SOURCE: The St. Petersburg Times
DATE: Issue #1601 (62), Tuesday, August 17, 2010
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TITLE: Powerful Winds Hit LenOblast, Petersburg
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: A powerful hurricane hit the city and the Northwestern region of Russia in the early hours of Sunday morning, causing a series of accidents and leaving nearly 90,000 people in 1,500 villages and small towns without electricity. 
More than 30,000 people in 250 villages in the Leningrad Oblast remained without electricity on Monday, while the local branch of the Russian Emergency Situations Ministry was busy repairing the networks.
No fatalities were registered during the hurricane. The Leningrad Oblast authorities reported that five parachutists, who went sky-diving shortly after 3 p.m. on Sunday went missing. The Emergency Situations Ministry, however, later issued a statement claiming that there had been only one missing parachutist who had subsequently been found alive and unharmed.
Vladimir Stepanov, head of the National Center for Crisis Situations Management, said more than 25 percent of the residents whose houses had been cut off from electricity lines had been reconnected to the networks by Monday morning.
In the south of St. Petersburg on Sunday afternoon, two construction cranes were blown over. A crane operator received a head injury and a broken leg. She is currently recovering in hospital.
Prime Minister Vladimir Putin on Monday held an emergency meeting to deal with the consequences of the hurricane. Putin contacted the governors of the Leningrad region as well as those of the Pskov, Novgorod and Vologda regions asking that the officials ensure the efficient, round-the-clock operations of the social and medical organizations involved in helping those affected by the extreme weather conditions. 
Ilya Klebanov, the presidential envoy in the Northwestern region, harshly criticized the response to the hurricane of Valery Serdyukov, head of the LenOblast government. “The regional authorities were poorly prepared for the storms,” Klebanov told the local television channel TV 100. 
The hurricane was the second of its kind this summer, after a massive storm hit the city on July 30, when 10 people died, and several districts were left without electricity.
Meteorologists have warned that there is a high risk of another hurricane and more storms reaching the region on Tuesday and Wednesday. Winds are expected to reach 20 meters per second.
The local branch of the Emergency Situations Ministry issued a statement on Monday calling for those in the region to be especially careful. “The risks of emergencies and accidents are high, including possible problems with public transport and electricity networks,” reads the statement.
In anticipation of the forthcoming storms, the Emergency Situations Ministry is setting up a series of operational centers in the Northwestern region which will work on a round-the-clock basis and oversee transport, electricity, medical and social problems that may arise during the expected storms. There are plans to create more operational centers in other regions of Russia where hurricanes and storms are expected, including the Moscow region, Vladimir, Ivanovo and Nizhny Novgorod.

TITLE: Putin Gives Warning Over Bread Prices
AUTHOR: By Olga Razumovskaya
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The government on Friday conceded that bread prices have risen across Russia and unleashed the Federal Anti-Monopoly Service on “market participants” who used the drought as an excuse to inflate prices by as much as 20 percent.
Containing inflation to the official forecast of 6 percent to 7 percent for this year — which would be an all-time low for Russia — had been a main government goal. Analysts now say the target will be much harder to meet since a widespread drought has forced Moscow to ban grain exports — starting Sunday — to keep domestic prices in check.
“Dishonest market participants need to understand that they had better act within the boundaries of law, or the losses they will incur from fines will outstrip many times over whatever gains they are trying to get through the use of speculative instruments,” Prime Minister Vladimir Putin said Friday at the meeting with Igor Artemyev, the anti-monopoly service’s director.
Artemyev said the service had already opened cases against roughly a dozen companies in Tatarstan and the Kursk and Magadan regions. Competition officials in Moscow have also been busy, bringing cases against three local bakeries, which the watchdog says inflated bread prices by as much as 20 percent.
In late July to early August, bread prices in Moscow rose 10 percent to 15 percent, the Moscow branch of the anti-monopoly service said Friday.
“Bread prices did not go up in chain stores, yet in independent convenience stores and government-subsidized stores accredited by the Moscow Mayor’s Office, they grew by 10 to 15 percent,” said Valentina Varfolomeyeva, interim head of Moscow’s retail markets department.
A second City Hall official said prosecutors and competition officials had already been notified about the sudden rise.
“The mayor has turned to the Prosecutor General’s Office and [the anti-monopoly service] with a request for them to look carefully into every instance of unlawful rises in bread prices,” Olga Kozlova, deputy head of the city’s science and industrial policy department, told reporters Friday.
Separately, First Deputy Prime Minister Viktor Zubkov addressed producers at a government working group combating the drought and pleaded with them to release the grain that had been locked up in stockpiles in hopes of future gains.
“There simply are no objective conditions for high prices currently,” Zubkov said. “I would ask the companies that have grain in excess not to keep it but to actively work on the market with those who are experiencing an acute deficit.”
Companies refusing to part with their grain will incur losses when the government “flips the ‘on’ switch to the intervention fund mechanism,” which Zubkov said could happen at any time.
Artemyev also said that waiting for the government to lift its newly established grain embargo, set to last until at least the end of the year, is not the best strategy because the state is “unlikely” to resume exports earlier.
The watchdog will be enforcing sanctions in the form of hefty fines — anywhere from 1 percent to 15 percent of the company’s yearly turnover — for violations, Artemyev said.
But in the long run, he said, introducing a grain exchange will help solve the problem. A commodities exchange would eliminate numerous intermediaries and shell companies that artificially inflate prices.
Putin encouraged Artemyev to work with the Economic Development Ministry and tax authorities to establish the exchange. Analysts, however, warned against treating the mechanism as a panacea for the country’s inefficient markets.
“Creating a grain exchange is a long process, and under conditions in which decisions have to be made quickly, this measure will unlikely help,” said Irina Vorobyova, an analyst at 2K Audit-Deloviye Konsultatsii/Morison International.
“At the same time, in the future it will be a good market instrument that will help effectively battle speculation,” she said.
An exchange will provide both buyers and producers with a clearer ability to forecast prices, she said, suggesting in-depth market monitoring and punitive measures for those who raised prices and speculated on drought and wildfires.
Andrei Sizov Jr., managing director of SovEcon, was less categorical in his appraisal of the market situation.
“In theory, price collusion is possible, but proving it will be quite difficult. Now everybody will be shaken: the farmers; the millers and bread factories; the meat dealers; and retail, “ Sizov said.
Higher bread prices, he said, may not be as groundless as they have been painted to be.
“Flour, which in early June cost 6,000 rubles [about $200], went up to 10,500 [rubles] per ton. That’s 75 percent. Are there any preconditions for higher bread prices with this kind of growth in prices for flour, a key ingredient of bread making? Yes, there are,” he said.
Food prices more generally are now likely to grow, spurring on inflation, Sizov said.
“We expect prices to continue growing for all foodstuffs because of price growth for grain. We predict that this year food inflation will go up to 10.2 percent to 13.7 percent, which is 1.5 or more times higher than in 2009.”

TITLE: FIFA Team Arrives for World Cup 2018 Inspection
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: A FIFA Inspection Group arrived to St. Petersburg on Monday to begin its assessment of the Russian bid to host the FIFA World Cup in 2018 or 2022.
The group is to visit the four proposed Russian host cities, namely St. Petersburg, Moscow, Kazan and Sochi.
“You can be sure that we’ll be asking for all the information we need to make a very objective and realistic report to the members of the commission,” said Harold Mayne-Nicholls, head of the FIFA Inspection Group at a press briefing in St. Petersburg on Monday.
“It will be a real pleasure and honor to inspect these four Russian cities,” Mayne-Nicholls, who is also head of the Chili Soccer Federation, said.
Vitaly Mutko, head of Russia’s Bid Committee and minister for Sports, Tourism and Youth Policy, said they hoped the FIFA’s inspection group’s visit to Russia would be “fruitful.”
“We have a great deal of resolve and wish to host the 2018 World Cup of 2018 in Russia,” Mutko said.
In each of the four cities the group will be shown a number of specific locations and facilities, including stadiums and infrastructure.
In St. Petersburg, the FIFA Group will be given a “Fan Fest Site” tour, and visit the construction site of the city’s new soccer stadium, which is due for completion in 2011, and the Mariinsky Theater which has been proposed to host the official draw for the World Cup, and have dinner at the Yusupov Palace.
In Moscow, the group will tour the Luzhniki Stadium, the proposed facility for the International Broadcasting Center and the proposed FIFA headquarters, as well as attending a full presentation of the bid hosted by the Government.
In Kazan, the FIFA representatives will attend the inauguration ceremony of the Kazan Olympic Stadium and visit Kazan Kremlin, while in Sochi there will be a tour of the future Olympic Stadium.
Initially  FIFA registered nine bids to host the World Cup in 2018 and 2022, including applications from Australia, England, Indonesia, Mexico, Russia, USA and Japan, and joint bids from Portugal and Spain and Belgium and the Netherlands.
Mexico withdrew its bid in September of 2009 for economic reasons.  In March, FIFA excluded Indonesia due to a lack of government support.  Japan and Australia both subsequently dropped their 2018 bids, focusing on hosting the tournament in 2022.
According to FIFA rules, the event can’t be held on any continent where one of the last two championships was held.  As a result, the 2018 World Cup can’t be held in Africa or South America.
The results of the competition for the right to host the championships are to be announced in Zurich, Switzerland, on Dec. 2 of 2010.

TITLE: In Brief
TEXT: <strong>Zenit Ends Streak</strong>
ST. PETERSBURG (SPT) — Local soccer team Zenit FC ended its winning streak at 8 successive wins on Saturday, drawing 1:1 with Dinamo Moscow. German striker Kevin Kuranyi, recently signed by the Moscow squad from the German league runner-up Schalke 04, put his team in front in the 26th minute, scoring his first goal of the season. Danko Lazovic scored the equalizer for Zenit eight minutes later.
Zenit’s closest competitor for the Russian league title, CSKA Moscow, capitalized on its chance to cut Zenit’s comfortable lead at the top of the table from 9 points to 7 points with a comfortable 4:0 win against Anzhi Makhachkala. With 14 out of 30 games still to be played this season, Zenit’s lead, however, is still comfortable. Zenit remains unbeaten this season.

<strong>Aquatic Champs</strong>
ST. PETERSBURG (SPT) — Two weeks after winning the European Athletics Championships in Barcelona, Russia has also topped the medal table at the European Aquatics Championships in Budapest, which ended on Sunday. Russia both claimed the most gold medals — 13, followed by runners-up Germany and France, both with 8 — as well as the most medals in total, with 28. France claimed 23, and Germany 20.
The most successful category of events was synchronized swimming, in which Russian athletes won all four disciplines. The bulk of Russia’s medals came from swimming (7 golds, 12 in total), in which it was only bested by France (8 golds, 21 total).
Russia’s performance marked an improvement over the 2008 Aquatics Championships, in which the squad also topped the medal table, winning 12 gold medals and taking 25 medals in total.

<strong>Tsoi Mourned</strong>
MOSCOW (SPT) — Hundreds of fans of the late rock star Viktor Tsoi visited his grave at Bogoslovskoye Cemetery in St. Petersburg on Sunday to commemorate the 20th anniversary of his death, Interfax reported.
People of all ages laid flowers on the grave, where a memorial, restored by architects who are his fans, was unveiled Sunday.
Tsoi, frontman of the rock band Kino, was considered the voice of perestroika generation youth. He died in a car crash in Latvia in 1990 at the age of 28.

<strong>Titanic Dive</strong>
MOSCOW (SPT) — James Cameron, director of the world’s highest-grossing film of all time, “Avatar,” arrived at Lake Baikal on Sunday to dive to the bottom of the 1,642-meter-deep lake, RIA-Novosti reported.
Cameron was due on Monday to join the crew of the two Mir deep-submergence vehicles, which have dived in Baikal since 2008 as part of a scientific expedition.

TITLE: Governor or Imam? Regional Bosses Seek a Title
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia has 83 regions, but not every regional boss enjoys the same title.
For most, the title is “governor,” but for others it might be “president,” “mayor,” “government chairman” or simply “head.”
Life could get a lot simpler — or complicated, depending on whom you ask — after Chechen President Ramzan Kadyrov announced last week that he no longer wanted to be known as president and suggested a common title for all regional leaders.
The initiative has rapidly gained steam, with the Kremlin, the Federation Council and other North Caucasus leaders expressing support. But some politicians said regions should be allowed to pick their own titles, and several senior Chechen officials declared that Kadyrov should be known as imam.
“The issue of unifying regional leaders’ titles has long been on the political agenda … but it needs to be done voluntarily,” an unidentified Kremlin official said Friday, Itar-Tass, Interfax and RIA-Novosti reported.
Kadyrov, who has been accused of running Chechnya like a personal fiefdom, said Thursday that the title of president was deserved by only one leader, in apparent deference to President Dmitry Medvedev.
“I believe there should be only one president in a unified state,” Kadyrov said in a statement on his web site.
Kadyrov credited the idea to his late father, Chechen President Akhmad Kadyrov, and said he had realized his father’s wisdom during a trip with Medvedev to Turkey and Syria in the spring.
“I felt awkward when they announced at meetings, ‘president of Russia,’ ‘president of Kabardino-Balkaria,’ ‘president of the Chechen Republic,’” Kadyrov said.
On Friday, he said he had agreed in phone conversations with the leaders of several other North Caucasus republics — Ingushetia, Dagestan, Kabardino-Balkaria, Karachayevo-Cherkessia and Adygeya — to ask the State Duma to pass a law introducing a unified title for regional leaders.
Alexander Torshin, first deputy chairman of the Federation Council, praised the initiative as “right and deserving full support.”
But a senior State Duma deputy with the ruling United Russia party said no new law was necessary. “Each subject of the [Russian] Federation can decide itself how to name its head,” said Alexander Moskalets, first deputy chairman of the Duma’s Constitution and State Affairs Committee, Interfax reported.
Torshin agreed that the regions had enough competence to change the names themselves, although “ideally it would be good to agree on a unified title,” Interfax reported.
The question of which title Kadyrov prefers has caused considerable controversy.
Chechen parliamentary speaker Dukuvakha Abdurakhmanov said the options discussed among local lawmakers have included head of the republic, father of the nation (mekhk-da in Chechen) and imam.
The possible use of a religious title was widely criticized Friday as running counter to the country’s secular status. Torshin warned that a title like imam would pave the way for other “archaisms” like sultan or khan.
Chechen presidential spokesman Alvi Karimov said Kadyrov was open to any title allowed by the Russian Constitution. Asked if imam was constitutional, Karimov replied, “Why not? … This is a succinct title, easy to write and pronounce,” Interfax reported.
The current titles of the leaders of the country’s 83 regions reflect various regional traditions and levels of autonomy. While many ethnic republics are led by presidents, others like Karelia and Mordovia call their leaders merely “heads” or, like Khakasia, “government chairman.” Most other regions are led by governors, although Moscow is governed by a mayor, even though its constitutional status is similar to St. Petersburg, which has a governor.
Two North Caucasus republics have changed their leaders’ titles in recent years. In 2005, North Ossetia renamed its president as head of the republic, while Dagestan in 2006 introduced the title of president. Previously, the republic had been governed by the leader of the state council, reflecting its multiethnic makeup.
Ingush President Yunus-Bek Yevkurov has asked the local parliament to change his title to “regional head” or “leader,” his spokesman Kaloi Akhilgov said Friday, Interfax reported.
Analysts said the title initiative appeared to be a show of loyalty to the Kremlin and expressed bemusement that it had come from Kadyrov, who has amassed more power than any other regional leader since assuming office in 2007.
“Kadyrov can call himself what he wants, but he will always remain powerful, like a tsar, in Chechnya,” said Nikolai Petrov, who follows regional politics at the Carnegie Moscow Center.
Meanwhile, Kadyrov’s office made it clear that the purging of presidents should include all walks of life, including charities and sports clubs. “Soon there will no more be positions called president in Chechnya,” a Kadyrov aide told Interfax.

TITLE: Sutyagin Yearns to Return to Russia
PUBLISHER: The Associated Press
TEXT: MOSCOW — Igor Sutyagin, an arms control researcher convicted of spying for the West who was released from prison and flown to Britain as part of a spy swap, said Friday that he was yearning to return home.
Sutyagin has been granted a six-month work visa by Britain, but he told Ekho Moskvy radio in a telephone interview from London that he did not intend to stay.
Sutyagin has spoken in recent days for the first time since he was delivered, still in Russian prison attire, to a British military base in rural Oxfordshire in early July. He said he was staying with friends in London and was talking to relatives about future employment in Russia.
“It’s my country. I am not on the run,” he said, adding that Russian officials have vowed not to hinder his homecoming.
He and three others convicted of betraying Moscow to the West were pardoned and exchanged in the largest spy swap since the Cold War for 10 Russian agents who had infiltrated suburbs of the United States.
Sutyagin was a military analyst with the U.S.A. and Canada Institute, a respected Moscow-based think tank, before he was sentenced to 15 years in prison in 2004 on charges of passing information about nuclear submarines and other weapons to a British company that Russian investigators claimed was a CIA cover. Sutyagin has insisted on his innocence, saying the information he provided was available from open sources.
For President Dmitry Medvedev’s pardon, Sutyagin was required to sign a confession, something he said he initially declined to do. But he reconsidered after speaking with U.S. and Russian officials who told him the release of others depended on his cooperation, he said.
Sutyagin said in Friday’s interview that he was fatigued and longed to be among his friends and relatives in Russia to make up for lost time.
“I need to return. Eleven years have been lost. I need to get moving,” he said, casting off warnings that he said he had received from acquaintances in Russia not to return and risk renewed trouble with the authorities.
In the meantime, relatives are applying for passports to fly to see him, he said, but have been told that the processing period would take longer than expected. He suggested that the holdup might be linked to interviews he had given since arriving in Britain, but did not go into any greater detail. Sutyagin in recent days has also given interviews to the Moscow-based opposition New Times weekly and The New York Times.
Of the four convicts pardoned and flown out of Russia, two — Sutyagin and Sergei Skripal, a former colonel in Russian military intelligence who was found guilty of passing state secrets to Britain and sentenced to 13 years in prison in 2006 — were sent to Britain. The others — Alexander Zaporozhsky, a former colonel in the Foreign Intelligence Service, sentenced in 2003 to 18 years, and Gennady Vasilenko, a former KGB officer sentenced to three years in prison on murky charges of illegal weapons possession — flew to the United States.
It remains unclear why the two were sent to Britain, although the country figured in both their cases.
“Honestly, I don’t know. No one has explained it,” Sutyagin said, adding that he welcomed the destination all the same for its relative proximity to Russia.

TITLE: Meeting to Go Ahead Despite Ban
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Democrats, who took part in the vigil to protect the Lensoviet, the then mainly democratic city parliament during the failed coup of Aug. 19, 1991, said they would gather on St. Isaac’s Square on Thursday to mark the event’s anniversary, despite the authorities having banned the meeting.
Last week, City Hall refused to authorize the meeting on the grounds that it may distract the attention of passersby and drivers causing traffic accidents. Meanwhile, the authorities will close the city’s three main streets on Sunday for massive Russian State Flag Day celebrations — a holiday dating to August 22, 1991. 
On that day, it was announced that the coup had failed and the current tri-color flag, banned under the Soviets, was made the state flag of Russia by the then Russian president Boris Yeltsyn.  The day was made an official holiday in 1994.
Sunday’s official celebrations will feature the “the world’s first and Russia’s biggest living flag.” 
Three large groups of people dressed in the Russian flag’s colors will march along Nevsky Prospekt (white), Voznesensky Prospekt (blue) and Gorokhovaya Ulitsa (red) and form a Russian Flag near the Alexandrovsky Gardens. 
The event, which will wrap up with a concert at Alexandrovsky Gardens, will be captured on photo and video from a helicopter and will be included in Russia’s Book of Records, a press release announced.
“It’s the usual story, we’re not allowed to do anything, while they are free to do everything,” said Olga Kurnosova of the Solidarity Democratic Movement, who was a Lensoviet deputy during the attempted coup.
It was planned that the event be held on the pavement near the building of the St. Petersburg Legislative Assembly, which was the home of Lensoviet during the coup and where people gathered to defend the city’s parliament in the event of troops entering the city.
Kurnosova said the veterans of Lensoviet’s defense and sympathizers would come to St. Isaac’s Square at 6 p.m. on Thursday despite the ban –— with no amplifiers and posters.
According to Solidarity’s Iosif Skakovsky, any event could be banned on the grounds that it may distract the attention of passersby and drivers.
“This could become an absolutely universal formula for the rejection of any event,” Skakovsky wrote on his Livejournal.com blog.  “What is the point of these events if it is not to attract people’s attention to a specific issue?”
Last year, a planned Aug. 19 meeting on St. Isaac’s Square was banned as works to check the water supply system in the run-up to the winter season would be underway close to the site at the same time, according to the official explanation.
Around 100 came to St. Isaac’s Square to find several city-owned repair works trucks and orange-jacketed workers, who hung around their vehicles without even pretending to be working, as well as policemen and OMON riot police.

TITLE: Mistrust Overshadows Stronger NATO Ties
PUBLISHER: The Associated Press
TEXT: BRUSSELS — After decades of tension, NATO and Russia are working together on a series of joint initiatives that range from supplying troops in Afghanistan to fighting airline hijackings.
It is far from certain, however, that the new cooperation to fight immediate and shared threats will help the former Cold War adversaries resolve longer-standing and more fundamental differences over issues such as NATO’s eastward expansion or Georgia’s relations with its Russian-backed breakaway regions.
Russia, which wants to quash militancy and drug trafficking in its neighborhood, has opened a land route to resupply the 140,000-member NATO force in Afghanistan and is discussing giving helicopters to Afghanistan’s nascent air force and training its anti-drug police.
Recently, Russia and NATO launched a shared system to monitor air traffic above most of the Northern Hemisphere in case of terrorist threats. A combined anti-missile defense system that would protect all participating nations is in the planning stages.
U.S. Admiral James Stavridis, the supreme NATO commander in Europe, said he would travel to Russia in the fall to discuss missile defense, Afghanistan, counterproliferation, counterterrorism and counternarcotics, among other efforts.
“I am highly interested and actively pursuing zones of cooperation with Russia,” he said in an interview.
But some observers warn against overplaying the significance of those initiatives, pointing out that unity within the NATO alliance itself has been fraying since the dissolution of the Soviet-led Warsaw Pact nearly two decades ago, which was its only true military rival.
“There are so many splits within NATO and so much of NATO policy has devolved to the member states that I’m not sure whether these improving relations with the alliance mean anything tangible to Russia,” said George Friedman, who heads the global intelligence company Stratfor.
Other observers also note that, despite the increasingly close ties, an element of distrust still lingers over the relationship.
For example, NATO continues to update contingency plans for the defense of the Baltic states, on Russia’s doorstep, although NATO officials say the measure is primarily intended to reassure alliance governments that NATO remains committed to the territorial defense of all member states — its core function since it was founded 60 years ago.
After the end of the Cold War, there were years of improving ties before NATO’s bombing of Serbia and Kosovo in 1999, which Moscow strongly opposed. Cooperation again improved after 2000, only to hit rock bottom following the Russia-Georgia war in August 2008, when the alliance — under pressure from the administration of former U.S. President George W. Bush — froze relations with Moscow.
The conflict erupted after Georgian troops tried to regain control over the separatist province of South Ossetia. Russia prevented that and now has troops stationed there, as well as in the like-minded province of Abkhazia. Moscow has recognized the independence of both of them — a move that the West has strongly opposed.
Since then, President Barack Obama has announced a “reset” of U.S. ties with Russia, and there has been a significant shift toward cooperation.
In April, Obama and President Dmitry Medvedev signed the New START nuclear arms reduction treaty, and in June, Russia agreed to support UN sanctions against Iran because of its nuclear program. NATO quickly followed suit.
During a visit to Moscow, NATO Secretary-General Anders Fogh Rasmussen said collaboration would continue to grow and lead to the creation of the combined missile defense system by 2020, “which will not only protect us from proliferation, but will also bind us together politically.”
But the anti-missile defenses have yet to be approved by alliance leaders. Some of the 28 member states are skeptical about the proposed system, citing declining defense budgets at a time of economic crisis.
Fyodor Lukyanov, editor of the Russia in Global Affairs journal, said ties have progressed more slowly than they could have, largely because of an underlying lack of trust.
“The relationship between NATO and Russia is better than it was two years ago, [but] in order for a real breakthrough to happen, both sides need to change their attitudes,” he said.

TITLE: Lukashenko Says Russia Meddling
PUBLISHER: The St. Petersburg Times
TEXT: Belarussian President Alexander Lukashenko accused Russian authorities of putting pressure on him ahead of a bid to seek re-election and blamed them for his failure to recognize Georgia’s separatist regions as independent states, Reuters reported.
Lukashenko, long at odds with the West but lately quarreling with Moscow, also said he wanted better ties with the United States.
The United States and European Union have criticized Belarus for not holding free or fair elections since Lukashenko came to power in 1994. The veteran leader, last re-elected in 2006, plans to seek another term within the next six months.
Lukashenko accused Russia of putting pressure on him ahead of the election, a date for which has yet to be set.
“America keeps its position, but Russia has sharply changed its stance, trying to bring the president of Belarus to heel before well-known political events,” Lukashenko said Friday during a visit to Belarus’ central Minsk region.
“But you have known me for ages — it is impossible to bend me, and trying to do so is useless,” he said, state media reported.
Lukashenko blamed Moscow for failing to provide incentives to Belarus that would offset any negative consequences of recognizing the independence of Abkhazia and South Ossetia, two pro-Russian separatist regions in Georgia that Russia recognized after a five-day war with Georgia in August 2008.
The Kremlin fired back Saturday, threatening to publish the transcript of a meeting of the Moscow-led Collective Security Treaty Organization where Lukashenko expressed a willingness to recognize the independence of the rebel regions.
“We can publish this and other statements by Alexander Lukashenko that would be of interest to public opinion in both Belarus and internationally,” said the Kremlin’s top foreign policy aide, Sergei Prikhodko, RIA-Novosti reported.

TITLE: Superjet Engine Certified After Fake Diploma Flap
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia has certified engines for its Sukhoi Superjet 100 planes, bringing the first deliveries of the much-delayed aircraft a step closer, engine producer Saturn announced Friday, Reuters reported.
The Superjet 100, which risked an additional setback last month when prosecutors reported that dozens of workers at the plane’s Far East plant had fake diplomas, will be the first passenger plane built by Russia since the Soviet collapse, and will attempt to challenge Canada’s Bombardier and Brazil’s Embraer in the regional carrier sector.
The manufacturer, controlled by state-run Sukhoi and 25 percent owned by Italy’s Finmeccanica, has postponed airplane deliveries to early customers several times, and sources familiar with the production program said the problem lay in engine certification.
The jet engine, designed by a joint venture between Saturn and a subsidiary of France’s Safran, must get additional Federal Aviation Administration certification to be sold in the United States and Canada, said Yury Basyuk, deputy managing director of Saturn.
Superjet plans to produce 1,000 planes primarily aimed at international markets, and the plane itself may be certified as early as October 2010, Basyuk said.
Aeroflot, which accounts for 30 of the 161 orders to date, and Armenia’s Armavia are most likely to receive the first aircraft.
A cloud was cast over the Superjet 100 in July when Khabarovsk region prosecutors said more than 70 engineers working at the Komsomolsk-on-Amur plant, which produces the plane, had fake diplomas from a local technical college, Ren-TV television reported.
The employees said the diplomas were only a formality because they had worked at the plant for years and knew their jobs from experience, NTV television reported.
Plant management said no engineers with fake diplomas were employed in actual plane production.
No employees were fired over the incident because their contracts did not permit dismissal for minor offenses, Ren-TV said. Fake diplomas are widely available for sale in Russia.

TITLE: Veteran Activist Hospitalized After Arrest
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Veteran human rights campaigner Lev Ponomaryov was rushed to the hospital after being detained at an unsanctioned opposition rally against Mayor Yury Luzhkov.
Ponomaryov, 68, said doctors had diagnosed him with high blood pressure and hooked him up to an intravenous drip after admitting him Thursday evening, Interfax reported.
He had expected to remain in the hospital for 10 days, but told The Moscow Times on Sunday that he was feeling much better and hoped to return home Monday.
Ponomaryov, chairman of the For Human Rights movement, was a co-organizer of the “Day of Wrath” rally, during which demonstrators accused Luzhkov of being responsible for the capital’s unpreparedness for this summer’s record heat wave and demanded his resignation.
Sergei Udaltsov, another co-organizer of the rally, was sentenced to four days in jail for “ignoring lawful demands of the police,” Interfax said.

TITLE: Soviets Defeated Japan, or Bombs?
AUTHOR: By Slobodan Lekic
PUBLISHER: The Associated Press
TEXT: MOSCOW — As the United States dropped its atomic bombs on Hiroshima and Nagasaki in August 1945, 1.6 million Soviet troops launched a surprise attack on the Japanese army occupying eastern Asia. Within days, Emperor Hirohito’s million-man army in the region had collapsed.
The Soviet advance was a momentous turn on the Pacific battleground of World War II, yet one that would be largely eclipsed in the history books by the atomic bombs dropped in the same week 65 years ago. But in recent years some historians have argued that the Soviet action served as effectively as — or possibly more than — the A-bombs in ending the war.
Now a new history by a professor at the University of California, Santa Barbara, seeks to reinforce that view, arguing that fear of Soviet invasion persuaded the Japanese to opt for surrendering to the Americans, whom they believed would treat them more generously than the Soviets.
Japan’s forces in northeast Asia first tangled with the Russians in 1939 when the Japanese army tried to invade Mongolia. Their crushing defeat at the battle of Khalkin Gol induced Tokyo to sign a neutrality pact that kept the Soviet Union out of the Pacific war.
Tokyo turned its focus to confronting U.S., British and Dutch forces instead, which led to the Pearl Harbor attack on Dec. 7, 1941.
But following the German surrender on May 8, 1945, and having suffered a string of defeats in the Philippines, Okinawa and Iwo Jima, Japan turned to Moscow to mediate an end to the Pacific war.
However, Soviet leader Josef Stalin had already secretly promised Washington and London that he would attack Japan within three months of Germany’s defeat. He thus ignored Tokyo’s plea, and mobilized more than a million troops along Manchuria’s border.
Operation August Storm was launched on Aug. 9, 1945, as the Nagasaki bomb was dropped, and would claim the lives of 84,000 Japanese and 12,000 Soviet soldiers in two weeks of fighting. The Soviets ended up just 50 kilometers from Japan’s main northern island, Hokkaido.
“The Soviet entry into the war played a much greater role than the atomic bombs in inducing Japan to surrender because it dashed any hope that Japan could terminate the war through Moscow’s mediation,” said Tsuyoshi Hasegawa, whose recently published “Racing the Enemy” examines the conclusion of the Pacific war and is based on recently declassified Soviet archives as well as U.S. and Japanese documents.
“The emperor and the peace party [within the government] hastened to end the war, expecting that the Americans would deal with Japan more generously than the Soviets,” Hasegawa, a Russian-speaking American scholar, said in an interview.
Despite the death toll from the atomic bombings — 140,000 in Hiroshima and 80,000 in Nagasaki — the Imperial Military Command believed that it could hold out against an Allied invasion if it retained control of Manchuria and Korea, which provided Japan with the resources for war, according to Hasegawa and Terry Charman, a historian of World War II at London’s Imperial War Museum.
“The Soviet attack changed all that,” Charman said. “The leadership in Tokyo realized they had no hope now, and in that sense August Storm did have a greater effect on the Japanese decision to surrender than the dropping of the A-bombs.”
In the United States, the bombings are still widely seen as a decision of last resort against an enemy that appeared determined to fight to the death. President Harry Truman and U.S. military leaders believed that an invasion of Japan would cost hundreds of thousands of American lives.
American historian Richard Frank has argued that as terrible as the atomic bombs were, they saved hundreds of thousands of American soldiers and millions of Japanese troops and civilians who would have perished if the conflict had gone on until 1946.
“In the famous words of Secretary of War Henry Stimson, [the bombs] were the ‘least abhorrent choice’ of a dreadful array of options facing American leaders,” he said in an interview. “Alternatives to the atomic bombs carried no guarantee as to when they would end the war and carried a far higher price in human death and suffering.”
Frank, who is writing a three-volume history of the Pacific war, said he continued to disagree with Hasegawa on the relative importance of the Soviet intervention and the A-bombs in forcing the surrender decision.
But he said they agreed that ultimate responsibility for what happened lay with Japan’s government and Hirohito, who had decided in June to draft almost the entire population, men and most women, to fight to the death.
“Since no provision had been made to place these people in uniform, invading Allied troops would have not been able to distinguish combatants from noncombatants, effectively turning each village in Japan into a military target,” Frank said.
The impact of the lightning Soviet advance comes through in the words of Japan’s wartime prime minister, Kantaro Suzuki, urging his cabinet to surrender.
He is quoted in Hasegawa’s book as saying, “If we miss [the chance] today, the Soviet Union will take not only Manchuria, Korea and Sakhalin, but also Hokkaido. We must end the war while we can deal with the United States.”
V-J Day, the day Japan ceased fighting, came on Aug. 15 (Aug. 14 in the United States), and Japan’s formal surrender followed on Sept. 2.
Dominic Lieven, a professor of Russian government at the London School of Economics, said anti-Soviet sentiment in the West tended to minimize Soviet military achievements.
Also, “very few Anglo-Americans saw the Soviet offensive in the Far East with their own eyes, and Soviet archives were not open to Western historians subsequently,” he said.
More surprising, even in Russia the campaign was largely ignored. Although the scale of the Soviet victory was unprecedented, 12,000 dead against Japan hardly compared with the life-and-death struggle against Nazi Germany, in which 27 million Soviets died.
“The importance of the operation was huge,” said retired General Makhmut Gareyev, president of the Russian Academy of Military Sciences, who took part in the 1945 campaign. “By entering the war with militarist Japan … the Soviet Union precipitated the end of World War II.”

TITLE: Orthodox Christian Believers Flock to Once-Banned Holy Site
PUBLISHER: Combined Reports
TEXT: SUMELA MONASTERY, Turkey — Orthodox Christians held the first Divine Liturgy in almost 90 years at an ancient monastery on the side of a Turkish mountain on Sunday, after the government allowed worship there in a gesture toward religious minorities, Reuters reported.
At least 1,500 pilgrims, including from Russia and Greece, traveled to the Byzantine-era Sumela Monastery for the service led by Patriarch Bartholomew I, spiritual leader of the world’s Orthodox Christians.
The Islamic-oriented government, which is aiming to expand freedoms as part of its bid to join the European Union, has said worship can take place at the monastery once a year. Services were previously banned.
Sumela, a spectacular structure cut into the side of a mountain, was abandoned around the time of Turkey’s foundation in 1923. Last year, authorities prevented Russians and Greeks from praying at Sumela, located at a remote site near the southern coast of the Black Sea often referred to by Orthodox believers as Pontus, its historical Greek name.
“In our family, we always kept Pontus alive,” said Fotiy Exizov, 62, whose family settled in Sochi after leaving in 1864. “We speak the language; we pass on the stories. We are like the birds who must return to the nest.”
The patriarch, who is based in Istanbul, wore a white robe with golden lace, and carried a staff. Priests sang hymns and spread incense amid faded frescoes. Visitors who could not fit into the crowded monastery watched on a giant television screen several hundred meters below the building.
Bartholomew sought to deliver a message of inclusion across faiths, including Islam.
“We would also like to take this opportunity to celebrate the arrival of the holy month of Ramadan,” he said. “We wish for you to live this meaningful month with peace, patience and prayer.”
(AP, SPT)

TITLE: Pulses Quicken as Fighters Track ‘Hijacked’ Plane
PUBLISHER: The Associated Press
TEXT: OVER THE PACIFIC — A Gulfstream passenger jet at the center of a U.S.-Russian military exercise was about to cross the International Dateline last Tuesday for the second time in three days, and some of the seven passengers seemed dulled by the dash across the Pacific and back.
But they all perked up and the mood turned jovial when Air Force Technical Sergeant Paul Shoop called out, “They’re here!”
Two Su-27 fighter jets had come into view behind the chartered Gulfstream and were closing in fast. The Gulfstream was playing the role of a hijacked airliner crossing Russian airspace on its way east across the Pacific, and the fighters had been sent aloft to track it.
It was part of a precedent-setting exercise called Vigilant Eagle to see how well Russia and the North American Aerospace Defense Command, or NORAD, once bitter Cold War enemies, could coordinate in an international hijacking.
The Gulfstream took off from Alaska on Sunday, sent a mock distress signal indicating that it had been “hijacked” and then flew west across the Pacific, pursued first by fighters from NORAD — a joint U.S.-Canadian command — and then by fighters from Russia.
On Tuesday, the pursuit was in the opposite direction as the plane headed back to Alaska.
The Gulfstream, code-named Fencing 1220, carried U.S., Canadian and Russian officers.
As the Su-27s drew near, the passengers raised their cameras to the Gulfstream’s windows, taking stills and video. One of the Russian pilots appeared to be pointing his own camera or binoculars back at them.
Greg Locke, the Gulfstream’s maintenance director who was aboard for the exercise, fired off a string of photos with his automated camera and then played out an imaginary conversation between the pilot and his wife.
“What did you do today, Honey?” he asked. “I shadowed a [Gulfstream] G-4 with a bunch of Americans pointing cameras out the windows.”
The fighters were so close that the pilots’ orange flight suits and white helmets were clearly visible under the cockpit canopies. One waved.
One Su-27 banked toward the Gulfstream, dropped slightly and swooped underneath, emerging on the other side. 
A steady chatter in Russian and English poured out of Fencing 1220’s radio speakers.
“My Russian’s not very good, but it sounded like he said, ‘I could take that right wing off with about a five-second burst of a cannon,’” pilot Ben Rhodes quipped, to laughter in the cabin.
All the planes were unarmed, a condition of the exercise, said Canadian Forces Colonel Todd Balfe, the NORAD observer aboard the Gulfstream.
“It’s just unbelievable that we’re able to fly [in] formation at 33,000 feet [10,000 meters] with a pair of Russian fighter jets,” Rhodes said. “It’s pretty amazing to me. I love it.”
Rhodes, who has logged more than 15,000 hours of flying time over 40 years, said he has seen a Russian-built fighter up close only once before, when he was flying near Cuba.
“That was a little more hostile,” he said with a chuckle. “So at least this time my heart’s not racing because I know that this is part of a script.”
Asked to describe the incident over Cuba, Rhodes cleared his throat and paused. “That’s kind of classified,” he said with a laugh.
Details of Vigilant Eagle were carefully scripted, including some of the radio communications, but Fencing 1220 co-pilot Daniel Moore had to ad-lib when a Russian air traffic controller asked, “How many hijackers are on board, and what are their demands?”
“That’s not on the script anywhere,” Moore said, so he replied, “We have two hijackers, and they want to go to Anchorage.”
Moore said he did not think the Russian controller believed that the hijacking was the real thing instead of a drill.
“Maybe that’s on his checklist; that’s one of the things he has to ask,” he said.
Terrorists have repeatedly targeted the United States and Russia, sometimes with tragic and catastrophic results, and both nations are looking for ways to steel their transportation systems against attack. Vigilant Eagle was the first-ever international hijacking drill, NORAD said.
It also showed how far the former enemies have come. Despite continued suspicions and disputes, they embarked on a complex exercise requiring close cooperation and communication.
About 3 1/2 hours into Tuesday’s flight, the Su-27s banked steeply and flew away, and Russian military controllers handed off responsibility for Fencing 1220 to NORAD.
Three hours later, two NORAD F-22 fighters barreled past in the distance from the opposite direction, banked so steeply that they seemed to turn on their wing tips and then pulled in close on either side of Fencing 1220.
Like the Russian fighters, they edged in close, and the pilots could be seen turning their heads toward the Gulfstream, the setting sun glinting off their helmets.

TITLE: Poultry Ban Lifted for Most U.S. Plants
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Agriculture Ministry said Friday that it would lift a ban on poultry imports for more than three-quarters of U.S. facilities now blocked, acknowledging that the plants satisfy its requirements for meat treatment and production processing.
Presidents Dmitry Medvedev and Barack Obama struck a deal in June to allow U.S. producers to import poultry meat that has been processed with substances other than chlorine. Implementation has been held up, however, by what Moscow has described as “technical” issues.
Of the 87 plants on a list proposed by the U.S. Department of Agriculture, 68 will be allowed to resume poultry supplies to Russia on Monday, ministry spokesman Oleg Aksyonov said Friday. The remaining 19 facilities failed to meet the sanitary norms set by the Federal Veterinary and Phytosanitary Inspection Service, he said.
But the USDA complained that the plan was not “an acceptable implementation” of the agreement reached in June. Russia will accept meat from only eight of the 27 slaughter and processing plants determined by the USDA as eligible to ship to the country, it said.
“The remaining 60 plants that Russia is listing are cold storage facilities that can only handle poultry if there is poultry to handle,” the USDA said in an e-mailed statement Friday, Reuters reported.
The U.S. side said it would “continue to press Russia” to implement the agreement in full.
Russia, which spent more than $750 million on U.S. poultry last year, froze imports Jan. 1 after long-planned regulations that forbid the import of poultry treated with chlorine — a production method used by many U.S. producers — went into effect.
Moscow made new demands earlier this month, saying the United States should provide guarantees that the plants authorized to supply meat have been inspected properly.

TITLE: 44% of Silvinit Sold, Potash Merger Nears
PUBLISHER: Combined Reports
TEXT: MOSCOW — Sibuglemet owner Anatoly Skurov and State Duma Deputy Zelimkhan Mutsoyev bought stakes in Silvinit, the country’s biggest potash producer, a person familiar with the sale said Friday, Reuters reported.
Skurov, who is also president of closely held coal producer Sibuglemet, acquired 20 percent, while Mutsoev bought 24 percent, the source said, declining to be identified because the purchase had not been announced.
Skurov confirmed the purchase of those stakes but declined to comment further.
The government is keen to create a national potash mining champion via the merger of its two biggest companies, Silvinit and Uralkali, and may allow a small stake to be bought by an overseas player, analysts said.
Uralkali is expected to kick-start merger plans with unlisted Silvinit in the coming days, creating the world’s second-biggest potash miner, worth about $20 billion.
Billionaire Suleiman Kerimov and his partners bought 53 percent of Uralkali in June from Dmitry Rybolovlev. Rybolovlev, ranked by Forbes as Russia’s 10th richest man, kept a 12 percent stake.
Potash Corporation of Saskatchewan, the largest producer of the material, and Rio Tinto Group, the third-largest mining company, are each seeking 10 percent to 15 percent of Uralkali, Vedomosti reported Friday, citing a source.
Rising demand for potash — especially after the United States forecast a decline in wheat output because of adverse weather in Russia, Ukraine and Kazakhstan — is driving acquisitions in the industry.
Last week, PhosAgro, the second-largest maker of phosphate soil nutrients, said it was seeking a merger with Silvinit and filed a proposal to the government. State-run Russian Technologies aims to create a national fertilizer holding company including Silvinit, Interfax reported earlier this month.
Silvinit is controlled by board member Pyotr Kondrashev and Anatoly Lomakin, chief executive of the company’s trader, International Potash, according to Forbes.
Silvinit will continue to export via International Potash, and the two new shareholders are not affiliated, said the person with knowledge of the sale. They purchased the shares from Eventus, Hustell Trading, IBH Beteiligungs-und Handelsges and RI Realinvest, the person said.
Those four companies owned 52.35 percent of Silvinit, according to the company’s web site.
Market sources say Kerimov, whose Nafta Moskva holding already holds 25 percent in Silvinit, may already have accumulated control. Nafta Moskva has previously denied that it is in talks to acquire Silvinit, a move that would require anti-monopoly approval.
 
(Bloomberg, SPT)

TITLE: HP Cooperating With Germany, U.S. Probe
PUBLISHER: The Associated Press
TEXT: WASHINGTON — Hewlett-Packard said Thursday that it was cooperating with U.S. and German authorities investigating allegations that three company executives used bribes to win a contract to sell computer gear to the Russian Prosecutor General’s Office.
German prosecutors have been looking into whether the executives, plus at least six accomplices who did not work for the company, paid bribes totaling 8 million euros (about $10.3 million) to win a 35 million euro contract to supply computers, software and hardware to the Russians.
Prosecutors say at least two of the executives no longer work for HP.
The Wall Street Journal reported Thursday that the U.S. Justice Department has asked HP to hand over internal documents to German prosecutors after they complained that the company had refused to provide them with relevant records.
The U.S. Securities and Exchange Commission (SEC) is also investigating possible violations of the Foreign Corrupt Practices Act, which prohibits bribes to foreign officials. Russian officials, who raided HP’s Moscow offices in April at the request of German prosecutors, have joined the investigation as well.
“HP is and has been fully cooperating with all authorities on this matter,” the company said in a statement.
The Justice Department and the SEC declined comment.
The latest development came just days after HP CEO Mark Hurd abruptly resigned following an investigation into sexual harassment claims.
The company said it found that its sexual harassment policy was not violated, but it uncovered falsified expense reports connected to dinners and other meetings with the woman who made those claims, actress Jodie Fisher.
Hurd has settled with Fisher for an undisclosed sum.
HP, based in Palo Alto, California, is the world’s largest personal computer maker.
The contract for the Russian deal was signed in 2000, and the deliveries continued until 2006 or 2007, German authorities have said.
The three executives were arrested in Germany and Switzerland in December and later freed on bail. The participants are suspected of offenses including breach of trust, tax evasion and money laundering, authorities said.
The matter came to the attention of Dresden prosecutors when a tax office in Germany’s Saxony state inspected a local company whose account was used in the kickback scheme, authorities said.

TITLE: LUKoil’s H1 Gas Production Makes Up for Weak Oil
PUBLISHER: Bloomberg
TEXT: MOSCOW — LUKoil, the country’s second-largest crude producer, said Friday that it boosted total output in the first half to 2.26 million barrels of oil equivalent per day as gains in gas compensated for falling oil production.
Oil output declined 1 percent to 1.96 million barrels per day in the first half, LUKoil said in a statement. Russian production fell 1.7 percent to 45 million metric tons (1.83 million bpd) in the period, and international output rose 9.2 percent to 3.11 million tons.
Oil output will probably continue to decline slowly in Russia until LUKoil starts production in 2013 at Filanovsky, its largest Caspian field, said Pavel Sorokin, an oil and gas analyst at Alfa Bank. The Korchagin field in the Caspian, which began producing earlier this year, has not balanced out declines at core West Siberian deposits.
“Opportunities for output growth in Russia, the company’s key production region, have been limited, but with the exit of ConocoPhillips that may change,” Sorokin said.
LUKoil agreed to buy 7.6 percent of its own shares back from the Houston-based company and has until Sept. 26 to exercise an option to purchase as much as 11.6 percent more.
On Friday, LUKoil also announced that it had raised $1.5 billion in an unsecured loan to finance part of the buyback.

TITLE: In Brief
TEXT: <strong>Rosneft Output</strong>
MOSCOW (Bloomberg) — Rosneft plans to increase oil output to 133 million tons by 2015, vice president Mikhail Stavsky said Saturday, Interfax reported.
Production will rise from a planned 118.7 million tons in 2011, Stavsky said in Khanty-Mansiisk, the agency re- ported. Yuganskneftegaz, its biggest unit, will keep output at this year’s 64 million-tonlevel, he said. 

<strong>Palladium Up?</strong>
NEW YORK (Bloomberg) — Palladium will rise to its highest price in a decade amid increased demand from carmakers and depleted Russian stockpiles, U.S. producer Stillwater Mining said.
“We have a perfect storm going on with the palladium price right now,” Stillwater CEO Francis McAllister said in an interview. The price could go up to $700 or $800 per ounce next year, from about $475 on Friday.
Stillwater is 51 percent owned by Norilsk Nickel, the world’s biggest pal- ladium producer, but it is mulling a sale of the stake. Stillwater has not achieved its objective of growth under Norilsk’s control, McAllister said.

<strong>Novatek Profit Down</strong>
MOSCOW (Bloomberg) — Novatek said Friday that 2009 profit declined 0.5 percent from a year earlier as the ruble fell against the dollar.
Net income slid to 7.14 billion rubles ($234 million) from 7.18 billion rubles, the gas producer said in a statement. That missed a mean estimate of 7.61 billion rubles from eight analysts surveyed by Bloomberg.
Sales rose 11 percent to 25.7 billion rubles as gas output and prices gained, the company said. Novatek, which sells all of its gas within Russia, said volumes rose 2.7 percent to 7.91 billion cubic meters.

<strong>Producer Prices Up</strong>
MOSCOW (Bloomberg) — Russian producer prices, an early indicator of inflation, increased in July for a ninth month, led by producers of electricity, gas and water, the State Sta-tistics Service said Friday.
Prices of goods leaving factories and mines jumped an annual 6.8 percent after a 9.8 percent rise in June, the service said in a statement. Economists surveyed by Bloomberg expected an increase of 8.8 percent. Factory-gate prices climbed 0.7 percent from the previous month after a 3.1 percent monthly drop in June, it said.

<strong>Deripaska On Ruble</strong>
LONDON (Bloomberg) — The ruble will likely keep trading at about 30 per dollar for the next few years as it is a good level for the Russian economy, RusAl CEO Oleg Deripaska said in an interview.
“We believe in the ability of the Central Bank and Ministry of Finance to balance the ruble,” he said. “Thirty per dollar is a good equilibrium and it will help companies to export, and ... it will not damage imports.”

<strong>Fertilizer Sales</strong>
MOSCOW (Bloomberg) — Russian fertilizer makers expect to boost local sales in the fourth quarter, even after the country’s worst drought in at least 50 years slashes agricultural output, as farmers seek to buy the material before prices increase.

TITLE:  Technology, Tourism Seen Saving Siberia
AUTHOR: By Alyona Chechel
PUBLISHER: Vedomosti
TEXT: MOSCOW — The government is planning to transform Siberia from a raw-materials backwater into a comfortable place to live and do business through the development of high-tech industries, science and tourism, but officials have yet to put a price tag on the project.
The government on Wednesday published on its web site a strategy for developing Siberia through 2020. The region has many problems to overcome, the report said, including its harsh climate, which makes the cost of living and doing business there 25 percent to 40 percent higher than in the European part of Russia. Siberia also has too few roads and airports, and links among regions there are also weak, it said.
But the main threat, the authors of the report wrote, is that Siberia could solidify its role as nothing more than a source of raw materials for developed countries.
Officials want to develop refineries and other value-added production, as well as science and tourism in Siberia. Among the priorities are bio-technology, machine building, medical equipment, agricultural development, construction of affordable housing, as well as production of pulp, paper and furniture
Universities in Irkutsk, Krasnoyarsk, Tomsk, Omsk, Novosibirsk and Kemerovo could be used as the foundations for national research universities. The strategy’s authors want the universities to create test models of innovative technologies, which would subsequently be produced and implemented in Siberia.
Tourists can also experience the beauty of Siberia beyond its famous Lake Baikal, they wrote. The region has thermal springs, therapeutic mud baths, forests and beautiful landscapes.
The governor of one of Siberia’s regions warned, however, that it would be impossible to shake off the region’s reliance on raw materials. The focus should be on developing refining facilities near mineral deposits and investing in training to improve workers’ skills, he said.
Siberia’s coal deposits account for 80 percent of Russia’s total. The region also holds 70 percent of Russia’s copper, 68 percent of its nickel, more than half of its hydropower resources and forests, as well as 99 percent of its platinum group metals, the strategy’s report said.
The document offers no estimates for what it might cost to redevelop Siberia. A draft version included the estimate of 1.5 trillion rubles ($49 billion), said one of the officials who participated in the document’s preparation. It was decided to drop the figure from the final version, he said, because the strategy should set general goals, while the volumes and sources of financing should be determined for specific projects.

TITLE: State May Abandon Azov-City for Anapa
AUTHOR: By Tatyana Romanova and Natalya Kostenko
PUBLISHER: Vedomosti
TEXT: MOSCOW — The Russian authorities have essentially given up on their plan to move all gambling to four remote zones, and Azov-City, the only one now functioning, might be eliminated in favor of Black Sea resort Anapa, Vedomosti has learned.
Krasnodar Governor Alexander Tkachyov raised the question of whether it made sense for Azov-City to remain in its current location on the border of the Rostov and Krasnodar regions, sources in several companies linked to the gambling industry told Vedomosti.
The sources said Tkachyov sent a letter to President Dmitry Medvedev several weeks ago proposing that Azov-City be relocated to Anapa, since the current location is too far from settled areas to attract gamblers or investors. The president ordered the government to study the proposal.
It was none other than Prime Minister Vladimir Putin — then serving as president — who proposed banning gambling in Russia in easily accessible places. After comparing the gambling business to the “alcoholization of the people,” Putin in October 2006 personally submitted to top lawmakers in the Duma his bill relocating gambling facilities to special zones.
As of July 1, 2009, gambling was banned in all but four so-called gaming reservations: Azov-City, the Sibirskaya Moneta zone in Altai, the Yantarnaya zone in the Kaliningrad region and Primorye in the Far East.
“Since the law took effect, it has become clear that no one wants to go to these zones. There isn’t enough infrastructure in Azov-City. But in Anapa there’s a modern airport, beaches and tourists,” said State Duma Deputy Gleb Khor, a member of United Russia’s faction and first deputy chairman of the Budget and Taxes Committee.
He has submitted amendments to the law on gambling that would remove the Rostov region from the list of territories where gambling is sanctioned. The changes would also withdraw a point in the current law that forbids the elimination of zones within 10 years of their creation.
The Duma’s Economic Policy and Entrepreneurship Committee has already approved the changes.
Vedomosti was unable to reach spokespeople for Tkachyov on Wednesday. A source close to the Rostov regional administration said “no one from the Krasnodar region sent any official documents to the Rostov regional administration, and [Krasnodar] didn’t approve anything with [Rostov].”
The source said he knew about Tkachyov’s letter to Medvedev.
The government officials responsible for the gambling zones were also aware of the Krasnodar governor’s proposal. A final decision has not been made, they said, and it remains unclear how Azov-City investors would be compensated for their expenses.
“The idea has already been approved. Sochi was proposed as an option, but there wasn’t a suitable spot there, and Anapa was chosen,” said a source close to the presidential administration.
The source said the new zone could be placed on a certain military site within the city. Spokespeople for the Defense Ministry said they knew nothing of the plan.
Most likely, the site under consideration is at the Institute of Coastal Defense, which is run by the Federal Security Service’s border guards and sits on more than 25 hectares of land — some of it waterfront. Vedomosti was unable to get a comment on the matter from the border guards.
“Anapa is the latest half-measure. If you’re going to talk about a zone in the Krasnodar region, then it needs to be done in Sochi. They could build five-star hotels with casinos by the time the Olympics start, using investments from the gambling campaign,” said Anatoly Kuznetsov, president of hotel and casino developer Korston.

TITLE: Bidders Line Up for Skolkovo City Plan Competition
AUTHOR: By Maxim Glikin, Natalya Kostenko and Polina Khimshiashvili
PUBLISHER: Vedomosti
TEXT: MOSCOW — Well-known firms are competing for the right to design the upcoming innovation city in Skolkovo, including several that are doing the design work for the 2012 Asia-Pacific Economic Cooperation summit in Vladivostok.
The Skolkovo Development Foundation stopped accepting applications to develop a plan for the innovation city on Thursday. Vedomosti has obtained a list of 12 companies that submitted applications by the middle of the day. A spokesperson for the foundation said, however, that several others could submit applications before the midnight deadline.
The contest was announced on July 29, 2010, and is being held in two stages. In the first stage, three to five companies will be chosen from those that submitted applications and will be given design tasks.
The description of the contest posted on the innovation city’s web site did not elaborate on what the city itself should be like, saying only that it would be judged based on environmental sustainability, ergonomics, energy-efficiency, and cost-effectiveness. The description also said that only companies that have implemented large, world-class projects can participate.
The maximum price for the project development is 195,000 euros ($249,000). The price tag is small but possible for such a project, said Alexander Kudryavtsev, president of the Russian Academy of Architecture and Construction Science. But they probably shouldn’t have indicated that lower bids would be welcomed, since that could negatively impact the quality of the proposals, he said.
The rules for accepting applications are completely reasonable and democratic, said Sergei Sitar, editor of the architecture magazine Proyekt International. He added, however, that the registration procedure was not very clear and that the preparation period was too short.
The applications will be considered by the Skolkovo city planning council, which is still being formed, along with Swiss firm Maxmakers, which won a tender to be a consultant for the project, a spokesperson for the Skolkovo Development Foundation said.
There was no way to extend the tight development schedule, the spokesperson said. Including the second round of the bidding, the design work for the innovation city has to start by the end of this year or the beginning of the next.
There are no companies in the world that would be able to respond to such an investment request alone, said Martin Bouygues, a Skolkovo council member and president of France’s Bouygues industrial group. They need to give the designers the ability to cooperate and put together a team of the best people available, he said.
Among the bidders was London-based Arup, one of the two world leaders in the field of new technologies in architecture and construction, Sitar said. One of the company’s best-known projects is the Olympic pool in Beijing. Arup also built the head office of British American Tobacco in Russia.
Another prominent bidder was Spanish architect Ricardo Bofill and his firm. In the postmodern 1980s, he was very popular, designing buildings in the style of the Seven Sister high-rises, Sitar said. This year, the Barcelona airport, which Bofill designed, was declared the best European airport by the European Association of Airports. Inteko said it would begin working with him in the beginning of August.
Royal Haskoning, along with fellow Skolkovo bidders Arup and U.S. firm Perkins Eastman, took part in the development of a concept design for Russky Island, which is to host the APEC summit in 2012. Another bidder, Danish firm Ramboll, became the head engineer of the Pulkovo Airport on June 9.
Kudryavtsev, of the architecture academy, stressed that the firms bidding were not as important as the architects they select to work with. According to the conditions of the bidding, the architects are supposed to be indicated in the applications.
The bidders included three Russian companies: Spektrum Group, ADM Partnership and architectural bureau ARPM. The other international bidders included France’s AREP, Germany’s AS&P, Singapore’s Jurong and Sweden’s Sweco.

TITLE: Russians Slam Putin Over Graft
PUBLISHER: The St. Petersburg Times
TEXT: Russians like Prime Minister Vladimir Putin for boosting Moscow’s image abroad and improving living standards, but fault him for not fighting corruption or reining in billionaires, according to a new survey, Reuters reported.
The poll by the independent Levada Center found that Putin’s overall ratings remained broadly positive. Fifty-nine percent of respondents said Putin was doing a good job or would do a good job sorting out Russia’s problems, down from 63 percent a year earlier.
When asked in detail about Putin’s achievements and failings, a more nuanced picture emerged.
On the positive side, 23 percent credited Putin with “strengthening Russia’s relations with the West,” and 20 percent praised him for improving living standards. Nineteen percent liked him for “strengthening Russia’s positions abroad.”
But a much higher proportion — 37 percent — said Putin’s least successful measures had been against corruption.
A further 24 percent criticized him for not curbing the power of the country’s billionaires, and 18 percent said he had failed to fight crime effectively.
Putin served as president from 2000 to 2008 before handing over the post to his chosen successor, Dmitry Medvedev, and becoming prime minister.
Most Russians believe that Putin remains the final arbiter on important decisions, and polls show that he is the country’s most popular politician, with approval ratings of more than 60 percent.
Western politicians, media and human rights groups often accuse Putin of stifling democracy, choking media freedom and curbing opposition.
But the Levada poll indicated that Russians take a very different view. Slightly more respondents praised Putin for protecting citizens’ political rights than faulted him in this area.

TITLE: Rosatom to Load Fuel Into Iranian Plant
PUBLISHER: The Associated Press
TEXT: MOSCOW — Rosatom said it would begin loading nuclear fuel into the reactor of Iran’s first atomic power station this week, an irreversible step marking the startup of the Bushehr plant after nearly 40 years of delays.
Russian and Iranian specialists are to begin loading uranium-packed fuel rods into the reactor on Saturday, a process that will take two to three weeks.
“This will be an irreversible step,” said Sergei Novikov, a spokesman for Rosatom, Russia’s state nuclear corporation.
“At that moment, the Bushehr nuclear power plant will be certified as a nuclear energy installation,” he said by telephone Friday.
“That means the period of testing is over and the period of the physical startup has begun, but this period takes about two and a half months,” he said, adding that the first fissile reaction would take place in early October.
Russia agreed in 1995 to build the Bushehr plant on the site of a project begun in the 1970s by German company Siemens, but delays have haunted the $1 billion project, and diplomats say Moscow has used them as a lever in relations with Tehran.
The United States has criticized Moscow for pushing ahead with the Bushehr project at a time when major powers, including Russia, are pressing Tehran to allay fears that its nuclear power program might be geared to develop weapons.
But Western fears that the Bushehr project could help Iran develop a nuclear weapon were lessened when Moscow reached an agreement with Tehran obliging it to return spent fuel to Russia. Weapons-grade plutonium can be derived from spent fuel rods.
The U.S. State Department said it did not regard Bushehr as a proliferation risk, but emphasized that broader concerns remained about the direction of Iran’s nuclear program.
“Russia’s support for Bushehr underscores that Iran does not need an indigenous enrichment capability if its intentions are purely peaceful,” State Department spokesman Mark Toner said in Washington.
Toner said in a statement that the Russian fuel deal for Bushehr mirrored a broader fuel swap proposal that Western powers have offered Iran in hopes of halting its domestic enrichment program.
The head of Iran’s nuclear power agency, Ali Akbar Salehi, said a ceremony inaugurating the plant would be held in late September or early October, when the fuel is moved “to the heart of the reactor.”
The reactor will be linked to Iran’s electricity grid about six weeks later when it is powered up to a level of 50 percent, Salehi told the semi-official Mehr news agency.
Diplomats say the Bushehr plant, monitored by the International Atomic Energy Agency, the United Nations nuclear watchdog, poses little proliferation risk and has no link with Iran’s secretive uranium enrichment program, seen as the main “weaponization” threat, at other installations.
The State Department, noting “the world’s fundamental concerns with Iran’s overall nuclear intentions,” said it was important to remember that Iran remained in serious violation of its broader obligations to the IAEA.
The United States sees the opening of the Bushehr plant as a false signal to Tehran as Washington strives to isolate Iran politically and economically to force it to compromise on enrichment.
A senior diplomat from an IAEA member nation said Friday that the Americans had “raised those concerns with the Russians” in recent weeks. The diplomat, who is familiar with the issue, spoke on condition of anonymity because his information was confidential.
Russia started the delivery of nuclear fuel to the Bushehr plant in late 2007, and deliveries were completed in 2008.
Moscow and Washington agree that importing fuel makes unnecessary Iran’s own enrichment project — the main focus of Western concerns that Tehran is trying to make a nuclear bomb.
Iran, the world’s fourth-largest crude oil producer, rejects such allegations and says its nuclear program is aimed only at generating electricity or producing isotopes for medical care.

TITLE: Russia Faces Long March to Energy Efficiency
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Residents of the Veshnyaki neighborhood in southeast Moscow were in for a surprise last month when the radiators in their apartments started heating at full blast while it was nearly 40 degrees Celsius outside.
No problem, district authorities told reporters, we’re just checking the system.
These and other problems with the way Russians produce and consume energy make the country among the world’s biggest energy wasters, using 2.5 times more energy to produce a given amount of goods and services than the world average. This dramatic inefficiency has led President Dmitry Medvedev to set a goal of lowering the amount of energy spent per unit of economic output by 40 percent by 2020, compared with the 2007 level.
Doing so won’t be cheap. The current programs directed toward this end will require 800 billion rubles ($26 billion) of state funds — and that’s not counting money channeled through state-run firms such as Rusnano and the Russian Venture Fund.
Modernizing the country’s energy infrastructure and promoting energy efficiency is one of the five priority areas for modernization established by Medvedev in June 2009 and overseen by his presidential commission for modernization.
The agenda includes programs to incentivize both conservation and the development of alternative energy sources. And while there is much to be gained by upgrading the Soviet-era energy infrastructure, plans to develop new sources of energy continue to be held hostage to a slow-moving bureaucracy and mixed signals from high-ranking officials.

Reducing Consumption
Theoretically, there is much to be gained by programs to help reduce consumption. As part of the “New Light” program, the government has pledged 100 billion rubles to start phasing out wasteful incandescent light bulbs in favor of compact florescent lights, which use five times less energy, by 2014.
The program is estimated to save as much as 10 billion kilowatt hours per year — or approximately the yearly electricity consumption of Lithuania.
Nevertheless, the energy used for lighting constitutes only a small percentage of all energy used at a company or a household, said Vladimir Baskakov, deputy director at Tsentr Teplovidenia, a Moscow-based heat imaging and energy audit company, with some estimates putting the figure at only 2.6 percent of the country’s total domestic energy consumption.
“Take an apartment, for example. There are several types of energy consumers there. You can replace the light bulb, but you also have a washing machine that eats a lot of energy, especially when there is an infant in the family, and there is a fridge that is constantly working,” Baskakov said. “So, of the total 300 [kilowatts] per household, 100 is used for light. Replace the bulb, and you will still be using 220 kilowatts,” he said.
If domestic energy consumption is to be reduced, the 800-pound gorilla that needs to be addressed is heating, which accounts for 70 percent of the total.
The key challenge to reducing residential energy consumption is to turn residents into more discriminating energy consumers. Consumers need to be given an incentive to turn down their radiator rather than open up a window when their apartment gets too hot in the winter.
The law on energy conservation, which went into effect in November, requires owners of all residences to install energy metering equipment on the premises: a heat meter for each building and meters for electricity, water and gas for each apartment.
Economic Development Minister Elvira Nabiullina has estimated that switching all residences over to modern metering systems will help reduce domestic energy consumption by as much as 20 percent.
But with an aging, inefficient energy infrastructure, there is only so much that can be done on the consumer’s end to increase energy efficiency. Policy needs to be coordinated on the municipal and regional levels.
To get the point across, Medvedev signed a decree in May ordering all municipal governments to issue yearly reports on how their energy efficiency strategies are progressing, including per capita consumption of electricity, heat, gas and water.
“Money needs to be spent correctly,” Medvedev wrote on Twitter after a meeting in late June, where he fumed that his energy efficiency ideas are seen too abstractly.
“What is energy efficiency in schools? It’s not just some checkmarks in documents,” he said at the meeting. “We have to understand that lowering energy consumption by 30 percent in the school means additional money for books and equipment.” He added that the law on energy efficiency should be fashionable for social institutions.
While it may take time for the whole country to get used to this new fashion, over the past year, several schools have adopted energy efficiency programs aimed at revamping their aging energy infrastructure.
In the frigid and sparsely populated Murmansk region, 90 percent of the fuel, which consists of coal, diesel and fuel oil, is imported from other regions, according to the Murmansk region’s energy efficiency strategy, published in June. All of the region’s energy infrastructure is at least 15 years old, and 53 percent is more than 25 years old. Carrying out the strategy to modernize the system will save 1.1 million metric tons of fuel per year, the document says.
The region also has estimated that it can reduce electricity consumption by 5 percent and heat consumption by 3 percent by implementing an “efficiency propaganda” program, which will include brochures, 10-second television advertisement clips and essay contests for schools.
Small Producers
But making far-flung regions like Murmansk more energy efficient requires changing the way they produce energy as well. Using biomass, for example, to produce energy would be much more efficient in a big timber-producing region than would importing huge quantities of coal and diesel to light and heat the region.
Enormous volumes of timber currently go to waste in Russia because small timber producers throw out as much as 50 percent of the initial product. Out of 130 million cubic meters of timber produced in Russia last year, 13 million was bark that has no commercial value, and millions more are floating logs in Russian reservoirs, where forests had not been cut before being flooded.
“Inefficient municipal heating stations would benefit the most from new equipment that permits the use of plentiful timber rather than diesel or fuel oil brought from hundreds of kilometers away,” said Denis Sokolov, managing director of the Timber Confederation of the Northwest.
A study Sokolov participated in estimated that converting 100 out of 700 power plants in the northwest to run on wood chips would save money. But these plants belong to municipal governments, which cannot afford to re-equip, and purchasing fuel other than what is customarily supplied by the state may be construed as a misuse of state funds, Sokolov said.
Another hindrance to a more widespread use of biomass as an energy source is the law on state purchases, he said. The law, which governs the sale of state assets, provides no incentive for federal agencies to make efficient use of the natural resources at their disposal.
“Vast natural resources that legally belong to the government — like timber cut to make way for roads built by the Federal Road Agency or floating logs in Russian reservoirs — are most likely to get thrown away because the state, in the form of the Federal Property Management Agency, has no incentive to organize the sale of this timber to others,” he said.
“The law has to be amended, not least because its loopholes leave a lot of room for corruption,” Sokolov said. “But that’s exactly the reason why many people don’t want it to change,” he added.

Waiting on the Law
And biomass isn’t the only renewable energy source being held back by restrictive legislation. Turning renewable energy sources into consumable energy requires huge amounts of capital investment, and investors may be hesitant to get involved in such projects unless the government irons out the kinks in its legislation and clarifies the rules for operating in the sector.
State industrial holding Russian Technologies, state-owned hydroelectric company RusHydro and German technology firm Siemens signed a preliminary agreement last month to create a joint venture to make wind turbines in the Volgograd region. RusHydro would then use the turbines to build a 1,000 megawatt wind farm on the Volga River, the sides tentatively agreed upon last month.
But the project won’t materialize unless the government finalizes a set of rules that clarify the alternative energy market for investors, said Mikhail Kozlov, head of the department for renewable energy and innovations at RusHydro, a former subsidiary of Unified Energy Systems that has inherited a hodgepodge of alternative energy projects.
“One thousand megawatts is a very big project, and we cannot launch it on a whim,” he said in an interview. “No large company is going to enter the Russian market without substantial guarantees,” he said.
Since 2007, the renewable energy industry has been waiting for new rules and regulations that would make it possible for alternative energy producers to compete with gas or coal. A so-called feed-in tariff would guarantee grid access and allow producers to charge prices high enough to generate a competitive return on investment.
“There have been many deadlines for introduction of these additional rules since 2008, but we are really counting on the latest date set by the authorities, and signing the partnership agreement with Siemens is a promising sign that this time it will really happen,” Kozlov said. “Over the past few months, many have come to the understanding that Russia should introduce subsidies based on installed capacity — it would be the easiest to realize and more understandable in our country,” Kozlov added.
Other alternative energy producers are also waiting not so patiently for these legislative reforms as well.
“I would be very happy if they are discussing these mechanisms right now,” said Alexei Bakharev, director of Nord Hydro, a company investing in small hydroelectric plants in the northwestern part of the country.
“Unless the rules of the game are established for investors, the renewable energy market will never be born,” he said by telephone from St. Petersburg.
Nord Hydro bought some 35 small hydroelectric plants and is renovating 16 of them. But rebuilding them is 30 percent to 100 percent more expensive in Russia than in Europe, and investment per unit of capacity is so high that it takes up to 40 years to generate profit, Bakharev said.
“No bank will ever finance such a project,” he added.
If the government allowed hydroelectric plants to charge five to eight rubles per kilowatt hour, prices in the Northwest Federal District would rise by only 0.5 percent, Bakharev said. Meanwhile, regions like Karelia would benefit tremendously — Karelia already buys 40 percent of its energy from other regions.
But while fostering the development of renewable energy may require higher energy prices in some regions, in some of the more remote areas it could lower prices by reducing dependence on oil and gas.
“There are settlements in Russia where one kilowatt hour costs 60 rubles, since it comes from diesel fuel brought in by helicopters,” said Andrei Kotenko, director of the polysilicon division at solar energy firm Nitol Solar. “A combined solar/wind power station would pay for itself in two years in such places,” he said.
Solar power becomes 8 percent cheaper every year while traditional power is becoming more expensive, Kotenko said, adding that with the right government support, solar panels could produce up to 12 gigawatts in Russia by 2020, accounting for up to 35 percent of the total power produced from renewable sources.
But government support is a fickle thing. Theoretically, it should exist: In 2009, the government instituted a long-term goal to increase the share of electricity generated from renewable sources to 4.5 percent by 2020.
While 4.5 percent may seem like a small share of the total electricity production, it would mean that a full 10 percent of the country’s electrical capacity would come from renewable sources, Kozlov of RusHydro said, citing company calculations. “That is about 25 gigawatts — or roughly another RusHydro — in 10 years,” he said.
But despite the optimistic goals, the government has been slow to implement the legislation necessary to support the sector, and many officials don’t really see the point.
“I am cautious regarding massive application [of renewable energy] and think that it is not a very good fit for Russia,” Energy Minister Sergei Shmatko said last month in Yekaterinburg as Siemens and Russian Technologies were reaching the agreement on the wind farm. “This technology can be used in Russia locally, but, to speak frankly, we will never use it on a large scale,” he said.
Small energy producers remain undeterred, however. Asked why his company is engaged in what is currently a loss-making business, Bakharev of Nord Hydro said, “Renewable energy is still the future.”

Olga Razumovskaya contributed to this report.

TITLE: Campaign Planned to Give Moscow’s Brand a Boost
AUTHOR: By Alyona Chechel and Filipp Sterkin
PUBLISHER: Vedomosti
TEXT: MOSCOW — The Economic Development Ministry has proposed a large-scale advertising campaign to help turn Moscow into an international financial center, including a dedicated Internet portal, work with Russian nationals abroad and more emphasis on “success stories.”
Foreigners have a poor understanding of Russia, and what they do know is dated, according to the ministry’s draft plan for improving Russia’s brand on international financial markets, a copy of which was obtained by Vedomosti.
Russia’s weak standing on investment climate, corruption and stability rankings only adds to the country’s poor image, the document said.
According to the Global Financial Centers Index, Moscow currently ranks 68th — well behind leaders London, New York, Hong Kong and Singapore.
Targeted advertising campaigns in support of the international financial center — or MFTs, by its Russian acronym — could help add positive information to the overall picture, the ministry said. The project will use both world experience in branding as well as Soviet developments in the field of propaganda, it said.
The proposals are already being discussed with experts and analysts, said Dmitry Skripichnikov, acting head of the ministry’s corporate governance department.
One of the main projects would be the creation of an Internet portal for the MFTs, where users could get information about Russia, as well as its investment and economic potential. Initially, the site will be in Russian, English, German and French, with an eventual expansion to include other languages of the BRIC countries, as well as Arabic.
The Economic Development Ministry also wants to include information about Russian financial services on the MFTs site. Another section would focus on “compatriots abroad,” which would seek to build ties with Russian finance specialists living outside the country.
An informal group of people, including representatives of the state, business and science, will be recruited to promote the possibilities for business in Russia and the promise of investing here. Accomplishments should become associated with specific individuals and success stories, according to the ministry’s plan.
The ministry proposed itself to coordinate the project and promised to partner with leading Russian publications — including Rossiiskaya Gazeta, Interfax, Biznes-FM radio and Expert magazine — to publish information about the good business climate in Russia. They would also seek to monitor stories about Russia in top foreign publications.
Skripichnikov said the ministry had not yet estimated what the program would cost. A campaign without using direct advertising that covers the major economies, such as those in the Group of Eight, typically costs several million dollars per year, said Yelena Fadeyeva, chief of communications agency Fleishman-Hillard Vanguard.
Providing information about Moscow as a business center will make the project more popular, said Yulianna Slashchyova, president of the agency Mikhailov & Partners. Seeking support from fellow Russians is also justified, she said.
“People who left the country in the past 10 to 15 years — unlike those who left the country before perestroika — aren’t bitter. They’ll be ready to help improve the country’s image,” she said.
For the international audience, it’s important to show the transparency in Russia’s decision making and that there’s a dialog between business and the authorities, Fadeyeva said.
But direct contact, particularly through social networks, is also important, and that’s still lacking in the ministry’s program, she said.
The MFTs plan is targeting an audience of top executives and investors, who value direct communication over publications in the press, said Alexei Volin, a former deputy chief of staff for the government. The government should focus on holding forums and conferences, he said.
Denis Rodionov, managing director of Bright Minds Capital, said the project’s goals should be realistic. Moscow is capable of becoming a regional financial center, particularly for former Soviet countries, but competing with global financial centers like New York and London is basically impossible, he said.
“Two conditions are needed for the MFTs: The stock market must rise and be of serious, fundamental interest for investors, and [investors] should have the ability to speak regularly with the regulator or the body responsible for creating the center,” Gazprombank vice president Anatoly Milyukov told Vedomosti.

TITLE: Google Tracks Traffic In Moscow, St. Petersburg
AUTHOR: By Valery Kodachigov and Anastasia Golitsyna
PUBLISHER: Vedomosti
TEXT: MOSCOW — The Russian version of Google on Tuesday launched a test version of its new service allowing drivers to monitor traffic conditions in Moscow and St. Petersburg.
Alla Zabrovskaya, a spokeswoman for Google in Russia, said the service could be accessed from mobile phones by downloading a special application. She said Google would not seek to monetize the service and that it would receive information, in part, from users.
According to data from Liveinternet, Yandex had 64.5 percent of all Russian Internet searches in July, while Google had 22.1 percent. A year earlier, Yandex received 57.1 percent of all search requests, while Google had 23.4 percent, suggesting that the homegrown web portal is gaining on its U.S. competitor.
Yandex is currently Russia’s most popular source for information on traffic. Google’s new service is a breakthrough for the company, since not having information on road conditions drove users to other services and cut Google’s market share, said Ivan Nechayev, executive director of Russian Navigation Technologies.
But it won’t be easy for Google to compete with Yandex, which has already built and developed a system for handling information about traffic jams, Nechayev said.
Yandex offers its traffic service in more than 30 Russian cities, whereas Google will initially only be in Moscow and St. Petersburg, but those two cities represent the bulk of interest in traffic searches, said Tatyana Tolmachyova, development director for consulting firm Frost & Sullivan in Russia.
In addition to Yandex, there are already several other traffic services, including Probki@mail.ru, Rambler-probki and Navitel. It’s difficult to predict what market share a new major project could capture, Yandex marketing director Yelena Kolmanovskaya said, referring to Google’s new service.
So far, Russian companies have been unable to generate revenue from their traffic services. Internet portals benefit from the added web traffic generated by geo-informational services, whereas content providers of traffic data gain added exposure for their software, said Viktor Lopatin, vice president of Vobis Computer, a navigational equipment retailer.
All Russian traffic service providers have quality problems with their data, and the Russian technology they use to handle the data remains imperfect, he said. There are still no specialized companies in Russia providing data on traffic jams to navigational services and web portals, meaning that they rely on drivers, traffic police, logistics companies and other independent sources for information.
U.S.-based Google is 70.6 percent controlled by management, including founders Larry Page (29.4 percent) and Sergey Brin (28.9 percent).
Yandex’s management owns about 30 percent of the company, including options, while investment funds hold 60 percent, and 10 percent belongs to private investors and former employees. State-run Sberbank holds a golden share in Russia’s largest search provider.

TITLE: Trebs and Titov to Start at $603M
AUTHOR: By Oksana Gavshina
PUBLISHER: Vedomosti
TEXT: MOSCOW — The government set the starting price for the Trebs and Titov oil fields at 18.2 billion rubles ($603 million), but the winning bidder will have to sell 15 percent of the fields’ crude on an exchange and refine 42 percent in Russia.
Analysts said the conditions for the sale, published last Tuesday by the Federal Subsoil Resource Use Agency, would make the project less attractive to potential investors.
The starting price for the fields had been a point of contention within the government, with the Energy Ministry insisting that the assets should be sold for 60 billion rubles. A ministry spokesperson declined comment.
But the subsoil agency, which reports to the Natural Resources and Environment Ministry, said the bidding for the fields as one lot would start at 18.171 billion rubles.
Trebs and Titov have combined C1 reserves of 89.73 million tons, the agency said. The tender will be held Dec. 2, while all bids must be submitted by Sept. 20.
Foreign companies will be allowed to bid for the strategic fields, but only in a consortium controlled by a Russian state company, a Natural Resources and Environment Ministry spokesperson said. The foreign company would also need to be approved by the government’s commission on foreign investments.
Virtually all the country’s largest oil holdings have expressed interest in the fields, including LUKoil, Rosneft, Gazprom Neft, TNK-BP and Bashneft. Spokespeople for all five confirmed their interest Tuesday, but said a final decision on whether to bid would only be made after the terms of the tender had been studied.
Spokespeople for Zarubezhneft and Surgutneftegaz declined comment. India’s state-run ONGC has expressed interest in the project and is in talks on creating a consortium with Rosneft. A Gazprom Neft spokesperson said the company could bid jointly with a foreign firm but declined to name the possible partner.
A source at one of the oil companies said the terms of the tender had left a mixed impression. The starting price is promising, but the demands made of the winning bidder significantly reduce the project’s profitability.
Of particular concern is the requirement that 15 percent of the fields’ output be sold on the Russian Commodities Exchange and that no less than 42 percent of the crude be refined in Russia.
A LUKoil export pipeline runs near the fields, delivering oil to the Varandeisky terminal for export. But according to the published rules, the oil produced from Trebs and Titov would need to be refined and could not be swapped for crude produced at other fields nearer refineries.
That means the investor would be required to build a new pipe to Transneft’s pipeline in the village of Usa, the oil industry source said.
“That’s hundreds of kilometers, which significantly increases costs for the investors. And forcing the investors to mix the high-quality oil from Trebs and Titov with lower-grade sorts in the shared pipeline would deprive them of another source of income,” he said.
Allowing swap operations on the oil would have prevented small oil companies from competing in the tender, the Natural Resources and Environment Ministry official said.
Bank of Moscow analyst Denis Borisov said the ban on swaps would complicate the project for Rosneft and Bashneft, whose nearest refineries are located in Samara and Ufa. There’s no feasible way to deliver oil to the plants from Trebs and Titov because pipelines heading to the refineries work only in one direction.
The requirement to sell part of the crude on an exchange is pointless, since there isn’t any real operating oil exchange in Russia, said Lev Snykov, an analyst at VTB Capital.
It is possible that by 2013, when the fields begin production, a hydrocarbons exchange will have started operating, but it is unclear how profitable those sales would be for companies, he said.
Earlier this year, the Federal Anti-Monopoly Service proposed that terms for new licenses be “toughened” by requiring that producers sell part of their crude on a Russian exchange. Deputy Prime Minister Igor Sechin, the government’s top energy official, backed the proposal.
“From an economic point of view, Trebs and Titov should be focused on exports. It’s pointless to blindly set conditions about refining or selling oil on an exchange,” Snykov said.

TITLE: Why Governors Shouldn’t Be Appointed
AUTHOR: By Yevgenia Albats
TEXT: For over a month, Moscow has been boiling in heat that has approached and sometimes surpassed 40 degrees Celsius, along with heavy, sticky, eye-burning smog. Carbon monoxide levels have reached crisis levels, at six times the maximum acceptable concentration. Other toxic substances in Moscow’s air are at nine times the normal level.
In early August, a journalist called the office of Mayor Yury Luzhkov, seeking comments on the situation. “The office is closed,” a woman at the press office answered, adding that smog had gotten inside the mayoral building, which is located several hundred meters from the Kremlin, so everyone was ordered to go home. This was a weekday, shortly after lunch. “Is it at all possible to get a comment from Mayor Luzhkov?” the reporter asked. “He is not in Moscow,” the woman replied.
Indeed, there are reports that the mayor’s spokesman had been telling journalists that there is no reason for the mayor to return to Moscow. “Why should he?” said the spokesman. “Is there a crisis in Moscow? No, there is no crisis.”
At the same time, a doctor from a local hospital was writing on his blog: “It is a disaster. There is no air conditioning in the hospital, no ventilators working; smog is penetrating everywhere, including the emergency rooms. Each day, 16 to 17 people die. The morgue is full, and there are not enough refrigerators for the dead. They just put bodies along the walls.”
Indeed, according to the Moscow city health department, the death rate has doubled over the past few weeks. And yet Moscow’s mayor chose to remain on vacation in Europe throughout the worst days of the heat and smog.
What would have happened if Luzhkov served in a country that had popular elections for governors? If Luzhkov knew that he would soon be facing re-election — his term expires in October 2011 — would he have allowed himself a vacation while Moscow was being ravaged by heat and toxic smog? Of course not. But neither Luzhkov nor whoever may replace him must worry about voter approval since the Kremlin appoints governors. (Although Luzhkov’s official title is mayor, the city of Moscow, along with St. Petersburg, is designated in the Constitution as a “federal jurisdiction,” and thus Luzhkov was appointed by the federal government on the same terms and conditions as the country’s governors.)
Another example of this is the Nizhny Novgorod region, just 400 kilometers east of Moscow, which has been hit hard by the heat wave and fires. At least 36 people, including seven children, have lost their lives in the region, and more than 1,000 people have lost their homes and livelihoods.
Rare candid footage of Prime Minister Vladimir Putin, displayed on government channels, depicted him visiting Verkhnyaya Vereya, a village in the region. People who had lost their homes, clothing and everything else were complaining to Putin that the regional and local governments did not warn them that the fire was coming. There were practically no firetrucks. In many towns and villages, there was no electricity, so water pumps were not operable. “No one even tried to save us,” they wailed to Putin, who was accompanied by Nizhny Novgorod Governor Valery Shantsev.
A week later, an inauguration ceremony officially began Shantsev’s second term in office. Like all other Russian governors, he was not elected by those who live in his region. (Before being appointed governor, he was Luzhkov’s deputy.) He was appointed by the president and thus bears no accountability whatsoever to those he is supposed to serve.
Forestry specialists blame a carelessly enacted Forest Code in 2007 that cut 90 percent of the country’s forest guards. The law was proposed by the government and was quickly passed by the State Duma. The legislation was passed without any discussion or debate within the Duma, without hearings or testimony from outside experts. Russians are now paying the price for Putin’s top-down, rubber-stamp lawmaking process.
Russia’s burning summer of 2010 underscores something that political scientists everywhere acknowledge. Authoritarian regimes, owing to their lack of accountability, are dreadful at coping with anomalous situations. By controlling the mass media, the leaders in such counties lack the ability to envisage and calculate possible risks.
Unfortunately, ordinary Russians have yet to connect the dots. The tragic situation in which they find themselves stems directly from how they voted in the past. The political apathy that characterizes today’s Russia presents a serious challenge to the country’s survival.
But it seems that this apathy is beginning to lift. The burning summer of 2010 may help Russians understand that their very existence depends on whether the authorities can provide assistance in times of emergency. A regime that cannot respond to its citizens’ basic needs has no legitimacy at all.

Yevgenia Albats is professor of political science at the Higher School of Economics in Moscow and editor of The New Times magazine. © Project Syndicate

TITLE: My P.S. to a Weighty Scientific Letter
AUTHOR: By Konstantin Sonin
TEXT: As short-story author Sergei Dovlatov would have written, my characteristic trait is that I have the unfortunate habit of showing up at the theater only after the actors have taken their final bows. Perhaps that is why it took me several months to ponder over the signing of a letter by Russian academicians in defense of two scientific foundations — the Russian Foundation of Basic Research, or RFBR, and the Russian Humanitarian Foundation, or RHF.
Despite the obvious correctness of the position taken by the document, I dragged my feet in signing it. As a result, the letter was sent to President Dmitry Medvedev on July 5 without my signature. That does not make the letter any less weighty of course: It was signed by 2,233 academics, making it perhaps the single most unanimous expression of our academic community in the last decade.
The meaning of the letter is simple. The RFBR and the RHF are instruments for the financing of basic science. These are organizations that receive money from the government and distribute it on a competitive basis. Peer review plays a decisive role in the allocation process — that is, scientists working in the same field as the applicant assess the merits of the proposed research or project.
Peer review is not without its flaws. For example, it clearly tends to be conservative by favoring scientists with previous achievements and by giving the “leading scientists” on the review board the ability to significantly influence new priorities. But that is only a reflection of the natural conservatism of basic science. Other instruments are needed to achieve breakthroughs, especially in the applied sciences.
Foundations such as the RFBR and the RHF are needed — not for achieving innovative breakthroughs but for the continued existence and development of ordinary, even routine, scientific work. Without that underlying bedrock of fundamental science, no dynamic system for national education or innovative breakthroughs would be possible.
Over the 17 years of their existence, through both lean and plentiful years, the RFBR and the RHF have proven that they are the most efficient and effective instruments for the allocation of money for basic research in our country.
Two things are required from the president and the government. First, funding cuts to those institutions should not only end, but financial support should increase. Second, the government should consider the importance of basic research, currently overlooked in the federal budget. In response, the government could request significantly greater transparency — but this does not mean greater bureaucratic accountability. For example, national borders play almost no role in fundamental science.
The use of Russian scientists living abroad as specialists improves the transparency of fund allocation and the quality of the research being funded. (In most academic disciplines, the leading scholars coming from Russia work in the world’s best universities and laboratories.) These scholars would then become participants in the academic life of Russia, and that would be good for science and Russia.

Konstantin Sonin is a professor at the New Economic School in Moscow and a columnist for Vedomosti.

TITLE: China Overtakes Japan as No. 2 Economy
AUTHOR: By Tomoko A. Hosaka
PUBLISHER: The Associated Press
TEXT: TOKYO — Japan lost its place as the world’s No. 2 economy to China in the second quarter as receding global growth sapped momentum and stunted a shaky recovery.
Gross domestic product grew at an annualized rate of just 0.4 percent, the government said Monday, far below the annualized 4.4 percent expansion in the first quarter and adding to evidence the global recovery is facing strong headwinds.
The figures underscore China’s emergence as an economic power that is changing everything from the global balance of military and financial power to how cars are designed. It is already the biggest exporter, auto buyer and steel producer, and its global influence is expanding.
World stock markets mostly fell Monday on Japan’s second-quarter figures. In Europe, the FTSE 100 index of leading British shares was down 0.6 percent while France’s CAC-40 fell 1 percent. Germany’s DAX, however, was up 0.1 percent. Wall Street was expected to drop at the open.
China has been a major force behind the world’s emergence from deep recession. Tokyo’s latest numbers, however, suggest that Chinese demand alone may not be enough for Japan or other economic giants.
“Japan is the canary in the goldmine because it depends very much on demand in Asia and China, and this demand is cooling quite a bit,” said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. “This is a warning sign for all major economies that just focusing on overseas demand won’t be sufficient.”
China has surpassed Japan in quarterly GDP figures before, but this time it’s unlikely to relinquish the lead.
China’s economy will almost certainly be bigger than Japan’s at the end of 2010 because of the huge difference in each country’s growth rates. China is growing at about 10 percent a year, while Japan’s economy is forecast to grow between 2 to 3 percent this year. The gap between the size of the two economies at the end of last year was already narrow.
Japan’s nominal GDP, which isn’t adjusted for price and seasonal variations, was worth $1.286 trillion in the April-to-June quarter compared with $1.335 trillion for China. The figures are converted into dollars based on an average exchange rate for the quarter.
Japan has held the No. 2 spot after the U.S. since 1968, when it overtook West Germany. From the ashes of World War II, the country rose to become a global manufacturing and financial powerhouse. But its so-called “economic miracle” turned into a massive real estate bubble in the 1980s before imploding in 1991.
What followed was a decade of stagnant growth and economic malaise from which the country never really recovered. Prime Minister Naoto Kan now faces a long list of daunting problems: a rapidly aging and shrinking population, persistently weak domestic demand, deflation, a strong yen and slowing growth in key export markets.
In contrast, China’s growth has been spectacular, its voracious appetite fueling demand for resources, machinery and products from the developing world as well as rich economies like Japan and Australia. China is Japan’s top trading partner.
China’s rise has produced glaring contradictions. The wealth gap between an elite who profited most from three decades of reform and its poor majority is so extreme that China has dozens of billionaires while average income for the rest of its 1.3 billion people is among the world’s lowest.
Japan’s people are still among the world’s richest, with a per capita income of $37,800 last year, compared with China’s $3,600. So are Americans at $42,240, their economy still by far the biggest.
“We should be concerned about per capita GDP,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo. China overtaking Japan “is just symbolic,” he said. “It’s nothing more than that.”
But the symbolism may be exactly the “wake-up call” Japanese leaders need, said Schulz of the Fujitsu Research Institute. “Japan is always strangely inward looking,” he said. “And nobody is doing anything about it.”
Japan’s people appear resigned to the power shift. A national poll conducted earlier this year by the Asahi, one of Japan’s biggest newspapers, showed a roughly equal split between those that believed Japan’s fall to No. 3 posed a major problem and those who did not.

TITLE: South Korea, U.S. Start War Games
AUTHOR: By Hyung-Jin Kim
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea — South Korean and U.S. troops launched computerized military drills Monday despite North Korea warning that it would retaliate with a “merciless counterblow” for the exercises Pyongyang considers rehearsal for invasion.
The 11-day drills, dubbed Ulchi Freedom Guardian, are annual war games that involve about 56,000 South Korean soldiers and 30,000 U.S. troops in South Korea and abroad, South Korea’s Defense Ministry and the U.S. command in Seoul said Monday.
No field training is involved in the war games, in which alliance soldiers, mostly senior officers, sit at computers to practice how they engage in battles and hone their decision-making capabilities. The exercises are eventually designed to improve the allies’ joint capability to defend the South and respond to any potential provocations, the U.S. military said in a statement last month.
Washington and Seoul engaged in joint naval drills last month off South Korea’s east coast they called a show of unity after a South Korean warship was sunk in March. The allies blame a North Korea torpedo attack but Pyongyang denies involvement.
Pyongyang has for years threatened the South with destruction, though it has never followed through with an all-out military assault since the Korean War ended in 1953.
The Korean peninsula technically remains in a state of war because that conflict ended with a cease-fire, not a peace treaty. The U.S. stations about 28,500 troops in South Korea and tens of thousands more in the greater region.
Seoul and Washington say the routine military drills are purely defensive, while North Korea calls them preparation for an attack.
“It is another grave military provocation aimed at ... igniting a nuclear war” against North Korea, Pyongyang’s main Rodong Sinmun newspaper said in a commentary carried Monday by the official Korean Central News Agency.
The country’s military threatened Sunday to deal a “merciless counterblow” to the U.S. and South Korea, “the severest punishment no one has ever met in the world.”
The North’s military did not elaborate on how it would retaliate. South Korea’s Defense Ministry said Monday it was keeping a close watch on North Korea and had spotted no suspicious activity.
Earlier this month, South Korea carried out its own naval drills near the tense western Korean sea border, and North Korea set off a barrage of artillery in response. The South is investigating whether land mines that have recently washed downriver from North Korea were deliberately floated by the North.
North Korea also seized a fishing boat with four South Korean and three Chinese crew earlier this month. The South has urged their release, but Pyongyang has not responded.

TITLE: Religious Minorities in Indonesia Push Back
AUTHOR: By Irwan Firdaus
PUBLISHER: The Associated Press
TEXT: BEKASI, Indonesia — Tired of government inaction, Christians and other religious minorities in Indonesia are pushing back against rising violence by Islamic hard-liners.
For months, Christians in the industrial city of Bekasi have been warned against worshipping on a field that houses their shuttered church. They’ve arrived to find human feces dumped on the land and sermons have been interrupted by demonstrators chanting “Infidels!” and “Leave now!”
But last week, tensions finally exploded.
Twenty worshippers were met by 300 Islamic hard-liners, many of whom hurled shoes and water bottles before pushing past a row of riot police. The mob chased down and punched several members of the group.
“The constitution guarantees our right to practice our religion!” Yudi Pasaribu of the Batak Christian Protestant Church said, vowing to return every Sunday until their request for a place of worship, made more than two years ago, is approved.
“And we want to do that on our own property, in our own church.”
Indonesia, a secular country of 237 million people, has more Muslims than any other in the world. Though it has a long history of religious tolerance, a small extremist fringe has become more vocal in recent years.
Hard-liners have also become more violent, according to the Setara Institute for Peace and Democracy, a human rights group, which said there have already been 28 attacks on religious freedom in 2010, including everything from preventing groups from performing prayers to burning houses of worship.
The institute said there were 18 such incidents in all of 2009 and 17 in 2008.
Though most Indonesians are moderate and oppose violence, critics say President Susilo Bambang Yudhoyono’s government has been slow to intervene because it relies heavily on the support of Islamic parties in the parliament.
Acting on the orders of local officials, police helped hard-liners forcibly close several mosques owned by Ahmadiyah, an Islamic sect they call “deviant,” last month in Manis Lor, a village in West Java province.
But members of the sect, who differ from other Muslims about whether Muhammad was the “final” monotheist prophet, have so far refused to buck under.
“We’re tired of being harassed and attacked,” said Yati Hidayat, a 48-year-old Ahmadiyah member. “We have the right to pray just like any other religious community. If anyone tries to stop us, we’re ready to fight.”
Recent attacks have largely been led by the Islamic Defenders Front, or the FPI, which is pushing for the implementation of Islamic-based laws in regions across the nation.
They are known for smashing bars, attacking transvestites and going after those considered blasphemous with bamboo clubs and stones. Perpetrators are rarely punished or even questioned by police.
Yudhoyono has in recent days urged his countrymen to be tolerant of others, especially during the Islamic holy month of Ramadan. But he has made no direct reference to attacks making headlines in Bekasi, just 40 kilometers from the capital, or Manis Lor, 300 kilometers farther east.
Hundreds of people held an interfaith rally in Jakarta over the weekend demanding the government take a tougher line.
“Those attackers have to be arrested, otherwise they will feel their actions are right,” said Saur Siagain, a rally organizer, standing in front of a banner that said: “The president has to be responsible in guaranteeing freedom of religion.” 
Minority groups, who represent less than 15 percent of the population, have long tried to keep a low profile.

TITLE: Longer Sentence Sought For Khmer Convict
AUTHOR: By Sopheng Cheang
PUBLISHER: The Associated Press
TEXT: PHNOM PENH, Cambodia — Prosecutors for Cambodia’s U.N.-backed genocide tribunal appealed Monday for a longer sentence for the former chief jailer of the Khmer Rouge.
Kaing Guek Eav, alias Duch, was convicted of war crimes and crimes against humanity but was sentenced last month to serve just 19 years in prison.
A statement by the prosecutors said the judgment “gives insufficient weight to the gravity of Duch’s crimes and his role and his willing participation.”
Separately, the prosecutors said they were seeking to lodge conspiracy charges against four senior former Khmer Rouge leaders who are in custody but have yet to be tried.
The tribunal is seeking justice for the estimated 1.7 million people who died from execution, overwork, disease and malnutrition under the Khmer Rouge.