SOURCE: The St. Petersburg Times
DATE: Issue #1603 (64), Tuesday, August 24, 2010
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TITLE: Blackout Creates Chaos In City
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The blackout that left almost half of St. Petersburg without electricity on Friday evening was allegedly caused by a control cable at the city’s Vostochnaya substation wearing out, Kommersant daily reported Monday.
The cable was due to be replaced in 2011 during planned renovation work on the substation, an anonymous source close to the investigation into the incident told Kommersant. The accelerated deterioration of the cable could have been caused by the abnormal heat experienced by St. Petersburg this summer.
One of the reasons for the power cut could be a change in the voltage of one of the high voltage cables. The substation works using partly new equipment and partly very old equipment, and could shut down at any moment due to even the smallest changes in the voltage, Kommersant said.
Yelena Gres, a spokeswoman for North-West Electric Main Lines, the energy company in charge of the station, said it was too early to speak about the reasons for the emergency situation.
“The commission investigating the incident has not yet given its official conclusion on the matter,” Gres told The St. Petersburg Times on Monday. “Therefore we can’t yet name the exact reason for the emergency situation,” she said.
Earlier Gres said that the power cut was the result of a technological malfunction at Vostochnaya that  subsequently caused two other city substations to shut down. 
Analysts estimated the cost of the power cut’s consequences to the city at 100 million rubles ($3.3 million). The sum could have been much higher, but the shutdown happened  at 6.40 in the evening, when most St. Petersburg offices were already closed. Energy companies lost several dozen million rubles as a result of the incident, 
Vedomosti daily reported, citing Alexander Khodachyek, a department head at the Higher School of Economics.
Friday’s blackout left about 40 percent of St. Petersburg without electricity for at least 40 minutes, and for several more hours in some parts of the city. 
The electricity collapse caused serious traffic problems in the city as trams and trolleybuses stuttered to a halt, metro lines shut down and traffic lights went off.  
At least 68 commuter trains and six long-distance trains, including ones to and from Helsinki, also ground to a halt. Many passengers missed trains and planes after getting caught in a snare of traffic jams.
Dozens of people found themselves trapped in elevators, and the emergency services hurried to get them out, heading first to those in which children and elderly people were trapped, the local emergency services said.
Radio broadcasting and a number of TV channels disappeared from the air for a while at the beginning of the blackout. Many larger stores saw their electronic doors stall, and were forced to close to customers. Most gas stations were also closed. 
In most buildings there was no hot or cold tap water, as electric pumping facilities also failed.
Anna Vyborova, 36, an administrator, said she was in a metro train when the power cut happened.
“The train suddenly stopped between stations and the driver asked passengers to remain calm. After a while, the train began to move very slowly. When we finally arrived at the station there was no light on the platform; it wasn’t a very nice situation to be in,” Vyborova said.
“Even so, people didn’t lose their sense of humor — the station we arrived at was ‘Chyornaya Rechka’ (Black River), and when in the darkness of the platform the driver announced the name of the stop, people even laughed,” she said.
Although the city’s police were quick to dispatch a number of traffic controllers to crossroads where the traffic lights had gone off, many junctions remained without regulation, leaving car drivers to rely on their own wits. 
The prosecutor’s office of the Vsevolozhsk district in which Vostochnaya substation is located has opened an investigation into the case. According to preliminary information, the incident was caused by a voltage jump at one of the four sources supplying the substation, the investigation said. One of those four sources is Leningrad Nuclear Power Station (LAES), Fontanka reported.
The power cut happened at 6.40 p.m. and lasted for about two hours. Electricity was later gradually restored to the city’s districts, and by 10 p.m. most of the city had electricity, though in some districts the water supply was slower to return.
The incident has exposed several problems, highlighting city residents’ dependence on electricity.
The power cut revealed that a number of St. Petersburg’s hospitals do not have their own reserve generators, Fontanka.ru reported.  
One of the web site’s readers said that the intensive care department of the hospital at which he works does not have a generator. He said it was very fortunate that there were no patients on artificial ventilation at the moment of the power cut.
Patients at another hospital said they had had their kidney dialysis stopped due to the power cut.
On Saturday, about 40 percent of Sberbank’s ATMs remained out of service, because they needed to be rebooted, Interfax reported.
Built in 1964, Vostochnaya substation is one of the oldest electric substations in the northwest region.  Friday’s incident was not the first emergency to happen at the station. Reconstruction work at Vostochnaya began in May 2008, and work is scheduled to continue until next year.

TITLE: Colonel Cleared in Chubais Attack
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A jury has acquitted a group of nationalists headed by a former military intelligence colonel of trying to kill Anatoly Chubais, an architect of Russia’s market reforms, in a high-profile retrial that cast rare light on anger in some military circles toward Vladimir Putin’s rule.
The jury on Friday also ruled that the attempt on Chubais’ life in 2005 was real, squashing speculation that the incident was a ruse staged by authorities as a pretext to crack down on nationalists.
Retired Colonel Vladimir Kvachkov, 62, and three co-defendants were cleared of all charges by the jury in the Moscow Regional Court late Friday, a court spokeswoman said.
The same court previously cleared Kvachkov, along with former paratroopers Robert Yashin and Alexander Naidenov as well as nationalist writer Ivan Mironov, in a jury trial in 2008, but the Supreme Court ordered a retrial last year.
Supporters of Kvachkov, an outspoken anti-Semite, cheered the verdict in the courtroom, shouting, “Hurray!” and “Thank you!”
Prosecutors did not say whether they would appeal, but Kvachkov said he expected them to.
Kvachkov — who told The St. Petersburg Times that Chubais is the head of an “Judeo-Protestant” group that rules Russia — also criticized Prime Minister Putin’s government, saying it was “Nazi-liberal.”
Investigators claimed that Kvachkov and his accomplices attacked the cortege of Chubais, then-head of the Unified Energy System electricity monopoly, on a highway in the Moscow region on March 17, 2005.
A bomb with the equivalent of 3.5 to 11 kilograms of dynamite went off on the road, and the cortege was pelted with bullets from machine guns. No one was injured in the attack.
The jury on Friday did not implicate anyone else in the attack, which means that the investigation will probably have to be reopened.
Chubais, who now heads Rusnano, the state nanotechnology corporation, said he accepted the jury’s “processual decision” but remained convinced that Kvachkov was the perpetrator.
“I have no doubt that in real life it was Kvachkov and the other defendants who tried to kill me,” he said in a statement posted on Rusnano’s web site Saturday.
“Honestly, I don’t feel like taking revenge against them. But I absolutely do not accept the fascist ideology that these people advocate,” Chubais said, adding that he would not contest the court’s decision.
Kvachkov, who wore his military uniform covered with medals at the trial, spent more than 30 years in military service and later worked as a civilian expert at the armed forces’ General Staff.
He is an explosives expert, which led some military officers to doubt his involvement in the attempt on Chubais’ life, simply because he would not have botched the job.
“If he were to carry out such an operation, the outcome would be positive,” a former military intelligence officer told the Vremya Novostei newspaper in 2005.
Kvachkov has never denied his hatred for Chubais, an architect of Russian economic reforms in the early 1990s that steered the country toward capitalism but also, as nationalists claim, robbed the nation of its wealth through privatization.
“I do not want to kill Chubais, but I really want him to be hanged by a court order,” Kvachkov told Ekho Moskvy radio in a 2008 interview.
After his arrest, Kvachkov became a symbol for nationalists, for whom Chubais remains a top public enemy.
When Kvachkov was leaving the courtroom Friday, a crowd of his supporters shouted curses at Chubais.

TITLE: Bushehr Launch Boosts Rosatom
AUTHOR: By Olga Razumovskaya
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia and Iran on Saturday jointly launched the Bushehr atomic power plant, the first in the Middle East, bringing the Islamic republic into the ranks of the world’s 29 nuclear power generating nations.
Both sides hailed the startup as a landmark. Russia, which agreed to complete the facility for $800 million in 1992, had delayed the final work in recent years amid international pressure on Tehran over its nuclear program.
The completion helps state-run Rosatom further its case to developing countries that it is a reliable supplier of nuclear power stations.
Prime Minister Vladimir Putin said in March that Rosatom had the capacity to build 25 percent of the world’s planned nuclear plants, up from the 16 percent it is building now.
“No one among the world’s professionals has any doubts about the possibility of the power plant in Bushehr being used for non-peaceful purposes. It’s absolutely clear that there has never been such a possibility,” Rosatom chief Sergei Kiriyenko said Saturday.
Moscow reached an agreement with Tehran under which it would supply fuel for the plant and dispose of spent rods, which could be used to develop nuclear weapons. The United Nations International Atomic Energy Agency has said it will monitor compliance.
“At this point, we’re not discussing new nuclear energy projects in Iran. We must first complete construction of the Bushehr power station,” Kiriyenko said. “We are not discussing any concrete projects to construct new blocks.”
The launch of the plant will be finished this year, he said, allowing it to start producing power. Russia has also agreed to provide two key nuclear isotopes for medical research.
Russian engineers will remain at the station for two to three years before handing the facility over to Iran.
But in a sign that Tehran was not content to start the plant without a scandal, Vice President Ali Akbar Salehi, also the country’s nuclear chief, vowed to continue seeking to enrich uranium ahead of the launch.
“The contract we have with the Russians doesn’t oblige us to buy the fuel from them,” Salehi said, Bloomberg reported. “It’s an agreement that when we need the fuel, they’ll supply it.”
Washington said it was unconcerned about Bushehr’s opening because of Russia’s role in handling the fuel.
“We recognize that the Bushehr reactor is designed to provide civilian nuclear power and do not view it as a proliferation risk,” State Department spokesman Darby Holladay told reporters Saturday.
Analysts agreed that fears — including from Israel — about Bushehr were largely unfounded.
“The Bushehr project is not a major proliferation risk given that the reactor is under IAEA safeguards and the spent fuel it will create will be taken back by Russia and cannot be used by Iran to extract plutonium,” Daryl Kimball, executive director of the Arms Control Association, told The St. Petersburg Times.
The real threat, analysts say, is at the Natanz uranium-enrichment plant and Qom, the second uranium-enrichment facility now under construction, as well as the heavy-water reactor Iran is constructing in Arak.
“Until Iran takes additional steps to assure the international community that it is not seeking a nuclear weapons production capability, I doubt Russia or any other state will initiate new civil nuclear power production there,” Kimball said.
The launch is something of a turning point for the Russian nuclear industry, which was near collapse before getting the Iranian contract for Bushehr.
Finishing the plant, started by a German consortium in 1974, may not have been as profitable as first planned, but it has given Rosatom a boost in its competition for new contracts.
Kiriyenko stressed in a meeting with Putin on Thursday that the start proves that “Russia fulfils its obligations.”
Bushehr, which has cost more than $1 billion to finish, will generate 1,000 megawatts, or 2 percent of Iranian’s projected electricity usage. By comparison, Kiriyenko has estimated that the Turkish deal for four reactors is worth $20 billion, and each reactor will be able to produce about 20 percent more energy than the one started in Iran.
Atomstroiexport, Rosatom’s civilian construction unit, won clearance this year to build a major plant in Turkey, and the company’s leadership plans to visit Bangladesh and Vietnam this fall.
“The projects Russia is pursuing elsewhere will not be as problematic as Bushehr. Russia could list a number of reasons why the project … took so long,” Anton Khlopkov, head of Moscow-based Center for Energy and Security Studies, told The St. Petersburg Times.
He cited the 1979 Islamic Revolution, attempts by Iran to finish the reactor on its own and switching from dollars to euros with subcontractors.
Bushehr is also something that Iranian leaders can show off to their citizens and neighbors.
“This project is a symbol of prestige for a nation that’s developing, although not at the pace it would like. Bushehr puts Iran ahead of some of its wealthier neighbors,” Khlopkov said.

TITLE: Bearded Assailants Harassing Bareheaded Chechen Women
PUBLISHER: The St. Petersburg Times
TEXT: GROZNY — Chechen women said Friday that they had been harassed and some physically harmed by bands of men for not wearing headscarves during the Muslim fasting month of Ramadan, Reuters reported.
Bearded men in traditional Islamic dress have been roaming the streets both on foot and in cars since Ramadan started on Aug. 11, demanding bareheaded women wear a headscarf, Grozny residents and witnesses said.
“Two men came up to me, one furiously fingering a prayer bead, and said it wasn’t pretty to have a bare head during Ramadan,” said Markha Atabayeva, 38. “They instilled such fear in me.”
Atabayeva said she had seen a group of men with automatic rifles taunting women for not wearing headscarves.
Atabayeva was one of at least a dozen women who told of harassment or attacks. A woman in her mid-30s said she was punched in the face by a man in Islamic dress after refusing to put on a headscarf he had given her.
One of the women’s assailants said in an interview that “hundreds” of women had been warned.
“We are trying to warn women of their possible sins before God,” the assailant, who described himself as an “activist,” said on condition on anonymity. “We do this through force, fighting and battles.”
Another assailant said they were working under orders from Chechnya’s Center for Spiritual-Moral Education, which Chechen President Ramzan Kadyrov set up 18 months ago.
Kadyrov’s spokesman declined to comment on the action against women failing to wear headscarves. Alcohol is all but banned in Chechnya, and women must wear headscarves in state buildings. Polygamy is encouraged by authorities.
The men’s action follows an order earlier in the week from Chechnya’s spiritual leader to shut all cafes during Ramadan, as well as paintball attacks on bareheaded women in June.
A number of other women last week described how men in cars threatened them with violence if they did not cover up. While some women carry headscarves in their bags, those without were encouraged to go home immediately.

TITLE: Big Break for the U.S. in ‘Merchant of Death’ Case
AUTHOR: By Pete Yost and Steve Braun
PUBLISHER: The Associated Press
TEXT: WASHINGTON — If Viktor Bout should start talking to U.S. prosecutors, as they are trying to arrange, the man accused of supplying the weapons for civil wars on three continents could raise the roof in both Moscow and Washington.
A tug of war between the two powers has played out largely in public over Bout, called “the Merchant of Death” in 2000 by a minister in Britain’s Foreign Office. On Friday, an appeals court in Bangkok, Thailand, ordered his extradition within three months to the United States, where he faces criminal charges that could put him in prison for life.
An arms trafficker who assembled a fleet of cast-off Russian cargo planes and operated a transcontinental network for more than a decade would not have stayed alive, much less thrived, unless he had the blessing and support of influential Russian officials, said people in and out of the U.S. government who have watched Bout’s operations from afar.
Bout has even made money off those who said they wanted to put him out of business: the U.S. government and the United Nations. He ignored sanctions by both, while counting as customers the U.S. military in Iraq and UN aid programs.
And now?
The Russians “wanted him back because he’s linked to Russian intelligence,” said U.S. congressman Ed Royce. “He lived in the open in Russia despite an Interpol arrest warrant” from a Belgian money-laundering case.
But the Russians say it is just about international politics.
Foreign Minister Sergei Lavrov called the Thai court decision “unlawful and political.” Without mentioning the United States, he said the ruling was influenced by “very strong outside pressure.”
“I assure you that we will continue to do everything necessary to push for his return to his homeland,” Lavrov said.
Juan Zarate, a senior counterterrorism official in the George W. Bush administration, said the Russians were pushing hard over the issue of sovereignty.
“They don’t like the fact that one of their citizens, especially one who’s so prominent and notorious, is facing charges in the United States,” said Zarate, who green-lighted a Drug Enforcement Administration sting operation that led to Bout’s arrest in Thailand in 2008.
Zarate also pointed to Bout’s “deep connections with the Russian establishment for some time,” saying “perhaps some of those people are nervous about what he knows and what he might say if he lands in a courtroom in New York.”
Royce, the ranking Republican on the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade, assessed the verdict in the Thai court this way: “It’s a big loss for every terror group that’s tried to employ him in the past, from the Taliban to Hezbollah to al-Shabab.”
Bout is thought to have supplied weapons that fueled civil wars in South America, the Middle East and Africa, with clients including Liberia’s Charles Taylor, Libyan leader Moammar Gadhafi and both sides of the civil war in Angola.
On Friday, dressed in an orange prison uniform, Bout stood after the appeals court verdict was announced. Tears welled in his eyes as he hugged his wife and daughter, who wept.
“This is the most unfair decision possible,” his wife, Alla Bout, told reporters, speaking in Russian through a translator. “It is known the world over that this is a political case.”
In Russia, her remarks received wide coverage on state television.
Her husband vowed to win his freedom. “We will face the trial in the United States and win it,” Bout told reporters.
Bout was led out of the courtroom and back to a Bangkok prison, where court officials said he would remain until the extradition is processed.
Before a prize catch like Bout would start telling important stories, the 43-year-old Russian would have to be facing lengthy time behind bars.
So far, he has spent two years in a Thai prison.
In the criminal case that landed him there, Bout assured two confidential sources posing as arms buyers that he was going to prepare everything that the Colombian narcoterrorist group FARC needed, according to the U.S. indictment. Bout’s assurance came after the two agents said they wanted arms for use against U.S. forces in Colombia and needed anti-aircraft weapons to kill U.S. pilots.
Bout advised them that the United States also was his enemy, according to the indictment, which said the meeting was covertly recorded.
Nonetheless, Moscow wants Bout to come home.
“In this case, it is not law and justice that is supreme but a politically motivated line towed from abroad by the American authors of the extradition request,” the Russian Foreign Ministry said in a statement.
Bout “was responsible for arms trafficking and supporting terrorist organizations on multiple continents,” John Brennan, President Barack Obama’s chief counterterrorism adviser, told a White House press briefing. “We are very pleased with the cooperation of Thai authorities, and we are looking forward to his expeditious return here.”
The U.S. Justice Department has made Bout’s extradition a major issue with the Thai government, dating back to Obama’s first year in office.
Last October, then-Deputy Attorney General David Ogden made a side trip to Bangkok from a law enforcement meeting he was attending in Singapore. Bout’s extradition was the only item on the agenda in the discussion with Thai officials, and Ogden went public, saying it was a matter of great importance.
Late Wednesday night, acting Deputy Attorney General Gary Grindler had a half-hour phone conversation with the Thai attorney general, Chulasingh Vasantasingh. That was followed by meetings Thursday in Bangkok among officials from the U.S. Embassy and representatives of the Thai government.
It was unclear just how the Thai court arrived at its decision, which came as a surprise to U.S. officials. A lower court’s ruling in Thailand a year ago rejected the U.S. request that Bout be brought to the United States.
Two weeks ago, the U.S. government announced its intent to sell Thailand three Black Hawk helicopters and support equipment worth $150 million, the third such helicopter sale to Bangkok in five years. The two countries have close military ties, and notification of the latest sale to Congress said that it would “contribute to the foreign policy and national security of the United States by helping to improve the security of a major non-NATO ally.”
“We functioned within a legitimate legal process within Thailand,” said State Department spokesman P.J. Crowley. “Thailand has its own independent judiciary, and we’re pleased that they, having evaluated the evidence presented, came to what we thought was the appropriate conclusion.”
A Canadian government official confirmed that the United States asked a couple of like-minded states including Canada to proactively urge the Thai government to have this matter move forward expeditiously, and Canada agreed to do that. The official, speaking on condition of anonymity, was not authorized to speak publicly about it.
A former U.S. official familiar with the extradition effort said the State Department and other U.S. agencies, including Defense and Justice, “pulled out the stops” in recent days, urging Thai counterparts to ensure that Bout was sent to trial in the United States. The former official, who spoke on condition of anonymity because of the sensitive nature of the case, said several governments, including Canadian officials, also weighed in.
That official said last-ditch appeals by Russia, coupled with extensive paperwork, could extend Bout’s Bangkok prison stay as long as 90 days before he could be extradited. An direct appeal to the Thai royal family is expected.

TITLE: Medvedev Secures Foothold in Armenia
AUTHOR: AP, SPT
PUBLISHER: Combined Reports
TEXT: YEREVAN, Armenia — President Dmitry Medvedev secured a long-term foothold for Russia in the energy-rich and unstable Caucasus region Friday by signing a deal with Armenia that allows a Russian military base to operate until 2044 in exchange for a promise of new weaponry and fresh security guarantees.
“The protocol doesn’t just allow the Russian military base to stay in Armenia for a longer period, it also extends the sphere of its geographic and strategic responsibility,” Armenian President Serzh Sargsyan said after talks with Medvedev.
Russia’s base in Armenia has about 5,000 troops along with MiG-29 fighter jets and S-300 air defense missiles, according to Russian and Armenian reports, citing official sources.
Medvedev said the base was intended to “support peace and stability in the southern Caucasus and the entire Caucasus region.”
The 24-year extension on the base is part of Moscow’s efforts to strengthen its clout in other former Soviet republics, which have worried many of its neighbors. Russia fought a brief August 2008 war with Georgia, which borders Armenia to the north, and tensions have remained high.
“Russia wants to underline its role as the key player in the region,” said Sergei Minasian, a Yerevan-based political analyst.
But Russia’s clout on former Soviet turf, which Russian leaders have declared a privileged zone of interests, has remained limited. Moscow has run into fierce economic and political disputes with its one-time closest ally, Belarus. Russian and Belarussian leaders have traded barbs and blamed one another for an increasing strain in relations.
Russia also has talked much about increasing its influence in Central Asia and has grown increasingly jealous of the U.S. presence there, but it did nothing when the government of Kyrgyzstan asked Moscow to send troops to help put down deadly ethnic violence in June.
After their talks, the Russian and Armenian presidents were joined by other leaders from the Collective Security Treaty Organization, a Moscow-led security alliance of seven former Soviet republics, including Kyrgyzstan and Belarus.
Medvedev said the Kyrgyzstan unrest showed that the CSTO needed to be able to respond more quickly and effectively in crisis situations. He said CSTO leaders agreed to form a plan by the end of the year, and he recommended studying the experience of other organizations such as NATO, the EU and United Nations.
The CSTO, however, failed to agree to provide military aid for Kyrgyzstan, whose interim leadership is struggling to maintain order before landmark parliamentary elections in October.
Kyrgyzstan had asked the CSTO countries to supply hardware and military training. But the CSTO meeting ended without a decision, and Sargsyan said consultations on the issue would continue.
Also Friday, Armenia awarded Russia with a contract to build two new reactors at a Soviet-era nuclear power plant. Construction works on the $5 billion project are expected to start next year. 
Medvedev on Friday visited the opening of a memorial in Gyumr to Russian servicemen killed during the Russian-Turkish wars in the 19th century.

TITLE: United Russia Changes Tactics for Elections
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Amid worries that this summer’s devastating wildfires have damaged the country’s ruling tandem of President Dmitry Medvedev and Prime Minister Vladimir Putin, United Russia has come up with some unusual news.
On Thursday, the ruling party announced that Novosibirsk Governor Viktor Tolokonsky would not be heading the party list for October elections to the local parliament.
Instead, the list will be headed by Tolokonsky’s first deputy, Vasily Yurchenko, followed by Novosibirsk Mayor Vladimir Gorodetsky and regional parliamentary speaker Alexei Bespalikov, United Russia secretary Vyacheslav Volodin said.
Novosibirsk is not the only region where United Russia appears poised to break from its much-criticized practice of placing party card-carrying governors at the top of party lists purely to attract voters.
Six regions — including those worst-hit by this summer’s wildfires and drought — and many more municipalities will go to the ballot boxes on Oct. 10, and United Russia seems determined to make up for a surprisingly poor showing in the last elections in the spring.
Jittery that discontent over the ruling elite’s handling of the fires might translate into fewer votes, United Russia is sidelining prominent members in favor of lesser-known officials with deep roots in the regions, analysts said.
“Many voters are tired of seeing the same faces over and over again. And United Russia takes a very close look at opinion polls, many of which they keep secret,” said Nikolai Petrov, who tracks regional politics at the Carnegie Moscow Center.
United Russia, which controls most legislatures and mayoral offices across the country, brushed aside the notion that it had anything to worry about in the October elections.
Volodin said the decision to exclude the governor from the party list in Novosibirsk was in response to criticism from the opposition that United Russia was abusing its ruling powers through the use of so-called “administrative resources.”
“This way we are taking the trump card out of our opponents’ hands,” Volodin said in a statement published on the party’s web site.
Volodin said the decision might hurt United Russia’s campaign. “We know that Viktor Tolokonsky is the region’s most popular politician, and if he headed the list, it would be easier for us,” he said.
Putin headed United Russia’s list for the 2007 State Duma elections when he was president, even though he never took a seat in the parliament and only later agreed to head the party.
United Russia also plans to exclude Magadan Governor Nikolai Dudov from its list for parliamentary elections there, national media reported. The party has not officially commented on its plans.
But United Russia has vehemently denied a report that it planned to base its campaign in at least one region on local politicians rather than Putin.
Vedomosti reported last week that opinion polls in Tuva had found that Putin did more harm than good to the party’s image in the impoverished South Siberian republic.

TITLE: IN BRIEF
PUBLISHER: The St. Petersburg Times
TEXT: <strong>Kuznetsov Released</strong>
ST. PETERSBURG (SPT) — Former boxer Alexander Kuznetsov was released on parole Friday from the fourth penal colony in Isilkul in the Omsk Region, Fontanka.ru reported. Kuznetsov was released six months before the official end of his sentence.
On New Year’s Eve 2008, Kuznetsov beat an unidentified man to death in front of his house, having caught the man allegedly trying to rape Kuznetsov’s stepson. The Dzerzhinsky Court sentenced the former boxer to two years and six months in a penal colony in Omsk.

<strong>Average Income Rises</strong>
ST. PETERSBURG (SPT) — Real incomes in St. Petersburg rose by 14.8 percent in the first half of 2010 in comparison to June 2009 according to Petrostat, Fontanka.ru reported. The nominal average salary in the northern capital amounted to 28,279 rubles ($925) by June 2010. Real wages have risen by 5.7 percent since June 2009.
Not only salaries increased, however: Average debt levels increased by 16 percent in comparison with the same period last year, amounting to 30.5 million rubles ($997,000) on Aug. 1. At the same time, Petersburgers spent 67.5 percent of their income on services and goods.
Roof On Fire
ST. PETERSBURG (SPT) — The roof of the St. Seraphim Vyritsky Chapel in central Petersburg was destroyed in an arson attack, according to a police report released on Monday, Fontanka.ru reported. 
“At around 8 p.m. on Sunday, an unidentified individual entered the territory of the Orthodox Church, beat up an altar server and set fire to the chapel,” the source said. The altar server was hospitalized with a concussion.

<strong>Back to School</strong>
ST. PETERSBURG (SPT) — City Hall has stated that all of St. Petersburg’s schools will be ready for reopening on Sept. 1, Fontanka.ru reported. 
“The preparation of schools is going smoothly this year in comparison with last year,” said Olga Ivanovna, head of the city’s Education Committee. 
Ivanovna said that the State Fire Inspectorate has issued permits to 92.4 percent of the city’s educational institutions, while consumer rights watchdog Rospotrebnadzor has also signed off on 91.4 percent. 
This year, 710 educational institutions are due to open their doors to 362,000 students, Fontanka.ru reported.

TITLE: Doppelganger Ads Banned
AUTHOR: By Irina Filatova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Federal Anti-Monopoly Service said Thursday it had banned an advertising campaign for a Kirov regional construction supply firm that featured a President Dmitry Medvedev look-alike sporting a hard hat and chainsaw.
Billboards around Kirov depicting an actor who resembled a slightly balding Medvedev must be removed, and advertisements running on local television with the same character can no longer be broadcast, the watchdog’s Kirov region branch said.
Dozens of people have called the anti-monopoly service — which also monitors compliance with advertising regulations — to complain, said Kirov anti-monopoly service spokesman Andrei Rogozhkin.
“People were disgusted, saying it was not ethical to use the acting president’s face in a commercial,” he told The St. Petersburg Times.
Construction supply firm Stroibat Trading House launched the cheeky campaign in May, with ads featuring the slogan “chief in charge of tools.” The TV spots, which included a voiceover by an actor imitating Medvedev’s inflection, quickly became a sensation in Kirov, about 900 kilometers northeast of Moscow.
“When I first saw the advertising, I thought it was Medvedev. But when I took a closer look, I understood it wasn’t him,” Kirov resident Andrei Zlobin said by telephone on Thursday.
“But the trick was clear at once. I don’t think Medvedev would pose in a hard hat,” he added.
The service ruled that the campaign violated the law on advertising, which forbids ads from claiming that state officials have endorsed the product. Rogozhkin also said the use of the word “chief” fell afoul of Article 5 in the law on advertising, which bans companies from saying their goods and services are superior to those of competitors.
But Stroibat will not remove the banners until it receives the service’s official order, said Andrei Negonov, head of the company’s marketing department. Stroibat’s web site also said the company would appeal the service’s ruling after being served the order.
“The brand awareness has, of course, increased,” Negonov told The St. Petersburg Times.
The anti-monopoly service also said Thursday that it would sue sue Kirov-based advertising agency Tom Garret, which developed the campaign. The agency would face a fine of 4,000 rubles to 20,000 rubles ($130 to $660) if it loses the case in court, Rogozhkin said.
Tom Garret denied any violations, saying it did not use Medvedev’s image in the campaign intentionally.
“But even if he looks similar is it bad?” Oksana Tits, the agency’s commercial director, told The St. Petersburg Times by telephone.
Tom Garret attempted to define what sort of person could represent Stroibat, ruling that it was “a man of 40, with a smart, calm face, dressed in a suit, [looking like] a professional.”
The agency then held a casting call among staff from Stroibat and Tom Garret, with Stroibat’s Mikhail Fomin getting the role.
“Do we have the president in the commercial? We have Mikhail Fomin as a chief in charge of tools. If we wanted to use the president’s image, we would have taken a photo without spending tens of thousands of [rubles] shooting [our own photos],” Tits said.
Fomin, 40, has acknowledged that he bears a striking resemblance to the Russian commander in chief.
“It was already clear that I resemble the president during the 2008 elections. People in the election committee where I came to vote for Medvedev grew wary first, thinking that Dmitry Anatolyevich had really come to Gidrotorf,” Fomin told Ogonyok magazine in July, referring to the Nizhny Novgorod town where he lives.  
“They were laughing then, saying they now had their own local president,” Fomin said, adding that he would like to play the role of Medvedev at some point in the future. He could not be reached for comment Thursday.
Thursday’s ruling is questionable because the law on advertising bans using a person’s image without permission, but it says nothing about look-alikes, said Julia Fyodorova, a lawyer at international law firm CMS.
“One should give written permission for one’s image to be used. [But] there’s no legal norm regulating the use of images’ resemblance that may cause confusion. Such a norm is only applied to trademarks,” she said.
“A precedent may be created if a court rules that using an image resembling a famous person without asking for a permit is a violation of the law. There’s no precedent yet,” she said.
A Kremlin spokesman said he was unaware of the campaign and could not immediately comment.
Using people who look like celebrities is a popular trick with advertisers on a limited budget.

TITLE: Plaque for Former City Leader Hotly Disputed
AUTHOR: By Galina Stolyarova
PUBLISHER: The St. Petersburg Times
TEXT: A scandal is brewing over a memorial plaque to Grigory Romanov, who ruled the city from 1970 to 1985 as the first secretary of the Leningrad Oblast Committee of the Communist Party of the Soviet Union. Praised by fellow Communists and some of the members of the current political establishment as a strong leader, Romanov is despised by the democratic camp and numerous prominent cultural figures. 
A model for the design of the plaque commemorating Romanov will be ready in September, according to the Communist Party faction of the St. Petersburg Legislative Assembly. The plaque is due to be put up on the side of the building on the corner of Troitskaya Ploshchad and Ulitsa Kuibysheva, where Romanov lived from 1972 until 1984.
The controversy began back in April, when City Hall took the decision to commemorate Romanov and his time in power in the city.
One of the most powerful politicians of his time, Romanov, who died in 2008 aged 85, was believed to be the strongest competitor to Mikhail Gorbachev for the post of General Secretary of the Communist Party of the U.S.S.R.
St. Petersburg Governor Valentina Matviyenko has expressed a positive view of Romanov, describing him as “one of the brightest and strongest politicians of our time, renowned for a number of memorable contributions to Russian history.”
A memorial plaque to Romanov was erected at the end of April in Moscow on the building where Romanov lived from 1985 until his death in 2008.
Dmitry Novikov, a Communist Party lawmaker with the State Duma, said Romanov “belonged to a breed of true patriots, of people with a creative spirit. He remained faithful to the ideas of Communism until his last day.”
Liberal locals, however, refer to the fifteen years of Romanov’s rule as an “authoritarian regime.” 
“Romanov was notorious for political censorship and persecution, as well as a strong anti-semitic attitude,” said Maxim Reznik, head of the St. Petersburg branch of the democratic party Yabloko. “During his time, it was common for theater productions, films and books containing dissident ideas of any kind to be banned.”
During the course of the summer, liberal politicians and cultural luminaries have been staging protest events and creating petitions against the City Hall initiative.
In July, the youth branch of Yabloko put up three hand-made cardboard memorial plaques on the walls of the building at the corner of Troitskaya Polshchad and Ulitsa Kuibysheva.
On the plaques, the politicians wrote that Romanov would be “long remembered by St. Petersburgers as a dissident hunter, who threw Dovlatov and Brodsky out of Russia.” The plaques, which were attached to the building at night on July 19, were removed by the police.
“Romanov hated any cultural figure who would not conform,” said St. Petersburg writer Nina Katerli, a member of the city’s PEN-Club. 
“He was personally responsible for the ideological persecution of the poet Josef Brodsky and writer Sergei Dovlatov, who were forced to flee the country. A number of St. Petersburg art figures, including the actors Arkady Raikin and Sergei Yursky, were pressured out of the city. They could not survive the suffocating atmosphere of tight control imposed by the regime.”
Katerli was one of thirty members of the city’s arts and culture community who sent a letter to City Hall saying they were insulted by the idea of erecting a plaque dedicated to Romanov. Other signatories included actor Oleg Basilashvili, poet Alexander Kushner, lawyer Yury Schmidt, rock-musician Yury Shevchuk, writer Boris Strugatsky and filmmaker Alexei German.

TITLE: Parties Square Off Over Blogger
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: United Russia has assailed one of the country’s most prominent humanitarian aid activists with accusations of secretly working for A Just Russia, a rival pro-Kremlin party.
The attack late last week against Yelizaveta Glinka, better known as the popular blogger Dr. Liza, has rocked the Russian blogosphere and raised suspicions that the ruling party is trying to shift attention away from this summer’s mishandled wildfires by manufacturing a conflict with its main pro-government rival in the run-up to Oct. 10 regional elections.
Glinka, a medical doctor who has long supported homeless and terminally ill people and this summer coordinated volunteer firefighters, received a call last Wednesday from editors at ER.ru, a general interest web site run by United Russia, requesting that she comment on volunteers’ efforts to fight the fires.
Instead of giving a straight “yes” or “no,” she turned to fellow LiveJournal bloggers for an answer. In the ensuing debate, which had attracted 254 comments by Sunday evening, a user called “ozoya” advised her to tell the ER.ru people to “go and have a smoke on the Internet.” In Russian slang, “go for a smoke” means to “shut up.”
Glinka replied that she agreed — and did not bother to return United Russia’s call.
Infuriated party officials responded Thursday by posting an article on ER.ru in which they accused Glinka of snubbing United Russia because her aid organization was working with A Just Russia.
The article quotes Pavel Salin, an analyst with the Kremlin-connected Center of Current Politics, as saying Glinka refused to comment because her Just Aid organization was under the personal patronage of A Just Russia leader Sergei Mironov. He said some of the commentators on her blog might even be sitting in A Just Russia’s party headquarters, acting on Mironov’s orders.
Pavel Danilin, a prominent pro-Kremlin blogger and analyst, said in the article that “anything relating to United Russia is like a red rag to a bull to these liberally minded people on the Internet.”
“In reality, these so-called independent aid workers are politically linked, in this case by A Just Russia,” he was quoted as saying.
Reached by telephone Friday, Glinka confirmed that Mironov was her organization’s biggest sponsor — but denied any political meddling. “I have known him for seven years, and he has supported us — but always as a private person and never as a politician,” she said.
Mironov’s spokesman Vladimir Avdeyev also confirmed links between A Just Russia and Just Aid and said the United Russia attack probably reflected its nervousness in the run-up to October elections.
“This will increase,” Avdeyev said of United Russia’s attacks.
United Russia and A Just Russia got into a bizarre squabble ahead of the last regional elections in March when Mironov said he disagreed with some of Prime Minister Vladimir Putin’s anti-crisis policies. United Russia subsequently accused Mironov of disrespect and called for his dismissal as Federation Council speaker.
United Russia commands a two-thirds majority in the State Duma and boasts a similar dominance throughout the country’s smaller legislative bodies. A Just Russia has the smallest Duma faction, with 8 percent of the seats.
Analysts have said rivalry between the two parties is mainly driven by the fact that both compete for support from the ruling bureaucracy: so-called administrative resources.
Blogger and pundit Vladmir Pribylovsky, who heads the Panorama think tank, said the latest attack by United Russia probably also reflected intraparty struggles.
“United Russia’s factions are now vying for influence and positioning themselves before the October elections and next year’s State Duma elections,” he said.
While Putin, who heads United Russia without being a member, has cultivated his strongman image during the fires, appearing in destroyed villages and piloting an amphibious firefighting aircraft, the party itself has struggled to make positive headlines.
Instead, bloggers have derided attempts by United Russia supporters to be at the forefront of volunteer efforts. Among other things, bloggers have accused Federation Council Senator Ruslan Gattarov, a leader of United Russia’s youth movement Young Guard, of amateurishly staging photos of himself putting out fires in the Ryazan region.

TITLE: 3,000 Praise Forest, Assail Putin at Rally
AUTHOR: By Alexander Bratersky and Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — More than 3,000 people crowded onto Pushkin Square in Moscow on Sunday evening to denounce the authorities’ plan to cut down a centuries-old oak forest north of Moscow, and rock musician Yury Shevchuk belted out two songs despite a concert ban.
While the three-hour rally ended peacefully, police earlier Sunday detained three prominent opposition activists who had planned to attend and blocked vans carrying the musical equipment of other musicians from the square.
Many demonstrators said they came to voice their opposition of both the deforestation in Khimki and of Prime Minister Vladimir Putin.
“The Khimki forest is the occasion, but if oil prices drop, there will be more people to protest here,” said Vladimir Kondrashyov, a 41-year-old driver wearing a T-shirt reading, “Putin, step down.”
City Hall allowed the rally, but not a concert organizers had wanted to stage, in a rare authorization of an opposition event. The anti-Putin sentiment and the relatively large turnout could prove worrisome to the authorities, coming a day after 3,000 people called for Putin’s resignation at a rally in Kaliningrad.
Despite the concert ban, Shevchuk, frontman for rock band DDT, sang his hits “Osen” (Autumn) and “Rodina” (Motherland) on an acoustic guitar standing on an improvised stage on a truck, surrounded by scores of journalists, police and demonstrators, including Yevgenia Chirikova, leader of the Khimki forest protest movement. Shevchuk made headlines in May when he criticized Putin in a televised exchange at a charity dinner in St. Petersburg.
Many more bands and singers, including Alexander F. Sklyar, Barto, Televizor and OtZvuki Mu, were expected to perform but could not enter the square. Cars with concert equipment were barred by the police from entering the site.
The rally — dubbed “We All Live in the Khimki Forest!” — was hosted by legendary rock critic Artemy Troitsky.
More than 3,000 people crowded into the cordoned-off square after passing though metal detectors, which saw long lines. Some carried the flags of opposition groups and chanted, “Putin resign!”
Police officers cordoned off the area. One officer told The St. Petersburg Times that about 1,500 officers had been deployed.
Sunday’s protest marked the largest in a weeks-long series of rallies to oppose federal authorities’ decision to raze part of the forest to make way for an $8 billion highway to St. Petersburg. The protesters say it is possible to construct the road around the forest without cutting down the trees.
The pro-Kremlin Nashi youth group brought three buses to Pushkin Square to offer demonstrators the chance to go to the Khimki forest to collect trash.

TITLE: Suspected Organizer Of Metro Blasts Killed
AUTHOR: AP, SPT
PUBLISHER: Combined Reports
TEXT: MOSCOW — An Islamist militant leader suspected of organizing suicide bombings that killed 40 people in the Moscow metro in March was killed in a shootout with security forces in Dagestan on Saturday, officials said.
Madomedali Vagabov was killed along with four others during a gunfight with special forces in the Dagestani village of Gunib, officials said.
The suspects were killed when the house they were holed up in caught fire, local police spokesman Vyacheslav Gadzhiyev said.
The National Anti-Terrorism Committee said Vagabov was effectively second in command in the separatist insurgency in the North Caucasus. The head, Doku Umarov, claimed responsibility for the metro attacks, carried out by two female suicide bombers.
The Federal Security Service has said one of the suicide bombers, Dagestani schoolteacher Mariam Sharipova, had been married to Vagabov. But Sharipova’s father has said he believed that his daughter was single because she had promised she would never marry without his consent.
State television showed the immediate aftermath of Saturday’s clash, a smoldering, half-destroyed stone house in a picturesque valley. Security forces in camouflage paced around the bodies.
Umarov has evaded capture in the forested mountains of the region. He announced this month that he was stepping down as leader, but later backtracked.
In other violence in the North Caucasus, a group of gunmen shot dead a policeman and a civilian in separate attacks in Dagestan’s capital, Makhachkala, before opening fire at a cafe, killing one customer and wounding another, Interfax reported, citing police.
Also, Chechen police said Sunday that a militant detonated explosives as officers tried to detain him, killing himself and one policeman and injuring nine other officers.
Police spokesman Magomed Deniyev identified the militant as Khamzat Shemilev and said he was suspected of organizing and carrying out a series of terrorist acts.
Deniyev said police surrounded 
Shemilov when he left his house Saturday night in the center of Grozny. The militant fired a couple of shots, but when he realized he could not escape he detonated the explosives he was carrying.

TITLE: Voloshin Says He Agreed To Join Uralkali’s Board
AUTHOR: Bloomberg, Vedomosti
PUBLISHER: Combined Reports
TEXT: MOSCOW — Alexander Voloshin, former chairman of mining company Norilsk Nickel, said Thursday that he agreed to be nominated to the board of potash producer Uralkali.
He accepted the proposal of Uralkali’s controlling shareholder Suleiman Kerimov to join the board, Voloshin said, adding that it remains to be seen whether he will become chairman. Uralkali will have a shareholders meeting Sept. 17 to re-elect the board, according to its web site.
A source close to Uralkali said that for the first time in 14 years, Dmitry Rybolovlev, former owner turned minority shareholder, would not be part of the board. Instead, Andrei Konogorov, long-time associate and former president of Uralkali, will represent Rybolovlev’s interests.
Alexander Nesis and Filaret Galchev, new co-owners of Uralkali, do plan to hold seats on the board, two sources told Vedomosti earlier. But their names on the list of candidates could not be confirmed Wednesday. Spokespeople for Nesis’ IST holding and Galchev’s EuroCement did not answer Vedomosti’s questions.
Kerimov, a senator from Dagestan, recently became Uralkali’s biggest shareholder and shortly before that was named deputy head of the working group for the creation of an international financial center, which Voloshin heads.
Kerimov proposed offering Voloshin the chairmanship because he considers him an extremely qualified manager, from a strategic point of view, said a source close to Uralkali’s new shareholders.
Voloshin had chaired Norilsk Nickel’s board since December 2008, but at a shareholders meeting this year he did not gather the necessary votes from the shareholders to stay on. United Company RusAl, which nominated Voloshin in accordance with an agreement with its creditor Vneshekonombank, accused the management of wrongdoing during the voting.
The vote ended in an open confrontation between the main owners of Norilsk Nickel: Oleg Deripaska and Vladimir Potanin. Both sides have already promised to buy the other out.
Voloshin’s return to head Norilsk’s board has not been ruled out. Kerimov, who has already bought stakes in Uralkali and Silvinit, is interested in creating a global mining champion and would like to see Norilsk become a part of it, said an acquaintance of the entrepreneur. He added that if this works out, leadership of the board of directors of a united company could be offered to Voloshin. RusAl, Norilsk Nickel and Potanin’s Interros would not comment on this idea Wednesday.
The creation of a global mining company is an interesting idea, said Kirill Chuiko, an analyst at UBS. But it will be difficult to implement and will require a lot of time to coordinate the interests of the shareholders and others.
Norilsk shareholders may not favor such a merger, Voloshin said Thursday.
“Such a deal would require the consent of every major shareholder of Norilsk, which is not likely at the moment,” he said.

TITLE: Financial Investigator’s Son Working at Aeroflot
AUTHOR: By Tatyana Voronova and Viktoria Sunkina
PUBLISHER: Vedomosti
TEXT: MOSCOW — The son of the country’s financial intelligence chief works for state airline Aeroflot, where he is responsible for handling the company’s cash and one of its top projects, Sheremetyevo’s Terminal D.
Andrei Chikhanchin, son of Federal Financial Monitoring Service head Yury Chikhanchin, has been working for nearly nine months at the firm Terminal, according to state-run Vneshekonombank’s quarterly report.
Relatively little is known about the 28-year-old. He worked at VEB’s infrastructure department, where he was involved in transportation projects, and now he is deputy director of Aeroflot’s corporate finance department.
The details of the younger Chikhanchin’s education are kept private. In 2007, he defended a dissertation on regional infrastructure at the Institute of Regional Economic Research. His research supervisor was Irina Rukina, an academician at the Russian Academy of Natural Sciences and a former Moscow City Duma deputy. She could not be reached for comment Tuesday.
In September 2009, Andrei Chikhanchin joined Terminal’s board of directors as a nominee from Aeroflot, but he has no other posts within that company, a spokesperson said in response to questions from Vedomosti. The company does not publish its financial reports.
Terminal is managing the construction of Terminal D, one of Sheremetyevo’s most expensive projects. The facility has cost Terminal’s shareholders — Aeroflot, VEB and VTB (with 52.82 percent, 25 percent and 22.8 percent, respectively) — more than $1 billion.
Last year alone, Aeroflot had to borrow $236.3 million from state-run VTB and VEB to finish building the terminal, bringing the overall total of loans for the project to $811.7 million as of the end of 2009.
Chikhanchin’s main employer, Aeroflot, is pleased with his work. “He’s the only person in the company working on this entire sector. He does financial and investment derivatives, places temporarily free cash, and he’s doing it fairly successfully. Not long ago he was given a raise,” said his boss, Aeroflot financial director Shamil Kurmashov.
According to the airline’s international financial reporting, it had short-term investments in stocks and bonds of $10.4 million at the end of 2009, with yields to maturity varying from 7.3 percent to 18 percent.
Chikhanchin has to his credit a cross-currency interest-rate swap that cut Aeroflot’s costs to service a loan to a record low of 3.89 percent, Kurmashov said.
What’s more, he said, Chikhanchin is coordinating the financial assets of Rosavia, a holding created by the Moscow city government and state-run Russian Technologies. Rosavia’s assets are currently being handed over to Aeroflot.
Yekaterina Karasina, head of VEB’s press service, confirmed that Chikhanchin no longer worked at the development bank, but declined further comment.
Yury Chikhanchin was on vacation and did not answer a call to his office.
The younger Chikhanchin is not the first child of a famous father to find work at VEB. Pyotr Fradkov, son of former prime minister and Foreign Intelligence Service chief Mikhail Fradkov, is a deputy head of VEB. Alexander Ivanov, son of Deputy Prime Minister Sergei Ivanov, also works there as a department head.

TITLE: Export Ban Causes Anxiety in Egypt
PUBLISHER: The Associated Press
TEXT: CAIRO — Russia’s temporary ban on grain exports is stirring both political and economic anxiety in Egypt, the world’s largest wheat importer, where half of the 80 million residents rely on subsidized bread to survive.
Russia, which supplies more than 50 percent of Egypt’s wheat imports, had announced a temporary ban on grain exports earlier this month because of a drought. In addition, Ukraine on Tuesday said it plans to halve grain exports for the rest of the year.
The Russian move predictably sent global grain prices higher. But for Egypt, it carried serious political and economic implications, and it came at a delicate time for a government already accused of corruption and ignoring the needs of the poor.
Protests over increasing food prices have been rife ahead of upcoming parliamentary elections this year and presidential elections next year, giving rise to concerns about who will steer a nation that has known one ruler for almost 30 years.
On Monday, a 24-year-old man known to suffer from a heart condition died while waiting in a chaotic bread line outside a bakery in southern Egypt. Authorities said he died after a two-hour wait in the line on a particularly hot day.
The media called him “the first victim” of bread lines in the holy month of Ramadan, when consumption of bread and baked sweets are at an all-time high.
“Subsidized bread is the most important thing the government gives to the people,” said Egyptian economist Mohammed Abu Pasha of investment house EFG-Hermes. “It is a very basic and sensitive issue, and the government had to act quickly to reassure people. It is not about elections; it’s about possible social unrest.”
Bread is one of the few affordable staples in the country — costing the equivalent of 1 cent per round loaf.
Its subsidization, for decades, was one of the many unwritten “understandings” between the government and the country’s poor majority, even though food subsidies cost the country $3 billion per year — or roughly 65 percent of what it made in the fiscal year 2009 from the Suez Canal, one of its key foreign-currency revenue sources.
Along with education and health care, the government’s tacit pledge to help shoulder the costs of key goods was integral to its ability to appease a nation where officials are widely seen as corrupt, favoring wealthy business interests at the expense of the nearly 50 percent of Egyptians who live on less than $2 per day.
The government has been burned by bread before.
When it attempted to lift subsidies in 1977, deadly riots erupted. Authorities backed down and called in the army to maintain order in major cities.
The lesson from those bloody days in January, 33 years ago, resonates to this day.
Reminders have since emerged.
In 2008, at least seven people died in fights in bread lines that formed because of shortages.
The shortages were so acute that President Hosni Mubarak, Egypt’s ruler for the past 28 years, ordered army- and police-run bakeries to step up production of the subsidized loaves to meet demand.
Small — though seemingly daily — protests over the past few months over rising prices are getting increasing media attention, and authorities would face serious challenges in keeping them from spreading.

TITLE: Bank Faces Risk of Luzhkov Leaving
AUTHOR: By Tatyana Voronova
PUBLISHER: Vedomosti
TEXT: MOSCOW — Bank of Moscow gets along so well with the city government that the approaching shakeup at the Mayor’s Office may have an effect on its business.
Mayor Yury Luzhkov’s term will expire in summer 2011, and he cannot count on being granted an additional term, as President Dmitry Medvedev has embarked on a project of rejuvenating regional authorities.
The replacement of the mayor is one of the main risks for the credit ratings of Bank of Moscow, said Yekaterina Sidorova, an analyst at Troika Dialog. Once Luzhkov leaves, the bank may lose its quasi-sovereign status and the privilege of servicing the city budget. The city money represents a third of the bank’s funds from clients, including state enterprises, although Sidorova said she thought that Bank of Moscow would be able to replace it by borrowing on the market.

TITLE: Investment Banks To Help Sell State Assets
AUTHOR: By Lyudmila Tsubiks
PUBLISHER: The St. Petersburg Times
TEXT: The Ministry of Economic Development has created a list of foreign and domestic investment banks that will organize the sale of state assets and the deployment of state bonds in the privatization of state companies. Amendments to the law on privatization, which will involve the investment banks in the sale process, were introduced in January this year. ?
The main criterion for the selection of the banks was their rated performance. The list includes 20 investment banks, of which 11 are foreign-owned, including Credit Suisse, Deutsche Bank, UBS, JP Morgan, Morgan Stanley, Goldman Sachs and Citigroup. The Russian banks include VTB Capital, Troika Dialog and Renaissance Capital. The list is not final, and is expected to be approved before the end of the month. ?
The main objective of the investment banks will be to find a buyer and sell off state assets at a maximum price. A seller for each asset will be approved by the government, and the remuneration fixed. Assisting with privatization operations looks set to be a profitable business for investment bankers. According to Russian Newsweek magazine, which cited a letter from the deputy minister of economic development, investment bankers will receive five billion rubles per year. 
According to the government’s plans, the proceeds from assets sales will be a valuable source of income for the budget deficit. The Ministry of Finance expects to receive about one trillion rubles in three years. The decision to include mainly foreign banks on the list shows a desire to involve buyers from abroad in the privatization process. 
“The experience of investment banks may be useful in assessing the company’s assets,” Yaroslav Lissovolik, chief economist at Deutsche Bank told RBK Daily. “In addition, their involvement indicates a certain interest in the sale of state assets to foreign companies.”
According to experts at Marker magazine, the participation of investment banks in the privatization of state companies can be explained by a reshuffle in the divisions of Western and Russian investment banks. This year, UBS, Morgan Stanley and JP Morgan have been appointed the new heads and co-heads of investment banks in the region. There have also been changes in the staff of Renaissance Capital, Troika Dialog and VTB Capital banks. However, as Marker noted with reference to experts, Russian investment banks will get the best deals. 
“Ties with the government, good results in placing state bonds and a strong team immediately put VTB Capital bank in the category of favorites,” according to the magazine.
From 2011 to 2013, the Russian government intends to privatize the assets of the largest state companies in order to reduce the budget deficit. The preliminary list includes the privatization of 11 companies.

TITLE: Rain Allows Farmers To Sow Grain Crops
AUTHOR: Bloomberg, SPT
PUBLISHER: Combined Reports
TEXT: MOSCOW — Russian farmers began sowing some winter crops after rain fell in central regions last week, though planting conditions will mostly stay worse than usual in the next 10 days, the national weather center said.
“Given the uneven distribution of rainfall, farms were able to start selective planting of winter grain crops depending on precipitation levels of specific fields,” the Federal Hydrometeorological Center said on its web site Monday.
Sowing may be possible in some areas in central parts of the Volga Federal District, where rainfall exceeded 20 millimeters (0.8 inch), the center said. Farmers in the Chelyabinsk and Kurgan regions in the Ural Mountains also started “selective” planting after the rains, the center said. 
Russia is suffering from its worst drought in at least 50 years, forcing the government to lower its forecast for the national grain crop by 38 percent from its original estimate to as little as 60 million metric tons. Farmers have delayed sowing winter grains because of the drought and may have to boost the area planted with lower-yielding spring grains.
Conditions for winter-crop sowing in most areas of the so-called black earth region and in the south of the Urals Federal District will be “worse than usual” in the next 10 days, and in central Russia as far south as Oryol they will be “satisfactory,” the center said. Harvesting conditions in the country’s center, western Siberia and the northern part of the Urals will be “satisfactory,” it said.
Rainfall last week in the black earth region was too light and no heavier than 7 millimeters, and conditions for late crops remain unfavorable, the center said.
Russia needs more rain for the soil to be ready for sowing, as precipitation brought by the cold front that arrived Thursday did not significantly improve the situation, Alexander Korbut, vice president of the Russian Grain Union, said in an interview.
“It’s time to start now. Sowing in some regions should have been in full swing already,” he told The St. Petersburg Times, adding that all regions except for Siberia, where sowing of winter crops starts later, needed abundant rainfalls to ready the soil.
Most of the 18 regions of the Central Federal District, including the Tver, Ivanovo, Vladimir and Bryansk regions, received 17 millimeters to 46 millimeters of rain on Thursday, the Federal Meteorological Service said Friday.
The Tver and Ivanovo regions received the heaviest rain, with about 33 millimeters and 46 millimeters, respectively, the center said on its web site.
Four of the 14 regions in the Volga Federal District received 20 millimeters to 33 millimeters of rain Thursday night, while the Krasnodar region — in the Southern Federal District — got 65 millimeters.
“The rain we have received is still insufficient. We need more rain, which we haven’t had for more than two months,” said Dmitry Rylko, director of the Institute for Agricultural Market Studies.
He said that a total of 20 millimeters to 25 millimeters of precipitation was needed to aid sowing of winter grain crops.
A number of regions, including those in the Central and Volga federal districts, had to delay sowing of winter crops for at least five days, although these regions are not of key importance, Rylko said.
Sowing of winter grain crops usually starts Aug. 15 in the northern regions, with southern Russia planting slightly later.
The Federal Meteorological Service forecasts heavy rain in most of Russia through the end of August, although the rates of precipitation will remain below the norm in some regions, including the Samara and Volgograd regions.

TITLE: Transneft Criticizes Contractor
PUBLISHER: Bloomberg
TEXT: MOSCOW — State pipeline operator Transneft complained Friday of construction delays and shoddy work by builder Stroitransgaz on links to China and the Baltic Sea.
Transneft has “concrete grievances with Stroitransgaz as a contractor due to delays and the poor quality of their work,” the company said on its web site.
Russia is building a 770 billion ruble ($25 billion) oil link across East Siberia to boost flows to China and a pipeline bypassing Belarus to a port near St. Petersburg after payment disputes with Minsk.
Transneft has raised tariffs to help pay for construction, against the protest of oil producers who say cost increases may slow resource development.
Stroitransgaz, controlled by energy trader Gennady Timchenko’s Volga Resources investment company, said Aug. 13 that failure to agree on payments with Transneft hurt its second-quarter results.
The pipeline builder said its loss, which increased to 3 billion rubles ($100 million) in the first half from 590 million rubles a year earlier, may narrow in the third quarter after it completes payment talks with clients.
“Unresolved problems” in calculating costs and signing off on completed work with Transneft and the Vankor unit of state-run Rosneft were the main reasons for the loss, Stroitransgaz said in its financial filing.
Stroitransgaz did not reply to an e-mail. Rosneft declined to comment.

TITLE: Anti-Monopoly Body Opens Cases Against Bread Makers
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The country’s competition watchdog opened cases against six bread producers on Friday, accusing them of price gouging as grain prices rise because of a drought that has significantly reduced the country’s harvest.
The price gouging cases come as fears grow among consumers that the drought will lead to long-term price rises.
According to a survey of 3,000 respondents conducted by Superjobs.ru, 83 percent of Russians believe that food prices will rise by at least 5 percent by the end of the year. And 38 percent of respondents expect prices to grow by 10 percent or more, according to the survey, conducted during the first week of August.
But according to official data, a countrywide acceleration in food price hikes has not yet been observed. Over the first seven months of the year, prices for food have increased 5.7 percent, with a 0.3 percent month-on-month increase in July.
That compares with an increase in the overall consumer price index of 4.8 percent in January through July. The figure for the same period in 2009 was 8.1 percent.
The Federal Anti-Monopoly Service has been closely monitoring producers of bread — prices of which have a particularly strong psychological impact on consumers.
The service’s Moscow branch opened probes into several producers in July, and the investigations showed that six companies raised prices by 10 percent to 20 percent between July and Aug. 16, the service said in a statement.
The service said the six bread producers had similar prices for their wheat and rye bread at the beginning of July, but they simultaneously raised their prices.
“On the basis of these facts, the Moscow Federal Anti-Monopoly Service suspects these enterprises of engaging in concerted actions that may lead to limiting competition,” the service said in a statement.

TITLE: Power Cut May Cause Prices to Rise
PUBLISHER: Bloomberg
TEXT: MOSCOW — Last week’s blackout in St. Petersburg may force the government to accelerate a planned revamp of the country’s derelict power grid and encourage utilities to raise prices, VTB Capital said.
“Although the early estimates put losses at only 100 million rubles ($3.26 million), we consider this event important for the utilities sector,” VTB Capital Moscow-based analysts Dmitry Skryabin and Mikhail Rasstrigin said in an e-mailed note. “The blackout will draw government attention to the sector and will accelerate the currently pending RAB introduction for grids,” which determines pricing based on asset values.
About 40 percent of St. Petersburg, where Prime Minister Vladimir Putin was born, had no electricity for at least an hour on Friday after a local substation failure. The blackout caused the subway and commuter trains to grind to a halt and traffic lights to shut down during the evening commute. (See related story, page 1.)
The power failure may also allow utility companies to charge more for their services to channel funds into maintenance and reconstruction of infrastructure that is in a “poor condition,” VTB Capital said. The level of power grid and equipment depreciation is 50-70 percent, according to the bank’s estimates.
Moscow suffered a power outage in May 2005 that halted traffic and stock trading. Seven months later, national power utility Unified Energy System cut supplies to some industrial users in the Russian capital to avoid another blackout amid record cold temperatures.

TITLE: IN BRIEF
TEXT: <strong>Drought Damages</strong>
MOSCOW (Bloomberg) — Russian agriculture suffered a loss of about 32.7 billion rubles ($1.1 billion) from this year’s drought, Interfax reported Monday, citing Alexander Petrikov, a deputy agriculture minister.

<strong>Wheat Prices Slump</strong>
MOSCOW (Bloomberg) — Russian wheat prices fell as much as 8.3 percent last week after the government banned outbound shipments, SovEcon said.
Fourth-grade milling wheat, the main export variety, fell 8.3 percent to 5,525 rubles ($180) a metric ton in the week through Aug. 20, the Moscow-based research agency said. Third-grade milling wheat was offered at 5,800 rubles a ton, down 7.6 percent, SovEcon said on its web site Monday.
The government’s ban on grain and flour exports until Dec. 31 came into effect on Aug. 15.

<strong>Polymetal Gets Credit</strong>
MOSCOW (Bloomberg) — Polymetal, Russia’s largest silver producer, said it got a $100 million revolving credit line from Moscow-based Nomos Bank.
Polymetal will use the funds, which can be drawn down in dollars, euros and rubles, to finance the operations of its subsidiaries, the St. Petersburg-based company said in a statement.
The amount, interest rate and duration of each tranche will be decided at the point of its draw-down, according to the statement. The maturity will be no later than Nov. 30, 2012, Polymetal said.

<strong>Sugar Duty to Decline</strong>
MOSCOW (Bloomberg) — Russia’s raw-sugar import duty may fall to $140 a metric ton in October, the Institute for Agriculture Market Studies said, citing preliminary calculations based on the sweetener’s price in New York.
“If sugar prices stay at the same level, the duty will be at $140 a ton in October,” Yevgeny Ivanov, a sugar analyst at the institute, also known as IKAR, said by telephone Monday. The duty will be $171 a ton in September, according to the Customs Union Commission.
Recent rains in the drought-hit areas in central Russia and along the Volga have been “of some help” to the sugar beet plantings, he said. IKAR forecasts sugar output from domestically grown beet at between 2.8 and 3 million tons.

<strong>Eurochem Profits Fall</strong>
MOSCOW (Bloomberg) — Eurochem, Russian billionaire Andrei Melnichenko’s fertilizer maker, said second-quarter profit fell 66 percent compared with a year earlier after a foreign exchange loss.
Net income declined to 2.49 billion rubles ($81 million) from 7.39 billion rubles a year earlier, the company said Monday in an e-mailed statement. Sales rose 38 percent to 23.8 billion rubles.

<strong>Turks in Talks</strong>
ISTANBUL (Bloomberg) — Turk Hava Yollari, the carrier known as Turkish Airlines, is in acquisition talks with three or four companies in Africa, Russia and Europe, Sabah reported, citing chairman Hamdi Topcu.
The talks aren’t in the final stages and it isn’t certain if they’ll all be successful, Topcu told the newspaper. Turkish Airlines plans to carry 56 million passengers in 2015, Sabah cited Topcu as saying.

TITLE: Heat Bites Into Sales Of Summer Sweets
AUTHOR: By Yulia Shmidt and Irina Skrynnik
PUBLISHER: Vedomosti
TEXT: MOSCOW — Sales of sugary goods have fallen at least twice as hard as usual this summer, as the abnormal heat causes consumers to stay away from sweets, retailers and producers said.
Sales of sugary goods fell 30 percent to 40 percent this summer in stores owned by X5 Retail Group, which includes the Pyatyorochka, Perekryostok and Karusel brands, compared with a typical summer decline of 15 percent, an X5 spokesman said.
“In our stores, the decline was smaller than on the broader market because we have installed good cooling equipment, allowing us to preserve sweets. Smaller retail locations didn’t have the conditions to work with such products,” he said.
The decline was most pronounced this summer in sales of fresh cakes, candy bars and chocolates, while demand for pastries such as pryaniki, cookies and sukhariki declined less, the X5 spokesman said.
On average, retailers ordered 40 percent fewer sweets in July and August, which they attributed to a corresponding fall in the market, said Tatyana Ilina, director of Russkiye Produkty Torg’s department of chain sales.
Companies also cut their purchases because of a lack of equipment for storing and transporting the products, she said. Not all stores even have air conditioners, and only large retail chains have cooled delivery trucks, she said.
The commercial director of a large retail chain, who asked not to be identified, said his company stopped buying candy in July.
“Demand collapsed, and far from every store has air conditioners installed. In this situation, the only reason to buy these goods would be so that you could throw them away later,” he said.
Producers are also complaining about the dwindling demand for sweets this summer.
Chocolate sales fell 20 percent this summer compared with the same period last year, said Natalya Kalyuzhnaya, director of marketing at Ritter Sport Chocolate. This year, the drop exceeded the typical seasonal decline, spokespeople for Kraft Foods Rus and Nestle said.
Nestle was able to partially compensate for the fall because of increased demand for ice cream, a spokesman said. For example, sales of Extreme ice-cream cones in X5, Real and Aliye Parusa stores doubled from last year, while sales of Bon Paris popsicles in CityStore locations rose tenfold, he said.

TITLE: Putin Slams Officials for Wasting $13.5 Billion
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prime Minister Vladimir Putin singled out Volgograd City Hall in his criticism of corruption Friday, while blasting regional and local officials for some $13.5 billion in pointless spending last year.
The city handed out most land plots for construction to its officials or their partners and relatives, he said.
Citing a week-old report by the Prosecutor General’s Office on Volgograd, Putin said real estate developers competed for only 28 land plots in the past 2 1/2 years, out of the total of 600 plots handed out.
“We need to eradicate this practice. We need to root it out,” Putin said, adding that pressure from the federal government would apply throughout all of Russia. “If we keep these types of management techniques, there won’t be … cheap housing in the country.”
The attack on the mayor at the regular session of the Presidium, a scaled-down Cabinet, came as the government’s program to build affordable housing has effectively stalled. Putin heard multiple complaints about the city at a construction-related meeting in Volgograd last month.
A United Russia member, Volgograd Mayor Roman Grebennikov, did not publicly respond to the criticism over the weekend, but his administration had been taking steps to rectify the situation since prosecutors filed the report. It vowed Thursday to auction off 22 land plots before the end of this month.
Putin also blamed city and regional chief executives across the country for 415 billion rubles ($13.5 billion) of “ineffective, essentially empty spending” last year,  particularly in public education and health care.
“The more we spend on these areas, the higher the amount of ineffective outlays,” he said.
Regional Development Minister Viktor Basargin said the 415 billion rubles amounted to more than 6 percent of total regional and municipal spending.
The Presidium on Friday handed out a total of 1 billion rubles to 20 regions to encourage their success in managing local affairs.
Putin said regional and municipal authorities reduced their staff by 4 percent last year.

TITLE: E.On Asks for Lower Gas Prices
AUTHOR: By Yelena Mazneva and Vladislav Novy
PUBLISHER: Vedomosti
TEXT: MOSCOW — Germany’s E.On is asking Gazprom to lower its prices for gas again, after convincing the export monopoly to give way on prices just this spring.
Last year was the first time that Gazprom had to deal with a sales crisis: Its gas output was the lowest in its history, and exports to Europe plummeted by 11.5 percent — and not only because of the conflict with Ukraine.
The large difference between Gazprom’s prices and those of its competitors in Europe took a serious toll.
“We’re not opportunists,” Gazprom Export chief executive Alexander Medvedev loved to repeat when explaining why Gazprom would not give discounts during the crisis.
Eventually, however, it had to give way. In 2009, several large European partners demanded that Gazprom adjust to the changes in the retail environment, according to a January report by Medvedev for Gazprom’s board. Russian gas was losing its competitiveness because of its high prices compared with gas from Norway, the Netherlands, Qatar and other countries.
Germany’s E.On, Wingas and RWE, Turkey’s Botas, Italy’s Eni, France’s GDF Suez, Austria’s EconGas, Finland’s Gasum and other companies demanded that Gazprom lower its prices and ease the terms of its contracts, spokespeople and sources close to the companies said.
Ultimately, at least five clients got discounts, and the average analyst estimate for Gazprom’s lost revenue was about $2 billion for this year alone.
But the story did not end there, as Gazprom is preparing for a new standoff. One of its biggest buyers, E.On Ruhrgas, is again asking for lower prices because its clients are demanding them, a Gazprom employee and an executive at one of its subsidiaries told Vedomosti. The sources did not say whether talks had already begun.
“We are always in talks with all of our suppliers on bringing their terms into accordance with the market environment,” E.On spokesman Kai Krischnak said, declining further comment.
E.On chief executive Johannes Teyssen, however, already warned at the beginning of August that the company would start to lose profits by October if its main suppliers did not lower their prices, Platts reported. He also said the company would hold talks with all its suppliers in hopes of reaching deals by the end of the year.
Other buyers have not yet approached Gazprom about lower prices, one of Vedomosti’s sources said, adding that it could not be ruled out.
A Gazprom spokesperson said none of its European clients was holding such talks with the company.
At the beginning of the year, E.On was able to secure an agreement under which it would get part of its gas at spot prices until the end of 2012, a Gazprom spokesperson said earlier.

TITLE: Multimillionaire Held for Offering Bribe
PUBLISHER: Bloomberg
TEXT: Russian investigators arrested a Siberian multimillionaire after he was caught in a sting operation trying to pay a bribe to halt a criminal probe into one of his companies, prosecutors said.
Eduard Taran, founder of RATM Holding, a Novosibirsk company with cement, coal and construction assets, was detained in Moscow and charged with attempting to pay more than 1 million rubles ($32,000) to an officer of the Interior Ministry’s economic crimes department, the Investigative Committee of the Prosecutor General’s Office said Monday on its web site. Taran organized the payoff through an intermediary, who is also in custody, according to the statement.
Taran was arrested in the VIP lounge at Sheremetyevo International Airport after returning from Nice, France, Kommersant newspaper reported earlier Monday, citing unidentified police officers briefed on the operation. A person who answered the phone at RATM’s press office said the company was aware of the arrest, declining to comment further. Taran’s fortune is worth about $100 million, according to Finans magazine’s annual rich list.
The businessman’s detention came two days after a nationwide poll showed that Vladimir Putin’s biggest failure in his decade as president and prime minister has been the fight against corruption. Given a list of Putin’s possible failures, 37 percent of 1,600 respondents named the struggle with graft, 24 percent the taming of billionaires and 18 percent the fight against crime.
The world’s largest energy supplier last year ranked 146th among 180 countries in the Transparency International Corruption Perceptions Index, on a par with Zimbabwe, Sierra Leone and Cameroon. The country is the 20th riskiest place to do business, according to Maplecroft, a Bath, England-based risk adviser.

TITLE: City Left In the Dark
AUTHOR: By Anna Shcherbakova
TEXT: 
On Friday evening, St. Petersburg suffered a massive blackout. At about 6.30 p.m., the electricity went off in seven of the city’s 18 districts and some parts of the Leningrad Oblast. The metro ground to a halt, along with commuter trains and the trolleybus network. Automatic doors were blocked, and hundreds of elevators stopped with people inside them. 
To make matters worse, the water was also turned off almost everywhere because the pumping facilities had no electricity. Huge traffic jams formed on the city’s darkening streets due to the disabled traffic lights. Crowds of people walked along the streets. Storage cell operators claimed that reserves would not last more than two to three hours. 
Along with the lack of electricity, there was also a shortage of information. Radio stations and television were out of service, and the local news sites and wire services that stayed alive were overloaded. Bloggers reported what they were seeing — or rather, not seeing. Friends and relatives called journalists asking alarmed questions.
The power remained on at St. Isaac’s Square, where the offices of The St. Petersburg Times and the St. Petersburg bureau of Vedomosti are located. Calls to the Emergency Ministry went unanswered for some time, while power companies responded with uninformative excuses. City Hall was silent. 
The first official news release came from Territory Generating Company (TGK-1), which stated that the problem with the energy supply was not TGK’s fault. At that time, most districts already had electricity again and the alarm was over. After 8 p.m., City Hall — whose office was also left without electricity — reported that the problem had happened at the Eastern power plant, which is owned by the Federal Network Company (Federalnaya Setevaya Kompaniya) and located in the Vsevolozhsky district of the Leningrad Oblast. The plant was built in 1964 and has been only partly renovated. The emergency may have been caused by the plant’s aging equipment, by a drop in temperature or by increased consumption of electricity during the incredible heat wave. 
Once the emergency was over, more detailed information began to appear, though the causes of the incident are still unknown.
At about 10 p.m., the governor’s press service said that St. Petersburg Governor Valentina Matviyenko was aware of the emergency and had tasked Deputy Governor Alexei Sergeyev with investigating the causes and taking urgent steps to neutralize its consequences. We also learned that 19 of the city’s hospitals had had their power cut off, but no patients had suffered thanks to reserve power facilities. And close to midnight, the Federal Network Company triumphantly reported that all of its energy facilities in St. Petersburg and the Leningrad Oblast were functioning normally.
The next day, state bank Sberbank reported that 300 of its 1,800 ATM machines in the city had been out of service for about an hour and a half. Sixty-eight commuter trains and six long-distance trains were delayed by up to three hours, according to a press release from the local railroad authority. The more time passes since the emergency, which thankfully did not result in any victims, the more details we learn about how everything was brought under control. The echo of an hour-long blackout will be heard for days, resounding ever louder. 

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

TITLE: Russian Blogs Are Harmful to Your Health
AUTHOR: By Victor Davidoff
TEXT: Everyone over the age of 40 has a good collection of failed doomsday prophecies. One of the most recent is that the Internet — especially Web 2.0 — will kill newspapers.
This prediction isn’t so far-fetched. The ritual of reading the morning newspaper over a cup of coffee has long become extinct. Now we rush to our computer screens instead. Web 2.0 is a great source of information, even better than conventional news services. In Russia, it’s virtually the only way to stay informed and definitely the best way to get a sense of people’s reaction to the news. All you need is an extended friend list in LiveJournal, and every time something happens you’ll get news and reaction faster than the wire services. And when there’s a whiff of scandal, news travels at the speed of light.
Some scandals are imported. For example, ethnic Russian bloggers in Ukraine were infuriated by a series of television videos released by one of the channels in commemoration of Ukrainian Independence Day. Each of the 10 videos gave a portrait of one of the ethnic groups populating Ukraine. “Armenians are working,” complained one of the bloggers. “Jews are at school, but Russians…”
So what were the Russians doing? An old, bearded man with the look of a retired sea captain woke up and poured himself a big glass of pickle brine, a favorite Russian remedy for a hangover. Then his son arrived with an accordion and a group of pretty young women, and they all sang the Ukrainian national anthem. Judging by the video, Russians are the happiest people in Ukraine. What’s the problem?
Bloggers by definition are known for concentrating on the negative, but Russia’s political bloggers are some of most unhappy people in the world. Bloggers who support United Russia got very upset with LiveJournal user doctor_liza — or Dr. Yelizaveta Glinka, who is actually a Russian mini-version of Doctors Without Borders. Several years ago, she set up a charitable organization that provides medical assistance to homeless people and terminally ill patients. During the recent fires that swept over Russia, Dr. Liza was one of the first to collect aid and to distribute it to homeless victims.
When fires became a hot political issue, United Russia asked Dr. Liza for a comment. She refused to talk and gave no reason for doing so.
Every person has a right to remain silent before the media. Even Russians know this version of the Miranda rights. It’s not clear why Dr. Liza didn’t want to speak to United Russia. Perhaps she was simply too busy. Or perhaps she didn’t like the clumsy attempts of United Russia to portray itself as volunteer corps battling raging forest fires. One of its regional branches posted a photo of United Russia volunteers supposedly extinguishing a fire. It took bloggers just a few hours to declare that the original photo was actually taken two years ago, and that wisps of smoke had been photoshopped in.
In any case, United Russia was upset by Dr. Liza’s snub and retaliated in full force. On its site, the party posted a humiliating photoshopped image of Dr. Liza with her mouth shut by an industrial-sized zipper. Then a squad of its supporters accused her of every mortal sin. The most far-fetched accusation came from well-known political analyst Mikhail Leontyev, notorious for his Cold War mentality. He said: “It might not have been Dr. Liza’s personal choice not to comment. She might have been ordered not to speak for political considerations.”
Thank you, Misha. You opened our eyes. Before, we all thought that Dr. Liza was a philanthropist and great volunteer organizer. Now we know that she is actually an agent of unnamed — but probably foreign — forces of evil.
And here we have the main peculiarity of surfing the Russian political blogosphere: No matter what links you follow, in two hours you get to some wacky Elvis-is-alive and Jews-rule-the-world post.
When you hit that post, it’s a sign from above that it is time to shut down the computer and get a second cup of coffee along with a good old, politically correct and mentally stable newspaper. No, we won’t let newspapers die. We need them. They are good for our health.

Victor Davidoff is a Moscow-based writer and journalist.

TITLE: Sputnik to Glonass: Playing Catch-Up in Space
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — On a quiet Sunday afternoon, a group of children gathered around a giant moon replica hanging from a wall in the Russian Space Museum.
“Work hard, so that we will be able to fly to the moon in three days,” an elderly museum attendant urged the children. “I think the Chinese will be able to do it faster,” replied one of the children’s mothers.
Such reactions reflect the concerns of many Russians who see their country’s former dominance in the field of space exploration being steadily eroded, as fast-developing upstarts like China begin to make inroads on Russia’s aging Soviet-era space technology.
While most experts agree that Russia’s space technologies still surpass those of China, they add that this might not be the case for long.
“Today they are not competitors, but Chinese space technology is developing fast,” said Igor Marinin, a member of the Russian Space Academy and editor of the industry journal Novosti Kosmonavtiki.
President Dmitry Medvedev has numbered the development of space technologies among Russia’s five priority directions for modernization and has repeatedly emphasized the importance of the country’s space programs.
That puts him in the same company as his predecessor, Vladimir Putin, who said space programs would be among the country’s top priorities, regardless of the financial situation. But despite the optimistic talk, the Federal Space Agency has remained chronically underfunded, a blow to a space program that put the first satellite, Sputnik, in space in 1957.

<strong>Finding Funding</strong>
Russia spent less than the United States and the European Union on space programs in 2009, Anatoly Perminov, head of the Federal Space Agency, said last year.
That is not enough for the country to regain its competitive edge, but it is still a big improvement from the mid-2000s.
“It was sad to answer questions [regarding financing for space programs] two or three years ago,” he said in the radio interview last year.
In 2009, the Federal Space Agency’s budget was about $2 billion, compared with more than $3 billion for Japan, $4.6 billion for the EU and $17.8 billion for the United States. China does not reveal the amount it pays on its space program, but it is estimated to be between $1.5 billion and $2 billion.
Simply ramping up spending, however, is not good enough to ensure the modernization of the space industry. For one thing, the space agency is not known for its efficient use of funds.
Igor Lisov, an expert at Novosti Kosmonavtiki, said that while Russia is about tied with China in terms of the development of its space industry, China spends its money “more rationally.”
In any event, a ramp-up in spending now will not begin to yield results for three or four years. “In the space industry, this money will not bring fast results,” Lisov said.

<strong>Satellite Sovereignty</strong>
But modernizing Russia’s space industry will involve much more than simply funding cash to the Federal Space Agency. As far as the presidential commission on modernization is concerned, it will involve four things in particular: developing the Glonass navigation system, a competitor to the United States’ GPS; developing a system of geographical monitoring that would allow satellites to analyze the land, air and sea from space; adapting an existing space-based defense targeting system for emergency situations; and moving to a system of satellite-based broadband.
Glonass is perhaps the highest-profile of these projects, and the government has spent more than $2 billion on the project since it began developing it in earnest a decade ago — then largely intended for military purposes.
But following the wild consumer success of GPS-based electronic devices, the emphasis behind Glonass has shifted from defense to consumer applications.
“To me, the Glonass program is a real sign that Russia is attempting to join the global marketplace with a highly desired and marketable item,” said Charles Vick, senior policy analyst at Globalsecurity.org, a U.S.-based think tank.
But so far, the country has met with only mixed success in selling Glonass to Russian consumers. While 21 of the total planned 24 satellites are already in orbit, there are only 43,000 Glonass systems currently in operation, according to government figures, and most of those are used by emergency and police vehicles. A pilot program has also been started in which prisoners are issued with Glonass anklets, which allow authorities to monitor their locations.
To give the nascent Glonass system a boost and to ensure what Prime Minister Vladimir Putin has called “satellite navigation sovereignty,” the government is considering introducing a 25 percent import duty on consumer navigation devices that do not use Glonass chipsets.

<strong>Big Dreams</strong>
To make its mark in space, however, Russia first needs to get a few things in order back on earth. For starters, the country still relies on the Soviet-era Baikonur Cosmodrome, located in Kazakhstan, to send its ships and satellites into space.
Instead, it hopes to start sending up civilian spacecraft from the proposed Vostochny Cosmodrome, to be located in the Amur region, with construction slated to begin in 2011.
The government will spend more than $800 million over three years on the new cosmodrome, which it hopes will start taking some of the traffic from Baikonur, which Russia pays Kazakhstan $115 million a year for usage rights.
“Russia should not rule out the continued use of the Baikonur Cosmodrome even though it intends to replace it with the other facility. Both can and should back each other up in the near term,” Vick said.
Another Soviet-era space legacy that needs updating is the rockets used to send vessels into space. Currently, Russia uses the Proton rocket booster, which is reliable but is limited in the amount of payload it can carry.
The Angara rocket has been tipped as the next generation rocket, able to carry 37 percent more payload than the Proton. But its development has been a long time in the making, and shortages of funding have repeatedly pushed back its delivery date.
Originally, the Angara was to be released by 2011, but the Khrunichev Center, which is developing the rocket, said in July that tests on the rocket now would not begin until 2013. By that time, it is likely to already be out of date.
“[The Angara] has been under development for 15 years, and now it is old technology by any measure,” said Marinin, of Novosti Kosmonavtiki.
But the difficulties involved in bringing such projects to fruition has not tempered officialdom’s big dreams for the space sector. The Federal Space Agency has announced plans to build a nuclear-powered space ship that will fly to Mars, among other possible destinations.
The first designs for the ship, based on ideas developed by Soviet scientists in the 1960s, will be ready by 2012, and the government will spend more than $570 million over nine years on the project, much of which will go to Rosatom, which is developing the vessel’s nuclear engine.
“The realization of this project will take Russian engineering to a completely new level, which in many ways will be far ahead of foreign innovations,” said Perminov, head of the Federal Space Agency.

<strong>Return to Science</strong>
But building a new cosmodrome just to send more foreign satellites into space will not give Russia leadership in the field of space exploration. Rather, the country should focus on expanding its own scientific interest in space, experts said.
Although it has launched many foreign scientific satellites into space, Russia has not been able to keep a single one of its own in orbit. The Koronas-Foton satellite, launched in January 2009, stopped functioning because of a battery problem in December of that year. The satellite was supposed to deliver data about the activity of the sun.
Advancing domestic space science is the key to modernization efforts, said Mikhail Pavlinsky, deputy director of the Russian Institute for Space Research.
“Building rockets, cosmodromes and developing Glonass — if we follow this path, then in 15 years, we will just be at the same place we are now,” he said.
But for the time being, developing Russian space-based science means looking abroad for the material to do so.
As Russian scientific institutions began to suffer during the 1990s, astronomers began to rely on foreign-made equipment, since most domestic companies stopped producing parts, Pavlinsky said.
As an example, he cited the X-ray telescope that he and his team are assembling to launch in 2012. The crystal to be used in the telescope was purchased in Japan after a long search of producers within the country.
“It’s turned out to be cheaper and better,” he said.

TITLE: Rwanda Becoming Africa’s  Singapore
AUTHOR: By Helen Vesperini
PUBLISHER: Agence France Press
TEXT: KIGALI — Rwanda’s capital is changing from a sleepy backwater where most things closed at 9 p.m. to a future Singapore with gleaming office blocks and all-night shopping.
Ten years ago, ordering a coffee got you an imported tin of the worst kind of Nescafe accompanied by a pot of powdered milk. Now you can choose from expresso, macchiato or mocha from home-grown beans and the milk comes frothing out of a steamer.
Rwanda’s ambitious “Vision 2020” plan seeks to transform the central African state into a middle-income country and acknowledges: “this will not be achieved unless we transform from a subsistence agriculture economy to a knowledge-based society.”
The country has already successfully promoted top-end eco-tourism around the endangered mountain gorillas that live on the mist-clad slopes of the Virunga volcanoes. It has also positioned its coffee output at the speciality end of the market.
“Kigali is one of the fastest-growing cities in Africa and we are committed to ensuring future growth is based on very good planning,” city mayor Aisa Kirabo Kacyira told AFP.
The Colorado-based OZ Architecture firm has developed a 50-year master plan for Kigali, incorporating a new international airport, and with entire districts of town given over respectively to shopping, offices, technology and medical facilities.
“They are trying to make Rwanda the most sustainable, high-tech, wired country in Africa, a little bit like what Singapore became,” to Southeast Asia, OZ senior architect Carl Worthington told Metropolis magazine. “They are trying to re-invent the whole country.”
“Before 1994 Kigali wasn’t a planned city,” explained Vivian Kayitesi, who manages the division of the Rwanda Development Board (RDB) charged notably with investment promotion.
Kirabo Kacyira wants the future city to be “as beautiful and as sustainable” as the current one, even if its population of one million is poised to double.
Giant yellow cranes are busy on the construction of a convention center that will include 300 top-end hotel rooms and conference facilities for more than 2,000 delegates, with conference tourism something that the RDB is pushing.
An additional 200 top-end rooms are under construction at a Chinese-built hotel in town.
“The target is to go from 700 to 4,800 rooms by the end of 2010,” Kayitesi said, referring to the small highland country as a whole.
To reduce sprawl, the authorities are encouraging investors to go in for 10-plus story buildings.
The country has registered 7.1 percent average GDP growth since 2004 and was chosen “fastest global reformer of business regulations” by the World Bank Doing Business Survey.

TITLE: Australian Leaders Haggle To Form New Government
AUTHOR: By Marc Lavine
PUBLISHER: Agence France Press
TEXT: SYDNEY — Australia’s political leaders Monday began horse-trading with a handful of independent MPs in a bid to form government after a cliffhanger poll that delivered the first hung parliament in 70 years.
Prime Minister Julia Gillard, who suffered a fierce voter backlash, and opposition leader Tony Abbott both launched talks on a coalition administration with three key independent lawmakers who will likely hold the balance of power.
With both leaders claiming to have the mandate to lead a minority government, experts warned the nation’s future could hang in the balance for weeks or months, leaving stock and currency markets flat but cautious.
“The results on the market show the market understands that stable government is continuing,” Gillard said, adding her Labor Party was best placed to form an effective and lasting coalition because it had won the popular vote.
“What that means is that the majority of Australians wanted a Labor government,” she told reporters in Canberra ahead of face-to-face talks with the independents and the Greens party. 
Voters on Saturday turned on Gillard, who came to power in a party coup just two months ago, after a trouble-strewn campaign, stripping her of her strong majority.
Abbott, who says Gillard’s government has lost its legitimacy, also arrived in Canberra to meet the three “kingmakers” — Bob Katter, Tony Windsor and Rob Oakeshott — who are likely to decide who runs the nation. 
Labor and the opposition Liberal/National coalition were each projected to take 73 seats in the 150-seat parliament, short of the 76 needed to rule in their own right, state broadcaster ABC said.
The independents — who all have past ties with Abbott’s party — vowed to stand “shoulder-to-shoulder” to produce a stable government but kept their alliance options open as vote counting from Saturday’s poll continued.
“I don’t have to pick a red team or a blue team, I don’t have to pick Julia or Tony,” said independent Rob Oakeshott, adding that he had spoken to both Gillard and Abbott on Monday.
“What I do have to do is find a way to work together to get a process in place where we can have a confident parliament with a clear majority.” 
The extraordinary weekend election has triggered unusual political turmoil in Australia.
The vote heightens the surreal nature of the campaign after Gillard’s Labor bungled a range of policy initiatives.

TITLE: Iran Launches Assault Boats With Warning
AUTHOR: By Farhad Pouladi
PUBLISHER: Agence France Press
TEXT: TEHRAN — Iran kicked off mass production of two high-speed missile-launching assault boats on Monday, warning its enemies not to “play with fire” as it boosts security along its coastline.
The inauguration of the production lines for the Seraj and Zolfaqar speedboats comes a day after President Mahmoud Ahmadinejad unveiled Iran’s home-built bomber drone, which he said would deliver “death” to Iran’s enemies.
State news agency IRNA reported that Seraj (Lamp) and Zolfaqar (named after Shiite Imam Ali’s sword) speedboats would be manufactured at the marine industries complex of the ministry of defense.
Defense Minister Ahmad Vahidi opened the assembly lines, saying the vessels would help strengthen Iran’s defence forces, IRNA said.
“Today, the Islamic Republic of Iran is relying on a great defence industry and the powerful forces of Sepah (Revolutionary Guards) and the army, with their utmost strength, can provide security to the Persian Gulf, the Sea of Oman and Strait of Hormuz,” Vahidi said.
He issued a stern warning to Iran’s foes.
“The enemy must be careful of its adventurous behaviour and not play with fire because the Islamic Republic of Iran’s response would be unpredictable,” IRNA quoted him as saying.
“If enemies attack Iran, the Islamic Republic of Iran’s reaction will not be restricted to one area. The truth of our defense doctrine is that we will not attack any country and that we extend our hand to all legitimate countries.”
Iran’s arch-foes, the United States and Israel, have not ruled out taking military action over Tehran’s controversial nuclear program.
Iran has in the past threatened to close the Strait of Hormuz, choking off some 40 percent of tanker-shipped oil worldwide, in the event of a military attack.
IRNA said Zolfaqar was a new generation missile-launching vessel which can be used for patrol as well as for attack operations.
“It is designed for quick assaults on ships and is equipped with two missile launchers, two machine guns and a computer system to control the missiles,” the report said.
Fars news agency cited Vahidi as saying that Zolfaqar was to be equipped with the Nasr 1 (Victory) marine cruise missile “which has high destructive power.”
Iran has previously said that the Nasr missile can destroy targets weighing up to 3,000 tons.
IRNA said Seraj, designed for a tropical climate, was also a swift assault vessel for use in the Caspian sea, the Gulf and the Gulf of Oman, adding that it can fire rockets and also be used in stormy seas.
“Seraj is a fast-moving assault rocket launcher using sophisticated and modern technology,” Vahidi was cited as saying by IRNA.
The launch of the production lines comes as Iran marks its annual “government week,” a period when it traditionally shows off its latest technological achievements.
Ahmadinejad on Sunday unveiled a bomber drone with a range of up to 1,000 kilometers, which he dubbed the “ambassador of death.” 
State media said the drone, Karar (Assailant), can carry four stealth cruise missiles, two bombs of 115 kilograms each or a precision missile of 230 kilograms. 
Tehran kicked off its week of military claims on Friday when it fired a surface-to-surface missile, named Qiam (Rising), with some more announcements expected over the next few days. 
The Islamic republic is also expected to test fire a third generation Fateh (Conqueror) 110 missile, after having already paraded a version with a range of 150 to 200 kilometers. 
Iran recently took delivery of four domestically built Ghadir mini-submarines, a “stealth” vessel designed to operate in shallow waters such as the Gulf.

TITLE: Bodies Hung From Bridge in Mexico
AUTHOR: By Oswald Alonso
PUBLISHER: The Associated Press
TEXT: CUERNAVACA, Mexico — The decapitated bodies of four men were hung from a bridge Sunday in this central Mexican city besieged by fighting between two drug lords.
A gang led by kingpin Hector Beltran Leyva took responsibility for the killings in a message left with the bodies, the attorney general’s office of Morelos state said in a statement.
The beheaded and mutilated bodies were hung by their feet early Sunday from the bridge in Cuernavaca, a popular weekend getaway for Mexico City residents.
Cuernavaca has become a battleground for control of the Beltran Leyva cartel since its leader, Arturo Beltran Leyva, was killed there in a December shootout with marines.
Mexican authorities say the cartel split between a faction led by Hector Beltran Leyva, brother of Arturo, and another led by Edgar Valdez Villarreal, a U.S.-born kingpin known as “the Barbie.”
The message left with the bodies threatened: “This is what will happen to all those who support the traitor Edgar Valdez Villarreal.”
Authorities said the four men had been kidnapped days earlier. The family of one of the men reported the abduction to police.
In western Mexico, police found the body of a U.S. citizen inside a car along the highway between the Pacific resorts of Acapulco and Zihuatanejo.
A report from Guerrero state police said the man was shot to death and had identification indicating he was from Georgia.
The U.S. Embassy could not be reached to confirm the man’s identity.
Police said they had no suspects and had not determined a motive.
Guerrero state has been wracked by drug-gang violence, including the strife within the Beltran Leyva cartel. There have also been a series of deadly carjackings this year along highways in the state.
Mexico has seen unprecedented gang violence since President Felipe Calderon stepped up the fight against drug trafficking when he took office in December 2006, deploying thousands of troops and federal police to cartel strongholds.
Since then, more than 28,000 people have been killed in violence tied to Mexico’s drug war.