SOURCE: The St. Petersburg Times
DATE: Issue #1548 (9), Tuesday, February 16, 2010
**************************************************************************
TITLE: Irkutsk Sees Dueling Rallies Over Paper Mill
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: IRKUTSK — Competing rallies on Saturday were held in Irkutsk over plans to relaunch the Baikalsk Paper and Pulp Mills, a day after majority owner Oleg Deripaska announced that he was planning to divest the controversial asset.
The government, which owns a 49 percent stake in the plant, agreed Jan. 13 to reopen the facility and allow it to dump waste into Lake Baikal so that it could resume output of its most profitable products. The plant is the main employer in Baikalsk, a single-industry town of 16,000 on the lake’s shore.
Deripaska, who controls the remaining 51 percent through Continental Management, a unit of his Basic Element holding, said Friday that the decision to reopen the plant was based on social considerations and that he would hand over his stake to the city as soon as the mill became profitable.
“Relaunching the facility is a social project, not a commercial one. From the moment it was stopped a year and a half ago, we, as a private investor, have spent more than 1 billion rubles [$33 million] of our own funds to pay salaries and pensions and to maintain the heating, without which the city would have simply frozen,” Deripaska said in an interview to Interfax circulated by Basic Element’s press office.
Some of the funds were also used to prepare for the relaunch, he said.
“Statements about how the decision to restart the [station] was made for the sake of the private shareholder are complete nonsense,” Deripaska said.
He said the company was in talks with the Baikalsk city government about handing over “our remaining stake” once the mill is operating at a profit, which he said could be as soon as May. Basic Element is planning to create 200 jobs in the town unrelated to the mill to help the city diversify, he added.
In a separate statement, Basic Element said Continental Invest, controlled by businessman Nikolai Makarov, was obtaining from Continental Management a 25.07 percent stake in the Baikalsk Paper and Pulp Mills.
The statement did not disclose terms of the deal, saying only that Continental Invest would start participating in the plant’s management. Deripaska and Makarov formed Continental Management in 2002 through a merger of their forestry assets, the statement said.
The St. Petersburg Times was unable to reach Makarov for comment.
Deripaska plans to hand over his remaining stake of 25.02 percent to the city for free after restarting the plant, Oksana Gorlova, a spokeswoman for Continental Management, said Sunday. She declined to comment on how the handover would comply with restrictions in the Budget Code that keep municipal structures from owning private companies.
“Solutions allowing that to happen will be found while the plant is being restarted,” she told The St. Petersburg Times.
Deripaska earmarked the 1 billion rubles “to support the plant’s infrastructure” over the period from October 2008 to December 2009, Gorlova said. She declined to elaborate on how the money was spent, saying only that the last 189 million rubles was allotted in November to finance preparations to restart the facility.
The changes at the plant came a day before more than 2,000 people gathered for an environmental rally Saturday to protest the reopening. Nearby, about 1,000 people rallied in support of Prime Minister Vladimir Putin’s decree allowing the plant — the city’s main employer — to restart.
“People should be offered employment that does not pollute Baikal, they have nowhere to go because the government does not want to create alternatives,” said Mikhail, who was holding a sign reading “We are 70 percent made of Baikal water.”
“I am sure Baikal has other ways to develop, without the plant,” said Marina Rikhvanova, coordinator of Baikal Wave, one of the groups that organized the rally.
Irkutsk has experienced rallies of several thousand in the past when people protested plans to lay a Transneft pipeline along the shore of Baikal. The pipeline was subsequently moved about 400 kilometers away.
Activists were also gathering signatures Saturday for a petition seeking clean employment alternatives for Baikalsk residents. The petition, asking President Dmitry Medvedev to cancel Putin’s decree and posted on the web site Babr.ru, has more than 31,000 signatures.
“We only have one Baikal,” said Natalya Tumureyeva, an activist from Ulan-Ude, the capital of Buryatia, who came to the rally late.
The van in which she was traveling “was stopped seven times, at every traffic police station. They were trying to stop us from participating,” said Tumureyeva, who is a member of Green Russia, a faction in the Yabloko party in Buryatia.
TITLE: Nord Stream Pipe Wins Final Clearance
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A Gazprom-led joint venture on Friday cleared the final hurdle to begin construction on Nord Stream, the $10 billion pipeline that will carry Russian gas to Europe and reduce the risk of supply disruptions.
A regional Finnish agency issued a permit deeming the pipeline environmentally safe for the Finnish part of the Baltic Sea that it will traverse, giving the project its last go-ahead, Nord Stream AG, the venture building the pipeline, said in a statement. The four other littoral states affected by the construction — Denmark, Sweden, Germany and Russia — have already given their blessing to the project over the past several months.
Nord Stream will begin laying pipes across the bottom of the sea on April 1 after the sea’s ice cover, which extends 120 kilometers offshore and is currently 50 centimeters thick, melts away, said Sergei Serdyukov, the company’s chief technical officer.
“We will start work on the day when people will laugh,” he said in reference to April’s Fool Day.
The first gas will flow in September next year, Prime Minister Vladimir Putin said in a meeting with Marcel Kramer, chief executive of the Netherlands’ gas distribution company Gasunie, late Thursday.
The company holds 9 percent in the joint venture, while Gazprom owns 51 percent and the remaining stock is split evenly between Germany’s Wintershall and E.On Ruhrgas.
The 1,220-kilometer pipeline will be able to carry 27.5 billion cubic meters of gas a year. A second phase — to be completed in 2012 — will double the capacity to 55 bcm per year, or two-thirds of Germany’s annual gas consumption. Nord Stream is designed to alleviate Russia’s dependence on transit countries Ukraine and Belarus in view of repeated midwinter tugs of war that have disrupted European supplies.
Despite clearing the final hurdle after four years of talks, environmental studies and petitioning for permits, staffers sounded reserved once the deal was done.
“There’s no time for celebration. The entire team is working very hard,” Serdyukov said. “It just gives us satisfaction that we did everything right.”
The pipeline project’s chief executive, Matthias Warnig, marked the occasion by congratulating the venture’s employees, Serdyukov said. Employees also congratulated one another, said Irina Vasilyeva, a Nord Stream spokeswoman.
“There’s still a lot of work ahead,” she said. “We promised to bake a pudding. And we have yet to bake it.”
Two barges will start laying pipes in the middle of Swedish waters and continue the work in various separate stretches of the route, scheduled to take into account bird nesting patterns and fish spawning seasons, seal reproduction and tourism, she said. Workers will ultimately connect these separate legs of the pipe, she said.
“We will not disturb nature in its sensitive moments,” Vasilyeva said.
Putin said at the Gasunie meeting that the pipeline construction would end in May next year and that testing will take place over the summer months.
Gazprom already has contracts to supply more than 20 bcm of gas through the line, Nord Stream said.
The deadline for completing the pipeline has been pushed back at least twice from an initial estimate that it would start operating by the end of 2010. Additional studies to address the environmental concerns of the littoral states were the reason for the delays.
Poland, which is another transit country for Russian gas, protested the pipeline’s construction along with Estonia, although it won’t cross their waters.
TITLE: IKEA Fires Two Top Managers Over Bribes
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Swedish furniture retailer IKEA has fired two of its top-ranking managers for turning a blind eye to a bribery case involving St. Petersburg’s Mega IKEA shopping mall.
“The authorities of IKEA received information that the management of one of the company’s Russian branches had closed its eyes to a case in which a contractor company paid a bribe to guarantee electricity supply at MEGA shopping mall in St. Petersburg,” IKEA said in a statement, Interfax reported.
The bribe appears to have been paid after the IKEA had difficulties in connecting its new outlet and Mega shopping mall in St. Petersburg to the electricity supply in 2007.
“We are deeply upset and disappointed,” Michael Olsson, president of IKEA, wrote in the company’s statement. “Any tolerance of a display of corruption is completely unacceptable for IKEA. We consider the situation to be deplorable, and we’ll be acting promptly and resolutely.”
The company fired Per Kaufmann, director of IKEA for Central and Eastern Europe, and Stephan Gross, IKEA’s director for real estate in Russia, Interfax reported. IKEA is currently investigating the circumstances of the incident, the news agency reported.
“IKEA always stands up against corruption. All the branches of the concern do its work absolutely transparently. The company has a strict code of business ethics and clear rules that are obligatory not only for regular employees and authorities of IKEA, but also for its business partners. These rules are the same for all the countries of the world, and Russia is no exception. In this case those rules were violated,” the report said.
Last year, IKEA said it had temporarily stopped investing in Russian projects due to “the unpredictable nature of administrative procedures in some regions.”
One of the main reasons for freezing further investment in the country was a delay in opening IKEA’s trade center in Samara due to the problems with permission documentation.
The Russian Ministry of Economic Development got involved in the situation and promised to help solve it.
Kirill Kabanov, head of the Russian National Anti-Corruption Committee, said IKEA “did the right thing in firing its managers who had turned a blind eye to bribery.”
“If IKEA says that it never pays bribes and even refuses to open stores when encountering such problems, and then it needs to follow its own line,” Kabanov told The St. Petersburg Times.
“Such actions show how strong the company is, how well it sticks to its principles, and how much self-respect it has,” he said.
Kabanov said that although it is difficult to solve certain business problems in Russia without having to resort to bribery, “it is possible.”
“In the case of a brand as well known as IKEA, the right thing to do in this situation is to declare that they can’t work in this country,” he said.
Kabanov said that in order to fight corruption in the country, state and society need to combine their efforts.
“Businesses need to understand that corruption makes them pay more, and companies should unite and refuse to do so. Otherwise, state bodies can’t solve this problem alone,” he said.
Nina Oding, senior economist at St. Petersburg’s Leontief Center for Social and Economic Research, said IKEA did what it had to do according to its corporate rules.
“IKEA traditionally knows how to fight corruption,” Oding said.
“Corruption is always a question of a company’s reputation, and many companies manage to fight that problem, even in Russia.”
Oding said that “corruption often acts as oil for the slow mechanisms of rules that were made that way, intentionally or unintentionally.”
IKEA is one of the world’s biggest retailers of furniture and household goods. Founded in 1943, it currently has more than 290 stores in 36 countries. In 2008 the income of the company reached 22 billion euros.
In Russia, IKEA has 13 stores and 13 Mega retail centers. The first IKEA store in Russia opened in 2000.
TITLE: Provider Refuses to Name Court
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: A national Internet provider has refused to name the court that it claims ordered the company to block access to several oppositional web sites, while continuing to deny access to them. Human rights activists denounced the situation as “illegal.”
“We do not publish this information,” VimpelCom’s press officer Ksenia Korneyeva said by phone on Friday.
“This is targeted information, which we’re not obliged to disclose,” Korneyeva said.
VimpelCom, which sells Internet access under the trademarks Beeline and Corbina Telecom, blocked a number of web sites, including the internet sites belonging to acclaimed author and opposition politician Eduard Limonov and the activists of his banned National Bolshevik Party (NBP) on Feb. 2.
Ivan Simochkin, a subscriber in Moscow, reported that Beeline’s technical support service had told him Thursday that the sites had been blocked on the grounds that the NBP was banned by court as “extremist” in 2007.
“I think that some law-enforcement agency — usually the prosecutor’s office does such things — has sent a memo: ‘Pay attention to extremist sites,’ and attached a court ruling for credibility,” Alexander Verkhovsky of the SOVA human rights organization said Monday.
According to Verkhovsky, the 2007 court ruling does not oblige VimpelCom to block the web sites, as the law demands that further investigation be conducted to determine whether a certain web site belongs to a particular organization.
“[Banning web sites] requires a court procedure,” he said.
“Why is a commercial organization taking it upon itself to decide what belongs to the NBP and what doesn’t? It’s strange. In fact, it’s a criminal offence,” Verkhovsky said.
TITLE: Police Investigate Alleged Molester Over 127 Cases
PUBLISHER: The St. Petersburg Times
TEXT: Police in St. Petersburg are investigating an elderly local man in connection with 127 criminal cases involving the alleged sexual abuse of minors over the course of three years, Interfax reported Monday.
The suspect, 63, was detained in May on suspicion of sexually abusing several children, including some younger than 14 years old. Police have since linked him to numerous other incidents involving similar charges. Authorities have not released the suspect’s name.
The man is accused of performing sexual acts at his apartment with students of a local boarding school and showing them pornographic videos involving minors. St. Petersburg police said they would wrap up the investigation soon and send the case to court, Interfax reported.
Sexual intercourse with minors carries a sentence of up to 15 years in prison, while nonviolent sexual abuse of children without intercourse is punishable by up to 12 years in prison. The law allows for harsher sentences in cases where suspects conspired to sexually abuse minors.
TITLE: Mother Separated From Children Due to Debts
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: Vera Kamkina, a 34-year-old widowed mother of four, is in despair. The regional authorities in her hometown of Kolpino, 30 kilometers to the south of St. Peterburg, have taken Kamkina’s children from her home and are threatening to place them in an orphanage amid bureaucrats’ claims that the woman is “too poor to raise them.”
Kamkina has outstanding utility bills amounting to 140,000 rubles ($4,230) and the Kolpino officials remain adamant that she will only get her children back when she repays her debts. Kamkina has three daughters — Larisa, aged 2; Yelizaveta, aged 5; Darya, aged 13 — and a son Ruslan, aged 9.
Kamkina has no history with social services or record of being a drug addict, alcoholic or criminal.
The mother has sent pleas for assistance to President Dmitry Medvedev, Governor Valentina Matviyenko and St. Petersburg Prosecutor General Sergei Zaitsev.
Kamkina said that she fell on particularly hard times when her husband died about a year ago. “My mother died some time ago, and none of my remaining relatives, who are quite distant, could do any babysitting, so I couldn’t even think about getting a full-time job,” Kamkina explains in her letter to Medvedev. “In fact, we maintained a very humble standard of living, but I have been getting help from a charitable organization and some relatives.”
“I gave birth to four children and I have been bringing them up as kind, good-natured, honest and intelligent people, despite our financial plight,” Kamkina said.
There has as yet been no response from the authorities, but Pavel Astakhov, Russia’s Children’s Ombudsman, has issued a statement on the incident, calling on the authorities to consider such cases in all their complexity. “Child welfare organizations should under no circumstances base decisions solely on material considerations,” Astakhov said on Monday. “If they did, the consequences would be tragic for many children and many parents.”
When on Dec. 28, 2009, Kamkina had an unexpected visit from Svetlana Vasiliyeva, an inspector from the child welfare department of the Kolpino administration who claimed the visit was a routine check, the mother initially had no suspicions. But then the inspector requested the children’s birth certificates, and refused to give them back. The incident resulted in Kamkina’s children being taken to Children’s Hospital no 22.
The Kolpino authorities have announced that they are planning to place Kamkina’s children in an orphanage as they insist that “this way they will be better fed and looked after, and they will be provided with sufficient personal space.”
Vera Kamkina and her children’s living quarters are limited to one 18-square-meter room in a communal apartment.
According to the Committee for Civil Rights pressure group, Kamkina’s is not an isolated case. The organization has documented a dozen similar incidents in various towns in Russia with children having been placed in orphanages as a result of their parents’ financial plight.
According to the state statistics, the numbers of children being taken away from their parents owing to the “improper execution of parental duties” has been on the rise during the past ten years. In 2000, 2,557 children were taken into orphanages, while in 2008 the figure reached 5,877.
In the meantime, the State Duma is reviewing a series of amendments to the law on the guarantees of children’s rights, which would include a special stipulation that “parents must provide adequate living conditions and material provisions, including proper food and clothing.”
If the amendment is passed, the number of cases like Kamkina’s could rise dramatically. Official statistics show that 80 percent of Russian families with three or more children live below the poverty line.
TITLE: Second Female Governor Appointed
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The parliament in the oil-rich Khanty-Mansiisk autonomous district Monday approved State Duma Deputy Natalya Komarova as the region’s new governor.
Komarova, a member of the ruling United Russia party, was approved unanimously and will become the country’s second female governor ever — after St. Petersburg Governor Valentina Matviyenko — when she takes office March 1.
President Dmitry Medvedev last week proposed Komarova, 54, as a candidate to succeed Alexander Filipenko, 59, who had led the region since 1991. His term expires Feb. 24.
Komarova had headed the Duma’s Natural Resources Committee since 2003. In 2000 she served as first deputy governor of the Yamal-Nenets autonomous district.
No gubernatorial candidate proposed by the Kremlin has ever been rejected by a regional parliament since former President Vladimir Putin abolished direct gubernatorial elections in 2004 following the Beslan school attack. Putin, the current prime minister, argued that the change was needed to strengthen the state and head off comparably serious attacks in the future.
Fifty-four percent of Russians would like a return to direct gubernatorial elections, according to a survey released Monday by the respected Levada Center pollster. Twenty-two percent said they were against restoring such elections, according to the Levada Center, which polled 1,600 people nationwide. The poll had a margin of error of 3.4 percent.
Earlier this month, the Institute of Contemporary Development — a think tank close to Medvedev — published a report called “21st-Century Russia: Reflections on an Attractive Tomorrow,” which called for a return to direct elections of governors.
TITLE: Inventor in Hot Water Over Use of Shoigu’s Name
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Entrepreneurs have not been shy about trying to capitalize on the popularity of top officials, with competing vodka brands like “Medvedeff” and “Putinka” having appeared on supermarket shelves in recent years.
But controversial self-styled inventor Viktor Petrik may have taken things too far by not even altering the spelling of Emergency Situations Minister Sergei Shoigu’s last name on a water filter sold by the little-known scientist’s company.
The ministry told Ekho Moskvy radio Friday that it had not granted Petrik permission to use Shoigu’s last name on the Gerakl Shoigu, or “Hercules Shoigu,” water filters sold by Petrik’s company, Golden Formula. The company saw a turnover of $1 million in 2008, according to Interfax’s Spark database on Russian businesses.
It is the latest scandal in recent months surrounding Petrik, who served a prison term for fraud and extortion in the 1980s and has been called a charlatan by many leading Russian scientists but nonetheless enjoys close ties to top officials.
Petrik told The St. Petersburg Times on Friday that Shoigu had visited his St. Petersburg laboratory several years ago and seen the filters himself. “When I said that I wanted to name the filters after him, I understood that there was no objection from his side,” Petrik said by telephone from St. Petersburg.
Petrik conceded that he did not have written permission to use Shoigu’s name, which he said he would remove from the filters only after being asked personally by the minister.
Shoigu is not the only member of the country’s ruling elite used by Petrik to promote his products. Some of his filters have featured the logo of the ruling United Russia party, headed by Prime Minister Vladimir Putin. The party’s top official after Putin, State Duma Speaker Boris Gryzlov, is a longtime supporter of Petrik. The scientist won a 2007 competition sponsored by United Russia called Clean Water.
Perhaps Petrik’s biggest claim to fame is a second water filter, which he and Gryzlov, an engineer by training, filed a patent for in 2007 and say turns radioactive water into pure drinking water.
Gryzlov is still on good terms with Petrik, a source in United Russia’s faction in the Duma told The St. Petersburg Times. The Duma speaker’s spokeswoman, Natalya Virtuozova, said party officials have sent a written request to Petrik asking him to remove the United Russia logo from the filters, Vedomosti reported Friday.
Petrik admitted that his rights to use the logo have expired and said he no longer sells filters bearing the emblem. But he said he plans to ask the party for the rights to use the logo in the future.
Petrik has no formal training in any applied science, and several leading members of the Russian Academy of Sciences have accused him of quackery.
TITLE: Foreign Minister Lavrov: Nicaragua, Russia Planning Military Exercises
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia and Nicaragua will hold joint military exercises, Foreign Minister Sergei Lavrov said on the sidelines of talks with Nicaraguan President Daniel Ortega during a working visit to Latin America, RIA-Novosti reported Monday.
The planned exercises could anger the United States, which considers Latin America as part of its traditional sphere of influence.
Meanwhile, Deputy Prime Minister Igor Sechin published an article Monday in Kommersant denying a report in the newspaper last week that Russia may invest in Cuba if the island nation recognizes Georgia’s breakaway regions of South Ossetia and Abkhazia as independent countries.
Following a brief war in August 2008, Russia recognized South Ossetia and Abkhazia’s independence and persuaded Nicaragua and Venezuela to follow suit.
Russia has been intensely courting Latin American countries. The leaders of Argentina, Nicaragua, Bolivia, Venezuela and Cuba all visited Moscow last year to renew bilateral contacts. Russian firms, especially state-owned ones, have secured lucrative contracts in electricity and oil and gas sectors.
In the fall of 2008, Moscow sent two strategic bombers and several warships to Venezuela for joint exercises in what appeared to be a retaliatory move after the United States sent warships to the Black Sea to deliver humanitarian aid to Georgia.
Lavrov began his tour across Latin American countries last week in Cuba and Nicaragua. The minister arrived in Guatemala on Monday in what was Russia’s first official visit to the country. He was to visit Mexico on Tuesday and Wednesday, RIA-Novosti said.
Russia and Guatemala on Monday signed a bilateral agreement on combating drug trafficking.
Russia and Nicaragua will also cooperate in fighting terrorism and organized crime, as well as in investments, Lavrov said. Russia will supply Nicaragua with humanitarian aid, including medicine and mine-clearing equipment, he said.
TITLE: Russian in ‘Special’ Doping Violation
PUBLISHER: Combined Reports
TEXT: VANCOUVER, British Columbia — Russian ice hockey player Svetlana Terentyeva became the first athlete to test positive at the Vancouver Olympics but escaped a ban as she took the substance before the Olympic period, the International Olympic Committee said on Thursday.
Terentyeva used a light stimulant contained in an over-the-counter nose spray that is not banned in out-of-competition tests but was still in her body when tested in Vancouver ahead of the Feb. 12 to 28 Games, IOC Vice President Thomas Bach said.
“This is the first doping case for Vancouver,” Bach told an IOC session.
“This case concerns an athlete who took a light stimulant even before the period of the Games, a light stimulant which is usually not prohibited out of competition but during the Games.”
The IOC said in a statement that she had tested positive for tuaminoheptane, a prohibited substance “in competition” but not “out of competition” on Feb. 6 in a urine sample.
“During the hearing, the athlete admitted that she had used Rhinofluimucil under prescription to cure a bad head cold in January, but that she had stopped using it on Feb. 4, 2010, as she knew the substance would be prohibited during the period of the Olympic Games, starting on Feb. 4, 2010,” it said.
The IOC said the prohibited substance would not have affected her performance as it would have been completely out of her system by the time of her team’s first game on Feb. 14. This is her first anti-doping rule violation.
Bach said the commission chose to reprimand the athlete, considering it a “very special case.”
“With regard to the consequences we thought that it would be fair to issue a reprimand for this special case rather than sending the athlete home and disqualifying her which seemed too severe in this very special case,” he said.
Normally, an athlete testing positive at the Olympics is automatically disqualified and expelled from the games.
Terentyeva remains eligible to compete at the games.
The IOC said the Russian team doctor was aware that Terentyeva had been taking the medication and the player was “totally open and cooperative” with the investigation.
More than a half-dozen Russian biathletes and cross-country skiers have been suspended in the past year for using blood-boosting drugs. IOC president Jacques Rogge said last week that he urged President Dmitry Medvedev and other officials to crack down on cheaters.
The IOC is conducting more than 2,000 urine and blood tests in Vancouver, compared with 1,200 in Turin four years ago. Athletes can be tested out-of-competition at any time and any place.
As of Wednesday, the IOC said it had collected 634 doping samples since the opening of the athletes’ village on Feb. 4.
There was only one positive test during the 2006 Turin Games — Russian biathlete Olga Pyleva was stripped of a silver medal for use of a stimulant. She is back with the Russian team for the Vancouver Games under her new married name of Olga Medvedtseva.
(SPT, AP)
TITLE: Secret Hunt for a Soviet Submarine
PUBLISHER: The Associated Press
TEXT: WASHINGTON — In 1974, far out in the Pacific, a U.S. ship pretending to be a deep-sea mining vessel fished a sunken Soviet nuclear-armed submarine out of the ocean depths, took what it could of the wreck and made off to Hawaii with its purloined prize.
Now, Washington is owning up to Project Azorian, a brazen mission from the days of high-stakes — and high-seas — Cold War rivalry.
After more than 30 years of refusing to confirm the barest facts of what the world already knew, the CIA has released an internal account of Project Azorian, though with juicy details taken out. The account surfaced Friday at the hands of private researchers from the National Security Archive who used the Freedom of Information Act to achieve the declassification.
The document is a 50-page article quietly published in the fall 1985 edition of Studies in Intelligence, the CIA’s in-house journal that outsiders rarely get to see.
In it, the CIA describes in chronological detail a mission of staggering expense and improbable engineering feats that culminated in August 1974 when the Hughes Glomar Explorer retrieved a portion of the submarine, K-129. The eccentric industrialist Howard Hughes lent his name to the project to give the ship cover as a commercial research vessel.
The Americans buried six lost Soviet mariners at sea, after retrieving their bodies in the salvage, and sailed off with a hard-won booty that turned out to be of questionable value.
Despite the declassified article, the greatest mysteries of Project Azorian remain buried five kilometers down and in CIA files: exactly what parts of the sub were retrieved, what intelligence was derived from them and whether the mission was a waste of time and money. Despite the veil over the project, its existence has been known for decades.
“It’s a pretty meaty description of the operation from inception to death,” said Matthew Aid, the researcher who had been seeking the article since 2007, when he learned of its publication thanks to a footnote he spotted in other documents. “But what’s missing in the end is, what did we get for it? The answer is, we still don’t know.”
Much of the operation on the scene unfolded as Soviet vessels watched and sometimes buzzed the Glomar Explorer with helicopters. The Americans told the Soviets that they were conducting deep-sea mining experiments.
Journalists broke the story in 1975, led by Seymour Hersh, then of The New York Times, and columnist Jack Anderson. The CIA maintained its silence except for declassifying a videotape of the burial of the Soviet seamen that was turned over to President Boris Yeltsin in the early 1990s.
Now the CIA article, written by an unidentified participant in the operation, brings back to life a time of brinkmanship between two nuclear-armed superpowers as they raced to uncover each other’s military secrets. That competition ranged from space, across continents, to the ocean depths.
For Washington, that meant sparing no expense to retrieve a mammoth vessel loaded with nuclear arms, codes and Soviet technology.
Yet the disclosed sections of the article hint that not much of value was found, just as long-ago reporting on the episode concluded.
It only claims “intangibly beneficial” results such as a boost in morale among intelligence officers and advances in heavy-lift technology at sea. The author argues that the value in mounting the operation was in proving it could be done — an assertion that does not point to a trove of intelligence.
“Lifting a submarine weighing approximately 1,750 tons from a depth of 16,500 feet [5,029 meters] had never been attempted or accomplished anywhere before,” the article says. “A government or organization too timid to undertake calculable risks in pursuit of a proper objective would not be true to itself or to the people it serves.”
To researchers, that sounds like bureaucratic justification for a project thought to have cost more than $1.5 billion in today’s dollars.
Accounts vary about what was actually brought back. Years later, Russian officials concluded that the CIA recovered at least two nuclear-armed torpedoes, not much of a bounty. In other tellings, most of the vessel broke up and fell back to the ocean floor, yielding little. The article does not settle such questions.
Nor does it say why the submarine is thought to have gone down.
The saga began in March 1968 when K-129, carrying three ballistic missiles armed with nuclear warheads as well as its torpedoes, sank 2,510 kilometers northwest of Hawaii with all hands lost. It took six years to ready the Glomar Explorer, create a winching system and sail to the wreck.
The CIA article carefully recounts the engineering hurdles of the operation, discloses the fears of the U.S. crew that Soviets would try to land on the Glomar Explorer and confirms that plutonium contamination was found in the salvage, apparently leaking from retrieved torpedoes.
But much else on the salvage is redacted, and the CIA’s story ends with the ship going to Hawaii, leaving out what was taken and its significance once investigated back on land.
TITLE: VTB, Sberbank Begin Lending Again
AUTHOR: By Anna Baraulina and Anton Filatov
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Both VTB and Sberbank are ready to start lending to developers this year, particularly those constructing residential housing, and VTB alone is planning to offer builders as much as $1.2 billion in 2010.
State-run VTB Group is planning to loan between 20 billion rubles and 35 billion rubles ($662 million to $1.16 billion) to developers this year and is already in talks on a $400 million deal, senior vice president Pavel Kosov said last week, Prime-Tass reported. Of VTB’s total lending to developers, 60 percent to 70 percent will be for residential property.
In Moscow, “the residential property market is starting to recover,” Kosov said, adding that since the fourth quarter of 2009, “gradually, neither well nor poorly, sales have begun.” Over the past year, VTB’s loan portfolio to developers has remained almost unchanged, with builders making up 10 percent to 14 percent of the bank’s lending, he said.
As of Sept. 30, 2009, VTB had 383 billion rubles in construction-related loans, or 14 percent of its portfolio, according to the bank’s financial reporting.
When contacted by Vedomosti, Sberbank declined to offer an official comment about its plans to lend to developers, but in January a Sberbank executive said the lender would focus on residential construction, particularly in the economy-class segment.
“Apartments in the center of Moscow were selling for $4,000 per square meter in the fall of 2009, and by the end of the year they had risen to $6,500,” he said, adding that since construction had been slow during the crisis, rising demand would push prices that much higher.
The Sberbank executive also expressed doubts about how soon the commercial property market would recover. In June 2009, Sberbank’s former director for construction lending, Alexei Chuvin, said the lender had given developers 600 billion rubles, or about 15 percent of the bank’s corporate lending portfolio.
Dmitry Garkusha, chief executive of DB Development, said the lending climate had improved for builders. Banks are now ready to offer up to 70 percent of the total investment, up from 50 percent, and rates have fallen to between 13 percent and 15 percent.
The improvement is thanks to a better property market, Garkusha said. Housing, in particular, has become more liquid over the past few months and prices have risen. He also said state banks were willing to offer loans for up to five years, whereas private banks were still playing it safe and only offering two-year loans.
“For now, we’re sticking to a more conservative lending policy,” said Alexei Grenkov, director of UniCredit Bank’s corporate clients department.
“Just like before the crisis, we’re only considering projects related to commercial property. And we don’t finance unfinished projects. Just like before the crisis, rates for developers are higher than for lenders from other sectors, and the lending periods are already nearing precrisis levels of seven to 15 years,” he said.
While developers could expect to borrow at 9 percent before the crisis, they should feel lucky to be getting money at 15 percent now, a banker from a private lender said on condition of anonymity.
TITLE: Russia Focus of Oil
And Gas Acquisitions
AUTHOR: By Irina Filatova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia accounted for 10 percent of total worldwide mergers and acquisitions in the oil and gas exploration and production sectors, consulting firm Wood Mackenzie said in a report published Friday.
A total of $16 billion was spent on M&A by Russian firms, more than 10 percent of the total $150 billion worth of deals conducted in 2009, up significantly from the $2 billion spent in 2008, said Luke Parker, a researcher at Wood Mackenzie who contributed to the report.
The amount of spending moved back in the direction of its historical average last year, rebounding from a dearth of deals in 2008, which was not a very productive year worldwide, Parker said.
Russian investment in M&A in 2005, 2006 and 2007 amounted to $21 billion, $26 billion and $19 billion, respectively, he added.
“Russian national oil companies made an aggressive return to the M&A market in 2009, although activity continued to focus exclusively on domestic deals,” the report said.
The largest deal by Russian companies in 2009 was Gazprom’s $4.2 billion purchase of a 20 percent stake in Gazprom Neft from Italian energy major Eni in April, Parker said.
The second-largest M&A deal on the domestic market was Gazprom’s acquisition of the 51 percent stake in Severenergia from Eni and Enel for $1.5 billion. As a result of the deal, Gazprom got control over Arcticgas, Urengoil and Neftegaztekhnologia — former gas assets of Yukos, which were acquired by Severenergia after Yukos’ bankruptcy.
Globally, the largest upstream oil and gas deal by far was Exxon Mobil’s acquisition of the U.S. gas producer XTO, the report said. The deal, valued at $41 billion, highlighted market participants’ interest in unconventional gas resources — especially the growing shale gas segment.
A rebound in oil prices in 2009 played a key role in the recovery of the M&A market, the report said. Brent oil prices fell from a precrisis high of $147 per barrel in July 2008 to a low of $49 in February 2009, only to recover to $70 by May and stay above that level for most of the remainder of the year.
“Once the oil price hit the $70 per barrel mark, it was back in alignment with market valuations and industry consensus planning assumptions for the first time since late 2007,” Parker said.
“It was this convergence that served to ease the disconnect between the price expectations of buyers and sellers, and to facilitate the rebound in deal activity witnessed during the second half of the year,” he said.
Ongoing oil-price stability will keep the market buoyant throughout 2010, though large-scale corporate consolidations are unlikely, the report said.
TITLE: Sistema Wants Approval From Watchdog for Russneft Purchase
PUBLISHER: Bloomberg
TEXT: MOSCOW — Sistema, billionaire Vladimir Yevtushenkov’s holding company, may attempt to buy almost half of oil producer Russneft as it seeks to increase oil output to match its refining capacity, the conglomerate said Friday.
The company applied to the competition watchdog for approval to buy as much as 49 percent of Russneft, said a Sistema official, who declined to be identified citing company policy.
Sistema, which has interests in telecommunications, retail and real estate, entered the oil industry last year with an agreement to pay $2.5 billion for Bashneft, an oil producer in the Bashkortostan region, as well as three Bashkir oil refineries, a petrochemicals plant and an oil trader.
Sistema aims to more than double oil production to 25 million tons a year from Bashneft’s 12 million metric tons a year, to match its refining capacity, Sistema chief executive Leonid Melamed said in October.
Bashneft made an offer to buy out minorities in the oil refineries as it plans to consolidate the units.
Russneft founder Mikhail Gutseriyev fled the country in 2007, facing criminal charges, and agreed to sell a stake to billionaire Oleg Deripaska, pending antitrust approval. Deripaska’s En+ Group withdrew the application this year. Russneft’s oil output fell 11 percent to 12.7 million tons of oil last year, according to the Energy Ministry’s CDU-TEK statistics unit.
TITLE: In Brief
TEXT: Richest Man?
MOSCOW (VEDOMOSTI) — Novolipetsk Steel owner Vladimir Lisin took first place in Finans magazine’s ranking of the richest Russian businessmen, said Oleg Tinkov, who made a video for Finans on the topic.
“I’m glad that an industrialist (I’m not afraid of that word) and even an engineer (as far as I understand his education) became the leader in the billionaire race,” Tinkov said.
The net worth of the top ten richest Russians nearly doubled last year, reaching $139.3 billion, up from 2008’s $75 billion. Onexim’s Mikhail Prokhorov took the first place in last year’s rankings.
No Greek Loan
MOSCOW (Bloomberg) — The government is not considering a loan for Greece, Deputy Finance Minister Dmitry Pankin said Friday.
Greek Prime Minister George Papandreou is flying to Moscow late Feb. 15 at the request of Prime Minister Vladimir Putin, the Greek Embassy in Moscow said Friday.
Bayerngas to Book Pipe
MOSCOW (Bloomberg) — Bayerngas, the company that runs Germany’s largest gas transmission zone with E.On, plans to book capacity in the Nabucco pipeline project to bring supplies of the fuel from the Caspian region to Europe.
Gazprom Organizer
MOSCOW (Bloomberg) — Gazprom is seeking an organizer to sell 300 billion rubles ($9.9 billion) of one- to three-year domestic bonds during the next five years, the company said Friday.
The company plans to sell the bonds in 5 billion ruble to 10 billion ruble increments and is accepting bids from banks until March 16 in Moscow, according to tender documentation on its web site.
Mobiles on Planes?
MOSCOW (Bloomberg) — The government may approve the use of cellular phones on airplanes, Vedomosti reported, citing unidentified Communications Ministry officials.
A commission on radio-frequency use will discuss the issue at a meeting next week, it said.
Eni, EDF on Pipeline
PISA, Italy (SPT) — The CEOs of Italian energy company Eni and France’s EDF will meet next week and discuss the French power group’s entry in the South Stream gas pipeline, Eni CEO Paolo Scaroni said Sunday, Reuters reported.
Gazprom and Eni have signed a memorandum of understanding to grant EDF a stake in South Stream. The plan to make EDF a minority shareholder in the project to bring more Russian gas to Europe was announced in early December.
Petropavlovsk Director
MOSCOW (Bloomberg) — Graham Birch, a former BlackRock fund manager turned dairy-farm owner, joined gold producer Petropavlovsk as a nonexecutive director after studying the mining industry for more than 25 years, the producer said Friday in a statement.
TITLE: Russia Faces the Contagions of Globalization
AUTHOR: By Martin Gilman
TEXT: Developments in international financial markets may, at first glance, seem irrelevant to the dynamics of the Russian economy. But, as has been learned the hard way, the link is strong and the causation is one-way. We had a vivid reminder of this fact again at the end of last week when global markets became spooked by concerns about the tepid economic recovery in the United States and the fragility of sovereign debt in the euro zone as a result of Greece’s fiscal prolificacy.
Those debt problems drove the euro down temporarily to below $1.36, bringing the dollar to an eight-month high. Because oil and other commodities are priced in dollars, gains in the dollar usually translate into declines in oil prices. As an indication of how sudden and unexpected market reversals can be, we could recall that just over a week earlier, positive manufacturing data from several economies had driven up energy prices to above $77 a barrel as market participants saw signs of stronger economic recovery. But that gave way to concerns about a debt contagion in Europe and the impact of austerity measures to bring debt under control. Oil prices duly dropped briefly to just below $70 and capital flows to emerging market economies apparently went into a tailspin as part of the generalized flight from risk to presumably “safe-haven” assets — notably U.S. Treasury securities. Even the gold price plummeted to about $1,050 an ounce. Contagion spread immediately to Russian financial markets as the RTS Index was down 4.3 percent for the week and declined a further 3 percent on Monday in line with global markets.
Around the world, investors fled from risk. The unwinding of leveraged debt positions by distressed market participants, herd behavior among investors and loss of liquidity giving way to a flight to quality can all lead to heightened correlations between markets. In extreme cases, this can set off a self-fulfilling crisis on a regional and global scale.
For Russia, thus far, this has just been a hiccup, but the real question is what may lie ahead as the world economy steers through a period of uncertainty. With its economy dependent on both oil prices and stable capital flows, the contagious effects from global markets can have real consequences as we discovered at the end of 2008.
Ironically, just as Russia’s economy was finally turning the corner, the global economy may be sputtering after a seeming resurgence in late 2009.
Russia’s recently announced gross domestic product numbers for 2009 imply that fourth quarter output rose by 4.7 percent quarter on quarter and that the momentum continued into last month. Russia’s Purchasing Managers’ Index data came in at 50.8 in January versus 48.8 in December, rail traffic — an important coincident indicator — rose significantly last month, inflation continued to trend downward, and the budget was financed without recourse to the Reserve Fund.
But turning to the outlook in the rest of the world, there is a big question mark as a result of the debt overhang in advanced economies. Ironically, most emerging market economies, notably Russia, have learned their lessons about debt. In recent years, they have improved their fiscal performance, lowered their stock of public debt-to-GDP ratios and reduced the currency and maturity mismatches in their public debt. As a result, sovereign risk today is a greater problem in advanced economies than in most emerging markets.
There is still a prevailing view that the world will return to pre-crisis conditions with a stable United States that functions as borrower, lender and consumer of last resort. What this ignores is that pre-crisis growth in the United States and the global economy was based in part on an unsustainable macroeconomic framework that implied an ever-expanding increase in debt relative to income.
Just like in the United States, the common patterns across the globe now suggest that the unwinding of excess household debt via increased saving or increased default rates could be a significant drag on consumption and bank lending going forward, possibly muting the vigor of the economic recovery. This realization of the long slog ahead has frustrated financial markets that were already pricing in a V-shaped recovery.
In any case, returning to a model that promotes financial bubbles would not be wise. While a relatively high, sustainable growth pattern can be achieved, it will take time. If growth does occur, it will happen in a global economy with fundamentally different structural characteristics. Waiting for the advanced countries to put their economies in order so that we can all go back to the old normal is neither good policy nor a good bet.
What is needed is coordinated restructuring and policy setting. The Group of 20 is well-intended but ineffectual, and the international political climate is hardly propitious to the type of courageous decisions and shared burdens that are called for. This would be especially hard to do when the United States, burdened by domestic problems, and China are seemingly at loggerheads.
In the meantime, with the global economic crisis still unresolved, the potential for policy mistakes grows with every day. Among the kind of conceivable risks, not to mention the other kind, we could imagine that, under political pressure with an election in nine months and employment sluggish, the Obama administration maintains too much stimulus and the bond market loses its patience, or it prematurely withdraws stimulus and the recovery slumps, or Greece does default in the spring also spiking bond yields, or Western consumers decide to save and refuse to spend, or foreigners lose confidence in the United States and a dollar crisis ensues. Each day seems to yield new possibilities.
The implications here are fairly straightforward. We are not yet out of the debt-crisis woods, and 2010 has the potential to remind us of that. The uncertainty as to what comes next is high, and markets are nervous. As the year proceeds, there is real potential for another economic relapse and even a double dip.
Whatever you might say about Russia, its economy is undoubtedly integrated with the rest of the world. So there is no escape. It helps, of course, that Russia still has substantial foreign exchange reserves of almost $436 billion and two reserve funds with about $150 billion. In this regard, Russia is fortunate that it pursued fiscally conservative policies over the past years. In view of what may lie ahead in the near term, a measured macroeconomic policy will matter.
At this juncture, we don’t know how 2010 will unfold. Our economic models do not handle so many unknowns at the same time very well. The main thing is to be prepared for the worst-case scenario of a double-dip recession in the relatively near term, but without forgetting that history teaches that governments often avail themselves of inflation to resolve their sovereign debt problems.
Martin Gilman, former senior representative of the International Monetary Fund in Russia, is a professor at the Higher School of Economics.
TITLE: The Reset Misfires
AUTHOR: By Peter Rutland
TEXT: A year ago at the 2009 Munich security conference, U.S. Vice President Joe Biden pronounced his now-famous “reset” speech. He signaled the high hopes that the administration of President Barack Obama had for improving U.S.-Russian relations after they reached a low point in the wake of the August 2008 war with Georgia.
The U.S. National Security Council conducted a formal review of its Russia policy, and it is worth noting that of the four top foreign speeches that Obama delivered in 2009 — in Cairo, Prague, Moscow and New York to the United Nations — only his July 7 address to students at the New Economic School in Moscow was devoted to a single country. A bilateral presidential commission was created under the leadership of Secretary of State Hillary Clinton and Foreign Minister Sergei Lavrov with a dozen working groups.
But the momentum of those early months soon dissipated. The most tangible result of the new policy of constructive engagement was Russian approval of land transit for U.S. supplies into Afghanistan, providing a cost-saving and strategically valuable alternative to passage through Pakistan. Moscow also agreed to allow flights carrying lethal materials — including troops — through Russian airspace, though negotiations over the protocols for such flights have delayed implementation for several months. President Dmitry Medvedev also showed new flexibility with regard to possible sanctions on Iran. Russia’s patience with Iran was strained when Tehran rejected Moscow’s offer to reprocess fuel for a research reactor and when U.S. Defense Secretary Robert Gates announced that the Iranians had concealed from the International Atomic Energy Agency a secret uranium enrichment facility that they built near Qom.
But, unfortunately, that is where the U.S.-Russian reset has ended. Despite both sides’ commitment to renew the START treaty that expired Dec. 5, negotiations over the finer points of warhead storage and telemetry encryption have dragged on. U.S. efforts to accelerate Russia’s entry to the World Trade Organization were torpedoed in June, when Prime Minister Vladimir Putin blithely stated that Russia was withdrawing its individual membership application.
Why did the hopes for a fresh start fail to materialize, despite the attention that Obama and Clinton devoted to the issue?
The poor relations were not simply a product of the mismanagement of the administration of former U.S. President George W. Bush, a situation that could be fixed with a burst of diplomacy. One big problem for the United States: It still cannot decide whether Russia is a potential friend or a future foe. The two sides also differ over how to interpret their past relations. For example, it was not clear what date the reset button was set for — surely, not the final year of the administration of U.S. President Bill Clinton. In 2000, thanks to the Kosovo war, U.S.-Russian relations were perhaps at their lowest point since 1985.
The main reason for the misfire revolves around the fundamental differences between the strategic perspectives of Moscow and Washington. Neither side wants to acknowledge these differences since it would involve each recognizing the limits of their respective powers. The United States refuses to grant Russia what Medvedev rather bluntly called its “zone of privileged interests” in the post-Soviet states. Russia, for its part, will not accept U.S. military bases or support for color revolutions in Russia’s backyard. Moscow was apoplectic at the idea of U.S. missile defense systems in Poland and the Czech Republic, a plan that the Obama administration finally dropped in September. (To be sure, that decision was not a sop to the Russians, but reflected a reassessment of the nature of the Iranian missile threat.) Absent some concessions on these crucial issues, there will be no serious thaw in relations.
Another drawback to the U.S. approach was a willingness to see Medvedev as a latter-day Mikhail Gorbachev, a progressive thinker and reformer who was held back by the Communist reactionaries in the Politburo. This canard was recycled in the latest annual threat assessment, which National Intelligence Director Denis Blair presented to the Senate Foreign Relations Committee on Feb. 2. Blair argued that Medvedev’s modernization agenda “faces formidable opposition from within the entrenched elite,” controlled by Putin.
In today’s complex and interdependent world, it is neither logical nor practical to try to nurture a special bilateral relationship outside of the general web of multilateral diplomatic initiatives. U.S. foreign policy is fragmented into a number of distinct domains — financial stabilization, nuclear proliferation, Islamic terrorism, climate change, etc. Russia’s position on many of these issues is at best unclear — and at worst contrary to U.S. interests. A policy of constructive disengagement may stand more chance of long-term success.
Peter Rutland is a professor of government at Wesleyan University in Middletown, Connecticut and an associate of the Davis Center for Russian and Eurasian Studies at Harvard University.
TITLE: Majority Rule
AUTHOR: By Richard Lourie
TEXT: As a rule, I’m not much one for statistics, but every so often one stops me cold. In the December issue of Russian in Global Affairs, political scientist Igor Zevelev pointed out in his article “Russia’s Future: Nation or Civilization” that “Russians … now make up almost 80 percent of the country’s population (compared with 43 percent in the Russian Empire in the late 19th century and 50 percent in the Soviet Union).”
The statistics that are usually bandied about concern Russia’s horrific death rate and shrinking population, though that’s showing signs of leveling off. But what Zevelev is telling us speaks of an emergence, not a diminution. For the first time in centuries, the Russians are a majority in their own country.
It is not as if the Russians weren’t running the show toward the end of the empire and the Soviet Union as well (Josef Stalin aside). But in Soviet times, it was a common conception among Russians that everyone — Poles, Czechs, Hungarians with their goulash communism — lived better than they did. And no one suffered more from Soviet oppression than the Russian themselves.
But now there’s been an essential demographic change, one in which quantity becomes quality. Russia has been shorn of all the nations — the Baltic states, Ukraine, the “stans” — that made it an empire. The United States may have had tens of thousands of Armenians, but the Soviet Union had Armenia itself. Now, Russia has been delivered of what many like Alexander Solzhenitsyn thought was “the Slav man’s burden,” and all that’s left is the 20 percent non-Russians composed mostly of small Islamic nations, some of whose citizens identify themselves as Russians anyway.
What has to happen for the Russians to realize the full significance of their becoming a majority in their own land? In “Warsaw Diary,” the Polish writer Kazimierz Brandys describes one of the unexpected and unintended consequences of Pope John Paul II’s first visit to his native Poland in 1979. The pope drew vast crowds, and for the first time the Poles were able to see just how many of them there were. And from that they drew the strength and courage that led to the Solidarity movement in 1980 and the eventual overthrow of communism.
Throughout its history, Russia’s development has typically been thwarted by tyranny, invasion and war. The country’s nascent capitalism was, for example, booming at the beginning of the 20th century — Russia was the world’s leading oil producer in 1898-1902 — but that promising trend was cut short by two wars (the Russo-Japanese war and World War II) and two revolutions (1905 and 1917). Many thinkers concluded that what Russia needed was a stretch of peace combined with a not overly oppressive government.
Well, that’s what it has had for the nearly 20 years since the Soviet Union imploded. The Chechen wars and Prime Minister Vladimir Putin’s crackdowns are relatively mild by Russian standards. There is no real enemy like Nazi Germany was during World War II or the United States during the Cold War. So the question is: Now that the Russians are a majority and have had a break from the exigencies of history, why haven’t they created a better country for themselves, one with a clear and definite Russian identity? And to paraphrase a perennial question, what can still be done? This is a question that only the Russians themselves can answer, with their choices and their actions.
Richard Lourie is author of “The Autobiography of Joseph Stalin” and “Sakharov: A Biography.”
TITLE: Progress and Backlash During Operation Moshtarak
AUTHOR: By Alfred de Montesquiou
PUBLISHER: The Associated Press
TEXT: MARJAH, Afghanistan — Sniper teams attacked U.S. Marines and Afghan troops across the Taliban haven of Marjah, as several gun battles erupted Monday on the third day of a major offensive to seize the extremists’ southern heartland.
Multiple firefights broke out in different neighborhoods as American and Afghan forces worked to clear out pockets of insurgents and push slowly beyond parts of the town they have claimed. With gunfire coming from several directions all day long, troops managed to advance only 500 yards (meters) deeper as they fought off small squads of Taliban snipers.
“There’s still a good bit of the land still to be cleared,” said Capt. Abraham Sipe, a Marine spokesman. “We’re moving at a very deliberative pace.”
The massive offensive in the Marjah area — the largest Taliban stronghold and a key opium trafficking hub — involves about 15,000 U.S., Afghan and British troops and is the biggest joint operation since the 2001 U.S.-led invasion of Afghanistan.
On Monday, Afghan military officials gave a more optimistic view of the progress being made, with Brig. Gen. Sher Mohammad Zazai saying Afghan and NATO forces have largely contained the insurgents and succeeded in gaining trust from residents, who have pointed out mine locations.
“Today there is no major movement of the enemy. South of Marjah they are very weak. There has been low resistance. Soon we will have Marjah cleared of enemies,” Zazai said at a briefing in Lashkar Gah, the provincial capital of Helmand province. He added that only three Afghan troops had been injured.
Interior Minister Hanif Atmar said he expected some insurgent fighters had already fled the area in advance of the offensive, possibly heading to the Pakistan border.
The enemy “had ample time to flee. Our intention was known to both our public and the enemy,” he said.
However, the mission faced a setback on Sunday when two U.S. rockets slammed into a home outside Marjah, killing 12 civilians. NATO said Monday that the rockets missed their target by about 600 meters, or about a third of a mile.
Differing accounts have emerged about the details. On Monday, Afghan Interior Minister Atmar said at the briefing in Lashkar Gah that nine civilians and two or three insurgents were among those killed, suggesting that insurgents were firing at troops from a civilian home.
The top NATO commander in Afghanistan, General Stanley McChrystal, apologized for “this tragic loss of life”.
Karzai spokesman Waheed Omar said the president “is very upset about what happened” and has been “very seriously conveying his message” of restraint “again and again.”
Inside Marjah, sporadic firefights increased by midday. One armored column came under fire from at least three separate sniper teams, slowing its progress. One of the teams came within 155 feet (50 meters) and started firing.
Marines said their ability to fight back has been tightly constrained by strict new rules of engagement that make their job more difficult and dangerous. Under the rules, troops cannot fire at people unless they commit a hostile act or show hostile intent.
“I understand the reason behind it, but it’s so hard to fight a war like this,” said Lance Corp. Travis Anderson, 20, from Altoona, Iowa. “They’re using our rules of engagement against us,” he said, stating that his platoon had repeatedly seen men dropping their guns into ditches before walking away to melt among civilians.
Allied officials have reported two coalition deaths so far — one American and one Briton killed Saturday. Afghan officials said at least 27 insurgents have been killed in the offensive.
TITLE: Head-On Train Crash In Belgium
PUBLISHER: Agence France Presse
TEXT: BRUSSELS — Two packed commuter trains collided head on during rush hour outside a snow-covered Brussels on Monday killing up to 20 people and injuring 150 amid scenes of bloody chaos, officials said.
The crash left a mass of twisted metal and several carriages on their side, according to witnesses, while an official said doctors were carrying out amputations at the scene. “The shock was terrifying. It was terrible,” said one of the passengers.
The death toll estimates varied, but just after 1.00 p.m., the Brussels investigating magistrate put the toll at between 18 and 20 dead.
Hours after the crash the scene was one of blood and chaos, with witnesses speaking of a “very violent” collision in very bad weather conditions after days of snow cover.
The two trains hit each other near the town of Halle, about 15 kilometres southwest of Brussels in Dutch-speaking Flanders.
The crash happened after one of the two trains involved did not stop at a red light, Brabant-Flamand regional governor Lodewijk De Witte told a press conference, saying 10 passengers were confirmed dead.
TITLE: Getting Ahead
AUTHOR: By Matt Symonds
PUBLISHER: The St. Petersburg Times
TEXT: Across the globe, business schools are nervously monitoring the volume of applications to their MBA programs. After a huge spike in demand in the early part of 2009, when the Graduate Management Admissions Council (GMAC) registered record levels of interest, numbers have been steadily dropping off ever since. This has not been down to any lack of faith in the qualification itself, but rather due to widespread worries about accessing funding to cover the cost of study and the likelihood of finding a well paid job on graduation.
At the same time, however, many of the world’s top business schools have expanded their MBA classes to their largest ever size. London Business School, for example, now has 400 students, while Harvard has 942 and INSEAD a dizzying 980. Perhaps not surprisingly, this combination of bigger classrooms and fewer applicants has led many commentators on the business education sector to ask where all the candidates for the 2010 intake are going to come from.
Perhaps they will come from Russia.
Despite the worldwide economic downturn, enthusiasm for the MBA here has shown little sign of abating. In fact, the 81 percent increase in the number of Russians taking the GMAT business school admissions test since 2005 suggests the very opposite may be the case. So what makes the qualification so attractive to such a high proportion of ambitious managers and professionals?
One reason may be the relative strength of the local jobs market for this group. According to the latest Global Snapshot, an international survey of hiring and firing trends conducted by the recruitment firm Antal, employment levels for professionals in Russia are currently some of the highest in the world. According to the research, the percentage of organizations hiring managers and professionals rose from 62 percent last September to 71 percent in January. And it seems that an MBA is definitely giving job seekers in this buoyant market a distinct competitive edge.
“An MBA is no substitute for good practical experience, but it can be an excellent compliment to it,” says Michael Germershausen, managing director of Antal Russia. “However, where you take your MBA can make a lot of difference and there’s no doubt that Western programs still carry more weight than domestic ones. Studying at a Western school, which tend to have more diverse classes, also gives you access to a wide range of business contacts which can be invaluable in your future career.”
Plugging into an international network was one of the key reasons for Albina Galeyeva deciding to take her MBA at the ESMT business school in Germany rather than at home in Russia.
“The program at ESMT is geared up to provide you with the tools necessary to work in a global rather than just domestic marketplace,” said Galeyeva. “And a key part of that is an extremely diverse class — 21 nationalities among just 40 students. I’ve found that getting exposure to so many different perspectives and sets of experience is invaluable given the fact that I’d only ever worked in Russia before coming here.”
Studying at ESMT also allowed Galayeva to overcome any concerns about financing the program.
“I was fortunate enough to get a corporate fellowship sponsored by one of the school’s founders, Allianz. This covers all my tuition and fees and also allows me to gain experience working at the company for six months — something that I think will prove invaluable when I return to Russia.”
For another Russian, Alexander Mendelev, the investment in a Western MBA has already paid off.
“I used my own savings to finance a place on the MBA at Desautels at McGill University in Canada,” he said. “That led directly into a VP level position with a Canadian software company that has allowed me to recoup my investment just a year and a half after graduating.”
However, it’s no longer necessarily essential to leave Russia in order to get the benefit of a Western business education. Ilya Yakimov, an accounting and treasury manager at manufacturing company URSA Eurasia, found that the experience was available on his own doorstep in St. Petersburg, and that banks were not only willing but even eager to help finance his studies.
“I wanted the prestige of an international school but wanted to stay with my current company here in Russia, so I chose the part-time MBA at Vlerick Leuven Gent,” said Yakimov.
“Getting a loan was surprisingly easy considering all I had heard about a lack of finance all around — I only spent an hour at the bank and it was all done! I’m confident that I’ll be able to pay back the loan without any trouble. In fact, since starting the course I’ve been promoted and have received a pay rise so it’s already paying off.”
Matt Symonds is founder of SymondsGSB and a guest lecturer at business schools on inspiring leadership through storytelling. http://symondsgsb.wordpress.com
TITLE: Adapting to Times of Crisis
AUTHOR: By Elmira Alieva
PUBLISHER: The St. Petersburg Times
TEXT: Only the strongest schools and the best business programs survive during a crisis. Applicants are becoming more demanding and selective.
“If several years ago, a combination of three magic letters — MBA — was almost all that an applicant cared about, today they are interested not only in the diploma itself, but in the knowledge and skills that they will obtain,” said Sergei Fyodorov, director of the Open Business School in St. Petersburg.
Practice-focused, pragmatic and systematic full-time MBA programs enjoy the highest demand, agree specialists. MBA students are unwilling to learn from books that were published before the current global economic crisis, and choose programs devised by teaching staff.
“The academic qualifications of a professor are not very important anymore,” said Fyodorov.
“Students are more interested in a professor’s real experience than in their doctorate degree. If a teacher has successfully dealt with a crisis during their working life, that is their advantage.”
General management MBA programs are leaving behind some of the more specialized business programs.
“Due to the crisis, managers have realized that at some point they will be forced to change their job,” said Igor Dukeov, EMT area principal at the Stockholm School of Economics (SSE) in St. Petersburg.
“The general programs allow them to be more flexible and capable of adapting to the market than managers in specific fields such as marketing or finance.”
“Highly differentiated programs have died out to make way for universal programs such as marketing, management or human resources,” said Dmitry Pavlov, deputy head of development and external relations at the International Management Institute (IMISP) in St. Petersburg.
“At the peak of the crisis, there were companies that required some specialized programs to solve specific problems, but now people want to have a systematic education, not just specific training.”
“Some students prefer specialized programs, such as an MBA in finance, marketing or international business,” said SSE’s Dukeov.
“However, I would say that two thirds of our applicants prefer to enroll on general management programs and to acquire more specific knowledge by attending short-term courses.”
Local business schools attract students from far outside the city.
“The trends in business education in our region are the same as on the federal level,” said Igor Baranov, first deputy dean of the Graduate School of Management of St. Petersburg State University (GSOM.)
“The fact is that the leading business schools in the northwest region are not regional schools in the strict sense of the word — all their programs are suitable for a federal audience.”
“At the Stockholm School of Economics we have more students from Moscow and from other regions than from St. Petersburg,” said Dukeov.
“This is due to the fact that our school is international and in Russia it has an office in St. Petersburg. Two thirds of our students are not from St. Petersburg.”
Another trend in the area of business education is the intensification of international cooperation between business schools. Reputed local schools are developing dual programs, inviting foreign academics and practitioners, implementing student exchange programs, organizing education modules abroad and accepting foreign students.
“Russian business schools are not rated in Western rankings, for example in the Financial Times, so if a Russian school concludes an agreement with a business school abroad, its joint programs become more popular and of a better quality,” said Dukeov.
The business schools in St. Petersburg offer three types of MBA diplomas. The local offices of international business schools such as the Stockholm School of Economics, Open Business School or Vlerick Leuven Gent Management School offer international diplomas.
Other popular types of qualifications include Russian-style diplomas and double diplomas.
“The advantage of Russian MBA programs is that they are taught by people accustomed to the Russian market,” said Fyodorov.
“Our teachers are top-level managers of real organizations that have coped with the crisis themselves, who have faced difficulties. In Western companies there are different nuances. So the choice of a diploma depends on the motivation. If a person wants to work in a company with Western-style management, it is worth having a Western diploma, because it is rated higher.”
The specialists agree that the economic crisis has raised competition among St. Petersburg’s business schools, which offer different programs and diplomas. This has a positive effect in that raising competitiveness naturally contributes to the improvement of education.
“To win, the school must offer top-quality systematic high-capacity education,” said IMISP’s Pavlov.
“The crisis makes us work more on polishing our education product toward the professional result that candidates want to have after graduation, so that they will be first to interest employers during a situation of stronger competition on the job market,” said Yelena Kornyshkova, executive director of master’s programs at GSOM.
TITLE: 21st-Century MBA Programs
AUTHOR: By Elmira Alieva
PUBLISHER: The St. Petersburg Times
TEXT: According to specialists, one of the current global trends is an increase in the number of students enrolling on full-time MBA programs, while demand for specialized business programs has decreased.
“The demand for our Executive MBA general and strategic management is stable,” said Anastasiya Korshunova of Vlerick Leuven Gent Management School’s St. Petersburg campus. “I think that in times of crisis there is a demand for more generalized programs, because it gives the graduates some freedom. This assessment is confirmed by the actions of some other local schools, which have been forced to close their highly specialized MBA programs. There has also been a decrease in the number of short-term courses, but some schools have even managed to launch new programs,” she said.
“Education must follow the best trends and standards in the world and reflect the globalization of the economy and contemporary expectations, requirements and skills in the quality of professional staff,” said Yelena Kornyshkova, executive director of master’s programs at the Graduate School of Management of St. Petersburg State University (GSOM.)
“We are starting new programs in response to demand on the job market (Corporate Finance, Logistics and Supply Chain), continue to offer an International Technology and Innovations Management master’s program, and to develop two full-time master’s programs with the very top players in the world business education industry (CEMS MIM and HEC-Paris),” said Kornyshkova.
“The development of so-called pre-experience master of business and management programs is a recent trend,” said Igor Baranov, first deputy dean of GSOM. “These are not ordinary master’s programs building on bachelor degrees; they are separate programs that admit applicants from different professional spheres and train either academics or practitioners,” he explained.
“The number of master’s program students at GSOM increased from about 70 in 2007-2008 to 200 in 2009-2010, with competition for places growing by 300 percent,” said Kornyshkova.
The overall number of applicants for business programs in St. Petersburg has decreased, say specialists. “If we talk about the market in general, there are fewer applicants for MBA programs, because these programs are more expensive, and the number of people able to pay such a sum of money has decreased,” said Sergei Fyodorov, director of the Open Business School (OBS). “However, some of our colleagues tell a different story,” he added.
“There has been a shift to the corporate sphere,” said Dmitry Pavlov, deputy head of development and external relations at the International Management Institute in St. Petersburg (IMISP).
“There is an open market consisting of individuals who decide to study and pay for their education themselves. This market has shrunk. On the other hand there is corporate demand, when a company orders an education program for its staff.
“It’s common knowledge that each school has two or three permanent customers — big companies and market players. So in our case there has been an increase in the proportion of these companies — more than 50 percent of our income comes from the corporate sector. However, our aim is to bring back individual students,” said Pavlov.
“Last year, the management of many corporate companies realized that their managers were not capable of solving crisis situations, so they started ordering corporate MBA programs,” said Igor Dukeov, EMT area principal at the Stockholm School of Economics (SSE) in St. Petersburg.
“For instance, Gazprom and RZD (Russian Railways) have started ordering such programs more actively. The crisis influenced top-ranking management, who realized that it is necessary to educate their staff more efficiently.”
“Now companies prefer to finance corporate programs for groups of their employees, but it’s more difficult to get financing for just one employee,” said Pavlov. “If before the crisis, it was often quite easy for the employee to get financing from their company for an MBA, now it’s more difficult. Today companies prefer comprehensive programs for their staff,” he explained.
The tuition fees for full-time MBA programs in St. Petersburg start from 7,000 euros, according to specialists. MBA diplomas from international schools in the city cost from 20,000 to 35,000 euros.
“International diplomas are more expensive, because they imply the participation of foreign tutors and international internships,” explained Dukeov.
Most schools offer payment by installment. One recent trend is the division of existing module programs into smaller modules that are sold separately.
“This makes it possible to extend the period of study,” said Dukeov.
Loans are another method of payment. Many schools have partner banks or offer their own credit program. However, specialists agree that since the onset of the economic crisis, it has become more difficult to obtain a loan for education.
Some schools, such as Vlerick Leuven Gent Management School, have launched their own scheme of crediting.
“It’s one of the factors in successful admissions in 2009 for the full-time MBA,” said Korshunova.
“Some schools offer discounts or bonuses,” said Fyodorov of OBS. “It’s something that was not common before. Since there are not many people able to pay for one or two years in advance, schools are considering an individual payment approach. This means that if someone offers their own scheme of payment, it will be considered,” he added.
Younger applicants who want to obtain master’s degrees in areas of business might aspire for government financing or individual grants.
“The number of federally financed places remained the same in 2009 as in 2008, despite an expected increase,” said Kornyshkova, talking about GSOM’s Master in International Business program.
“GSOM continued to motivate large corporations — the strategic partners of the school — to support quality business education at a master’s level, and for the second year it resulted in funding 31 individual grants covering full tuition for two years of the master’s programs in addition to about 10,000 rubles ($330) per month as a merit-based scholarship.”
MBA programs continue to encourage experienced professionals to pay for their education themselves, or get funding from their corporate sector.
“It’s experienced top-level managers who come to get an MBA,” said SSE’s Dukeov. “They know how to control their cash flows. So I think it is not the flexibility of payment that plays the most important role when applicants choose their MBA program.”
TITLE: The Value
Of Education
AUTHOR: By Anna Shcherbakova
TEXT: “A total waste of time and money,” moaned my acquaintance about his daughter’s degree. According to him, shortly after graduation, his daughter and her fiance found out that the field they had specialized in was shrinking. Unfortunately, I did not ask what their specialization was or where they had studied — I was simply too shocked. How could people study without looking for future employment, and why didn’t they change their specialization upon learning the bad news?
The answer is that they simply followed the Soviet-era paradigm that a degree guarantees a professional job. This was only ever part of the truth. A degree was a necessary condition, but by no means the only condition, of forging a successful career. Some employees from science and research institutions abandoned their chosen field to work in factories or construction sites, or — like one of my father’s friends — to manufacture jeans. A degree was however a ticket in the direction of a good life.
Now there are dozens of “private” colleges and universities that can provide any certificate, not to mention the ease with which degrees can be bought. Official documents have therefore depreciated as much as the national currency, and no longer guarantee anything.
The paradigm has changed. Employers now care more about whether a candidate has particular skills, rather than any documentary confirmation of these skills and knowledge. Journalists working for Vedomosti have had degrees in journalism, economics and math. A couple of my colleagues never graduated, but it does not stop them from reporting on the results of IPOs or political issues. Perhaps in journalism, education is not as important as experience, enthusiasm and vision — regardless of how and where they were gained. Obviously, in medicine and other scientific fields, everything is far more serious.
Business education is also different. The prestige of the MBA has diminished in recent years, especially since the onset of the financial crisis. Top managers who juggled with DCF-methods or Porter’s five forces analysis in order to rationalize their risky decisions compromised their MBA degrees as well as themselves.
Business education has come to be seen as something of a luxury in the public opinion. Our report that many top-level managers who had lost their well-paid jobs during the crisis were using the time to study invoked unexpected outrage in one of my colleagues: “Ordinary people scarcely have enough money to live off, and they are paying huge sums for an MBA!”
But $15,000 — which seems to be the bottom price for a proper MBA in St. Petersburg — and a brand new diploma do not guarantee a manager anything except new knowledge and contacts in reward for two years of busy weekends, evenings and sleepless nights. And even these are only obtained by doing the assignments oneself (one of my MBA-classmates dared to boast that he delegated all the work to his employees, and ruined his reputation forever.)
For the founders and owners of businesses, vision is far more important than knowledge of modern methods.
This is not to say that education — particularly business education — has no future. Its future is a question of values. There are business schools and universities that teach approaches, and there are those that are selling illusions. Probably the managers of the latter were top students at the former.
Anna Shcherbakova is the St. Petersburg bureau head of business daily Vedomosti.
TITLE: In Search of New Linguistic Horizons
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: St. Petersburg’s language schools are evidence of this observation. Most of them say they have not noticed any large-scale outflow of students during the global recession.
However, the crisis has brought some changes and new trends to the city’s foreign languages market.
The recession forced many companies to cut their budget for corporate language courses for their employees, causing specialists to start paying for language courses from their own pocket. The interest of employees in foreign languages increased, due to increased competition on the labor market and consequently increased requirements for personnel.
The crisis has forced language schools to become more flexible, and in some cases has even opened the way for new teaching formats.
“The crisis, which affected the financial stability of many companies, did indeed force many of them to cut their budgets for corporate foreign language programs,” said Natalya Rostovtseva, director of St. Petersburg’s Benedict School.
“On the other hand, the crisis caused employers to become very demanding of potential candidates for new positions. Therefore, good knowledge of a foreign language, particularly English, in many cases became essential for candidates,” Rostovtseva said.
“As a result, we have seen an increase in demand for learning foreign languages from professionals themselves,” she said.
Irina Semenitina, corporate training manager at Globus International British language center, said that during the crisis her company had also faced a situation in which a number of its corporate clients had had to stop paying for its employees to learn foreign languages. However, a number of the employees at those companies did not want to lose the opportunity altogether and continued to study, paying for the program themselves.
Semenitina said that the school had not reduced the fees for its courses, but that in some situations Globus International offered a more flexible approach to setting prices.
Semenitina said that the situation on the language market is currently returning to its regular rhythm, in which “the main indicators of student activity are not economic factors, but seasonal factors.”
Walter Denz, owner of the city’s Liden and Denz language centers, said that when the crisis started to unfold, the school wondered “whether people were really going to save on education, or quite the opposite — whether they would actually spend more to gain an advantage in a much tougher job-seeking environment.”
“Now we can say that probably both trends are true,” said Denz. “As a result, student numbers have not really changed much. Some people are cutting down on educational expenses, some are actually spending more.”
Denz said the number of students at the school’s Russian language department has remained the same during the crisis, though that in itself contrasted with the “ever increasing figures they had before.” However, in the past two months Liden and Denz has once again seen growth in foreign student numbers.
“It’s difficult to say whether this is already a trend, but it seems that we are looking at a very busy season this summer,” said Denz.
The school’s foreign language department was hit harder, forcing Liden and Denz to come up with a different course and pricing structure to stay on the market.
“We have moved from a closed-group system to an open-group one, where we allow new students to join an existing group (if they are of the same level) every second week,” said Denz.
“This has allowed us to maintain rates without adjusting them in line with inflation, as we can now replace students who dropped out with new ones. The advantage for new students lies in the absence of a waiting list. You call, do a test and enroll the following week. You pay on a monthly basis and finish your course when you want. Our students have far more flexibility than before,” he said.
The continuous enrollment system is practiced in language schools around the world but presents a challenge for local foreign language teachers, who are not used to working in an open environment, said Denz.
“With a new team of expatriate teaching specialists we are training locally hired language teachers for this purpose. The feedback so far has been encouraging,” he said.
Denz identified two major motivating factors among Russian students learning foreign languages. Some do so with the aim of moving abroad and starting a new life because they believe the situation in other countries is better, while others invest in their language skills in order to better position themselves on the local job market.
“Those who want to leave should understand that the crisis has hit some other countries much harder,” said Denz. “Not everybody seems to understand this.”
Among the most popular foreign languages, English continues to retain its leading position. German remains the second most popular foreign language, followed by French.
“We have seen a rise in demand for English or German for special purposes, such as banking, law, tourism and so on,” said Denz. “This growing demand cannot yet be met by a sufficient number of qualified teachers in Russia. We definitely need more native specialists with the right qualifications. There is a lot of work to do in these areas.”
Denz observed that today’s students have in general “much clearer goals and more focused expectations than a couple of years ago.”
Students are better informed, know which exams open which paths to which universities or colleges, and expect a far higher teacher competence level, including from native speakers, he said.
“Students don’t want to be bored with grammar, they want to be able to speak as fast as possible,” said Denz. “They also want to know much more about the cultural differences between Russia and, let’s say, the U.K. We also feel that today’s students are younger than a couple of years ago. Generally, they are more demanding, but also ready to work hard to achieve their goals.”
Another local language school, the Runov School, said they had not suffered from any noticeable outflow of students during the crisis either.
“Learning foreign languages is basically impossible to do on your own, therefore the crisis has not been a significant obstacle for most of our clients,” said Anna Berkovich, general director of Runov School.
However, like Liden and Denz’s students, Runov’s students tend to look for more specialized programs.
Berkovich said that such a trend was “quite natural,” since “in the current economic situation, employers have higher demands of their workers in various fields of competence.”
Runov School has noticed that students are more highly focused on language services for career purposes, international business and education abroad.
“For instance, some of our popular options right now are short — one or two day — courses in job interviews, effective presentation, effective negotiating, business trips and others that allow the rapid activation of essential language skills for a certain situation,” said Berkovich.
Many of the students who choose these short programs have previously studied at the school — 40 percent of its students continue their studies at Runov’s specialized programs or conversation classes, Berkovich said.
Berkovich said that students’ motives for learning languages remained the same — career or job-hunting considerations, a requirement for their MBA or second degree, or simply as a hobby.
EgoRound educational center, whose programs used to be mostly tailored to corporate teaching, said they had felt the effect of the crisis, since many companies had cut their budgets and put educational projects on hold for the time being.
The company said its other services and reasonable prices had enabled it to remain profitable.
Yelena Yarovaya, director of EgoRound, said the center had switched its focus to short-term courses that require minimal funding and time from clients. The courses are focused on forming conversational skills essential for business communication and everyday life.
“The result was just fantastic,” said Yarovaya. “Our short-term courses became more popular than standard long-term courses, not only among private clients but also among corporate clients,” she said.
EgoRound also hypothesized that their clients had an increased need of specialized business English courses in various fields of economics, and the school quickly came up with such programs.
A year after the crisis, the market has begun to gradually return to its regular rhythm, and companies are renewing their budgets for employee education programs, Yarovaya said.
Yarovaya said that although English, German and French remain the most popular foreign languages, they had also noticed increased interest in the city in Japanese and Korean, which is connected with the development of an automobile plant cluster in St. Petersburg. Finnish also enjoys considerable interest.
Semenitina said the most popular foreign languages at Globus International were English, Finnish, Italian and French.
Following the modern trend of specialized language courses, Globus International also offers a job interview in English program that includes both conversational practice, such as discussing work experience, professional skills and personal character traits, and writing CVs and covering letters.
Rostovtseva said the Benedict School is also seeing an increase in demand for studies abroad, because “it’s the most effective way of becoming a sought-after specialist on the international market.”
Rostovtseva said that the crisis had brought with it increased demand for children’s English courses, due to the fact that more and more parents are thinking about preparing their children for international careers.
TITLE: Gender Divide in Business Education
AUTHOR: By Olga Kalashnikova
PUBLISHER: The St. Petersburg Times
TEXT: Although women perform the same jobs as men and number among the students of business schools, statistics show gender-differentiated trends.
According to research conducted by the Begin Group several years ago, of the students enrolled on MBA courses in Russia, 65 percent were men and 35 percent women. The ratio is currently about the same.
The last group enrolled at the Graduate School of Management of St. Petersburg State University (GSOM) in December last year consisted of 35 percent women. In five previous groups during the last two years, female students accounted for an average of 27 percent.
Vlerick Leuven Gent Management School’s St. Petersburg campus saw a record year for its Executive MBA program in 2007, when the number of women reached 45 percent. Since then, the proportion has decreased to 20 to 25 percent.
Although in theory men and women have equal opportunities of getting a business education, there are factors that obstruct female students.
“The accepted opinion in society about the traditional role of women being limited by their home and family — or, on the contrary, the image of the emancipated woman — can have a negative influence on women obtaining a business education,” said Yelena Kornyshkova, executive director of master’s programs at GSOM.
An opinion exists that women are less suited to management roles than men. But stereotypes are not the only reason for lower female student numbers. Women sometimes have different priorities to men, putting their family life before their career.
“The average age of students on the programs is 32 to 33 years old — the age when most women are focusing on their personal life and having children,” said Anastasiya Korshunova, deputy director for international business development at Vlerick Leuven Gent Management School. “Most women studying for an MBA degree are under 30 or over 40. Many women try to combine studying with maternity leave,” she added.
Children are a major limiting factor for women seeking to obtain a business education — young mothers are a rarity on MBA programs.
Gender trends can also be identified in students’ choice of educational program.
“First of all, women are interested in a convenient schedule,” said Korshunova. “Usually, the most attractive program is one with free weekends and one that does not require long trips away.”
Experts also identify gender trends among students already enrolled on programs.
“Women do not want to be leaders,” said Nadezhda Golenishcheva, marketing director of the Open Business School. “They consciously choose another role. They don’t want to be responsible for others, because they already have too much responsibility in their personal life.
“Women are most successful in accounting or marketing — fields in which decisions are made on the basis of figures,” she continued.
“Female students often show an interest in marketing, finance and management of technology innovations, especially if their first degree was connected to IT, math or physics,” said GSOM’s Kornyshkova.
Women often earn less than men, and not necessarily as a result of salary discrimination. Even women with MBAs often work in fields that are traditionally lower paid. Yet notions of “male” and “female” jobs persist.
“All of us, in forging a career, are unintentionally susceptible to the influence of these ideas,” said Nikolai Shalayev, director of Ancor recruitment’s St. Petersburg office.
“It is considered that men are most suited to making a career and increasing profits while women are mostly focused on stability and the development of their professional competence, with less accent on their career.”
“As a result, both the choice of occupation and future income are determined by the opportunities of building a career in this or that field. Yet nowadays, the notion of “male” and “female” jobs is gradually being eroded,” he added.
Differences between male and female students can be observed in the way that different genders approach the same problems. The Open Business School once organized two similar residential schools. One of the groups consisted mostly of men, and the other of women. The way the students solved the same problem was quite different.
“The men held an heated debate, while the women tried not to turn the situation into a conflict. They discussed everything as diplomatically as possible,” said Golenishcheva.
The crisis has also highlighted gender differences in business education. Open Business School specialists note an increasing number of female students who have found the opportunity to study in difficult times, while men prefer to solve problems and postpone their education in such a situation.
“The motivation for business education is the same for everyone. Their first priority is personal development in order to manage the company more effectively, and then comes career growth,” said Golenishcheva.
Foreign business schools try to attract women with special grants, but Russian schools do not offer any gender benefits. The schools that do so often do so out of rating considerations, as student diversity is a factor that adds points to the reputation of the school.
“There is no sense in [offering grants for female students] in Russia,” said Golenishcheva. “We still cannot say that we have a business school market. Each establishment has its own niche and it is impossible to compare them, and ratings can exist only where there are similar products. That’s why Russian business schools do not offer any special incentives for women.”
Although the interest of women in business education is increasing now, lower proportions of female students are standard on business education programs all over the world, confirming the idea of management as a male domain. Yet this is not due to gender discrimination, but rather an inevitable result of women’s roles in the family and in society.