SOURCE: The St. Petersburg Times
DATE: Issue #1564 (25), Tuesday, April 13, 2010
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TITLE: Investigators Put Blame For Crash On Crew
AUTHOR: By Matt Moore and Monika Scislowska
PUBLISHER: The Associated Press
TEXT: WARSAW — Russian investigators suggested human error may have been to blame in the plane crash that killed the Polish president and 95 others, saying Monday that were no technical problems with the Soviet-made plane.
The Tu-154 went down while trying to land Saturday in dense fog near Smolensk airport in western Russia. All aboard were killed, including President Lech Kaczynski and dozens of Polish political, military and religious leaders.
They had been travelling in the Polish government-owned plane to attend a memorial at nearby Katyn forest honoring thousands of Polish military officers who were executed 70 years ago by Josef Stalin’s secret police.
The pilot had been warned of bad weather in Smolensk, and was advised by traffic controllers to land elsewhere — which would have delayed the Katyn observances.
The pilot was identified as Captain Arkadiusz Protasiuk, 36, and the co-pilot as Major Robert Grzywna, 36. Also on the cockpit crew were Ensign Andrzej Michalak, 36, and Lt. Artur Zietek, 31.
In Warsaw, there was concern that the pilots may have been asked by someone in the plane to land at Smolensk instead of diverting to Minsk or Moscow, in part to avoid missing the commemoration ceremonies.
In Warsaw, Polish Prosecutor General Andrzej Seremet said Polish investigators talked to the flight controller and flight supervisor and “concluded that there were no conditions for landing.”
“The tower was advising against the landing,” Mr. Seremet said.
Polish investigators have not yet listened to the cockpit conversations recorded on the black boxes, but will do so to see if there were “any suggestions made to the pilots” from other people aboard the plane.
Polish media reported in August 2008 that pilots flying from Kaczynski to Tbilisi refused the president’s order to land there because of the country’s military conflict with Russia, diverting instead to Azerbaijan.
In remarks shown on Russian television, Deputy Prime Minister Sergei Ivanov told a government meeting including President Dmitry Medvedev that the data recorders on the plane were found to have been completely functional, which will allow a detailed analysis.
“It is reliably confirmed that warning of the unfavorable weather conditions at the North airport and recommendations to go to a reserve airport were not only transmitted but received by the crew of the plane,” he said.
Russian investigators have almost finished reading the flight recorders, said Alexander Bastrykin, Russia’s chief investigator.
“The readings confirm that there were no problems with the plane, and that the pilot was informed about the difficult weather conditions, but nevertheless decided to land,” Bastrykin said during a briefing with Russian Prime Minister Vladimir Putin in Smolensk.
Bastrykin said the readings would be double checked, according to footage of the meeting broadcast Monday on Poland’s TVN24.
The wreckage, meanwhile, will remain on site through midweek to help speed the investigation, Russian Deputy Transport Minister Igor Levitin said.
Both Russia and Ukraine declared Monday a day of mourning, as Poles struggled to come to terms with the national tragedy that eliminated so many of their government and military leaders.

TITLE: Polish Ties Face Test After Plane Crash
AUTHOR: By Alexandra Odynova and Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia’s uneasy ties with Poland face a test after Polish President Lech Kaczynski, his wife and dozens of other senior Polish officials died in a weekend plane crash tentatively blamed on fog and pilot error.
The Polish delegation was flying to Smolensk on Saturday to commemorate the 70th anniversary of a Soviet massacre of Polish officers in the nearly village of Katyn when its descending Tu-154 plane got caught on a tree and crashed.
Air controllers at the Severny military airport said the pilots ignored recommendations to land elsewhere, including in Minsk, because of the poor weather conditions and made three attempts to land before the disastrous approach. All 96 people on the plane died.
Russian leaders quickly offered support and sympathy. President Dmitry Medvedev ordered crash investigators to make sure that the Poles have complete access to all information that they collect. Prime Minister Vladimir Putin, who marked a reset of relations with Poland at a meeting with his Polish counterpart, Donald Tusk, at Katyn just three days earlier, gave Tusk a comforting embrace at the crash site late Saturday that was beamed around the world. Putin is personally leading the crash investigation. 
See related story on this page.
The Kremlin published Medvedev’s condolences in Polish on its web site and declared a national day of mourning for Monday — a day when Russia usually celebrates Yury Gagarin’s feat of becoming the first man in space.
“Medvedev and Putin found the surprisingly right words for the Poles,” said Alexander Rahr, a Russia expert on the German Council for Foreign Relations. “To organize a day of mourning on a national holiday — not every country could have done that.”
Rahr suggested that relations might be damaged if the crash is blamed on something other than bad weather and a pilot error. Otherwise, they do not face much risk, he said.
Indeed, the joint investigation into the crash might draw the countries closer together, said Nikolai Zlobin, director for Russian and Asian programs at the World Security Institute in Washington.
“No matter if they want it or not, they will have to deal with this together,” he said. “It may become a basis for rebuilding mutual trust.”
Putin and Tusk took a major step toward bridging the gap between the countries when they attended the first Russian-Polish commemorations at the Katyn memorial on Wednesday. Putin had invited Tusk to the ceremony but pointedly excluded Kaczynski, who was a critic of Russia.
“It is an accursed place,” former Polish President Aleksander Kwasniewski told Poland’s TVN24 after the crash. “It sends shivers down my spine. First the flower of the Second Polish Republic is murdered in the forests around Smolensk, now the intellectual elite of the Third Polish Republic die in this tragic plane crash when approaching Smolensk Airport.”
Stalin’s secret security force, known by its acronym NKVD, massacred 4,400 Polish officers and intellectuals in the forest near Katyn in the spring of 1940 after Soviet troops invaded Poland. In all, more than 20,000 Poles were killed in various parts of Russia.
“I am at loss for words. It is a disaster, the second after Katyn,” former President Lech Walesa said. “They wanted to cut off our head there, and here the flower of our nation has also perished. Regardless of the differences, the intellectual class of those on the plane was truly great.”
A total of 88 of the 96 people on Kaczynski’s plane were members of the official Polish delegation, including the central bank chief, the head of the armed forces, the deputy foreign minister, the head of the National Security Office and the deputy parliamentary speaker, the Polish Foreign Ministry said.
The body of Kaczynski was sent home to Warsaw on Sunday. The rest of the bodies were sent to Moscow, where relatives and Polish officials arrived to identify them on Sunday.

TITLE: Construction Starts on Nord Stream Gas Pipeline
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: PORTOVAYA BAY, Leningrad Oblast — Russian and German leaders marked the start of construction on the Nord Stream gas pipeline from Russia to Europe under the Baltic Sea on Friday.
 The pipeline aims to increase Russia’s share of the market in Europe while bypassing Ukraine, with whom strained relations have caused supply disruptions in the past.
President Dmitry Medvedev said Nord Stream would be the “key section to ensure energy security in Europe.”
“The new pipeline will ensure the reliable supply of fuel to Europe at reasonable prices,” Medvedev said at the opening ceremony.
German Chancellor Angela Merkel also said in her video message that Nord Stream would be “an important input into European energy security.”
Alexei Miller, CEO of state gas company Gazprom, said it had already signed up customers for the entire supply volume.
“All the gas capacity has already been contracted,” said Miller. “We already know when, to whom and in what volumes we’ll be selling this gas,” he said.
Miller said Nord Stream would be a more cost-effective way of transporting gas to Europe, since it eliminates having to pay transit fees in countries crossed by pipelines.
The project represents an alternative to pipelines running through Ukraine, Belarus and Poland, and offers a way around the disruptions caused by Russia’s price disputes with neighboring Ukraine, which have led to gas shutoffs. The disputes have spurred European governments to look for alternative sources.
Medvedev said it would also help to solve ecological problems, including global warming.
“Everything necessary is being done to guarantee the environmental safety of the project,” he said. “It will even allow us to reduce CO2 emissions.” 
Neel Stroback, a representative of Ramboll Denmark, which carried out environmental research for the project, said Thursday that Nord Stream is spending more than 100 million euros on detailed environmental studies and making the project safe for the environment.
“In regards to ecology, Nord Stream has tried to be fully transparent, and we believe that the project won’t have any significant influence on the environment,” Stroback said Thursday.
The company will halt the construction of the pipeline from January to mid-May in Germany for the herring spawning season, Nord Stream said.
The 7.4 billion euro offshore pipeline from Portovaya Bay near Vyborg in the Leningrad Oblast to Lubmin near Greifswald, Germany, will consist of two parallel pipes, each running 1,224 kilometers along the seabed. The capacity per line will reach 27.5 billion cubic meters (bcm) of natural gas per year — a total capacity of 55 bcm per year.
The 7.4 billion euro ($10 billion) project faced early skepticism in Europe over costs and mounting Russian influence on the continent’s energy market.
But then-President Putin recruited a close ally, former German Chancellor Gerhard Schroeder, to lead the international consortium and to secure financing and support in Europe. Putin personally applied his immense political muscle to secure construction permits from Finland, Denmark and Sweden, whose territorial waters the project will cross.
The project has four shareholders: Gazprom (51 percent), Germany’s E. ON Ruhrgas (20 percent) and BASF SE/Wintershall Holding (20 percent), and the Netherlands’ Nederlandse Gasunie (9 percent). The project is due to get a fifth shareholder in the near future — France’s GDF Suez, which will have 9 percent of shares after the two German concerns give it 4.5 percent each.
Thirty percent of investment is to be funded by equity contributions from shareholders and 70 percent by financing from 26 banks.
The first pipeline is due to start delivering gas next year, followed by the second line in 2012. 
The project is of high strategic importance for both Russia, which wants to export its gas, and for Europe, whose demand for gas increases every year. The pipeline will make transporting gas cheaper for both exporters and customers.
According to experts’ calculations, the EU’s annual demand for natural gas imports, which was approximately 312 bcm in 2007, will increase to 516 bcm by 2030, at which time the annual import shortfall will reach more than 200 bcm.
By connecting Russia’s gas reserves — the largest in the world — to the European gas grid, the Nord Stream pipeline is expected to meet about 25 percent of the additional import demand by supplying Europe with 55 bcm of natural gas per year — enough to supply more than 26 million households per year.
During the environmental work, more than 3,000 objects were discovered on the seabed using sonar equipment, including old military weapons.
Medvedev on Friday referred to the protracted environmental considerations by Sweden, Finland and Denmark, which delayed the start of construction by a year.
“Unprecedented preparatory work has been done,” he said. “Frankly speaking, it sometimes seemed to me that it would never end. But it did.”
The pipes for the pipeline are manufactured from high-tensile steel. The thickness of the pipeline wall varies from 41 to 26.8 millimeters in accordance with the decreasing pressure along the route.  To give them extra weight and ensure their stability on the seabed, the pipes are coated with concrete.

TITLE: Policeman Shoots Driver; Driver Under Investigation
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: A police officer fired rubber bullets at a packed marshrutka minibus, injuring the driver in central St. Petersburg after chasing the bus in his car in rush hour Thursday, witnesses say. 
Despite witnesses’ claims that the shooting was unprovoked, the police who arrived at Teatralnaya Ploshchad, where the incident took place at about 6 p.m., arrested the wounded driver rather than the shooter, who was later identified as neighborhood police inspector Anton Kasenkov. The driver, Artur Bakov, is suspected of “using violence against a representative of authority” — an offence punishable by up to 10 years in custody.
In a statement Friday, the police claimed that the police officer was beaten up by three men, including two of the driver’s colleagues, who were travelling in the same bus. 
The statement acknowledged that the police officer in question had fired several rubber bullets from his weapon, but said that shots were fired at the wheels of the bus to force it to stop after the policeman observed the driver making a “dangerous maneuver” that violated traffic rules. However, BaltInfo news agency published photographs Thursday showing dents on the side of the bus.
Speaking Monday, Bakov’s lawyer Mukhtar Anteyev said the two men who were detained with Bakov would file complaints against their “unlawful detention and beating, and the assault on the bus driver” on Tuesday. He said the two were detained for two days, while Bakov was only hospitalized after several hours without medical attention in the police precinct.
“I believe [the criminal case] is groundless and unlawful, because it was the police officer who carried out an assault here — why on earth should a case be initiated against the victim?” Anteyev said by phone. Bakov, who was injured in the buttock by a rubber bullet fired at close-range, was expected to spend several more days in hospital, Anteyev said Monday.
Witness Georgy Nozdrin, who was on the bus, said that Kasenkov had shot about 12 rounds at the bus, which had more than 20 passengers on board. He described the shooting as unmotivated and shocking. 
“The driver was driving very carefully — and how serious must a violation be to open fire on a bus?” Nozdrin said Sunday. “I think in any case it’s wrong to shoot at a bus full of people. The only thing that saved us was that the gun fired rubber bullets and was not a combat weapon.”
When shocked passengers called the police, several officers arrived, shook hands with Kasenkov and, to the passengers’ amazement, arrested Bakov with another two men who happened to be drivers from the same company and had got out of the bus to see what was happening and perhaps defend the driver, Nozdrin said.
“Claims that anybody started beating up the policeman are not true; in actual fact it was him who dragged the driver out of the bus and started hitting him,” he said.
“The guys who got out to help him only tried to drag them apart.”
According to Nozdrin, the policeman was off-duty and driving his own Chevrolet car. “He was in plain clothes — it only became apparent that he was a policeman when he shook hands with the [other] policemen, got into his car and drove off,” he said.
Nozdrin described Kasenkov’s behavior as strange.
“He was totally outrageous,” he said.
“Some female passengers spoke to him and said that he didn’t smell [of alcohol], but he was acting as though he was either drunk or stoned. He was not in his right mind, that’s for sure.”
But the policemen who arrived at the scene did not check whether Kasenkov was intoxicated, nor were they interested in witnesses’ statements.
“The police did not take any statements from us,” Nozdrin said.
“They lost any interest in us as soon as we started to explain that we had seen that it was in fact the driver who was innocent, and the policeman had started it all, literally out of nowhere.”
Nozdrin said that seven of the bus passengers would file complaints to the city’s prosecutor about the police’s actions.
The incident is the latest in a recent surge of scandals involving police officers in Russia, the most infamous being Major Denis Yevsyukov’s deadly shooting rampage in a Moscow supermarket in April last year that left two people dead and several more injured.

TITLE: Adopted Boy Sent Back From U.S.
PUBLISHER: The Associated Press
TEXT: MOSCOW — The Foreign Ministry threatened to suspend all child adoptions by U.S. families after a 7-year-old boy adopted by a Tennessee woman was sent alone on a one-way flight to Moscow with a note saying he was violent and had severe psychological problems.
The boy, Artyom Savelyev, was put on a plane by his adoptive grandmother, Nancy Hansen.
“He drew a picture of our house burning down and he’ll tell anybody that he’s going to burn our house down with us in it,” Hansen said by telephone. “It got to be where you feared for your safety. It was terrible.”
Foreign Minister Sergei Lavrov called the actions by the grandmother “the last straw” in a string of U.S. adoptions gone wrong, including three in which Russian children have died in the United States since 2005.
President Dmitry Medvedev said the boy “fell into a very bad family.”
“It is a monstrous deed on the part of his adoptive parents, to take the kid and virtually throw him out with the airplane in the opposite direction, and to say ‘I’m sorry, I could not cope with it, take everything back’ is not only immoral but also against the law,” Medvedev said on U.S. ABC television.
Russia’s main television channels ran extensive reports on the adoption in their main evening news shows on Friday.
The Education and Science Ministry immediately suspended the license of the group involved in the adoption — the World Association for Children and Parents, a Renton, Washington-based agency — for the duration of the investigation. In Tennessee, authorities were investigating the adoptive mother, Torry Hansen, a 33-year-old, unmarried nurse.
Any possible freeze could affect hundreds of American families. Last year, nearly 1,600 Russian children were adopted in the United States, and more than 60,000 Russian orphans have been successfully adopted there, according to the National Council For Adoption, a U.S. adoption advocacy nonprofit group.
“We’re obviously very troubled by it,” U.S. State Department spokesman P.J. Crowley said in Washington when asked about the boy’s case. He told reporters that the United States and Russia shared a responsibility for the child’s safety and that Washington would work closely with Moscow to make sure adoptions are legal and appropriately monitored.
Asked if he thought a suspension by Russia was warranted, Crowley said, “If Russia does suspend cooperation on the adoption, that is its right. These are Russian citizens.”
The boy arrived unaccompanied at Moscow’s Domodedovo Airport on Thursday on a United Airlines flight from Washington.
The office of children’s ombudsman Pavel Astakhov said the boy was carrying a letter from his adoptive mother saying she was returning him because of severe psychological problems.
“This child is mentally unstable. He is violent and has severe psychopathic issues,” the letter said. “I was lied to and misled by the Russian orphanage workers and director regarding his mental stability and other issues. … After giving my best to this child, I am sorry to say that for the safety of my family, friends, and myself, I no longer wish to parent this child.”
The boy was adopted in September from the town of Partizansk in the Far Eastern region of Primorye.
Nancy Hansen, the grandmother, said she and the boy flew to Washington and that she put the child on the plane with the note from her daughter. She vehemently rejected assertions of child abandonment by Russian authorities, saying he was watched over by a United Airlines stewardess and that the family paid a man $200 to pick up the boy at Domodedovo Airport and take him to the Education and Science Ministry.
Nancy Hansen said a social worker checked on the boy in January and reported to Russian authorities that there were no problems. But after that, the grandmother said, incidents of hitting, kicking and spitting, along with threats, began to escalate.

TITLE: Judge Who Sentenced Nazis Murdered
AUTHOR: By Mansur Mirovalev
PUBLISHER: The Associated Press
TEXT: MOSCOW — A judge who sentenced to prison neo-Nazis responsible for dozens of hate killings was gunned down Monday amid a surge of violence against activists and officials opposed to Russian nationalists.
Moscow City Court judge Eduard Chuvashov was shot contract-style in the stairwell of his apartment building in central Moscow, Russia’s top investigative body said.
The murderer used a silencer and left no shells, but investigators obtained footage from surveillance cameras showing a tall Slavic man, about 30-years-old, coming out of Chuvashov’s apartment building shortly after the killing, it said.
“We have definite leads,” investigator Pyotr Titov said in televised remarks.
A leading rights group pointed the finger at a far-right ultranationalist group with alleged ties to Kremlin-backed youth movements, saying it may have links to the murder and incited hatred for Chuvashov on the Internet. A nationalist leader denied the accusations.
Russia has experienced a surge of xenophobia and racially-motivated assaults in the years after the Soviet collapse, and the number of neo-Nazi groups has mushroomed.
As the nation struggles through an ongoing economic meltdown, nationalist groups have targeted dark-skinned migrants from ex-Soviet Central Asian nations and Russia’s own North Caucasus region, accusing them of stealing jobs from ethnic Russians.
Chuvashov, 47, presided over several high-profile cases that involved hate killings committed by neo-Nazis and skinheads.
In February, Chuvashov presided over the trial of the White Wolves, a gang of mostly teenaged skinheads who kicked and stabbed their victims to death, often videotaping the attacks and posting them online. 
They were convicted by a jury of the killings of six Central Asian people and Chuvashov sentenced them to up to 23 years in jail.
Chuvashov began receiving threats during the trial, a Moscow-based hate crime monitoring group, Sova, said.

TITLE: Sapsan Train Damaged Again, Vandalism Suspected
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The high-speed Sapsan train was involved in another incident on its way from Moscow to St. Petersburg on Sunday night.
The train had to stop for more than an hour after the railway’s overhead electric cable was damaged in the Tver Oblast at 9.32 p.m. The broken cable affected the train’s electrical current receiver and damaged its front window, according to the press service of the Northwest transport police.
As a result, electricity on the line failed and caused another Sapsan train to be delayed for about an hour.
Initially police suspected that the incident was caused by a foreign object on the electrical cable, and that it was another act of deliberate vandalism — Sapsan has suffered several since its launch — but that version has not been confirmed.
“The investigation into the matter is still ongoing,” the press service said in a statement.
A few days before the incident, St. Petersburg police detained two men for firing an air rifle at another Sapsan train.
The men said they were testing the new rifle by shooting at the Sapsan train, which was passing by at high speed. One of the train’s cars was damaged as a result of the shooting.
The two recent incidents brought the total number of acts of vandalism against the Sapsan trains to more than ten during the last four months, since the Sapsan began operating on the railway between Moscow and St. Petersburg, Petersburg.ru web site reported.
The Sapsan trains, which can reach speeds of up to 300 kilometers per hour, have regularly had rocks and pieces of ice thrown at them, some of which have damaged the trains’ windows.
Dmitry Pegov, director of the high-speed train department at Russian Railways (RZD), said that damage from acts of vandalism against Sapsan trains had already cost the company 1.5 million rubles ($52,000), Itar-Tass news agency reported.
Pegov said that even replacing a window on the Sapsan costs 100,000 rubles ($3,450), adding that it was not easy.
From April 5, the number of Sapsan journeys between Moscow and St. Petersburg increased to five a day from three in each direction.
Yulia Mineyeva, spokeswoman for Oktyabrskaya Railways, the subsidiary of RZD that operates that section of track, said the Sapsan train is seeing high demand among passengers, and that tickets are often sold out.
The launch of the Sapsan on Dec. 18 increased competition on the stretch of railway, causing the popular Nikolayevsky Express night train that used to travel between the two cities to go bankrupt, Tourprom.ru web site reported.
Some local commuter trains traveling along the route between St. Petersburg and Moscow have also been cancelled since the Sapsan was launched.
The high-speed trains, which cover the distance between Russia’s two biggest cities in 3 hours and 45 minutes, also present competition for the frequent flights between Moscow and St. Petersburg, since passengers can save time by not having to travel to airports.

TITLE: Poles Mourn as Coffin of Their President Comes Home to Warsaw
AUTHOR: By Monika Scislowska
PUBLISHER: The Associated Press
TEXT: WARSAW, Poland — The leader of Poland’s government in exile while the nation was under Soviet-backed rule. The shipyard worker whose firing helped ignite the labor uprising that ultimately toppled communism here. A banking head who helped keep the country stable while the rest of the European Union plunged into recession.
When Poland lost its president and top military brass on Saturday in a plane crash that killed 96, it also lost much of its living history and other elite members of society.
It is a supreme bitterness that they died near, of all places, Russia’s Katyn forest, where thousands of Polish officers were slain by Soviet forces in World War II in an attempt to eliminate some of the country’s brightest.
“This is so very much like Katyn, where our head was cut off,” former President Lech Walesa said.
Killed with President Lech Kaczynski in the plane crash near Smolensk, western Russia, were his wife, Maria Kaczynska, his closest aides, lawmakers, army commanders, church figures, historic figures, plane crew and relatives of the victims of the 1940 massacre of Polish officers in Katyn and in other sites. They had been traveling to Katyn to mark the 70th anniversary.
The Soviet secret police killed thousands of Polish military leaders and intellectuals at Katyn and other places at the start of World War II. It was part of a strategy to subdue the country, whose eastern half it occupied starting in 1939, and to better control it.
Among the victims Saturday was a former president in exile, Ryszard Kaczorowski, 90, the last leader of Poland’s exiled government in London. The exiled leadership was established during the Nazi occupation of Poland and continued to declare itself the rightful government during the decades of communism, until Walesa became Poland’s first popularly elected president in 1990.
The crash also took an icon of Poland’s Solidarity freedom movement, 80-year-old Anna Walentynowicz. Workers at the Lenin Shipyard in Gdansk went on strike when Walentynowicz was fired from her job as a crane operator in August 1980 for her opposition activity. That injustice sparked strikes that spread like wildfire to other plants across the nation, giving rise to Solidarity, the movement that helped bring about the demise of communism in Poland nine years later.
Poland also lost one of the architects of its economic stability during the recent global crisis, head of the National Bank of Poland, Slawomir Skrzypek, 46, a close Kaczynski associate.
Skrzypek’s nomination in 2007 was highly criticized because he was perceived as inexperienced and Kaczynski’s critics claimed cronyism. Yet his decisions defending the value of the zloty and the bank’s security helped Poland emerge as the European Union’s only economy to avoid recession amid the global downturn last year.
“It was one of the truly brilliant careers recently in Poland,” said political analyst Rafal Chwedoruk from Warsaw University. “He took his positions among heated disputes and he came out victorious. Even his critics were saying under his leadership the bank was playing its role well.”
Several of Poland’s top military officers were killed in the crash, including the army chief of staff, General Franciszek Gagor, 58; the navy’s Vice Admiral Andrzej Karweta, 51; General Andrzej Blasik, 47, from the air force; and the top commander of the ground forces, General Tadeusz Buk, 49.
In Kabul, the American who leads allied forces in Afghanistan and Pakistan, General David Petraeus, offered his condolences. He was in Poland days earlier to meet with its military leaders.
“Almost everybody who was sitting on the other side of the table at my meeting with the general staff is no longer with us,” Petraeus said.
Government spokesman Pawel Gras said the officers’ first deputies had taken over and Poland’s armed forces and state offices were operating normally despite the devastating losses.
Also killed was Janusz Kochanowski, 69, the state official in charge of protecting citizens’ rights. He was often in the news this past winter because he waged a strong rebuke against the government for refusing to provide swine flu vaccines to the public amid a global panic, casting the decision as a violation of basic rights.
Another prominent figure to perish was Janusz Kurtyka, 49, a historian and researcher who headed the state-run National Remembrance Institute that oversees Nazi and communist-era files. Some files document collaboration of public figures with the communist secret police — ace cards that have been used in political infighting in past years. His decisions to let information seep out made him a controversial figure.
Yet “Kochanowski and Kurtyka were men of learning and their death means a great loss to the intellectual life,” Chwedoruk said.
“We are dealing with a loss of some of the elite: trained politicians, intellectuals, scholars. There is no measure for that,” he said.
Some of Kaczynski’s closest advisers, men who studied abroad, were also on board. They include Wladyslaw Stasiak, 44, head of the presidential office; Aleksander Szczyglo, 46, chief of the National Security Office; and advisers Mariusz Handzlik, 44 and Pawel Wypych, 42. They all met Kaczynski at various stages of his political carrer and won his personal trust.
The nation also lost a much-loved first lady, Maria Kaczynska, 66, an economist and translator with a gracious manner who put her career aside to support her husband. She had devoted herself in recent years to charity work.

Recent Tu-154 Crashes

* April 10, 2010: The Polish presidential plane crashes on approach to Smolensk airport, killing all on board.
* July 15, 2009: A Caspian Airlines Tu-154 flying from Iran to Armenia nosedives into a field, killing 168 people.
* Sept. 1, 2006: A Tu-154 jetliner operated by Iran Airtour skids off the runway and catches fire while landing in the northern city of Mashad, Iran, killing 80 of 147 passengers.
* Aug. 22, 2006: A Tu-154 with Russia’s Pulkovo Airlines with about 170 people aboard crashes during a thunderstorm in Ukraine en route from a Black Sea resort to St. Petersburg, killing all aboard.
* Aug. 24, 2004: A Tu-154 operated by Sibir Airlines crashes en route from Moscow to the Black Sea resort of Sochi, killing all 46 people aboard. The crash was later determined to be caused by explosives brought on board by a Chechen suicide bomber.
* July 1, 2002: A Bashkirian Airlines Tu-154 flying to Barcelona, Spain, from Ufa collides with a cargo plane over Germany, killing 71, including 52 children.
* Feb. 12, 2002: A Tu-154 airliner operated by Iran Airtour carrying 119 people smashed into snow-covered mountains near its destination of Khorramabad, Iran, killing all aboard.
* Oct. 4, 2001: A Sibir Airlines Tu-154 flying from Tel Aviv, Israel, to Novosibirsk explodes and plunges into the Black Sea, killing 78 people, most of them Israeli citizens. It was later determined that the plane was hit by a Ukrainian missile during military training exercises.
* July 3, 2001: A Tu-154 operated by the Vladivostokavia airline en route from Yekaterinburg to Vladivostok crashes in Irkutsk, killing all 145 on board.
* Feb. 24, 1999: A China Southwest Airlines Tu-154 on a domestic flight from Chengdu crashes on approach to Wenzhou, killing all 61 people aboard.
* Aug. 29, 1998: A Cubana Tu-154 flight from Quito to Havana crashes just after takeoff, killing 79 people, including 10 on the ground when the plane plowed into a soccer field.
* Dec. 15, 1997: A Tajikistan Airlines Tu-154 crashes in the United Arab Emirates, killing 85 passengers and crew.
* Aug. 29, 1996: A Vnukovo Airlines Tu-154 passenger plane carrying Russian and Ukrainian miners and their families from Moscow to Norway crashes into a mountain, killing all 141 on board.
* Dec. 7, 1995: A Tu-154 operated by Aeroflot Khabarovsk Airlines with 97 people on board disappeared flying to Khabarovsk. The remains were found 11 days later by a helicopter pilot in mountains near the Pacific coast.
* June 6, 1994: A China Northwest Airlines Tu-154 bound for Guangzhou crashes minutes after takeoff from Xian, a tourist city in northern China, killing all 160 people aboard.
* Jan. 3, 1994: All 124 people aboard a Moscow-bound Baikal Airlines Tu-154 are killed when it crashes into a snowy field near the town of Irkutsk. A farmer on the ground was also killed.
— AP

TITLE: Solidarity ‘Godmother’ Dies in Katyn Plane Crash
PUBLISHER: Bloomberg
TEXT: Anna Walentynowicz, a Solidarity activist whose firing started the Gdansk shipyard strike in 1980 and helped spread trade-union activism against the communist regime in Poland, died in the Katyn plane crash in Russia.
Walentynowicz, 80, worked in the Gdansk shipyard as a welder and a crane operator. In 1978, she joined an illegal trade union and edited its newspaper. 
For her participation in the opposition movement, she was fired on Aug. 7, 1980, five months before her scheduled retirement. Her colleagues started a strike, ultimately led by Lech Walesa, calling on management to put her back to work.
“Anna Walentynowicz is one of the mothers-founders of Solidarity, in a way a godmother of Solidarity,” Gdansk Mayor Pawel Adamowicz said by phone. “She became a catalyst. She embodies the protest against evil.”
Walentynowicz fought for equality, human dignity and truth, Adamowicz said. 
She criticized Polish society as it emerged after the communist regime was abolished in 1989, because the change did not bring well-being to everyone, he said. 
Walesa called an end to the shipyard strike on Aug. 16, 1980, after management agreed to re-employ fired workers and raise wages. Walentynowicz opposed this move, demanding that protests should continue until all workers’ concerns were addressed.
This created a conflict between Walesa and Walentynowicz that communist-era secret services tried to use to discredit Walesa. She opposed helping the secret police damage Walesa, historian Slawomir Cenckiewicz said in an article about Walentynowicz published by Polish daily Rzeczpospolita on Aug. 13.

TITLE: Crash Boosts Prime Minister Tusk
AUTHOR: By David McQuaid
PUBLISHER: Bloomberg
TEXT: WARSAW — Polish Prime Minister Donald Tusk’s pro-euro Civic Platform party is likely to cement its grip on power in a presidential election that must now be held by June after President Lech Kaczynski died in a plane crash.
Polls taken before the April 10 accident showed Civic Platform’s candidate, Bronislaw Komorowski, was running ahead of Kaczynski and other contenders in an election originally scheduled for October. The tragedy in Smolensk, western Russia, killed all 96 passengers on route to commemorate the 70th anniversary of the massacre of thousands of Polish officers by Soviet forces.
Following the crash, in which Left Democratic Alliance party candidate Jerzy Smajdzinski also died, Komorowski is left as the sole surviving contender of Poland’s three major parties. The only significant impediment to a Civic Platform victory may be the possibility of a wave of sympathy for the dead president, political commentators said, and that still probably won’t be enough to prevent Tusk extending his control over the political system.
“This changes the whole political dynamic,” said Marek Matraszek, Warsaw based head of CEC Government Relations, which advises companies dealing with the government. “Does it cement Civic Platform’s dominance? That’s a very strong possibility.”
With control of the government and the presidency, Tusk’s party would have more freedom to pass legislation needed to keep the budget in check and satisfy investors focused on fiscal health.
Kaczynski, who over the past three years had tried to block government efforts to overhaul Poland’s debt-ridden healthcare and pension systems, was also the last EU leader besides Vaclav Klaus of the Czech Republic to sign the Lisbon Treaty, and opposed Tusk’s euro adoption goal.
Kaczynski placed a euro-skeptic ally in charge of the central bank, Slawomir Skrzypek, who was also killed in the crash.
“Investors viewed President Kaczynski and Skrzypek as hostile figures,” said Preston Keat, the London-based research director of Eurasia Group, a political risk consulting company. “What kept coming up in client meetings is that they were the two blocking forces to market reform.”
Under Governor Skrzypek, Poland’s central bank last week intervened to cap zloty gains for the first time in 12 years. The currency is up 6 percent against the euro this year, making it eastern EU’s best performer in the period. The bank appointed Skrzypek’s deputy Piotr Wiesiolek as acting governor and will hold a meeting today to discuss how to proceed.
“My sense is that the view that the zloty is appreciating too far and too fast is widely held in the central bank, so there’s no reason to believe they won’t come back into the market again next week or the week after,” said Blaise Antin, managing director of TCW Group Inc. in Los Angeles, which has $115 billion under management, including $4 billion in emerging market assets.
The zloty lost as much as 0.7 percent against the euro today before recovering to trade at 3.873 at 10:04 a.m. in Warsaw. The currency will probably stabilize after investors digest the initial shock of the plane crash, Citigroup Inc. and RBC Capital said.
The central bank had also signaled it was deciding when to start raising interest rates from a record low 3.5 percent.
“Uncertainty should be out of the way by June and we stick for now with our call of three rate hikes from July, but with risks to the downside given prospects of further intervention,” said Peter Attard Montalto, an emerging markets economist at Nomura International Plc, in a note to clients. He expects the country to join the pre-euro Exchange Rate Mechanism, a prelude to adopting the euro, in 2011.
Poland abandoned its 2012 euro adoption target last July after it became clear it would miss the bloc’s fiscal targets. Tusk now says 2015 is a “realistic” date.
Though polls show Komorowski was likely to win the October elections, an earlier presidential victory may allow the Civic Platform more time to push through policy changes.
“There is now likely to be a longer period of Civic Platform presidential rule before the parliamentary elections in 2011,” Montalto said. “This should allow the privatization program, the passage of other laws and fiscal reforms to progress more smoothly through the second half before campaigning for the parliamentary elections start next year.”
Support for Civic Platform party rose to 53 percent from 50 percent, Rzeczpospolita reported on March 11. Support for Kaczynski’s Law & Justice was unchanged at 27 percent, while the Left Democratic Alliance increased its support to 8 percent from 7 percent, according to a poll of 1,000 adults by researcher GfK Polonia.
Poland, the biggest of the EU’s eastern members and the only EU economy to have avoided a contraction during the credit crisis, will post a budget deficit of 7.5 percent of gross domestic product this year, with a debt of 57 percent of GDP, the European Commission estimates. Economic output will expand 3 percent in 2010 after growing 1.7 percent last year, the government estimates.

TITLE: U.S. Senate Pressed to Back New START
PUBLISHER: The Associated Press
TEXT: LOUISVILLE, Kentucky — U.S. Secretary of State Hillary Rodham Clinton has offered assurances that a new nuclear arms control treaty enables the United States to maintain a “strong, flexible deterrent” as she urged a divided U.S. Senate to ratify the pact signed by Presidents Barack Obama and Dmitry Medvedev.
In a speech delivered Friday, Clinton hailed the treaty signed by U.S. and Russian leaders on Thursday as the “latest chapter in a history of American nuclear responsibility” supported by presidents of both countries and strong majorities in Congress.
The nuclear arms pact now faces a ratification vote from Democratic and Republican senators, who are near gridlock on many issues, as well as from the Russian legislature.
“There are times when people of good will and great intellect have diverging views on how to deal with complex issues. But I don’t think this is one of those times,” Clinton said in a speech at the University of Louisville.
“We believe strongly that this is in our nation’s best interest, and I am confident that once senators have the chance to study this new treaty, we will have the same high levels of bipartisan support as the agreements that this one builds upon,” she said.
The pact commits the United States and Russia to slash the number of strategic nuclear warheads by one-third and more than halve the number of missiles, submarines and bombers carrying them. 
Clinton said the treaty would enable the United States and Russia to “build trust and increase understanding of each other’s forces while eliminating potential opportunities for mistakes and miscalculation.”
But she assured that by ratifying the treaty, the United States “won’t give up anything of strategic importance. But, in return, we will receive significant, tangible benefits.”
Some Senate Republicans are reserving judgment on the deal until they are assured that it won’t set back U.S. defenses or interfere with plans for a European missile shield. 
Clinton also said approval of the treaty would enhance U.S. security and give it more international credibility in dealing with Iran and North Korea’s nuclear programs. 
Clinton said she was not suggesting that reducing U.S. and Russian nuclear stockpiles would convince Iran and North Korea to “change their behavior.” 
“But can our efforts to bring the New START treaty into force help persuade other nations to support serious sanctions against Iran? I believe they could,” she said.
Iran, meanwhile, is pushing ahead with its nuclear work. On Friday, President Mahmoud Ahmadinejad unveiled a third generation of centrifuge that will be used to accelerate a uranium enrichment program that is of central concern to the United States and its allies.
Clinton told a television news program on Sunday that Iran’s claimed advancements should be taken “with more than a grain of salt.”
There’s “not a chance” that the New START treaty will be approved this year, Senator Lamar Alexander, a Tennessee Republican, said on “Fox News Sunday,” Bloomberg reported.

TITLE: Kyrgyz President Bakiyev Vows to Fight On
AUTHOR: By Peter Leonard
PUBLISHER: The Associated Press
TEXT: TEYIT, Kyrgyzstan — Kyrgyzstan’s deposed president on Monday rallied supporters in his home village, testing his ability to mount resistance to the opposition forces that drove him out of the capital last week.
As about 500 people gathered in a muddy field in Kurmanbek Bakiyev’s native village of Teyit, the deputy head of the self-declared interim government said in the capital that an operation to arrest Bakiyev was being organized.
“Just let him try. If he does, much blood will be shed,” Bakiyev told reporters who asked him about the statement by Almazbek Atambayev.
Atambayev did not give details about the arrest plans, but said “we do not want fresh bloodshed.”
At least 81 people died in the capital last Wednesday when a confrontation between police and protesters exploded into gunfire and chaos. Protesters stormed government buildings and Bakiyev fled to his native southern region.
He has refused to step down and the rally in Teyit brought an array of speakers who vowed their support and waved banners with slogans such as “Hands off the legitimate president.”
There were no uniformed police in view at the rally, and the loyalty of the country’s security forces remains a significant question.
The stalemate has left Kyrgyzstan’s near-term stability in doubt. That worries the West because a U.S. air base in Kyrgyzstan is crucial in the military campaign against the Taliban in Afghanistan.
The base is used both as the launch point for refueling flights over Afghanistan and as a troop transit point. Troop transit flights had been diverted for several days, but the U.S. Embassy said Monday that those flights have returned to normal operation and that the refueling flights are continuing.
U.S. Assistant Secretary of State Robert Blake is to travel to Kyrgyzstan on Wednesday for talks including topics such as the base’s status.
Atambayev, echoing previous statements by interim government leader Roza Otunbayeva, said the base’s status will be discussed with the United States and “we shall decide everything in a civilized way.”
Many Kyrgyz oppose the base and Atambayev expressed deep ambivalence.
“This base is our common cause to provide stability in Afghanistan,” he said. 
But then he launched into criticism of the United States for allegedly cutting deals with Bakiyev’s family for contracts at the base.
Alleged corruption by members of the Bakiyev family, including enriching themselves through fuel contracts for the base, was one of the top issues that brought out protesters last week.
“While trying to preserve the base, you lost the respect of the people,” Atambayev said of the United States.
Bakiyev said in an interview on Sunday that he had not ordered police to fire at protesters in the capital.
“My conscience is clear,” he said.
He strongly urged the United Nations to send a peacekeeping force to Kyrgyzstan, arguing that the nation’s police and the military are too weak to keep the unrest from spreading.
“The people of Kyrgyzstan are very afraid,” Bakiyev said. “They live in terror.”
Otunbayeva, after meeting Monday with European Union representatives, said “We are in a rather rigid and delicate situation: people in the street demand revenge, they are ready to go there and deal with him shortly, but we’ll be cautious as far as the forceful scenario is concerned and won’t allow new victims.”
In taking power Thursday, the interim leaders said they controlled four of Kyrgyzstan’s seven regions. By Saturday they claimed to have expanded their control throughout the country.
The interim leadership on Monday announced the dismissal of Kyrgyzstan’s ambassadors to the United States, Germany, Russia and Turkey. But the ambassador to Russia, Raimkul Attakurov, rejected the order, telling the Russian state news agency RIA Novosti that he would leave only on Bakiyev’s order.
Kyrgyzstan’s society is strongly clan-based, but there are few signs that Bakiyev could muster any significant tribal support in the south to challenge the self-declared interim government. Some analysts say that a hike in utility prices and massive corruption has set many southerners against Bakiyev.

TITLE: Anatoly Dobrynin, Key Soviet Diplomat, Dead at 90
PUBLISHER: The Associated Press
TEXT: Anatoly Dobrynin, a Soviet diplomat who represented Moscow during the Cuban Missile Crisis and later in key superpower negotiations to curb the growth of nuclear arsenals, has died, the Kremlin said. He was 90.
In a statement released by the Kremlin, President Dmitry Medvedev called him “a legend of Russian diplomacy.”
In Washington, U.S. State Department spokesman Philip Crowley also expressed condolences to Russia over the death of its “renowned” ambassador.
Dobrynin died Tuesday in Moscow, Itar-Tass reported.
During his last years, Dobrynin had been an honorary professor at the Russian Diplomatic Academy, training a new generation of post-Soviet Russian diplomats and officials, Itar-Tass said.
Dobrynin never intended to become a diplomat but ended up as one of the Cold War’s most prominent and respected, playing a key role in resolving the Cuban Missile Crisis and representing the Soviet Union in Washington for a quarter-century.
In public, Dobrynin always followed the Kremlin line assiduously, but senior U.S. officials respected him for his ability to get their points of view across to the leadership in Moscow. He was both sides’ preferred channel of contact between the Kremlin and U.S. presidents for 24 years, as both countries swung through big changes.
Dobrynin’s ambassadorship began in 1962, the Nikita Khrushchev era, when most Americans saw Soviets as crude and bellicose men in ill-fitting suits. Dobrynin, however, was warm and suave, with fluent English; his style meshed with the sophisticated image cultivated by U.S. President John F. Kennedy.
Dobrynin quickly established a back-channel relationship with Kennedy’s brother, Robert, the U.S. attorney general. The relationship was put to a stomach-clenching test within a few months, when U.S. spy planes took pictures of Soviet nuclear missiles being installed in Cuba. President Kennedy ordered a naval blockade of Cuba as Soviet ships steamed toward the island, while Soviet Foreign Minister Alexei Gromyko denied that such missiles were in Cuba. The world watched in dread, fearing that a clash over Cuba would touch off fighting in a divided Berlin that would engulf Europe and lead to global nuclear war.
Although Dobrynin stood with Gromyko when he denied the missiles’ presence, in private he was meeting with Robert Kennedy. Through those meetings, Khrushchev proposed that the United States withdraw missiles from Turkey in exchange for Moscow taking the missiles out of Cuba. Khrushchev announced the withdrawal two weeks after the crisis began.
The UN Security Council paid tribute to Dobrynin’s “contribution to promoting international cooperation” and his “major role in saving the world from nuclear disaster” during the Cuban Missile Crisis.
Japan’s UN ambassador, Yukio Takasu, the current council president, said members were “deeply moved” and noted that Dobrynin had served as a UN undersecretary-general.
The tensions and public attention were in stunning contrast to the quiet and obscure life that Dobrynin had aspired to as a young man. Trained as an engineer, he was working as a designer in an aircraft factory in 1944 when his life took a sharp turn. According to his memoir “In Confidence,” he was ordered to report to the Communist Party Central Committee. There, an unsmiling man told him, “There is an opinion to send you to study at the Higher Diplomatic School.”
That phrasing, he wrote, was a common way of conveying an order. “You did not know to whom to appeal, and the only way out was to consent,” Dobrynin wrote.
He never knew who came up with the opinion or what had attracted the authorities’ attention to him. But Dobrynin not only had the blue-collar background valued by the Soviets, but also was notably cultivated. His mother worked as an usher at Moscow’s Maly Theater, and through her he wrangled free passes to many of the capital’s renowned drama performances.
He clearly knew how to adapt to roles, and he rose rapidly. He was sent to Washington as an embassy counselor in 1952 and became head of the Foreign Ministry’s U.S. and Latin American department in 1960. He returned to Washington as ambassador in 1962.

TITLE: Putin, Medvedev Reveal Income
AUTHOR: By Paul Abelsky
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian Prime Minister Vladimir Putin made 3.9 million rubles ($134,000) last year, a drop of 15 percent from 2008, though he still eclipsed the earning power of his protege, President Dmitry Medvedev, the government said.
Medvedev, 44, declared an income of 3.3 million rubles in 2009, down from 4.1 million rubles a year earlier, and had 3.6 million rubles in 12 Russian bank accounts, the Kremlin said in a statement Monday. While the president’s wife, Svetlana, had no income, Lyudmila Putina made 582 rubles and had no assets, according to the statement.
Medvedev, handpicked by the 57-year-old Putin to succeed him as president, signed a law in December 2008 requiring the prime minister, his deputies and Cabinet members to file income declarations for themselves and family members. In March 2009, he said the rule should apply to the president. Russia convicted 3,512 officials on corruption charges last year.
Natural Resources Minister Yury Trutnev made 155 million rubles last year, more than any other Cabinet member, compared with the 369.9 million rubles he earned in 2008. Trutnev was trailed by Deputy Prime Minister Alexander Khloponin, Medvedev’s representative to southern Russia’s mostly Muslim republics, with an income of 68 million rubles.
The declarations don’t say how the income was earned. Russia’s average monthly wage was 19,128 rubles in February, according to the Federal Statistics Service in Moscow.
First Deputy Prime Minister Igor Shuvalov earned 6.5 million rubles and his wife made 641.9 million rubles, the single highest income of any government member or spouse. Shuvalov owned or rented 10 properties, including a house in Austria and an apartment in the U.K., and seven vehicles, including a Jaguar and three Mercedes-Benz cars.
Putin owns two GAZ passenger cars, a Niva sports utility vehicle and a trailer. Medvedev owns a 1948 GAZ Pobeda, while his wife has a Volkswagen Golf.

TITLE: Prokhorov to Present Hybrid Car Design
AUTHOR: By Maria Ermakova and Anastasia Ustinova
PUBLISHER: Bloomberg
TEXT: MOSCOW — Billionaire Mikhail Prokhorov plans to unveil prototypes of Russia’s first hybrid electric car this year as the government tries to reduce the country’s reliance on natural resources.
Prokhorov’s Onexim Group will invest 150 million euros ($204 million) in a joint venture with Russian truck maker Yarovit and roll out three electric car prototypes in December, said Dmitry Razumov, Onexim’s chief executive officer.
The venture will set up several production facilities in Russia and abroad, Razumov said. It will begin building the first factory in January 2011 and expects to ‘break even on the operational level” once production starts in mid-2012, he said.
Prokhorov, Russia’s second-richest man, whose business interests range from gold mining to a U.S. basketball team, last month won approval from Prime Minister Vladimir Putin to build one of the planned electric car factories in Tolyatti, where state-run automaker AvtoVAZ is based. Putin has vowed to support new high-tech projects and scientific research, as he wants to wean the world’s biggest energy producer off its fossil fuel dependency.
Andrei Biryukov, president of the Yarovit holding company, said the new car will weigh about a third as much as “the smallest cars that are produced now,” and will cost between 300,000 rubles ($10,300) and 450,000 rubles. In the beginning, the car will run on both normal gasoline and methane, he said.
“I don’t see a real application for this project at the moment,” Andrey Rozhkov, an analyst at IFC Metropol, said in a phone interview from Moscow. “There is no infrastructure ready for it and Russians are not used to the idea of a light vehicle given the number of car accidents in Russia.”
Prokhorov’s new venture will compete with companies including Daimler’s Mercedes-Benz unit, General Motors and Renault, which also have said they will offer electric vehicles.

TITLE: Healthy Norilsk May Help RusAl Make Profit
AUTHOR: By Yuriy Humber and Susan Li
PUBLISHER: Bloomberg
TEXT: MOSCOW — GMK Norilsk Nickel may pay its first dividend in two years, allowing United Co. RusAl, which controls a third of the board of Russia’s largest mining company, to pare debt, billionaire Oleg Deripaska said.
“Norilsk will show very good results this year,” Deripaska, the chief executive officer of Moscow-based RusAl, the world’s largest aluminum producer, said in an interview in Hong Kong on Monday. They “can well afford to pay good dividends to shareholders. We expect them very soon,” he said.
Metal prices have soared 73 percent in the past year, helping RusAl return to profit in 2009 as the value of its 25 percent stake in Norilsk more than doubled. A Norilsk payout may help RusAl, which had to postpone its Hong Kong share sale twice on credit concerns, reduce debt of at least $12 billion.
“Norilsk, given the current commodity price levels, is clearly a cash cow,” said Mikhail Stiskin, an analyst with Troika Dialog in Moscow. “Under the existing mechanism with lenders, RusAl will be forced to give all the cash it gets to the banks.” Norilsk may pay $1 billion in dividends for 2009, he said.
RusAl, which this year became the first Russian company to sell shares in Hong Kong, rose 0.9 percent to close at HK$9.48 in Hong Kong trading Monday. The company raised $2.2 billion selling shares at HK$10.80 each.
Net income was $821 million for the 12 months ended Dec. 31, compared with a loss of $6 billion in 2008, RusAl said in a statement to the Hong Kong stock exchange. A $1 billion rise in the value of RusAl’s stake in Norilsk and an expected $400 million from its share of income in the world’s largest nickel producer helped, the company said.
Norilsk stopped paying dividends in April 2008 when RusAl bought its stake and vowed it would seek a merger of the two. The purchase, which came prior to a collapse in global stock and commodity markets, doubled RusAl’s debt, and the falling value of its investment contributed to the aluminum maker’s 2008 loss.
RusAl may use payouts from Norilsk to repay creditors, Deripaska said. The company used all net proceeds from its IPO to cut debts.
Norilsk paid dividends at least once a year between 2002 and 2008. The mining company made a $449 million loss in 2008 and has yet to report last year’s results. RusAl will start to pay closer attention to the operations of the world’s largest supplier of palladium, Deripaska said. 
“Now we know exactly what needs doing, how it needs to get done,” he said. It’s a very important asset for us.”
Deripaska has put himself forward as one of RusAl’s candidates for the next Norilsk board, which shareholders will vote on this summer.
“Our competitive advantages, supported by the increasing value of the Norilsk Nickel investment and positive aluminum price momentum which is expected to continue in 2010, will drive the value of the company forward,” Deripaska said in a statement Monday.

TITLE: In Brief
TEXT: <strong>WalMart Eyes Lenta</strong>
MOSCOW (Bloomberg) — Wal-Mart Stores, the world’s biggest retailer, is in talks to buy TPG’s 25 percent stake in Russian grocery chain Lenta, Vedomosti reported, citing an unidentified person familiar with the matter.

<strong>Deripaska Takes Helm</strong>
MOSCOW (Bloomberg) — Russian billionaire Oleg Deripaska will take over as chief executive officer of the EN+ energy and metals group he controls to steer preparations for initial public offerings of the holding company’s units.
Deripaska will replace Vladislav Soloviev, who will become the billionaire’s first deputy at United Co. RusAl, EN+ and RusAl said in statements Monday. EN+ holds Deripaska’s 48 percent stake in RusAl, as well as oil, coal and electricity assets.
EN+’s “strategy envisages its companies’ listings on well-established stock exchanges in order to raise capital for the group’s investment and innovation projects,” it said.

<strong>Euro 2012 Budget</strong>
MOSCOW (Bloomberg) — Ukraine plans to spend $3.3 billion on preparations for the UEFA Euro 2012 soccer tournament, Deputy Prime Minister Borys Kolesnikov told reporters in Kiev on Monday. 
The Ukrainian government will sell securities maturing in seven to 10 years to fund the preparations, Kolesnikov said, without elaborating.
Euro 2012 is being shared by Ukraine and Poland, which beat Italy and a joint bid by Croatia and Hungary to become the first East European nations hosting the tournament since the former Yugoslavia in 1976.

<strong>Diamond Prices Rise</strong>
MOSCOW (Bloomberg) — Alrosa, Russia’s diamond monopoly, said prices for large diamonds reached pre-crisis levels amid “high” global gem demand.
State-run Alrosa expects April sales of about $300 million, the company said in an e-mailed statement Monday, without giving comparative figures.

<strong>Kalina Sees Profits Soar</strong>
MOSCOW (Bloomberg) — Concern Kalina, a Russian cosmetics maker, said net income advanced 79 percent last year as it developed new brands.
Sales climbed 20 percent to 14.5 billion rubles ($500 million), Kalina said on its web site Monday.

<strong>Oil Export Tax May Rise</strong>
MOSCOW (Bloomberg) — Russia may raise its tax on crude oil exports by as much as 5.5 percent on May 1 to between $281.10 and $283.80 per metric ton after prices for Russia’s Urals export blend rose.
Russia sets the duty based on the average Urals price from the 15th day of each month to the 14th day of the next. 
Urals, Russia’s benchmark export blend, may average from $78.09 to $78.66 a barrel during this monitoring period, Alexander Sakovich, head of the Finance Ministry’s analysis department, said Monday by phone.
The export tax on light oil products may rise to between $201.70 and $203.50 per ton. The duty on heavy products may increase to between $108.60 and $109.60 per ton.

TITLE: Ruble Gains Against Dollar on Greek Plan
AUTHOR: By Denis Maternovsky
PUBLISHER: Bloomberg
TEXT: MOSCOW — The ruble gained to its strongest level against the dollar in more than four months as a Greek bailout package eased concern that the global recovery will slow, spurring investor appetite for riskier assets.
The Russian currency added as much as 1.2 percent and was 0.8 percent stronger at 29.0325 per dollar when trading in Moscow ended, its highest closing level since Nov. 25. The ruble was last 0.7 percent weaker at 39.4525 per euro, leaving it little changed at 33.7206 against the central bank’s currency basket, which is used to manage exchange-rate swings hurting Russian exporters.
Greece was offered as much as 45 billion euros ($61 billion) at below-market rates to help end its fiscal crisis, quelling concerns that a default by the debt-burdened nation will hurt the economic recovery. Crude, Russia’s chief export earner, rose as much as 0.9 percent to $85.71 in New York as the dollar slipped, bolstering demand for commodities. It erased gains in later trading and was 0.7 percent weaker at $84.36. 
“The Greece decision and the usual suspect, higher oil, are the positive, supportive factors for the ruble today,” said Vladimir Osakovsky, a Moscow-based economist at UniCredit SpA said.
Investors pared bets that the ruble will weaken, with non-deliverable forwards showing the currency at 29.26 per dollar in three months compared with an NDF of 29.38 on April 9. The contracts are a guide to expectations of currency movements as they allow foreign investors and companies to fix the exchange rate at a particular level in the future.
The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged January 2009 to defend.

TITLE: RenCap Says Aluminum Prices May Boost Economy
AUTHOR: By Maria Levitov
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s economy may expand an annual 8.3 percent in the second quarter, more than previously forecast, on domestic demand and aluminum prices, said Moscow-based Renaissance Capital.
The investment bank raised its estimate from 7.9 percent after higher wages, improved retail services and a decline in unemployment, as well as higher aluminum prices and a larger trade surplus, fueled growth, it said in an e-mailed statement Monday. The economy probably grew 7.5 percent in the first quarter, according to RenCap.
“The biggest contributors to the brighter outlook were factors suggesting that domestic demand is finally rebounding,” Alexei Moiseyev, RenCap’s senior economist, wrote in the statement. “These factors raise tentative hopes that the economic recovery in Russia may be based on more than just the export of expensive commodities.”
The Russian economy may expand as much as 4.5 percent this year, according to Deputy Economy Minister Andrei Klepach. Consumer confidence rose in the first quarter after the unemployment rate fell in February for the first time in four months, reaching 8.6 percent. The average monthly wage gained an annual 2.9 percent in the month when the effects of inflation are stripped out, boosting retail sales. Russian service industries from banks to supermarkets expanded in March at the fastest pace since October, signaling “renewed momentum,” VTB Capital’s Purchasing Managers’ Index showed.
The economy contracted a record 7.9 percent in 2009, the “hardest year” since Russia’s 1998 financial crisis, according to President Dmitry Medvedev. The contraction was smaller than the government originally forecast because oil’s 83 percent rebound at the end of last year helped buoy the economy of the world’s biggest energy exporter.

TITLE: Facebook Plans to Open Russian Office
AUTHOR: By Igor Tsukanov
PUBLISHER: Vedomosti
TEXT: MOSCOW — Social-networking site Facebook is in talks on cooperation with Russian mobile operators and is opening an office in Russia.
Within a few days, Facebook will announce the opening of its Russian office, said Unova Media, organizer of the Russian Internet Technologies conference, where Andrew Bosworth, Facebook’s top software engineer, made a presentation. Unova received this information directly from Facebook.
Facebook representatives did not answer a letter from Vedomosti, but a manager of a large Internet company operating in Russia was informed of Facebook’s move.
Facebook counts more than 400 million active users. Its main competitor, MySpace, already opened a Russian office but closed it in summer 2009 along with offices in a number of other countries. One of the main functions of MySpace’s Russian office was ad sales.
Facebook may also sell space on its site to Russian advertisers, said the manager of a large Internet holding. More likely, he says, Facebook may reach an agreement with mobile phone carriers. For example, Vodafone has a free SMS service that alerts users when they have received a message on Facebook.
Executives of Facebook and the big three Russian mobile operators — MTS, VimpelCom and MegaFon — are already acquainted. MegaFon and MTS have already discussed possible joint ventures with the social network, said representatives of the two companies, Karen Asoyan and Irina Osadchaya.
Representatives of VimpelCom and Facebook met six months ago, said Ksenia Korneyeva, the operator’s spokeswoman. There have been no concrete agreements, but VimpelCom is already planning to incorporate an application for communicating on social networks — including Facebook — into its Beeline brand telephones.
The mobile operators are discussing many different possibilities for cooperation, said an executive of one of the big three. In particular, there is talk of integrating the social network with the operators, of paying for Facebook content via SMS and of a subsidized fee structure.
Facebook’s goal is to reach 15 percent to 20 percent of Russian Internet users, said an employee at another operator. According to TNS Web Index, there were 32.6 million Internet users in February. The social network could get about 4.9 million to 6.5 million users, said Denis Terekhov, a partner at consulting agency Sotsialniye Seti.
But the user base of Vkontakte, Russia’s biggest social network, is already much larger: According to TNS Web Index, Vkontakte had 18.37 million users in February. For mobile operators working with the average customer, it is more logical to work in partnership with a mass-market brand, but the Russian users of Facebook are more upmarket, Terekhov said. The Russian version of Facebook has been around for a while, and the appearance of a Russian office won’t affect its users, said Vladislav Tsyplukhin, head of the press service at Vkontakte.

TITLE: MICEX May Buy RTS Exchange
AUTHOR: By Irina Filatova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — MICEX Group will make an offer to buy the RTS after it gets its own house in order, turning the rival stock exchange into a full subsidiary, a Central Bank official said Wednesday.
MICEX Group may exchange its own shares for a controlling stake in the RTS after finishing the asset consolidation that it started last year, said Sergei Shvetsov, head of the Central Bank’s department for financial markets. That means that it must first gain complete control over the MICEX exchange, stakes in which are owned by a range of other banks.
“MICEX has nothing to offer RTS without vertically integrating the MICEX system itself,” Shvetsov said, adding that amendments to current legislation were needed for MICEX Group to buy out the MICEX Stock Exchange. “Right now, it’s impossible,” he said.
Besides its stake in the MICEX Stock Exchange, MICEX Group also holds an 86.3 percent stake in the MICEX Clearing House, a 46.7 percent stake in the National Depositary Center, and 99.3 percent of the National Clearing Center.
A merger would not immediately mean a physical consolidation of the two exchanges, said Vladimir Milovidov, head of the Federal Financial Markets Service. He added that such a consolidation could follow in the future.
First it is necessary to allow securities depositaries to service both exchanges, which will “push the stock exchanges to discussing integration and requirements unification,” he said, adding that both the markets service and Central Bank are proposing such a change in regulations.
The MICEX Stock Exchange’s clients are currently served by the National Depositary Center, while the Depositary-Clearing Company serves the clients of the RTS. If the exchanges agree, their clients will be allowed to choose which depositary they want to work with, Shvetsov said at the MICEX 2010 forum.
Traders are optimistic about the new proposal, since it will make trading much easier, said Karen Isadzhanyan, a client manager at Rye, Man & Gor Securities.
Many securities trading on the RTS have become rather illiquid since the most liquid securities have been transferred to MICEX, Isadzhanyan said. That’s why clients of the RTS will feel more comfortable after the new plan comes into force.
Merging the two stock exchanges is a key step toward making Moscow an international financial center, since it would help to attract more foreign investors to Russia’s financial market, he said.
Government and business leaders have been pushing for reforms that would transform Moscow into a global financial center along the lines of London, Singapore or New York. They are hoping that liberalized financial laws and robust institutions will attract foreign investors to Russia.
First Deputy Prime Minister Igor Shuvalov reiterated such hopes at a meeting Tuesday with representatives of investment banks. He said that while efforts to create an international financial center had slowed due to the crisis, doing so was still a priority.
Russia would provide a number of advantages for such a center, including liberal tax legislation, well-educated employees and the chance to invest in big infrastructure projects, market players said.

TITLE: Aeroflot Considers Starting Budget Carrier
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Aeroflot said last week that it may launch a subsidiary budget airline as part of its plans to dominate the domestic market and said it may sell more shares in a free float.
The carrier will become one of Europe’s 10 largest airlines, with 20 million passengers annually, once six regional airlines come under its control next year, CEO Vitaly Savelyev said at a news conference.
Aeroflot is set to gain control of the regional airlines from state-owned conglomerate Russian Technologies, and the two have been in talks with the government on how to integrate the airline assets. Aeroflot will sign an agreement with Russian Technologies on the deal by the end of the month, Savelyev said.
Although the details of the handover are not yet finalized, Aeroflot already has ideas on integrating the other carriers’ operations with its own.
Rossia, the biggest of the six airlines, will become a subsidiary of Aeroflot, and St. Petersburg’s Pulkovo Airport, its current home base, will become an Aeroflot hub. But for the change to take effect, Rossia first must be transformed into a joint-stock company from its current status as a federal unitary enterprise, and as part of the deal, the St. Petersburg city government will gain a 25 percent stake in the airline.
In its bid to gain control of the domestic market, where its main competitor is S7 Airlines, Aeroflot may roll out a separate charter flight operator and a budget airline, while Aeroflot itself would remain a “premium-class” airline, Savelyev said. The chief executive officer gave no further details on the possible new carriers.
As part of Aeroflot’s growing pains, it will now have to expand into Sheremetyevo’s new Terminal E, in addition to its operations in Terminals D and F. The newly opened Terminal D is already too small for the airline, as the initial plans to handle 7 million passengers annually has already been adjusted to 12 million passengers and is still insufficient to accommodate the airline.
Terminal E will open in the second quarter of 2010, Sheremetyevo has said. Terminals D and E will eventually service foreign flights, which will make up 55 percent of the company’s business.
Savelyev estimated that the company would post a profit of $100 million from 2009, not counting the fees that it receives from international carriers for overflight rights.
The company saved $39.4 million by integrating fuel purchases and switching to electronic auctions for tour operators but estimates that it lost $450 million because of lowering ticket prices, he said.
Savelyev also said the company might float some or all of the 19.5 percent stake currently owned by Alexander Lebedev on the open market once a deal to repurchase the shares goes through.
Aeroflot already bought back 6.3 percent from Lebedev and has plans to buy the rest, but Lebedev’s National Reserve Corporation said last week that it may change its mind about the sale.
Alternatively, Aeroflot could use the repurchased stake as part of the deal to acquire the regional carriers from Russian Technologies, he said. “The government will make the final decision whether they will get the stake.”

TITLE: GAZ Taps Wolf For Chairman
PUBLISHER: Bloomberg
TEXT: MOSCOW — Billionaire Oleg Deripaska named Siegfried Wolf, co-CEO of Canadian car-parts maker Magna International, as chairman of his van and truck producer GAZ.
Wolf, who joined the GAZ board of directors last year, said he took over from Bo Andersson, who resigned as chairman to concentrate on his managerial role as president, on Jan. 1.
“We kept it kind of quiet,” said Wolf, 52. “We didn’t make a public relations campaign out of it,” he said. “The important thing is the results of GAZ.”
GAZ, built in 1929 with the help of Ford Motor, was forced to slash about a third of its work force when demand for its products plunged by as much as 70 percent during the financial crisis that started in the second half of 2008. 
That October, with his companies struggling to refinance more than $20 billion of debt, Deripaska ceded to banks the shares in Magna that he had bought in May 2007 for $1.54 billion.
Magna joined with Sberbank last year in a failed bid to acquire General Motors’ Opel unit. The partners said they would consider making Opel cars at GAZ’s facilities. Andersson was GM’s top purchasing executive until last year, when he quit to join GAZ.

TITLE: In Brief
TEXT: <strong>50-Year Mortgage</strong>
MOSCOW (SPT) — There will be a new mortgage system created in the North Caucasus, allowing homebuyers to take out 50-year loans at 5 percent interest, Alexander Khloponin, presidential envoy to the North Caucasus Federal District, said Friday.
“We’re planning to create conditions for owning homes on a subsidized basis. Loans will be given out at 5 percent annual interest for 50 years,” Khloponin said, RIA-Novosti reported. “Families will have to pay 700 rubles [$24] per month. I think this sum is accessible for young families living in the region.”
Khloponin added that if the other governors in Russia came to Chechnya and saw its rate of development, they would applaud Chechen President Ramzan Kadyrov.

<strong>Rosselkhozbank Bond</strong>
MOSCOW (Bloomberg) — Rosselkhozbank, a state-owned lender to the farming industry, said Friday that it planned to return to the market for ruble-denominated eurobonds in the second half of the year.

<strong>Guinean Wage</strong>
CONAKRY, Guinea (SPT) — Guinea’s government said Friday that it would propose a minimum wage for the country’s mining sector in a bid to end a strike over pay that has halted United Company RusAl’s Friguia alumina refinery since April 1, Reuters reported.
The plant has the capacity to produce about 640,000 tons of alumina per year, which RusAl ships around the world to be refined further into aluminum.
A RusAl executive said on condition of anonymity that after nine days of halted production, the company was willing to submit to a government decree on minimum wages.

<strong>Editor Resigns</strong>
LONDON (SPT) — Roger Alton has resigned as editor of British newspaper The Independent after owner Independent News & Media agreed to sell it to Russian billionaire Alexander Lebedev, Reuters reported.
Alton will be succeeded by editor-in-chief Simon Kelner until a new editor is appointed. “The new owners should be free to appoint an editor of their own choosing,” Alton said Friday. “I am sure that, under the ownership of the Lebedevs, the paper will go from strength to strength.”

<strong>X5 Sales Slow Up</strong>
MOSCOW (SPT) — X5 Group, the country’s top grocer by revenue, said Friday that its first-quarter sales growth slowed slightly from the previous quarter, pressured by weak consumer sentiment that forced it to keep prices low, Reuters reported. Sales at X5 grew by 20 percent to 75.8 billion rubles ($2.58 billion) in the three months to end March — slowing from a 23 percent pace in the fourth quarter of 2009.
“As expected, we did not see improvements in consumer behavior in the first quarter of 2010, as Russian consumers remained uncertain about their income levels and purchasing power,” X5 said in a statement. 

<strong>Cross-Country Road</strong>
MOSCOW (Bloomberg) — Prime Minister Vladimir Putin said Friday that a highway from the capital to the Pacific Ocean would open this year as the state tries to revive the economy of Siberia and the Far East.
“This year we’ll complete a strategic task: We will provide for automobile traffic from Moscow through to Vladivostok on a safe route,” Putin said.

TITLE: Chaos in Kyrgyzstan
AUTHOR: By Erica Marat
TEXT: The apparent regime change in Kyrgyzstan will either prove that the country is destined to regain its image of an “island of democracy” in Central Asia or that it is doomed to fail because of weak political institutions and deep social divisions.
After five disastrous years under President Kurmanbek Bakiyev’s authoritarian rule, revolutionary change is desired and feared at the same time. It is unclear whether the provisional government will be able to curb corruption and implement effective political and economic reforms. Before it can even think about tackling those tasks, however, the provisional government has to defeat Bakiyev’s attempts to reclaim power.
The 2010 revolution was sparked by spontaneous gatherings of angry crowds who demanded Bakiyev’s resignation. During his autocratic reign, Bakiyev suppressed political opposition and made an already poor country even poorer. According to the International Monetary Fund’s 2009 rating, the per capita income of Kyrgyzstan is $2,227, which is ranked No. 138 out of 181 countries below Yemen and Sudan. In addition, more than a dozen political opponents and journalists have been killed in the past five years. Owners of small and medium-sized businesses were forced to pay stifling taxes. Free media ceased to exist, while tariffs for mobile communication and utilities skyrocketed.
According to media reports, Bakiyev, his son Maxim and members of their inner circle had financial control over 80 percent of the economy. Thus, it came as no surprise that Bakiyev was ready to use brutal violence to protect his own hold on power. But his alleged use of police and professional snipers to shoot at the civilian population, leading to more than 80 deaths, still shocked many. Although the head of the provisional government, Roza Otunbayeva, promised that Bakiyev would not be persecuted if he resigns peacefully, other members of the new government have called for a international investigation of the April 7 atrocities.
Prime Minister Vladimir Putin was the first politician to extend support to the provisional government. He criticized Bakiyev’s rule and recognized the new government’s legitimacy. Putin was also the first leader to offer help in preventing a further spread of violence in the country.
In contrast, official U.S. support to the provisional government was offered only on April 10 by Secretary of State Hillary Clinton. By that time, however, Otunbayeva had already managed to appoint key government members and calm Bishkek streets from looting. To complicate matters, Washington still views Bakiyev as the legitimate ruler since he has not given up power and, technically, still remains the country’s president.
At this point, Kyrgyzstan is leaning more toward Russia than the United States. Provisional government member Almazbek Atambayev has already visited Moscow, and other provisional government officials said they would welcome further help, including military assistance if violence continues.
Members of the opposition had sought Russia’s support even before the riots. They also turned to the United States for assistance, but Putin was the first to offer support.
To be sure, there are strong pro-Western members in the provisional government, including Otunbayeva, but the United States seems to have missed the opportunity. It is by no means lost for good, but it will take a considerable effort on Washington’s part to build good relations with Otunbayeva’s coalition.
The provisional government’s calls for closer ties to Moscow resonate with the people. They realize that the provisional government needs Russia’s support to reinstate stability.
The provisional government still faces a substantial risk of more riots and an armed confrontation with Bakiyev supporters. Bakiyev is reportedly trying to put together forces in the southern parts of the country to be used to attack Bishkek and reclaim power. According to Ruslan Isakov, the son of the defense minister in the provisional government, Bakiyev is hiring foreign fighters to boost his forces.
Is it difficult to say whether Kyrgyzstan will be stabilized or whether it will be doomed to remain a failed state. For now, the provisional government needs international support to effectively reform state institutions and resist threats still emanating from Bakiyev. If Kyrgyzstan is eventually successful in restoring order, the 2010 revolution could inspire opposition forces in other Central Asian countries to challenge their authoritarian governments. But if Kyrgyzstan’s democratic revolution fails — again — many in Central Asia will prefer authoritarian stability over democratic chaos.

Erica Marat is author of “Military and the State in Central Asia.”

TITLE: Lessons Learned
AUTHOR: By Anna Shcherbakova
TEXT: IKEA’s senior manager was furious as he left the meeting room of the St. Petersburg government in Smolny. On the downstairs landing, he limited himself to saying that the prospects for his company’s projects were unclear, declining to give any explanation. This was in 1999 and I was trying to talk to Lennart Dahlgren, who represented IKEA in Russia at the time. He had just come out of a two-hour discussion with the St. Petersburg government about the construction of a local store, and had failed to reach agreement on any of the conditions for his company receiving a plot of land. 
Shortly after that, Vladimir Yakovlev, the governor of St. Petersburg at that time, bluntly stated in an interview with Vedomosti that IKEA simply wanted everything to be cheaper and easier. Is that not what every investor wants? But the attitude of the city authorities with regard to foreign investors was pretty hostile back then. No surprise, then, that both St. Petersburg IKEAs, with their huge MEGA-malls around them, are actually located in the Leningrad Oblast, just beyond the city’s borders. The government of the surrounding region appeared to be more open to negotiations. 
Although IKEA’s St. Petersburg saga was prolonged and trying, Dahlgren only devoted a couple of pages to the topic in his book “In spite of the absurdity — how I conquered Russia and it conquered me” (Alpina Business Books, Moscow, 2009). According to him, the most complicated issue was the cost of the electric and gas supplies. 
The real battlefield for Ikea was 600 kilometers to the south. And again, not in Moscow, but in the Moscow region. Moscow Mayor Yury Luzhkov seemed to be friendly to investors, but the price of the land that was offered to IKEA was astronomically high. Perhaps this was due to the fact that the company refused to buy plastic items produced by the company owned by Luzhkov’s wife, Yelena Baturina. As a result, IKEA launched its first Russian store in the Moscow suburb of Khimki. Relations with regional authorities plagued Dahlgren, who devoted a sizeable part of his account to mysterious phonecalls and suspicious leaks of information. One of the messages of Dahlgren’s book is that Russia is a magnificent country with an incredibly strong and incredibly greedy bureaucracy. And that made his job at IKEA, which is known as a transparent and honest company that doesn’t pay bribes, extremely difficult. 
Dahlgren’s favorite part of the country appeared to be Tatarstan, where the government was extremely friendly and helpful and shared the IKEA spirit. 
Dahlgren worked in Russia for eight years, arriving in 1998. The account of his experience, seasoned with jokes, can at times be a bit cloying, but it’s a thrilling ride. I don’t recall any other top foreign executives claiming that they had been told by members of the president’s entourage that a fee of $5 million to $10 million would secure an interview with then-president Vladimir Putin. The book will be of much use to foreigners considering doing business in Russia, and IKEA’s success here, as both a retailer and developer, is a powerful argument in the country’s favor. 
I hope Dahlgren loves Russia as much as he says he does, because without real love, his years in this poor, corrupt and mysterious country must have been a real torture for the author. 
And there’s a twist in the tale which has damaged IKEA’s reputation for inflexibility where corruption is concerned. In Feburary, two senior managers, including Dahlgren’s successor Per Kaufman, were fired when it was revealed that they had known about bribes being paid in order to solve problems concerning electricity in the company’s malls in St. Petersburg.

Anna Shcherbakova is the St. Petersburg bureau head of business daily Vedomosti.

TITLE: Designers Gather for City’s Premier Fashion Extravaganza
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: St. Petersburg’s leading fashion event, Defile on the Neva, is in full swing, having kicked off Saturday at the Manezh Kadetskogo Korpusa, the former cadets riding school, with shows by local fashion icon Lilia Kiselenko, glamorous club-manager-turned-fashion-designer Tatyana Gordienko and Latvian designers Katya Shehurina and Anna Led.
Living up to its reputation of an event that gives center stage to well-established fashion gurus such as Tatyana Kotegova, Irina Tantsurina, Janis Chamalidi, Yelena Badmayeva and Stas Lopatkin, Defile on the Neva, now in its tenth year, features an array of Russian fashion’s biggest names.
Owing to the economic crisis, the size of event this year has shrunk from seven to four days as most fashion houses are struggling to stay afloat and have decided to economize on the show.
The name “Defile” comes from the French word “defile,” meaning fashion show.
Tuesday’s program fuses offerings from Yelena Badmaeva, a veteran of the event and one of the city’s most successful designers with shows by Latvian designer Marina Medvedeva and by emerging star Polina Raudson, who will be making her debut at the event. 
The award-winning designer is a favorite with a number of younger Russian film and pop stars, including, for example, Oksana Akinshina.
Also on Tuesday, Tatyana Kotegova’s show takes place at the Manezh, while another established fashion name, Stas Lopatkin, unveils a show of his artwork at the Yelena Obraztsova Cultural Center on April 21.
“The ever-increasing enthusiasm with which local people are trying to gain access to the shows is a good indicator of the creative power and the potential of the designers that we represent,” said Irina Ashkinadze, the director of the event. “Our fashion players are winning a greater share of fans year after year.”
“My main ambition is that Russian people start to wear Russian designers and develop a taste for Russian fashion,” she added.
Defile on the Neva was originally conceived as a specialist event targeting industry specialists, rather than being a fashion week. Yet it has grown beyond its remit and has become attractive to the fashion-conscious general public as well as designers, buyers and fashion experts.
Unlike Modny Desant (“Fashion Landing Force” as it would be in English), a festival and contest of creative pret-a-porter fashion aimed at fashion-conscious youngsters, Defile on the Neva is for sophisticated, well-off middle-aged customers. 
The invitation-only event is usually limited to the initiated, with an unorthodox admission system. The easiest way to get a ticket was to become a customer of the Defile boutique, where one can shop for any item seen on the event’s catwalk, or join the list of sponsors of the event.
However, this time around the project’s organizers decided to expand their range and reach out to younger audiences as well as expand the event’s geographical borders by introducing several aspiring young designers from Latvia.
Ashkinadze says the organizers are closely looking at up-and-coming young talents.
“The catwalk of Defile on the Neva is open for talented beginners and I consider it my mission to find young stars whose works don’t fade in the presence of well-known designers,” Ashkinadze said. 
“Some people complain there are a lot of students at the show, but I say we should support young designers because the commercial success of the story we call Russian fashion will be seen in five, or maybe even in 10 years,” she added. The event concludes on Tuesday.

TITLE: Gordon Brown Unveils Election Manifesto
PUBLISHER: Agence France Presse
TEXT: BIRMINGHAM, U.K. — Prime Minister Gordon Brown unveiled his party’s election manifesto on Monday, seeking to regain the initiative after a first week of campaigning dominated by economic squabbling.
The Labor Party leader set out “a plan for national renewal” after the May 6 polls, vowing to rebuild the recession-battered economy, cut the giant deficit while protecting public services, and shake up the political system.
In office for 13 years, Labor hopes their manifesto will help them overturn opinion polls that have consistently put them trailing the main opposition Conservatives.
“The forward policies we set out today are rooted in the day-to-day concerns of the British people,” Brown said at the launch, held at a newly-built hospital in Birmingham.
Brown fired the poll race starting gun last Tuesday, and the economy has dominated campaigning so far, with the Conservatives and Labor arguing over whether Brown’s payroll tax rise plans would help or hinder the recovery. 
The country’s budget deficit is 167 billion pounds, according to government estimates.
The manifesto promised not to raise the basic rate of income tax — though does not say the same of value-added tax, a levy on goods and services.
It set out plans to modernize infrastructure with a high-speed rail network and widespread broadband Internet access.
The manifesto pledged to invest in high-tech and environmental industries and reform financial institutions so that banks “pay their fair share to society.”
On political reform following last year’s row over MPs’ expenses, it pledged referendums on switching to the alternative vote system for general elections, and on an elected House of Lords.
It laid out plans to give people the right to recall MPs and a vote in parliament on whether to reduce the voting age to 16.
“This is the first post-crisis vote for our country, and the most important in a generation. Get the big decisions right now ... and we not only renew our economy but renew our politics and society too,” Brown said.
But, acknowledging that his party risks being ousted on May 6, he admitted: “New Labor is in the fight of our lives.”
The Conservatives’ manifesto, to be unveiled Tuesday, will include pledges to scrap a planned rise in payroll taxes, give married couples a tax break and introduce a young people’s community service program.
Party leader David Cameron has said he wants to see a “great national coming together” to solve Britain’s problems and has accused Labor of having “no new ideas.”
“If we join together, if we act decisively and move forward with optimism, we can start to fix the economic, social and political problems that threaten the nation,” he will tell voters in the manifesto.
The Liberal Democrats, the centrist third-biggest party, unleash their manifesto on Wednesday.
Their leader Nick Clegg said Monday that the Lib Dems would offer a “radical overhaul” of the tax system, rebalancing it to “make it fair once and for all.”
The rush of manifestos comes in the build-up to Thursday’s first ever US-style televised election debate between Brown, Cameron and Clegg.
A YouGov poll in The Sun newspaper Monday put the Conservatives down three points to 37 percent, Labor up one to 31 percent and the Liberal Democrats unchanged on 20 percent.
Despite their opinion poll lead, the Conservatives may not win enough seats to hold a majority in parliament.

TITLE: Thai Poll Body Slams Ruling Party
AUTHOR: By Vijay Joshi
PUBLISHER: The Associated Press
TEXT: BANGKOK — Thailand’s Election Commission ruled Monday that the ruling party be dissolved for alleged misuse of poll donations, in a potential victory for anti-government protesters who paraded slain comrades through Bangkok to press the prime minister to resign.
The ruling, which would require Constitutional Court endorsement to take effect, came soon after Thailand’s influential army chief appeared to back a key demand of the protesters, saying Parliament might need to be dissolved to resolve the country’s violent political standoff.
Prime Minister Abhisit Vejjajiva, who has remained defiant about not resigning, now faces unprecedented pressure, after the deadliest political clashes in nearly two decades on Saturday.
The Oxford-educated prime minister was largely seen as having the backing of the powerful military, which has traditionally played an important role in the country’s politics, and has not hesitated to step in with coups in times of political instability.
But his control of security forces has increasingly been called into question over the past month as red-shirted protesters — supporters of former Prime Minister Thaksin Shinawatra — repeatedly marched through the capital. On Saturday, soldiers and police failed to dislodge demonstrators, setting off clashes that killed 21.
“If the issue cannot be resolved through political means, then Parliament dissolution seems to be a reasonable step,” army chief Gen. Anupong Paochinda told reporters. “If people want a government of national unity, then by all means, go ahead. I just want peace to prevail.”
“Right now the circumstances dictate that a solution should be achieved through political means,” he said.
The Red Shirt protesters accused Abhisit’s government of coming to power illegally with the help of the military after Thaksin was ousted in a 2006 coup amid allegations of massive corruption.
In its ruling Monday, the Election Commission found the Democrat Party — Thailand’s oldest — guilty of misusing campaign donations. No date was set for the Constitutional Court to hear the case.
Raucous cheers erupted at a major protest site when a speaker announced the decision to his audience.
“This is a victory for us. Our democracy heroes didn’t die in vain,” Veera Musikapong, a protest leader, said.
The commission was ruling on a complaint filed by the Red Shirts that the Democrat Party received more than 258 million baht ($8 million) in donations from a private cement company, TPI Polene, without declaring it, as required by law, and using it for election campaigning. The party was also accused of misusing 29 million baht ($800,000) from a political fund.
The commission had scheduled the ruling for April 20, but announced it more than a week early without explanation. Still, the decision could offer a way out of the political deadlock between Abhisit’s government and the Red Shirts.

TITLE: World Leaders Work to Stop Nuclear Spread
AUTHOR: By Steven Hurst and Anne Gearan
PUBLISHER: The Associated Press
TEXT: WASHINGTON — President Barack Obama and presidents, prime ministers and other top officials from 47 countries start work Monday on a battle plan to keep nuclear weapons out of terrorist hands.
Confronting what he calls the “single biggest threat to U.S. security,” Obama is looking for global help in his goal of ensuring all nuclear materials worldwide are secured from theft or diversion within four years.
On the eve of what would be the largest assembly of world leaders hosted by an American president since 1945, when the San Francisco conference to found the United Nations was held, Obama said nuclear materials in the hands of al-Qaida or another terrorist group “could change the security landscape in this country and around the world for years to come.”
While sweeping or even bold new strategies were unlikely to emerge from the two-day gathering, Obama declared himself pleased with what he heard in warm-up meetings Sunday with the leaders of Kazakhstan, South Africa, India and Pakistan.
“I feel very good at this stage in the degree of commitment and a sense of urgency that I have seen from the world leaders so far on this issue,” Obama said. “We think we can make enormous progress on this, and this then becomes part and parcel of the broader focus that we’ve had over the last several weeks.”
He was referring to what had gone before this, the fourth leg of his campaign to rid the world of nuclear weapons. The United States is the only country to have used the weapons, when it dropped two bombs dropped on Japan to force its surrender in World War II.
The high-flown ambition, which the president admits will probably not become a reality in his lifetime, began a year ago in Prague when he laid out plans for significant nuclear reductions and a nuclear-weapons-free world.
In the meantime, he has approved a new nuclear policy for the United States, promising last week to reduce America’s nuclear arsenal, refrain from nuclear tests and to not use nuclear weapons against countries that do not have them. North Korea and Iran were not included in that pledge because they do not cooperate with other countries on nonproliferation standards.
That was Tuesday, and two days later, on the anniversary of the Prague speech, Obama flew back to the Czech Republic capital where he and Russian President Dmitri Medvedev signed a new treaty that reduces each side’s deployed nuclear arsenal to 1,550 weapons. Medvedev also arrives Monday to sign a long-delayed agreement to dispose of tons of weapons-grade plutonium from Cold War-era nuclear weapons — the type of preventive action Obama wants the summit to inspire.
Obama welcomes the assembled world leaders at a Washington convention center late Monday afternoon, but begins the day with a morning meeting with Jordan’s King Abdullah II, whose intelligence apparatus is deeply involved in the Afghan war.
He then will sit down one-on-one with the leaders of Malaysia, Ukraine, Armenia and China.
National Security Council spokesman Ben Rhodes said Obama would squeeze in a meeting with Turkish Prime Minister Recep Tayyip Erdogan. Turkey is a key NATO ally, and relations have been difficult recently, particularly over Iran. Rhodes said there were additional “pressing issues,” including normalization of relations between Turkey and Armenia.
Throughout the two-day gathering, Iran will be a subtext as Obama works to gain support for a fourth round of U.N. sanctions against Tehran for its refusal to shut down what the United States and many key allies assert is a nuclear weapons program. Iran says it only wants to build reactors to generate electricity.
In an interview on ABC’s “Good Morning America,” Medvedev agreed that Iran’s nuclear program must be watched closely, but he said sanctions on the regime would have to be smart and effective because they often do not work.

TITLE: NATO Gunfire Kills 4 on Bus, Sparks Protests
AUTHOR: By Noor Khan and Kathy Gannon
PUBLISHER: The Associated Press
TEXT: KANDAHAR, Afghanistan — International troops opened fire on a bus carrying Afghan civilians Monday, killing four people, officials said, setting off anti-American protests in a key southern city where coalition forces hope to rally the public for a coming offensive against the Taliban.
Elsewhere in the city of Kandahar, three suicide bombers attacked an Afghan intelligence services compound, but security forces who opened fire repelled them, said the spokesman for the government of the surrounding province, also called Kandahar. Four intelligence agents and six civilians, including a teacher at a nearby school were injured in the attack, said the spokesman, Zelmai Ayubi.
Kandahar, the largest city in southern Afghanistan, was the birthplace of the Taliban regime ousted in 2001 and insurgents remain active there despite a heavy presence of foreign forces. Securing it is key to the U.S. military and NATO’s aim of turning around the more than eight-year war, but anger stirred by civilian deaths threatens to undercut local support for the central government in Kabul.