th-century communist experience, I hope that I don’t canalize everything into a single exclusive explanation.
“Crime and Punishment” — Fyodor Dostoevsky. Oh, this is the antidote to ways of looking at history that insist only on external and objective workings of political and economic and social circumstances. A long time before Freud, Dostoevsky was at work explaining the contradictory, clashing tendencies of the human spirit through his anti-hero, the murderer Raskolnikov. I read this in my second year at college when I was still doing Russian literature and my very enlightened tutor said that I could just stop doing the rest of the 19th-century curriculum and concentrate on Dostoevsky for a year. I have never regretted it. I think Dostoevsky understood psychological and social contradictions in life to a peak of intensity later writers have seldom been able to match.
“The Twelve” — Alexander Blok. Alexander Blok was a poet living in the early 20th century, a symbolist poet who wrote the most opaque verses imaginable about the British Museum, music of the times. It was all deeply congenial. But, when the 1917 Revolution happened, he managed to attune himself to the chaos and the disorder. He wrote about the achievements and disasters of revolutionary Russia. He centered on a rabble that was roaming through the streets of Petrograd at the end of 1917. And he used this very refined language that he had developed many years earlier, and he combined that with snatches of folksong and street jargon that make for one of the really great pieces of Russian poetry — and also world poetry — in the first half of the 20th century.
I remember that when I read this as a student of Russian literature it went really deep. When I later came to study the Revolution itself, the politics and the economics and the sociology of the Revolution — time and again I could hear in my mental ear the rhythms of this poem. It’s one of the great literary achievements.
He was spurned by the people he belonged to politically because half of him sided with the Russian Revolution which in their view destroyed the values of the Old Russian intelligentsia. On the one hand he was spurned by the Bolsheviks themselves who recognized that he was still an old-style intellectual and they placed limits on his ability to travel abroad. But, because he fell between stools, he could see both sides of practically every situation.
“My Life” — Leon Trotsky. This is one of the books I read when I was starting to move into historical study. It’s a wonderful memoir of a childhood and young adulthood. Trotsky is a wonderful writer. I think he is one of the two great political writers of the 20th century, the other being Winston Churchill. But, as you move through the book, you get a very strong sense of a man who is justifying his own politics and his own career choices. He gets less and less attractive and less and less plausible as the first half of the book gives way to the second half. In that sense it was a very influential work for me because I started thinking that he was a very attractive man, and I ended up thinking that he was a very unattractive politician whose self-justification for the terror and the dictatorship and the ultracentralist discipline he imposed didn’t have much merit.
Autobiographies are always attempts at self-justification, and they always involve evasion and selectivity and sometimes outright falsification. I was really lucky when I researched Trotsky for my biography, to get the original manuscripts for Trotsky’s “My Life.” And it was really impressive to go through the manuscript and see what bits he altered before they appeared in the final edition. He cuts down on the references to his disputes with Lenin, and he cuts down on references to the Jewish background of several of his early acquaintances. He cuts down on examples of his own behavior where he showed vacillation or feeble-mindedness. His published work is a much leaner and much more effective attempt at self-justification than the original draft.
The unedited version of this interview can be found at www.five-books.com.
TITLE: Trail of Shadowy Arms Deal Leads to Kazakhstan
AUTHOR: By Simon Shuster
PUBLISHER: The Associated Press
TEXT: SHYMKENT, Kazakhstan — The trail of the plane busted in Thailand in December 2009 for allegedly smuggling North Korean weapons to Iran leads back to a small airfreight company housed near an old Soviet airfield on the edge of the Kazakh steppe.
The aging Russian plane’s odyssey took it through a web of companies, financiers and air cargo carriers with addresses stretching from New York through the Persian Gulf to New Zealand, an Associated Press investigation has found.
The persistence of carriers willing to ship anything anywhere for a price — even to countries under international sanctions like Iran and North Korea — has frustrated global efforts to stem the flow of illegal arms.
Alexander Zykov, whose crew was flying the plane grounded in Bangkok, denies that he had anything to do with the seized shipment of 32 metric tons of explosives, rocket-propelled grenades, surface-to-air missiles and other weaponry.
But family members say the plane’s pilot and crew were working for Zykov’s East Wing airfreight company when they were taken into custody. And crewmen who have worked for Zykov said they have flown cargo on rattletrap Russian planes into conflict zones such as Sudan and Somalia.
They often did not know what their cargo really was, four of these crewmen said. Two of them spoke of an industry that sometimes uses falsified flight documents and skirts customs rules.
The Soviet collapse left an infrastructure of idled aircraft and pilots desperate for work, and the families of the arrested crew portrayed them as pawns in this arms trade.
Speaking from the Kazakh city of Almaty, Zykov insisted that his crew was not working for him at the time of the Dec. 12 weapons seizure, saying all five took an unpaid leave about two weeks before the flight. He and his wife, Svetlana Zykova, who is listed as the plane’s owner, denied any knowledge that arms were involved.
“Go find the people who ordered this flight,” Zykov told an AP reporter and hung up the phone.
The AP spent three weeks trying to do that, studying documents and talking to pilots, shippers, government officials and experts on arms trafficking. No one would take responsibility for the arms aboard the flight, which, had they not been seized, would have followed a circuitous route spanning more than 24,000 kilometers.
The case came to light when Bangkok police, acting on a tip, said they seized the Russian-made Il-76 cargo plane and its five-member crew — four Kazakhs and a Belarussian — after finding weapons on board.
All five have been charged with possessing arms and are in a Thai jail pending investigation.
The Russian-language flight plan names Mehrabad Airport in Tehran as the cargo’s destination. The cargo manifest lists “oil industry spare parts” of various types but no weapons.
Aerotrack Ltd. of Ukraine and the Korean General Trading Corporation of Pyongyang, North Korea, are identified as the companies responsible for the cargo.
Shymkent, the town where the four Kazakh crew members come from, is a dismal outpost full of ramshackle houses and kebab shops. Zykov, a local cargo magnate, is something of a legend here, and the airmen who work for him are known around town as “Zykovtsy” — Zykov’s guys.
According to the arrested crew’s families, Zykov has employed them for about a decade and hired them for the Bangkok flight.
Zykov houses his pilots in a compound at the edge of town protected by barbed wire, cameras and a snarling guard dog at the gate. Its massive concrete walls and satellite dishes stand out among the surrounding shacks and hovels.
Pavel Mogilevsky, who manages the compound, confirmed that the crew members arrested in Thailand were East Wing employees.
“Yes, those are our guys. They worked for us,” he said, after opening a heavy metal door in the outer wall for a brief chat. But on this particular flight, he said, they were moonlighting for another employer whom he didn’t identify, and he denied that East Wing was involved.
Zykov’s wife, reached by phone in Sharjah, United Arab Emirates, where the couple shares a home, also denied any knowledge of arms aboard her plane, saying: “If we’d known, we would never have leased it out.”
Zykov has links to a chain of companies that stretches across four continents. One — SP Trading Ltd., which leased out the plane for this shipment — was created just five months ago and managed by a longtime Zykov associate, Yury Lunyov.
This is not the first time that Zykov’s name has come up in connection with sanctions-busting flights, said Brian Johnson-Thomas, an arms trafficking expert who works closely with the International Peace Information Service, a Belgium-based independent research institute that focuses on Sub-Saharan Africa.
According to a UN Security Council report from November 2006, a firm owned by Zykov’s wife provided the plane that carried Somali volunteers to fight alongside the Hezbollah militia against Israel during the 2006 Lebanon War.
“It also flew [Somali] volunteers for training to both Libya and Syria,” Johnson-Thomas said.
He added that in both cases — the Somalia flights and last month’s Thai seizure — the Zykovs may have been unaware of what their planes were being used for.
In the early 1990s, thousands of flight crews across the disintegrating Soviet bloc, most of them decades from retirement, were discharged, while well-connected businessmen bought up Soviet military cargo planes, mainly old Ilyushins and Antonovs, to start airfreight companies.
Zykov got his start this way, and some of the airmen in Shymkent defended him as a man who looked after their interests in an industry where work is hard to find and often risky.
“Pretty much every month they call up with offers” of work, said Vitaly, a pilot in Vitebsk, Belarus, home of the fifth crew member arrested in Bangkok, Mikhail Petukhov. Vitaly, a friend of Petukhov who said they previously worked together in Sudan, asked that his surname not be used for fear of losing his job.
“It’s not easy working for them. For one thing, their planes are old, so the flights are dangerous. And it also means being ready to break pretty much every aviation law on the books,” he said.
“But it’s work, and they pay well,” he added.
In Shymkent, an engineer who has worked on Zykov’s planes for years said the men jailed in Thailand were part of Zykov’s regular crew. But the engineer said crew members would have been free to take work from another employer between East Wing flights.
“You get paid to do the flight, and you don’t ask any questions about what’s inside the boxes,” said the engineer, who also asked not to be identified, fearing for his job.
On July 26, Alexander Zrybnev, an engineer on the plane seized in Thailand, traveled to Kiev to join the Zykov crew that he always worked with, said his twin sister, Svetlana Naidenova, 53. He waited there for five months, she said, before being assigned to what she called a major flight to pick up and deliver cargo from North Korea in early December.
Two other relatives — Natalya Isakova, daughter of captain Ilyas Isakov, and Yanna Abdullayev, daughter of navigator Viktor Abdullayev — corroborated Naidenova’s story in separate interviews.
All said they learned of the Dec. 12 arrests of their relatives through the news media. When Naidenova called Zykov for an explanation the next day, she said, he referred all her questions to Lunyov of SP Trading Ltd.
Interviewed by the AP in Kiev, Lunyov said he had worked with Zykov for years, and Zykov confirmed that they know each other well.
SP Trading, the company that leased out the plane to make the North Korean shipment, was registered in New Zealand on July 29, roughly four months before the flight took off and three days after its Kazakh crew members had gathered in Kiev.
Lunyov conceded that a chain of lease agreements links the Zykovs to the plane and crew carrying the North Korean weapons, but he denied that they were directly involved in organizing the shipment or knew of its contents.
The chain begins with Svetlana Zykova’s company in Sharjah, Overseas Trading FZE, leasing its 30-year-old Il-76 to a Georgian firm, Air West airlines.
The owner of Air West, Levan Kakabadze, said last month that he did not know the plane’s final destination or the real nature of its cargo.
Air West in turn leased the Il-76 to Lunyov’s SP Trading, a transaction carried out through two major New York banks, Deutsche Bank and JP Morgan Chase, which served as intermediaries along with a Georgian and a Danish bank, according to the lease agreement.
Both Deutsche Bank and JP Morgan Chase declined requests for comment on the transaction.
SP Trading then chartered the plane Dec. 4 to a Hong Kong-registered firm, Union Top Management, or UTM, according to the charter agreement. It was the first flight ever handled by either SP Trading or UTM, created just a month earlier, on Nov. 2.
UTM reported that it was carrying oil industry spare parts from North Korea to Iran, according to the charter agreement and the plane’s packing list, which details the cargo.
Extensive efforts since December to find UTM and the man who signed its incorporation in Hong Kong, Dario Cabreros Garmendia of Spain, have been unsuccessful.
Messages to the e-mail address given for the North Korean company came back undeliverable, and no one answered the telephone number provided.
New Zealand police said Friday that they were “working with a number of other government agencies to determine links with New Zealand-formed shell companies, in particular SP Trading Limited, and the December 2009 munitions seizure in Thailand.”
Lunyov said a Ukrainian firm, Aerotrack Ltd., was to blame for falsifying the paperwork and attempting to smuggle the weapons.
It was Aerotrack’s job, he said, to chaperone the shipment on the final leg of its journey from Kiev to Tehran, after picking up its cargo from North Korea and making several other stops, including in Bangkok and Al-Fujairah, United Arab Emirates.
On the packing list, Aerotrack is listed as the consignee for the shipment, alongside the shipper — the North Korean company.
Efforts to reach Aerotrack were unsuccessful. Its address is listed as a Kiev office building, but security guards and secretaries there said there had never been a company with that name at that address.
The packing list gave the name Victoria Doneckaya as the contact person for Aerotrack. A woman who answered the Kiev phone number listed on the document said it was a private apartment and no one by that name had ever lived there. Faxes sent to Doneckaya’s fax number went unanswered.
The Ilyushin’s roundabout flight plan looks as complicated as the paperwork that set it up.
It took off from Baku, Azerbaijan, and landed in Al-Fujairah in the United Arab Emirates and Bangkok before reaching Pyongyang, taking on its cargo and heading back to Bangkok.
Had it not been seized, it would have continued to the Sri Lankan city of Colombo, then Al-Fujairah and Kiev, before doubling back to Tehran to offload — and would have finished up back in Europe, at Podgorica, Montenegro.
TITLE: Mid-Atlantic Digs Out of Snow, Government Shut
AUTHOR: By Nafeesa Syeed and Ben Nuckols
PUBLISHER: The Associated Press
TEXT: WASHINGTON — The federal government was shuttered Monday while the Mid-Atlantic region dug out from as much as three feet of snow that left tens of thousands without power and blocked trains, planes and cars, with another storm looming.
Federal agencies that employ 230,000 in Washington were closed, as were many local governments, businesses and school districts across the region. Around 200,000 students in Philadelphia’s public and Roman Catholic schools got a snow day.
With more snow expected Tuesday, stranded travelers and those struggling with no electricity wondered when they’d escape the icy, gray mess.
“You’ve got a whole city held captive here,” Gwen Dawkins, who was trying to get to Detroit, said as she waited at Washington’s Reagan National Airport, where all flights had been canceled after 18 inches of snow was recorded by Sunday. That was the fourth-highest storm total for Washington. Reagan remained closed for snow and ice removal Monday and officials said operations were expected to resume at some point during the day.
Baltimore-Washington International Thurgood Marshall Airport opened one runway Sunday evening, but airport officials warned that delays and cancellations will likely continue Monday.
Dulles International Airport was open, but the Metropolitan Washington Airports Authority warned that some flights may be canceled or delayed.
More than 24,000 utility customers in Virginia were without electricity after some areas got nearly a meter of snow. In Pennsylvania, Allegheny Power reported outages to about 65,000 customers. West Virginia had about 5,000 customers without electricity.
The National Weather Service called the storm “historic” and reported a foot of snow in parts of Ohio and 60 centimeters or more in Washington, Delaware, New Jersey and Pennsylvania. Parts of Virginia, Maryland and West Virginia got closer to a meter.
Crews plowing streets and homeowners shoveling their walkways faced the possibility of another storm adding to the work. The National Weather Service issued a storm watch for the Washington area Tuesday, saying there was potential for another 5 inches or more of snow. Forecasters expect highs in the low- to mid-30s for the next few days, though sunshine on Monday should help melt some of the snow, said weather service meteorologist Bryan Jackson.
The sight of cross-country skiers cascading down monument steps and flying snowballs has since given way to images of people hunched over snow shovels or huddled next to fireplaces.
John and Nicole Ibrahim and their 2-year-old son, Joshua, have been without power at their suburban Washington home in Silver Spring, Maryland, since overnight Friday. They were among hundreds of thousands without electricity across the region, and utilities warned it could be days before electricity is restored to everyone.
“We were all bundled up in the same bed together and (Joshua) was coughing in his sleep and his heart was racing, and we worried he might be getting pneumonia,” Nicole Ibrahim said.
Eric Berry, a plow driver for Baltimore, said he worked 12-hour shifts Saturday and Sunday. He said overanxious residents were sometimes hindering his ability to clear secondary roads by digging out their cars and moving them into the path of his plow.
“They feel like they need to park in the street, so that when it’s time to go, they can up and go,” Berry said.
Authorities say most public transportation in Philadelphia has resumed. In Pittsburgh, bus service restarted but light-rail wasn’t running. Washington’s Metro trains were to be limited Monday to underground rails, and its buses were going to operate on a very limited basis.
Despite the snow, watching the Super Bowl was still a priority for many. Eric Teoh, 29, of Arlington, said he borrowed his neighbor’s snow shovel and spent at least an hour getting his car out of the snow to head to the Crystal City Sports Pub in Arlington, Virginia.
“I was snowed in and I dug my car out today to come here,” he said. “I couldn’t go anywhere.”
The frigid temperatures and snowy and icy streets did not deter runner Patrick Duffy, 23, from training for the Pittsburgh Marathon in May. He admitted was going slower than usual.
“I’m trying not to fall. I haven’t fallen yet,” Duffy said, his eyelashes frosted white.
TITLE: Iran Says It Will Raise Uranium Enrichment
AUTHOR: By George Jahn
PUBLISHER: The Associated Press
TEXT: VIENNA — Iran on Monday told the UN nuclear agency that it will start enriching uranium to higher levels, shrugging off international fears that such a move will bring it closer to being able to make nuclear warheads.
Iranian envoy Ali Asghar Soltanieh sought to dispel such concerns. The uranium to be enriched to 20 percent would be used only to make fuel for Tehran’s research reactor, which is expected to use up its present stock within a year, he said.
Soltanieh, who represents Iran at the Vienna-based International Atomic Energy Agency, also said that IAEA inspectors would be able to fully monitor the process. And he blamed world powers for Iran’s decision, asserting that it was their fault that a plan that foresaw Russian and French involvement in supplying the research reactor had failed.
“Until now, we have not received any response to our positive logical and technical proposal,” he said. “We cannot leave hospitals and patients desperately waiting for radio isotopes” being produced at the Tehran reactor and used in cancer treatment, he added.
Iranian President Mahmoud Ahmadinejad had already announced Sunday that his country would significantly enrich at least some of the country’s stockpile of uranium. Still, Monday’s notification to the IAEA was important as formal confirmation of the plan, particularly because of the rash of conflicting signals sent in recent months by Iranian officials on the issue.
The Iranian move came just days after Ahmadinejad appeared to move close to endorsing the original deal, which foresaw Tehran exporting the bulk of its low-enriched uranium to Russia for further enrichment and then conversion for fuel rods for the research reactor.
The plan was endorsed by the U.S., Russia, China, Britain, France and Germany — the six powers that originally elicited a tentative approval from Iran in landmark talks last fall. Since then, however, mixed messages from Tehran have infuriated the U.S. and its European allies, who claim Iran is only stalling for time as it attempts to build a nuclear weapon.
The original plan was welcomed internationally because it would have delayed Iran’s ability to make a nuclear weapons by shipping out most of its low-enriched uranium stockpile.
Although material for the fissile core of a nuclear warhead must be enriched to a level of 90 percent or more, just getting its stockpile to the 20 percent mark would be a major step for the country’s nuclear program. While enriching to 20 percent would take about one year, using up to 2,000 centrifuges at Tehran’s underground Natanz facility, any next step — moving from 20 to 90 percent — would take only half a year and between 500-1,000 centrifuges.
Achieving the 20-percent level “would be going most of the rest of the way to weapon-grade uranium,” said David Albright, whose Washington-based Institute for Science and International Security tracks suspected proliferators.
TITLE: Space Shuttle Blasts Off on Last Night Flight
AUTHOR: By Marcia Dunn
PUBLISHER: The Associated Press
TEXT: CAPE CANAVERAL, Florida — Endeavour and six astronauts rocketed into orbit Monday on what’s likely the last nighttime launch for the shuttle program, hauling a new room and observation deck for the International Space Station.
The space shuttle took flight before dawn, igniting the sky with a brilliant flash seen for miles around. The weather finally cooperated: Thick, low clouds that had delayed a first launch attempt Sunday returned, but then cleared away just in time.
“Looks like the weather came together tonight,” launch director Mike Leinbach told the astronauts right before liftoff. “It’s time to go fly.”
“We’ll see you in a couple weeks,” replied commander George Zamka. He repeated: “It’s time to go fly.”
There are just four more missions scheduled this year before the shuttles are retired.
“For the last night launch, it treated us well,” Leinbach said.
Endeavour’s destination — the space station, home to five men — was soaring over Romania at the time of liftoff. The shuttle is set to arrive at the station early Wednesday.
Zamka and his crew will deliver and install Tranquility, a new room that will eventually house life-support equipment, exercise machines and a toilet, as well as a seven-windowed dome. The lookout has the biggest window ever sent into space, a circle 31 inches across.
It will be the last major construction job at the space station. No more big pieces like that are left to fly.
Both the new room and dome — together exceeding $400 million — were supplied by the European Space Agency.
NASA began fueling Endeavour on Sunday night just as the Super Bowl was kicking off to the south in Miami. The shuttle crew did not watch the game — neither did the launch team — but it was beamed up to the space station in case anyone there wanted to watch it.
Endeavour’s launch also was broadcast to the space station residents, who got to watch it live.
Launch manager Mike Moses said he got “evil glares” in the control center for making his team report to work on Super Bowl night. He noted that the shuttle’s fuel tank was made in New Orleans. “They were at least happy with the results of the game,” he said with a smile.
The coin used in the opening toss flew to the space station in November, aboard Atlantis.
Monday morning’s countdown ended up being uneventful, except for a last-minute run to the launch pad. Astronaut Stephen Robinson forgot the binder holding all his flight data files, and the emergency red team had to rush it out to him, just before he climbed aboard. The launch team couldn’t resist some gentle teasing.
A quick look at the launch video showed a couple pieces of foam insulation breaking off Endeavour’s external fuel tank, but none appeared to strike the shuttle, officials said.
The 13-day mission comes at an agonizing time for NASA. Exactly one week ago, the space agency finally got its marching orders from President Barack Obama: Ditch the back-to-the-moon Constellation program and its Ares rockets, and pack on the research for an as-yet-unspecified rocket and destination.
NASA’s boss, ex-astronaut Charles Bolden, favors Mars. But he, too, is waiting to hear how everything will play out.
The space station came out a winner in the Obama plan. The president’s budget would keep the outpost flying until at least 2020, a major extension.
The spectacle of the night launch illuminating the sky attracted a crowd, including some members of Congress, federal big shots and European space leaders.
TITLE: 17 Soldiers Dead, 53 Rescued In Kashmir Avalanche
AUTHOR: By Aijaz Hussain
PUBLISHER: The Associated Press
TEXT: SRINAGAR, India — A massive avalanche plowed into an Indian army training center at a ski resort town in Indian-controlled Kashmir on Monday, killing 17 soldiers and critically injuring 17 others.
The avalanche slammed into the army’s High Altitude Warfare School at about 11 a.m. and swept away the soldiers during a training session, said army spokesman Colonel Vineet Sood. It was the worst avalanche in the area in many years, he said.
Seventeen bodies were found and 53 troops were rescued about six hours after the speeding mass of snow and ice struck the center high on a Himalayan slope, senior police officer Qayoom Manhas said.
Manhas said of those rescued, 17 needed emergency medical care.
About 70 troops were taking a skiing test when the avalanche came crashing down, he said.
Rescue efforts involving army, police and civilian officials were “very timely, swift and coordinated,” Manhas said.