SOURCE: The St. Petersburg Times
DATE: Issue #626 (0), Tuesday, December 5, 2000
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TITLE: Putin Proposes Symbols Of Past
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW - President Vladimir Putin wants Russia to go back to the past symbolically, proposing on Monday that the country adopt the Soviet-era anthem and tsarist-era coat of arms. 


Following a meeting with leaders of the parliamentary political factions, Putin said he was sending legislation to the State Duma calling for adoption of the double-headed-eagle coat of arms and the familiar white-blue-and-red flag. He also proposed making the Soviet red flag the official flag of the armed forces.

Putin expressed support for adopting the melody of the Soviet-era anthem, a proposal that last week got initial approval in the Duma. 

Since the collapse of the Soviet Union in 1991, Russia has used the tricolor as its flag and a melody by 19th-century composer Mikhail Glinka as its anthem, although words have never been written for the tune. 

But those symbols were established only by the decree of then-President Boris Yeltsin, and Putin, in a statement broadcast on ORT television, said symbols must be approved by law rather than a single person's decree. 

He acknowledged the emotional resonance that the issue has, noting that many people want to abandon vestiges of the decades of communist repression while others resent the fall of communism. 

"We must not dramatize," Putin said, saying that both periods saw substantial accomplishments by Russians that deserve to be honored by adopting those periods' symbols. 

The Soviet-era symbols represent not only repression, he said, but scientific advances and the once-dominant space program. It was under the red flag that victory was won in World War II, he said.

The tsarist-era symbols call to mind cultural titans such as Fyodor Dostoyevsky and Alexander Pushkin, Pu tin said. 

"If we accept the fact that in no way could we use the symbols of the previous epochs including the Soviet one, then we must admit that our mothers and fathers lived useless and senseless lives, that they lived their lives in vain. I can't accept it either with my mind or my heart," Putin said. 

Glinka, who wrote the melody currently used as an anthem, is one of Russia's most lauded composers, but many have complained that the tune is too complex - hard to remember and harder to sing. 

The Soviet anthem, written by Alexander Alexandrov, is stirring and easy to sing, its proponents say. Following the meeting, Duma Speaker Gennady Seleznyov, a Communist, said he hoped the new anthem would be official by New Year's Eve. That would have strong symbolism in itself, because Russians widely regard 2001 as the beginning of the new millennium, rather than the Western preference for 2000. 

But even if the melody is official by then, singers will only be able to hum it because there are no new lyrics in view. Seleznyov suggested the lyrics could be determined by a national competition.

TITLE: Russia May Pay Back Germany With Shares
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - German Chancellor Gerhard Schroeder has announced that Berlin may be willing to trade some of Russia's billions of dollars in debts in return for shares in "the most worthy" Russian corporations.


Schroeder made the surprise announcement over the weekend just after receiving Russian Prime Minister Mikhail Kasyanov. The idea apparently originated in Moscow. 

It's possible that Schroeder was not very happy about it: At a news conference Friday, the German chancellor looked like "a person who had overindulged in lemons," according to the Kommersant daily. The newspaper added that after Kasyanov explained to journalists that Schroeder had "understood that he will never get" a full repayment for Soviet-era debts, Schroeder blurted out a bitter "Ja, ja!"

As of Monday, there were still almost no details of how - or whether - Mos cow's Soviet-era debts of about $22 billion to Germany could be exchanged for stakes in Russian blue-chip corporations. 

A former Russian finance minister suggested sardonically that it would in essence mean making Germany a gift of the entire natural gas monopoly Gaz prom. Other market watchers were similarly baffled.

"The overall capitalization of the Russian stock market is about $52 billion, while Russia's debts to Germany are about $22 billion," said Roland Nash, an analyst with the brokerage Renaissance Capital, in remarks reported by Interfax. "It's hard to imagine that half of all Russian corporations will be transferred to German property."

In fact, it is so hard to imagine that a popular interpretation Monday was that the entire idea was a decoy. 

In just weeks, Moscow is supposed to resume payments on Soviet-era debts owed to national governments abroad - with an $85 million payment scheduled for January and a heftier payment in February, with $3.2 billion ultimately due by the end of 2001.

Efforts to win a postponement have been futile, as Paris Club creditors insist Russia is earning billions thanks to booming oil prices. And indeed, the Central Bank's vaults are holding an all-time high of more than $27 billion in hard-currency reserves.

Now, however, with a novel new German debt-for-Russian equities proposal on the table, Moscow can talk instead of pay and still save face.

Germany is Russia's biggest creditor. But it is also just one of many nations to which Moscow owes money. The Kremlin's sovereign creditors are united in the so-called Paris Club, which holds about $48.4 billion in debts - including $42 billion from the Soviet era - that Moscow has promised to honor. 

Kasyanov told reporters that other members of the Paris Club would also be offered blue-chip shares in exchange for debt relief. But it was far from clear Monday if other nations would opt to play that game - a fact that also suggests the proposal is merely designed to buy time.

"Moscow will win even if Tony Blair, Jacques Chirac and the new American president all reject [the bluechips-for-debt swap]," commented the newspaper Vedomosti on Monday. "For the duration of the negotiations at the highest levels, Russia will enjoy a breather from payments to the Paris Club." 

The Paris Club debt makes up about a third of all Russia's $148 billion in national borrowing. That $148 billion figure includes everything from tsarist-era debt to Soviet-era debt to modern-day borrowing via Eurobonds and World Bank loans. 

It represents a debt burden equal to about $1,000 per Russian citizen (compared to an average annual salary of about $700, and a 2001 federal budget that assumes $40 billion in revenues next year).

But it is the relatively small amount of $3.2 billion due to the Paris Club next year that has the Cabinet preoccupied. It was no doubt with his eyes firmly on the next several weeks and months that Prime Minister Kasyanov called Schroe der's openness to a debt swap "a breakthrough." 

Kasyanov was quoted by Vedomosti on Monday as having told German entrepreneurs those debts could be traded for stakes in Gazprom, in state-owned Russian banks and in the national power grid Unified Energy Systems. The Financial Times reported Monday that Schroeder and President Vladimir Putin would meet in Moscow later this month to discuss further details.

So far, the idea of such a deal has left many observers cold.

"We are skeptical about the substance of this idea," said a statement released on Monday by the United Financial Group brokerage, or UFG. "Debt-for-equity is by definition financially inefficient and untransparent (unless, of course, the assets are priced in a way that gives Russia after all the major debt reduction which Germany so adamantly opposes in principle)."

Any such deal would also hit opposition in the State Duma, where on Friday lawmakers - partly in response to the startling Kasyanov-Schroeder announcement - quickly passed a ban on selling off stakes in major corporations.

Kasyanov has offered debt-for-equity swaps to other nations who owe Russia money - most notably Uk rai ne, which owes massive debts for gas purchases. Kasyanov has proposed to Ki ev that its gas debts be turned into IOU vouchers that can be used as chits to buy up Ukrainian properties at future privatizations.

TITLE: Mental Patients Have Kids Hospital All Sewn Up
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: It used to be that sewing sheets or making boxes was the sort of low-level labor given to those assigned to Soviet-era mental institutions. 


And while the connotations of having their babies swaddled in sheets sewn by mental patients may be unusual for some new mothers, it is just this idea that occurred to the Caledonia Club, a Scottish-supported charity, to solve some of the many shortages at St. Nikolas Hospital. 

Last week, the St. Nikolas Children's Hospital received 1,000 free sheets for sick babies that were sewn by patients at the St. Nikolas psychiatric clinic. 

The patients' work was paid for by the Caledonia Club, which has been involved in several charity programs in the city, including support for the Art Therapy Center at the Russian Museum.

The St. Nikolas Children's Hospital - like virtually all state-funded clinics in Russia - can barely find nurses willing to accept their wages, while doctors work several jobs to make ends meet, including jobs not related to medicine. And like other state clinics, St. Nikolas is not likely to attract the eyes and wallets of wealthy Russians. 

"Though we do get certain help from the city administration and sometimes from foreign charities or businesses, Russian sponsors remain indifferent to our problems," said Galina Goncharova, St. Nikolas Children's Hospital's chief doctor.

The Caledonia Club was anxious to help out, however. 

"The Scots do not need the exposure. We are trying to draw attention to the plight of Russian hospitals," said the club's president, Adrian Terris. "And we are happy to help the two at once."

The Soviet practice in mental institutions of sewing and building boxes served, the authorities said, as occupational therapy. It also helped build up cash for clinic budgets. Now, the more depoliticized atmosphere of mental institutions could certainly use the money. 

"In those years, the system worked quite well with workshops given lots of work that was always paid for on time," said Vladimir Agishev, chief doctor at St. Petersburg Psychiatric Hospital No. 3. 

"But now, the hospitals or schools or other social institutions [which once were our customers] are too broke to afford even that, so we can barely offer any work for the patients."

Asked to estimate her clinic's most urgent needs, Goncharova couldn't even determine what kind of assistance would be the most helpful at the moment. "Frankly, we would welcome anything," she said in an interview last week. 

"People may just come and have a look at the hospital ..."

"Ours is a small input, indeed, but with more help like this, we can really make life better for the clinics and its patients," Terris said.



Those willing to make donations can reach St. Nikolas Children's Hospital at 114-45-73.

TITLE: Stepashin: Chechen Cash Stolen
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Investigators with the Audit Chamber say that federal money intended to rebuild Chechnya has been embezzled and top officials in the Finance Ministry and Economic Development and Trade Ministry have played a part.


"We are sending materials to the Prosecutor General's Office and there are concrete officials there, officials of the Finance Ministry and the Economic Development and Trade Ministry," said Audit Chamber head Ser gei Stepashin.

Stepashin did not name names and would only say two highly placed officials were involved.

The Audit Chamber also found that the Kremlin-installed Chechen administration of Akhmad Kadyrov misspent 27.4 million rubles (just under $1 million) - including 4.1 million rubles ($146,000) meant to pay the wages of teachers and doctors, but which the Audit Chamber found was spent on travel and purchases by Kadyrov's officials.

Officials with the Finance Ministry and Kadyrov's administration both rejected Stepashin's allegations.

Speaking after a closed-door meeting Friday of the collegium of the Audit Chamber, at which the investigation into Chechen reconstruction funding had just been presented, Stepashin also had harsh words for how little has been done to restore order in Chechnya.

"We must admit that the situation is simply pathetic," he told reporters. "Nothing is being rebuilt there and nothing works.

"Since July of this year, the program of rebuilding Chechnya has been virtually at a standstill," Stepashin said. He said not one major industrial concern had been put back on its feet since the second war began in autumn 1999.

State wages are also going unpaid, according to Malika Gezimiyeva, head of the Gudermes city administration.

"Our teachers had not been paid since May. They have just been paid up through August, only because they went on strike. Our doctors have not been paid for five months now," Gezimiyeva said in a telephone interview Friday.

Kadyrov has said not a single apartment block in the mangled republic has been rebuilt, and he has asserted that federal troops are looting metals and oils from Chechnya.

Kadyrov's office chronicled such looting by the military in a report first brought to light by the German newspaper Frankfurter Rundschau, but the federal response seems to have been to grow just a bit wearier of Kadyrov.

Last week, President Vladimir Putin appointed a new cabinet minister for Chechnya, Vladimir Yelagin. But it is unclear how the two Kremlin civilian appointees - Kadyrov and Yelagin - will divide power with each other and with federal military forces.

Yelagin said Friday, "The situation [in Chechnya] is worsening every day," adding "we have only a little time left."

Kadyrov and Stepashin both echoed that Friday.

"If in the next five to six months the situation with the funding of Chechnya does not improve, including the problem with the reconstruction of housing, the situation in Chechnya may spin out of control," Kadyrov said.

In response to Stepashin's allegations, Finance Minister Alexei Kudrin told Interfax that his employees had "nothing to do with the serious violations that could have led to the opening of criminal cases" and said the materials of the Audit Chamber "need to be checked again."

The Audit Chamber's financial audit found that only 60 percent of the cash set aside in the budget for Chechnya for the eight-month period of January to August - or 1.23 billion rubles ($44 million) - was actually allocated by the Finance Ministry.

TITLE: No Results From City Finances Probe
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: The City Prosecutor's Office embezzlement probe and an examination of the financial dealings of the St. Petersburg city administration for the fiscal year 1995-96 has been officially closed without findings, officials said Monday. 


The case had involved summoning high-profile government figures, such as Alexei Kudrin, President Vladimir Putin's first vice prime minister of finances, and Yabloko faction Duma deputy Igor Artemyev. 

But on Monday Anatoly Skukovsky, the investigator on the case, confirmed that the Prosecutor's Office had dropped the investigation into the City Financial Committee's activity since no criminal activity had been found.

Artemyev was questioned on Nov. 24 and Kudrin was summoned from Moscow on Nov. 17, though precisely what date he was questioned is unclear. 

"The case was not brought personally against me," said Kudrin in an interview with Vedomosti on Monday. "Rather, it had to do with the use of funds. After I gave my explanations, all questions were cleared against me." 

Artemyev likewise said in an interview that he thought the prosecutor had clarified all the questions it needed to during his interrogation. 

The line of questioning for both men apparently covered the purchase of some apartments by members of the financial committee. 

The two men - Kudrin and Artemyev - can hardly be considered allies. But both headed the City Financial Committee, albeit for different bosses. Kudrin worked under Anatoly Sobchak until Sobchak was defeated by Vladimir Yakovlev in 1996.

Kudrin's interrogation, however, had caused speculation to rise that he was being elbowed out of the future prime minister's post. 

News of the case's closure first broke on Friday when Viktor Cherkesov, governor general for the Northwest region, mentioned it at a press conference. 

He also said that a string of recent bank raids in the city should serve as an example to public officials who are abusing their posts for financial gain. He condemned the raids and the probes of Kudrin and Artemyev as fruitless "harassment" of the concerned parties.

TITLE: Rights Ombudsman Criticized by Own Staff
AUTHOR: By Ana Uzelac
PUBLISHER: Staff Writer
TEXT: MOSCOW - Human rights ombudsman Oleg Mi ro nov has often been the target of human rights activists, who accuse him of being soft on the government. But now he is under attack from some of his own staff for the opposite. 


In a letter to President Vladimir Putin, 10 employees of the ombudsman's office accused Mironov of "discrediting the new leadership" and taking money from "dubious foreign organizations" financed by the CIA. The letter was published Saturday in the official government newspaper Rossiiskaya Gazeta.

Mironov said he was invited to the United States by the nongovernmental organization, Center for Democracy, to observe the U.S. presidential elections in November. His plane ticket was paid for by the center.

But the authors of the letter said the center, which in 1991 gave its International Democracy Award to former President Boris Yeltsin, was "financed by the CIA."

Mironov suggested the letter was a government-steered attempt to get rid of him. "In my work, I disturb some of the most powerful Russian institutions - the army, police and justice system. Somebody there obviously dislikes it," he said in a telephone interview.

But only last week, Mironov said his office would not accept complaints against Putin because the president is the guarantor of the Constitution.

Nevertheless, human rights activists spoke in his defense Monday.

Diedrik Lohman, head of the Moscow office of Human Rights Watch, said there were still glitches in Mironov's work. "But overall, he knows the human rights situation in Russia very well and is not trying to whitewash the government in his reports," Lohman said.

TITLE: Berezovsky Gives $3M Grant To Rescue Sakharov Museum
AUTHOR: By Ana Uzelac
PUBLISHER: Staff Writer
TEXT: MOSCOW - An unlikely tandem was forged Thursday as the cash-strapped Sak harov Museum accepted a $3 million grant from Boris Berezovsky, who has been living in self-imposed exile abroad after fleeing a criminal investigation he has called "politically motivated."


The museum - which aims to promote the ideas of human rights and civil society, and is named after Nobel Peace Prize-winning Soviet dissident Andrei Sakharov - has been plagued by grave funding problems and had been planning to close its doors as early as Friday.

The donated sum is almost twice the museum's total budget over the four years of its existence, which was about $1.7 million. That money had come from foreign grants, the bulk of which were from the U.S. Agency on International Development, which stopped funding this fall.

Berezovsky said in a statement he considered supporting the museum both "a great honor" and a necessary measure to prevent "authoritarian rule [from] depriving each and every person of [his or her] rights."

Berezovsky has called himself a "political emigrant," claiming the probe was retribution for his opposition to President Vladimir Putin, whom he accuses of authoritarian tendencies.

Sakharov's widow and the spiritus movens behind the museum, Yelena Bonner, said at Thursday's press conference she has accepted the grant on the explicit condition Berezovsky will have no influence on the museum's work and political stance.

TITLE: Proposed Code Enrages Labor
AUTHOR: By Sarah Karush
PUBLISHER: Staff Writer
TEXT: MOSCOW - A long-simmering debate over the country's outdated Labor Code is coming to a head as the government prepares to push its version through the State Duma this month, much to the chagrin of the labor movement.


Alarmed at the government's plan, which diminishes the power of unions, introduces a potential 56-hour work week and halves the allowed maternity leave, pro-union deputies introduced their own alternative in May. Cabinet officials say the deputies' version is too hard on management and will hinder economic development.

The Duma is scheduled to consider both versions - in addition to a radical Communist version and an incomplete one, neither of which is considered to have a chance at passing - on Dec. 21. The Federation of Independent Unions of Russia has planned demonstrations for Dec. 14 through Dec. 19 to drum up support for the deputies' version.

The current Labor Code has changed little since 1971, although dozens of additional laws regulating labor relations have been passed outside the code. Employers complain that many of the limitations it contains do not make sense in a market economy.

"The code does not reflect, even approximately, the dynamic and changing relationships that have taken shape between the worker and the employer," said Alexei Sklyar, personnel manager at Business Consulting Group in Moscow.

Labor activists agree that the current Labor Code, which was drawn up when the state was the only employer, no longer meets society's needs.

"The biggest problem is the lack of mechanisms to bring people to accountability," said Irene Stevenson, Moscow field representative of the AFL-CIO's Solidarity Center. "There are a lot of rights, guarantees, but a lack of mechanisms."

The classic example is the right to get paid twice a month for one's work. For much of the 1990s, millions of workers saw their wages delayed or substituted by goods that they could then sell or barter away to survive. But when workers tried to sue, their efforts came to nothing.

The deputies' version of the Labor Code lays the responsibility for on-time payment explicitly on the employer's shoulders and gives workers the right to take action even before a lawsuit is settled - by stopping work.

For the most part, however, the deputies' version differs little from the current code. All of the guarantees for workers laid out in the latter are included, and some are expanded on.

The government version, on the other hand, contains radical changes.

Among the most controversial are:


. Temporary contracts. The government version would pave the way for wider use of temporary work contracts, which under the current Labor Code can only be used in certain cases. It would also allow employers to renew those temporary contracts indefinitely. Today, if a temporary contract is renewed, it automatically becomes a permanent contract.

. Diminished role of unions. The current code lists eight acceptable reasons to fire an employer. Union approval is required for three of them - including mass layoffs, incompetence and inability to work for more than four months (e.g. because of illness). The government's version does not require union approval for any firing.

. "With the worker's consent." The government version would allow exceptions to accepted norms, such as the eight-hour day, if the worker agrees to it. A person's hours could be increased in this way up to 12 hours a day and 56 hours a week.

. Less maternity leave. According to today's code, women get five months of paid maternity leave, but can stay home without losing their jobs for three years. The government wants to cut that down to 1 1/2 years. Labor Minister Alexander Pochinok has argued that the three years of leave prompts employers to discriminate against women in hiring.


The current labor laws are obeyed only a small part of the time. Rostrudinspektsia, the state labor inspectorate, registers 2 million violations of the code a year. Former Duma deputy Anatoly Golov, who introduced his own, incomplete code in 1999, said at last month's hearing that the real number of violations was closer to 300 million.

Golov estimated that half of all workers are completely off the books and therefore have even more difficulty using the Labor Code to defend their rights.

Adherents of the government version say the current Labor Code is not being followed because it is utopian and needs updating.

TITLE: IN BRIEF
TEXT: Official Survives Blast

ST. PETERSBURG (Reuters) - A senior Russian city official and his daughter were injured on Monday when their car exploded in St. Petersburg, an Emergencies Ministry spokes man said. 

The spokesman said by telephone the explosion went off early on Monday when Sergei Alyoshin, deputy administration head of one of St. Petersburg's central districts, was getting into his car. His daughter was already inside the vehicle. Alyoshin was taken to hospital while his daughter sustained only minor injuries, a police spokesman told Reuters. It was not immediately clear what caused the explosion.



Dutch To Lift Kursk 

MOSCOW (AP) - The federal government and the Brussels-based Kursk Foundation have selected two Dutch companies to help lift the Kursk submarine in a joint effort with the Rubin design bureau and the Norwegian branch of U.S. oil services company Halliburton. 

Holland's Smit International and Heerma Engineering Services will participate in the salvage operation planned for next summer, Deputy Prime Minister Ilya Klebanov told reporters Thursday. Neither Klebanov nor the secretary-general of the Kursk Foundation, Rio Praaning, who accompanied him, specified what roles the companies would play.



Ode To Edmond Pope 

MOSCOW (AP) - Pavel Astakhov, the attorney for U.S. businessman Edmond Pope, asked a Moscow judge Friday to acquit his client of espionage charges - and read his closing argument in verse. 

The former naval intelligence officer is accused of obtaining classified torpedo designs, but defense lawyer Andrei Andrusenko told the court that the designs are not a state secret. Astakhov then read his poetic closing argument. 

He repeated fragments to reporters afterward: "I call on you to open your eyes, tune in your ears and speak the truth from your lips. There is one truth. He is not guilty." 

He praised the judge for recognizing its iambic pentameter, but said the court interpreter threw up his hands at the task of translating it.



Greens To Fight CEC 

CEC MOSCOW (Reuters) - Environmentalists vowed Thursday to fight a decision by election authorities to throw out more than half a million signatures from a petition for a referendum that would bar imports of spent nuclear fuel. 

The Central Elections Commission on Wednesday refused the petition, saying many signatures were not authentic. Campaign group Greenpeace said the decision trampled on the rights of those who signed. The statement said signers would appeal to the courts to challenge the decision. It said court cases should start no later than in 10 days.



Lawmaker Dies 

ST. PETERSBURG (SPT) - Vla dimir Snyatkov, an Industrial Faction lawmaker with the St. Petersburg Legislative Assembly, died of heart failure in the Second City Hospital on Dec. 2. He was 52. 

Snyatkov was under investigation for allegedly accepting a bribe. 

In his youth Snyatkov was a five-time all-Leningrad wrestling champion, and maintained his health most of his life, friends said. They also said his health deteriorated after the criminal case was opened against him. 

During his career, Snyatkov had worked as a prosecutor for the General Watch Department of the Leningrad Oblast government. In 1992, he was appointed as a deputy governor. In 1998 he was elected a deputy of the Legislative Assembly. 



Visas to Slovakia

BRATISLAVA, Slovakia (Reuters) - The Slovak Foreign Ministry announced Thursday that it would impose a visa regime on citizens of Russia and Belarus from Jan. 1. 

The government had signaled earlier this year that it would require such visas. Russia said it would reciprocate with visa rules for Slovaks, also from Jan. 1. 



2nd Reactor for Iran 

MOSCOW (SPT) - While the United States is preoccupied with deciding who should be president, Russia is busily expanding its links with Iran - something that always provokes sharp criticism from the United States. 

The Iranian parliament decided Wednesday to give Russia the contract to build a second reactor at the Bushehr nuclear power plant in Iran, Nuclear Power Ministry spokesman Andrei Yedem sky said. Nuclear Power Ministry enterprises are the main contractors for building the first reactor. Construction is due to be completed by 2003. Yedemsky said building the second reactor will be profitable for Russia.

TITLE: Elections Maintain Status Quo
AUTHOR: By Ron Popeski
PUBLISHER: Reuters
TEXT: MOSCOW - Voters opted for continuity in weekend regional elections throughout the country, with incumbents and other senior officials winning or leading in most contests.


Eleven regions staged gubernatorial elections, but only four contests declared winners with the necessary majority in the first round, with the rest going to a run-off.

The elections are taking place in a changed atmosphere for regional politics after President Vladimir Putin's overhaul of state structures intended to strengthen central authority. Governorships are less of a coveted prize after new legislation denied regional leaders the right to sit in the Federation Council and made them subject to dismissal if deemed to have violated federal law.

The Kremlin was accused of trying to influence regional elections in October when the Novaya Gazeta newspaper published a document it said had come from the presidential administration listing undesirable governors and ways to oust them. Allegations that the list was produced by the Kremlin have not been confirmed.

Further suspicions were raised when Kursk Governor Alexander Rutskoi was prevented from running for re-election hours before the vote, after a regional court struck him from the ballot for campaign violations. 

Three incumbents chose not to run Sunday - including the Communist head of the Krasnodar region, Nikolai Kondratenko, known for his disparaging comments about Jews and other minority groups. Although he cited poor health, newspapers said he may be angling for a seat in the Federation Council.

His designated successor, Alexander Tkachyov, a Communist member of the State Duma, scored an easy victory, capturing nearly 82 percent of the vote. The winner in the Astrakhan region was declared sitting Governor Anatoly Guzhvin.

In a hard-fought battle for the gubernatorial seat in Perm, the mayor of the region's eponymous capital, Yury Trutnev, who had appeared on television displaying his karate skills, cleared 50 percent to defeat Governor Gennady Igumnov. The governor had initially stood aside and named Trutnev his successor, but later changed his mind.

One of the most closely watched contests, that for president of the Marii-El region, went to a second round with incumbent Vyacheslav Kislitsyn and challenger Leonid Markelov virtually neck-and-neck.

The match-up is a re-run of the 1996 election won by Kislitsyn. It generated controversy because of a court challenge to the incumbent's eligibility on grounds similar to those which disqualified Rutskoi. This time, legal action failed.

In the Stavropol region, the run-off was shaping up between Communist-backed Governor Alexander Chernogorov and former head of the regional government, Stanislav Ilyasov.

In the Kamchatka region on the Pacific coast, First Deputy Governor Boris Sinchenko held a slender lead over Communist challenger Mikhail Mashkovtsev. In Ivanovo, Communist State Duma deputy Vladimir Tikhonov fell just short of victory and will have to face regional government head, Anatoly Golovkov, while in Ryazan Communist Governor Vyacheslav Lyubimov takes on prominent builder Valery Ryumin in the run-off.

TITLE: Matviyenko Urges Support for Disabled
PUBLISHER: The Associated Press
TEXT: The number of people with disabilities in Russia more than doubled in the past six years, reaching 10 million, First Deputy Prime Minister Valentina Mat vi yenko said Monday.


Matviyenko urged the government Monday to provide more assistance to people with disabilities, and give tax breaks and other perks to enterprises that employ the disabled. 

President Vladimir Putin has promised an additional 70 million rubles ($2.5 million) next year for disabled children and disabled veterans, acknowledging that their needs have been often ignored.

Putin said during a visit to a prosthesis factory Saturday that he was sure most of the country's 10 million disabled people "can adapt to a normal life in society ... but without material help nothing can be solved," according to local news reports.

The sum, though welcome, will solve just a fraction of the huge needs of the nation's disabled. Very few are employed, and most rely entirely on subsidies that have dwindled dramatically over the last 10 years. Most disabled people rarely leave their apartments because almost nothing is wheelchair-accessible - not public buses, not schools, not even the bulk of medical facilities. Those who do go out in public are often stigmatized.

Putin acknowledged in televised remarks that government funds for the disabled have been meager in recent years and often fall far short of budget promises. He said the new money would come from his presidential fund, not the state budget, Itar-Tass said.

Most of the money will go for the country's 600,000 disabled children - who are often placed in state institutions where they are written off as ineducable. 

People disabled because of military service, including active duty in breakaway Chechnya, receive little support from the cash-poor Defense Ministry.

During the visit to the prosthesis center, Putin met with a 12-year-old girl who roller-skated for him on an artificial leg. Putin then invited the girl to celebrate New Year's at the Kremlin, Itar-Tass said.

Prostheses are in short supply in Russia and often of poor quality. Labor Minister Alexander Pochinok said during the visit that just 20 percent of those who need artificial limbs have good prostheses.

When asked by two disabled lawmakers Saturday why the government isn't spending more of its current surplus on social welfare, Putin insisted that digging the country out of its mountain of foreign debt constitutes a higher priority.

TITLE: Space Tourist Is Ready To Ride - But Where?
AUTHOR: By Marcia Dunn
PUBLISHER: The Associated Press
TEXT: STAR CITY, Moscow Region - For years, people have talked of traveling to space as tourists, but it has only been talk - until now.


Dennis Tito, who started dreaming of space flight when he watched Sputnik's launch as a teenager, worked as a rocket scientist charting paths to planets, then switched to investing and became a multimillionaire, has a ticket to ride.

The fit, 60-year-old Californian has left his Pacific Palisades mansion for two rooms in the Star City cosmonaut training center outside Moscow to prepare for the launch, which could come early next year.

He has deposited millions of dollars in an escrow account, to be released to the cash-strapped Russian space authorities the moment he is launched as the first space tourist, but not a millisecond before. That's all in his contract, his ticket.

"The key is launch," Tito said recently during an interview in Star City. "All they have to do is light the rockets and the escrow opens up and they get all the money. And it's a lot of money. There's a real strong incentive, I think, for the Russians to fly me."

But the question remains: Which space station will he fly to? There's a chance, however slight, it will be a turn-out-the-lights mission in January to the Russian Aviation and Space Agency's abandoned Mir. A suicide dive is planned for February and a crew will be sent beforehand only if a problem in preparations arises.

More likely it will be a taxi ride to the newly occupied, NASA-led international space station Alpha. In April, the attached Soyuz capsule, the crew's lifeboat, needs to be replaced. Tito says the pendulum has swung toward Alpha in light of Russia's recent decision to ditch Mir. Either way, if he hasn't left Earth by June 30, 2001, the deal's off. That's also in his contract with the Russians.

"I just hope this doesn't become some kind of a political mess between the two agencies or the two countries," he says with a sigh.

A clash of titans, though, may be coming. Yury Semyonov, president and general designer of the KKK Energia Corporation, says he's committed to honoring Tito's contract. He doesn't need NASA's or anyone else's permission to launch Tito on a Soyuz capsule to Mir, or to the international space station if Mir can be decommissioned by autopilot, Semyonov says huffily.

NASA administrator Daniel Goldin finds the whole matter distasteful. It's wrong, he contends, to peddle spaceship seats to rich guys looking for fun. "I can't tell the Russians what to do. They're a sovereign program, a sovereign nation," Goldin says. "But we do have a part to play in it because the lives, the safety of the astronauts are at stake," along with the future of the space station.

The NASA chief says spare seats on Russian Soyuz rockets should go to European or Japanese astronauts who have been training for years, not to wealthy "spectators."

The would-be space tourist insists he's more than a spectator. The oldest child of working-class Italian immigrants became smitten with space the same way many did: with the launch of the first space satellite, the Soviet Union's Sputnik, in 1957. "What I saw when I was 17 led me to enroll in aerospace engineering the next year," he said.

Tito ended up at the Jet Propulsion Laboratory in Pasadena, California, in 1964, plotting the flight paths for NASA's Mariner probes to Mars and Venus.

During that time, he once called the space agency to get information on becoming an astronaut, but it never went beyond that single phone call.

Eventually, he put his dream on hold and changed course. Quitting his $15,000-a-year lab job to start his own investment business, he made his first million before he turned 40. His firm, Wilshire Associates, is a powerhouse that manages more than $10 billion in assets. At his quarters in the cosmonaut complex, a computer chirps constantly with e-mail messages from his home office in Santa Monica, California. Even as he built his business, though, the idea of space travel remained with him.

Earlier this year, he got a call from MirCorp, the Amsterdam-based firm trying to raise money to keep the space station going, with commercial applications in mind.

Would Tito be interested, MirCorp wondered, in flying to a resurrected Mir? In April, MirCorp's bigwigs went to his home in the Pacific Palisades area of Los Angeles and, within 15 minutes, a deal was clinched. Tito, who's divorced with three children in their 20s, won't say how much he's paying for the one- to two-week space adventure.

MirCorp's list price: $20 million.

Some at NASA worry about Tito's physical ability to handle a space trip. If anything goes wrong, the safety of the entire crew could be jeopardized by this cosmonaut-come-lately.

"He meets the parameters," Semyonov responds, noting Tito had to pass all the cosmonaut medical tests. Short, slim and bald, Tito looks years younger than 60.

Evidence of a healthy lifestyle is everywhere in his Star City apartment: worn running shoes, whole-wheat pasta, organic tomato sauce, soy protein.

Tito insists he won't be shattered if the Russians break their contract and he never makes it to space.

"The way I look at it is, every day counts and every day I'm learning about manned space flight. I'm learning about systems. I'm not sacrificing anything in terms of my business. My business is trucking along."

TITLE: Chernobyl Victims Lobby for More Support
PUBLISHER: The Associated Press
TEXT: KIEV, Ukraine - Some 10,000 Chernobyl victims protested Sunday in Kiev, marking the international day of disabled people and demanding more government spending on social care and support. 


The demonstrators, many of whom took part in the Chernobyl cleanup operations and suffered disabilities as a result, held a mass meeting in the center of Ukraine's capital, Kiev. 

Chernobyl was the site of the world's worst nuclear accident on April 26, 1986, when the plant's reactor No. 4 exploded and caught fire, sending a radioactive cloud over much of Europe. 

The disaster is believed to have eventually killed some 8,000 people. Hundreds of thousands suffered from its aftereffects. 

Currently, Chernobyl operates only one reactor, which has been the focus of disputes between international groups concerned about safety of energy-strapped Ukraine. 

President Leonid Kuchma has promised to close Chernobyl on Dec. 15. 

"These people were liquidated in the accident, these people were deactivating the exclusion zone, the sarcophagus [over reactor No. 4] was built with their hands," said Yuriy Andreyev, president of Ukraine's Chernobyl Union which organized the demonstration.

TITLE: International Warrant Out on Gusinsky
PUBLISHER: Reuters
TEXT: MOSCOW - Russian authorities have issued an international arrest warrant for exiled media magnate Vladimir Gusinsky, the chief prosecutor's office said on Monday. 


Gusinsky, owner of Russia's largest independent country-wide media group, Media-MOST, is charged with fraud. He remains abroad and failed to turn up for questioning by a prosecutor last month. Interfax news agency quoted prosecution investigator Valery Nikolayev as saying that the international warrant had been issued after Gusinsky failed to appear as required and had been in effect since Nov 20. A countrywide arrest warrant had already been issued. 

The charges against Gusinsky, who was jailed for three days earlier this year, have sparked fears of a crackdown on a free press in Russia. Media-MOST's flagship, NTV television, has frequently been critical of Kremlin policy. Gusinsky is charged with irregularities in buying a video company and illegally transferring assets abroad in a bid to reduce his media empire's vast debts. 

A deal was announced to settle some of Media-MOST's debts but Gu sin sky repudiated it, saying he had signed it under duress. 

A subsequent deal, clinched last month, involved the sale of shares to the media arm of the state-dominated gas giant Gazprom to clear Media-MOST's $211 million in debt. President Vladimir Putin has pledged to deal harshly with the alleged illegal activities of "oligarchs" such as Gusinsky, who made fortunes in the years following the collapse of the Soviet Union.

TITLE: Summit Seeks Chemicals Treaty
AUTHOR: By Ed Stoddard
PUBLISHER: Reuters
TEXT: JOHANNESBURG - Delegates from more than 120 countries began a week of talks in South Africa on Monday to devise a global treaty that conservationists hope will ban production of some of the world's most dangerous chemicals.


The talks, under the auspices of the UN Environment Program, are the fifth round of global discussions on POPs and are expected to produce a treaty to be signed at a diplomatic conference scheduled for Stockholm next May.

Persistent Organic Pollutants (POPs), which include DDT and PCBs, have been linked to adverse effects, including death, disease and birth defects.

They are used in a wide range of industrial and farming activities, from paint additives to pesticides that kill crop-eating insects.

Highly stable compounds, they can last for years or decades before breaking down and circle the globe in air and water through a process scientists dub the "grasshopper effect."

Because of this, conservationists say POPs have had a devastating impact on human and wildlife populations worldwide, even in pristine Arctic and Antarctic habitats thousands of kilometres from the original source.

South African Deputy Minister of Environmental Affairs and Tourism Rejoice Mabudafhasi told delegates in her opening remarks that the conference was for building a better world for mankind.

Mabudafhasi said Pretoria supported the restriction of DDT for public health purposes but, also called for research on malaria, Africa's biggest killer disease.

South Africa wants to retain the use of DDTs for malaria control, a position widely expected to be endorsed.

A diplomatic source close to the talks said the European Union was leading the charge for elimination of the 12 main POPs singled out for urgent attention - dubbed the "Dirty Dozen" - as well as a ban on new chemicals with POP characteristics.

But conservationists complained that five industrial powers - the United States, Japan, Canada, Australia and New Zealand - were seeking to water down aspects of the treaty.

TITLE: Woman Sues Candy Firm for Misusing Likeness
AUTHOR: By Dina Vishnya
PUBLISHER: Vedomosti
TEXT: Candy giant Krasny Oktyabr is being sued for 4 million rubles ($143,087) by a woman who claims that the company improperly used her likeness on its Alyonka chocolate bars.


Yelena Gerinas states in her lawsuit, the first of its kind in Russia, that the portrait on Alyonka bars has significantly contributed to the brand's popularity over the past 30 years. 

Gerinas claims that the image on Alyonka bars was copied from a photograph taken by her father, the well-known photographer Alexander Gerinas who once worked for Krasny Oktyabr. She says Krasny Oktyabr used the photograph in designing the Alyonka label.

The lawsuit, citing Article 21 of the Law on Copyrights, argues the candy company should have obtained permission from Yelena Gerinas and owes her royalties for reproducing her likeness for commercial purposes. Gerinas is seeking compensation of more than 4 million rubles.

Krasny Oktyabr fiercely denies that Yelena Gerinas' likeness is depicted on the bars, saying the image was developed in the style of Russian folk art.

Company officials also pointed out that the Alyonka label has been modified several times since it was launched.

"We believe that this dispute is unethical," said Konstantin Fedenyuk, head of the legal department at Krasny Oktyabr. "Krasny Oktyabr has produced this chocolate bar, one of our most popular, for more than 30 years."

TITLE: Investors Expect Further Drops
AUTHOR: By Emma-Kate Symons
PUBLISHER: Reuters
TEXT: NEW YORK - The bears have come to Wall Street - at least in high-tech form - and investors are not counting on Federal Reserve Chairman Alan Greenspan to play Santa Claus this year and deliver the traditional Christmas rally.


The NASDAQ composite index, already littered with deflated Internet and high-tech stocks, lost 23 percent in November, its most dismal monthly performance in 13 years. A relief rally early on Friday lost steam in the afternoon amid continued worries of slowing corporate earnings growth and continued uncertainty over the U.S. presidential election.

"Any type of a rally like we saw on Friday is going to be short-lived and it's not going to be sustainable," said Howard Kornblue, money manager with ING Pilgrim Inc. which has $12 billion in funds. "The best that you can hope for is for the market to go sideways and I would not expect a rally."

Indeed, investors are bracing for more drops in U.S. stocks this week.

Irrational exuberance - the term Greenspan coined for the booming stock market of the 1990s - is a quaint and outmoded notion when the technology-heavy NASDAQ is by any measure in a bear market, down 20 percent or more.

In fact, the NASDAQ has lost almost half its value since its all-time high of 5048.62 on March 10. That is the second-worst performance for the index since it was started in 1971, after a drop of nearly 60 percent in the market crash of 1973-74. 

The blue-chip Dow Jones industrial average is in bad shape, but with much less exposure to technology stocks, it fell only 5.1 percent in November. The Dow is still not considered to be in bear territory, down 9.8 percent on the year and only about 12 percent below its all-time high.

Wall Street now has its sights set on the U.S. Federal Reserve to drag stocks out of their doldrums. Six interest-rate hikes to stave off inflation since June 1999 have taken the wind out of the once-roaring U.S. economy - so much so that recession has entered Wall Street's vocabulary. Some analysts now believe the Fed will change its stance on monetary policy to neutral when it meets on Dec. 19.

The U.S. Labor Department will report crucial unemployment figures for November on Friday. The jobless rate was at a 30-year low of 3.9 percent in October, and the Street is banking on a rise in unemployment, which will take some pressure off wages and inflation.

U.S. fixed-income markets are already pricing in up to three interest-rate cuts of 25 basis points each by the Fed in the coming months, analysts said.

But any interest-rate cuts could come too late for battered U.S. stocks, already limping under the weight of a stream of warnings of slower sales from technology heavyweights, and the nearly month-long battle for the White House.

Technology companies have consistently warned of weaker growth throughout the quarter and analysts have taken notice. Estimates for fourth-quarter earnings growth in the technology sector have been scaled back by almost half in the past two months, First Call/Thomson Financial said on Friday.

Since Oct. 1, earnings growth expectations for the tech sector have dropped from 29 percent to 14 percent for the fourth quarter 2000, according to First Call, which tracks brokerage estimates for future corporate earnings. For the first quarter of 2001, analysts cut growth estimates from 28 percent to 14 percent (see story, page 15.)

The story is much the same across the Atlantic, where European stock strategists see more downside before any recovery kicks in.

There is a growing conviction that a bottom is not far away, but fund managers remain loath to put money back into volatile new economy sectors, they said.

"We are expecting things to get uglier before they get better," ABN Amro European strategist Theodore Varelas said.

TITLE: Remains of Man's Earliest Ancestor Found in Africa
AUTHOR: By David Fox
PUBLISHER: Reuters
TEXT: NAIROBI - French and Kenyan scientists have unearthed fossilised remains of mankind's earliest known ancestor that predate previous discoveries by more than 1 1/2 million years, the team announced on Monday.


They said the discovery of "Millennium Man," as the creature has been nicknamed, could change the way scientists think about evolution and the origin of species.

The first remains were discovered in the Tugen hills of Kenya's Baringo district on October 25 by a team from the College de France in Paris and the Community Museums of Kenya.

Since then the scientists have unearthed distinct body parts belonging to at least five individuals, both male and female.

"Not only is this find older than any else previously known, it is also in a more advanced stage of evolution," palaeontologist Martin Pickford told a news conference.

"It is at least six million years old, which means it is older than the [previously oldest] remains found at Aramis in Ethiopia, which were 4.5 million years old."

"Lucy," the skeleton of Australopithicus afarensis found in Ethiopia in 1974, is believed to have lived around 3.2 million years ago.

An almost perfectly fossilised left femur shows the much older Millennium Man already had strong back legs which enabled it to walk upright - giving it hominid characteristics which relate it directly to man.

The length of the bones show the creature was about the size of a modern chimpanzee, according to Brigitte Senut, a team member from the Museum of Natural History in Paris.

But it is the teeth and jaw structure which most clearly link Millennium Man to the modern human. It has small canines and full molars - similar dentition to modern man and suggesting a diet of mainly fruit and vegetables with occasional opportunistic meat-eating.

Although no dating has been done on the remains just unearthed, strata from where the fossils were recovered have been previously proven twice by independent teams, from Britain and the U.S., to show an age of six million years.

The Baringo area is part of Africa's Great Rift Valley, which has long been rich in archeological and palaeontological discoveries and the source of almost all fossils related to man's earliest ancestors.

The area is rich in calcium carbonate and calcium phosphate that replace the organic material in bones to form fossils in an environment sealed by lava or volcanic ash.

Pickford and Senut said they were confident the team would unearth even more remains that could help form a near-perfect picture of Millennium Man.

"We are just going to publish our initial findings, to get the excitement, and continue with our work," Pickford said. "I am sure there is still a lot more out there - possibly even older."

TITLE: AVVA Positions To Swallow AvtoVAZ
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - The All-Russia Automobile Alliance, or AVVA, held an extraordinary shareholders meeting on Friday and changed its charter in what appears to be a step toward taking full control of the nation's largest car maker, AvtoVAZ.


AVVA was an investment fund founded in 1993 by Boris Berezovsky and Alexander Voloshin, who is now President Vladimir Putin's chief of staff. AVVA holds about one-third of AvtoVAZ, according to a Renaissance Capital report. Both companies are believed to be under Berezovsky's control.

Meeting Friday in Tolyatti, where AvtoVAZ is based, the AVVA shareholders changed the charter to define AVVA not as an investment company but as a holding company, according to the local information agency BRiA.

AVVA will function as a holding company "with regard to companies producing cars, components and aggregates to cars and to the group of companies connected to them in a unified technological and production cycle," a BRiA employee said by telephone, citing the new charter.

AvtoVAZ spokesman Vladimir Artsikov confirmed that shareholders met to "clarify" the charter, but refused to give details. Vladimir Kadannikov, the head of AvtoVAZ's board, said AVVA plays no role in the car maker's financial operations, Prime-Tass reported.

Yury Zektser, general director of AVVA, said the charter was changed because of the "negative attitude" toward the company and because a new law on investment companies will soon come into force, according to BRiA.

What he failed to mention is that AvtoVAZ is in the last stages of restructuring into a holding company. Under the restructuring, all of the plant's divisions are to separate into different companies and many have already done so this year.

Soon it will be necessary to create a financial control center for the created holding. With the changes to its charter, AVVA is ready to fill this role.

AVVA was originally set up to finance the investment programs of AvtoVAZ. Voloshin helped Berezovsky found the consortium, which was formed by Berezovsky's LogoVAZ car dealership and AvtoVAZ. AVVA collected money from citizens to build a "people's car," selling $50 million in shares, but few shareholders saw any returns.

AVVA's largest shareholder is AvtoVAZ, with an 80.83 percent share. A total of about 10 percent is owned by LogoVAZ and Forus, a Swiss company founded by Berezovsky, Kadannikov and Moscow Mayor Yury Luzhkov.

Forus was the only major shareholder that did not take part in Friday's meeting, BRiA said. Forus and another Swiss company, Andava, are suspected of misappropriating nearly $1 billion from Aeroflot. Berezovsky has refused to return to Russia for questioning in the case.

TITLE: Duma Passes Budget In Long 3rd Reading
PUBLISHER: Combined Reports
TEXT: MOSCOW - After a marathon debate that lasted for more than 11 hours Friday, the State Duma passed the draft 2001 budget on a third reading.


The lower house of parliament, which had to consider more than 5,000 proposed amendments, voted 279 to 87 with three abstentions to approve the 1.19 trillion-ruble ($42.7 billion) bill, the country's first balanced budget since the 1991 Soviet collapse. 

Earlier in the day, the Duma passed an amendment banning privatization of big companies until a law on the privatization program for next year is passed. 

Deputies supported the amendment by 267 votes to 84, with one abstention. 

Yevgeny Ishchenko, deputy head of the Duma's property committee and one of the authors of the amendment, said the bill aimed to suspend privatization of companies whose assets exceeded $150 million. 

This would put on hold further sales of natural gas giant Gazprom, oil major LUKoil and oil companies Rosneft and Slavneft, he said. 

Deputy Prime Minister and Finance Minister Alexei Kudrin told deputies the government would introduce a draft of next year's privatization program to the Duma soon, but did not specify the date. 

"It's impossible to stop the privatization process," Kudrin said, adding sales should not be of small enterprises only. 

The government has already budgeted 18 billion rubles ($600 million at a projected average rate for the year of 30 rubles per dollar) of expected privatization revenues for 2001 and is counting on proceeds from state property sales for possible funds to pay foreign debt, Kudrin said. 

The government said earlier this week it considered the sale of a 6 percent stake of LUKoil through American Depositary Receipts a priority for 2001. 

The government also planned to sell about 2.5 percent of Gazprom and a blocking stake of 25 percent plus one share in Rosneft next year.

A fourth and final reading of the budget is tentatively scheduled for Dec. 14. The government won the State Duma's approval on the second reading by agreeing to redistribute spending to boost allocations for the military, education and science. 

The Communist Party made good on its promise and voted against the budget Friday, but that failed to prevent the draft from garnering far more than the required minimum of 226 votes. 

Some observers have complained that the budget relies too heavily on the assumptions that high oil prices will continue and that Russia would be able to renegotiate payments on $48 billion in Soviet-era debt to nations known collectively as the Paris Club. 

Negotiations collapsed this month with the International Monetary Fund on arranging a line of credit that the Kremlin could draw on if oil prices fall. Such an arrangement also would have been an IMF imprimatur that could boost Russia's attempts to renegotiate payments to the Paris Club. 

Kudrin said Friday, during a break in the debate, that the absence of IMF loans does not undermine the budget. 

"The budget will not collapse without IMF loans," Interfax quoted him as saying. "We will be able to settle the matter with additional revenues." 

Duma budget committee head Alexander Zhukov said last month that unanticipated extra revenues could be as much as $5 billion. But without IMF loans and renegotiated debt payments, the budget faces a $6 billion shortfall.


- Reuters, AP

TITLE: TNK Given Title of World's Best Oil Firm
AUTHOR: By Brad Cook
PUBLISHER: Staff Writer
TEXT: MOSCOW - In a year when it weathered months of litigation, accusations of judicial manipulations, a police raid, an Audit Chamber investigation and the wrath of the U.S. State Department, Tyumen Oil Co. has been named the best oil and gas firm in the world.


A specialist branch of the prestigious Financial Times Group, FT-Energy, gave TNK its "Best Oil and Gas Company of 2000" award in a New York ceremony Thursday night.

FT-Energy, which bills itself as "the world's most comprehensive provider of global energy industry news," said TNK won for its "phenomenal growth in the past year, breaking into the world's top 15 oil firms, and showing remarkable entrepreneurial spirit in extremely trying circumstances."

The six-member international panel of judges included the CEO of the World Coal Institute in London, a UBS Warburg managing director, the chairman of the African Chamber of Commerce in Washington and the head of the Norwegian Water and Energy Directorate in Oslo.

"This is a tremendous honor to prevail over such a distinguished group of established global companies," TNK president and CEO Simon Kukes said in a telephone interview Friday from London.

TNK, considered the country's No. 4 oil major after LUKoil, Yukos and Surgutneftegaz, beat out finalists Shell, ATP and British Gas for the honor.

Kukes, a Russian-born former executive at U.S. giant Amoco, said the award is "a vote of confidence not just for TNK, but for the whole Russian oil industry and the Russian government's efforts to improve the investment climate." 

With the caveat that the award is largely symbolic, industry experts polled Friday agreed with Kukes that the award is a public relations coup for the country's energy sector.

"Russia has a PR problem; it generally doesn't promote itself very well abroad," said Alexander Wostmann, editor of Alexander's Oil and Gas Connections, in Cologne, Germany, in a telephone interview. "This award is a great recognition that its oil industry and its government are serious about making progress."

TNK received wide applause in September when it won what many analysts consider Russia's most transparent and fair tender for a major state enterprise, paying $1.08 billion for 85 percent of Onako, the nation's No. 14 oil company.

TNK is also the only Russian company since the 1998 financial meltdown to secure a major loan guarantee from the U.S.-government-owned Export-Import Bank - some $600 million to upgrade its Ryazan refinery and develop the massive Samotlor field in Siberia.

The U.S. State Department blocked the loan guarantees in December, then reversed its position in April, without explanation. Some reports said at the time that the U.S. move was in response to TNK's controversial acquisition of rival Sidanko's major production unit Chernogorneft. TNK's move outraged BP-Amoco, which paid $571 million for a 10 percent stake in Sidanko in 1996.

In the interview Friday, Kukes denied the loan delay had anything to do with Chernogorneft and said that TNK's relationship with BP had been patched up, adding that Chernogorneft would "absolutely" be returned to Sidanko soon.

"We have very good relations with BP now - and I personally have very good relations with key executives," he said.

With the purchase of Onaco, the acquisition of Chernogorneft and Kondpetroleum - another production unit controversially wrestled from Sidanko - the purchase of a Ukrainian refinery and a deal with Texaco to expand its Moscow retail network, TNK has outpaced the industry in 2000.

"TNK was able to achieve this phenomenal growth because it is well-managed, ambitious and its managers are highly-qualified," said Valery Nesterov at Chase. "It is on its way to becoming a successful global company."

TITLE: 4th Smirnov Vodka To Launch
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - A fourth Smirnov vodka brand will enter the market this week and will almost certainly join the already complicated legal battles raging between its three rivals. 


Boris Smirnov, founder and 50 percent shareholder of the Trading House of the Descendants of P.A. Smirnov, said Monday that the St. Petersburg group Niva-Alliance will start production of vodka under the Boris Smirnov brand. 

He said Monday at a news conference he had made the contract with Niva-Alliance because he needed money to fight the legal battles surrounding the trading house.

The vodka will be produced "in the same bottle by the same [Smirnov] recipe," he said. 

Only the label will change - "It will not be nameless anymore," he added. 

Niva-Alliance is going to produce 500,000 bottles a month and then increase production to 3 million bottles per month, Smirnov said.

The first Smirnov vodka was produced by Boris Smirnov's great-grandfather, Pyotr, who founded his distillery in 1860 and eventually became official purveyor to the imperial Russian court. The family lost control after the 1917 revolution when private ownership was abolished.

After perestroika, Boris was involved in restarting local production of the Smir nov trademark, as the Trading House of the Descendants of Pyotr Smirnov. 

Boris Smirnov said his former partner and uncle, Andrei Smirnov gave his 50 percent stake to three offshore Cyprus companies backed by Alfa Group for 154 rubles ($5.50). Boris Smirnov does not recognize the deal. Andrei Smirnov could not be reached for comment.

In addition, Smirnov has been fighting a protracted legal battle with the makers of Smirnoff, the international vodka brand controlled by United Distillers and Vintners, a subsidiary of Britain-based food and beverage giant Diageo PLC.

Police on Nov. 4 raided the offices of the trading house in central Mos cow to enforce a court order naming Sergei Yuze fov as the company's general director. 

Smirnov refused to leave the office and did so only on Friday after he had "a heart attack and was hospitalized," Smirnov said.

The same day bailiffs visited the Ost-Alko distillery in the Moscow region town of Chernogolovka, which has been producing Smirnov vodka for the last five years. They presented a Nov. 23 ruling by the Moscow arbitration court that prohibits Ost-Alko from producing Smirnov vodka. It complied with the order.

The ruling was made after Alfa-Eko filed a lawsuit. The case will be reviewed on Dec. 14.

An Alfa-Eko spokesman, who refused to be named, denied Smirnov's allegations, saying Alfa-Eko wanted the trading house to succeed.

"Smirnov is one of the nation's best brands and Alfa Eko wants to make it a national leader," the spokesman said.

Alfa-Eko started its own production of Smirnov vodka at the beginning of September in the Moscow region town of Krasnoznamensk and announced that it had produced about 1 million bottles in its first month. It plans to increase production to 3 million bottles a month next year.

Valery Dzhermakyan, first deputy director for expertise at the Russian Agency for Patents and Trademarks, said Monday that Boris Smirnov was the first producer of Smirnov vodka in Russia so the trademark belongs to him.

Eugene Arievich, the legal co-counsel for the Coalition for Intellectual Property Rights and partner at Baker & McKenzie, which represents the interests of UDV said the dispute around Smirnov trademark is due only to weak Russian legislation "court proceeding continue to be plagued with repeated violations of procedural and substantive Russian law and international practice," and that is the only reason why UDV can not win its case.

TITLE: PepsiCo Makes a Move on Quaker Oats
PUBLISHER: Reuters
TEXT: NEW YORK - PepsiCo Inc. (PEP.N) on Monday said that it will buy Quaker Oats Co. (OAT.N) in a $13.4 billion stock deal that will give the world's No. 2 beverage company ownership of Quaker's Gatorade, the crown jewel of sports drinks.

This deal will also end more than a month of speculation over who might acquire Quaker.


If the deal comes to fruition, the combined entity is expected to have a market value of more than $80 billion, which will place it on the list of the world's five largest consumer products companies, the firms announced in a joint statement.

The deal reportedly has an offer of 2.3 PepsiCo shares for each Quaker share, which matches the bid that the Chicago-based Quaker reportedly rejected from the same Purchase, New York-based PepsiCo a little over a month ago.

Based on Friday's closing price, PepsiCo's offer is valued at $97.46 per Quaker share, representing a 10 percent premium over Quaker's closing price of $88-5/8 on the New York Stock Exchange Friday.

This acquisition will give PepsiCo, whose Pepsi-Cola Co. is the perennial No. 2 behind beverage giant Coca-Cola, a huge boost for its noncarbonated drinks business with the acquisition of the the Gatorade brand of sports beverages.

"Combining with the world-renowned PepsiCo organization will unleash the tremendous global growth potential of the Gatorade brand and leverage the strengths of our foods business," Robert Morrison, the chairman of Quaker Oats Co., announced in a statement.

Carbonated soft drinks, such as Pepsi and Mountain Dew, are still the mainstay of the PepsiCo's beverage business, but sales of non-carbonated beverages such as Aquafina bottled water are growing at a rapid clip as consumers' tastes continue to become more varied.

This transaction is going to require the issuance of approximately 315 million new shares to Quaker's shareholders, and will "enhance PepsiCo's ongoing sales and profit growth rates," the companies announced in their statement.

"This will be a truly outstanding combination," Roger Enrico, PepsiCo's chairman and chief executive, said in a statement. 

The deal is being accounted for as a pooling of interests and is expected to be completed in the first half of next year. It is expected to add to PepsiCo's earnings per share after the first full year, the firms said.

Late last month, the world's leading soft drink maker Coca-Cola Co. backed away from its plans to buy Quaker.

Just days later, another global giant, French food group Danone took itself out of the running for the cereal and sports drink maker.

TITLE: Fitch Gives Petersburg Small Rating Boost
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: International rating agency Fitch has raised St. Petersburg's long-term foreign currency rating from CCC to CCC+, according to a report on Fitch's Web site posted last week.


The city's short-term foreign currency rating remains at C, while its long-term local currency rating was also upgraded from CCC to CCC+.

According to the Fitch press release, the rating upgrade reflects an improved local economic and budgetary performance

"Since the 1998 recession, St. Petersburg's economy has demonstrated remarkably good performance, with a 6.8 percent increase year-on-year of Gross Regional Product (GRP) in 1999, higher than Russia as whole," the press release said.

"The improvement has continued into 2000."

However, it said, the city's uneven debt repayment schedule remains a big concern, the report said. The major part of St. Petersburg's outstanding debt, a $295.3 million Eurobond, makes the city far too dependent on external resources to ensure full and timely payment.

Renaissance Capital analyst Roland Nash said that the Fitch upgrade showed St. Petersburg was heading in the right direction, but that it should not be taken too seriously.

"In fact, it isn't that big a step up," Nash said in telephone interview on Monday.

"The [new] rating is better, but the situation still remains very poor. For instance, if Fitch gives a C-category rating, it can signal the possibility of default in the near future."

TITLE: South Korea To Restructure Banks
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea - South Korea's parliament approved a government plan to spend billions of dollars to help clean up debt-ridden banks, the state-run Yonhap news agency reported Sunday.


After a series of marathon meetings between ruling and opposition legislators, the National Assembly passed a bill Saturday to raise $36 billion in public funds, it said.

The aim of the spending is to boost the government's efforts to restructure its shaky banking industry and restore foreign investors' confidence in the sluggish economy.

Three years after South Korea was forced to accept a $58 billion bailout fund from the International Monetary Fund amid a regional financial crisis, its economy has recovered significantly, thanks in part to the government's drive to slim down bloated industries.

The government has spent about $90 billion on restructuring efforts since the 1997 bailout.

TITLE: MARKET WRAP
PUBLISHER: Reuters
TEXT: Market Steadies as Buyers Await New Developments 

MOSCOW - Local shares ended slightly easier Monday amid uncertainty about the market's trend through the end of the year and financial turbulence in Turkey, traders said. 


The key RTS index closed off a tiny 0.09 percent at 141.58 on thin volume of $14.2 million. The Reuters Russian composite eased 0.38 percent to 1,057.06. 

Michael Stein, a salesman at United Financial Group, said a fresh slide in Turkish equities was pressuring the local market. "While Russia remains firmly planted on the radar screens of most [Europe, Middle East and Africa] investor groups and hedge funds, Russian equities are poised to take a back seat to developments in Turkey and the U.S. right now," he said. 

Stein added he saw investors eyeing an upcoming board meeting at gas giant Gazprom that he said would be a litmus test for the government's willingness to improve corporate governance at the country's largest company. 

Gazprom ended up 0.36 percent at 7.44 rubles (26 cents) on the Moscow stock exchange. 

Sergei Sheikov, head of sales and trading at Centerinvest Securities, said that trade was dependent on foreign developments. 

"We are looking at what happens in the United States and elsewhere abroad. ... I don't see anything domestically before the end of the year that is going to move us at all," he said. 

But a local trader was hopeful the market could see an influx of cash before the end of the month with a late-year rally possible on more-liquid shares ahead of the New Year. 

"I doubt that it will be anything like the rally the market has been wanting, but I am optimistic there will be foreign investors who see current prices as a chance to buy," he said. 

"It is really just a psychological factor, but it at least does offer us some hope," the trader added. 

Brokerage Renaissance Capital said in a Monday report there was the possibility of series of price jumps in coming months. "The next few weeks and months may well see a number of short and intense technical rallies, during which the market may appreciate as much as 10 to 20 percent before stalling on wide spread profit-taking," it said. 

Unified Energy Systems eased 0.25 percent to end $0.0788 while LUKoil had lost 2.67 percent to $8.75. Mosenergo was up 4.5 percent at $0.0232 and Surgutneftegaz had added 1.16 percent to $0.1930.

TITLE: The Mineral-Rich North Still Hanging on During Lean Times
AUTHOR: Sarah Karush
PUBLISHER: Staff Writer
TEXT: Russia's North supplies the country with much of its wealth. But unfortunately, many of its settlements are impoverished and dangerously undersupplied during the severe winter months.

NORILSK, Northern Siberia - An orange liquid bubbles ominously in caldrons lapped by blue flames. Heavy metal chains swing noisily and unpredictably from the ceiling. The soot-filled air makes your throat itch the minute you enter.


No, it's not hell. It's the Norilsk copper smelter, and while it may not be anyone's idea of paradise, for many it is a proud symbol of the conquest of the North and the triumph of industrial labor.

Built by prisoners and pioneers, Norilsk, a city of 300,000, is one of the world's biggest settlements above the Arctic Circle and a persisting economic success story. After a brief period of stagnation in the early '90s - when the factories stood still and the city's residents left in droves - Norilsk is back on its feet.

From 1994 to 1999, Norilsk Nickel increased its nickel production from 162,500 metric tons to 220,100 tons. Copper production went from 313,800 tons to 410,500 tons. The economic health of the city has improved accordingly. The average worker at the 50-year-old copper smelter brings home $630 a month.

"In the beginning of the '90s a lot of Norilsk residents left. But now it's just the opposite," said Aleko Gabuchia, deputy director of the copper smelter, in a recent interview. "We are like an oasis - a little island here - and there is life."

But when you leave behind the sulfur dioxide-belching smokestacks of the Norilsk industrial zone and travel deeper into the Taimyr peninsula, the economic picture is not quite so rosy.

In Ust-Port, a village of 450 people in Taimyr, the local equivalent of the copper smelter is the lednik, a maze of storage rooms that was dug into the permafrost in the 1930s. With a year-round temperature of minus 21 to minus 24 degrees Celsius, the lednik is used to keep fish and reindeer meat in the summer and is a source of pride for Ust-Port residents.

"All this was built with the help of a pick and a lot of chutzpah," said Alexei Kuvilkin, deputy head of the local fishing company, as he guided visitors through the icy halls 16 meters below the tundra.

But the Ust-Port fishing company, like other former sovkhozy, or state farms, in the North, has seen better days. Because they are located in areas where transport is severely limited, the sovkhozy struggle to break even selling their goods in Norilsk and other cities. The average fisherman or reindeer herder in Taimyr's rural settlements has a base salary of about $70. Meanwhile, prices in the villages are two or three times higher than in Moscow.

Things weren't always so grim. It used to be that everyone in the North, no matter what industry they were involved in, earned a high salary as compensation for the tough climactic conditions.

Wages in rural areas like Ust-Port were actually higher than those in the cities simply because life was deemed tougher there. But today, the only northerners who are living well are the ones working for money-making companies.

"In Norilsk, there is a big concentration of businesses that can provide security in the social sphere, as well as other areas, for their workers," said Olga Busovikova, chairwoman of Tai myr's Red Cross committee.

"In the Taimyr Autonomous District [which surrounds Norilsk but does not have jurisdiction over it] there are few such businesses, and where they exist, they are subdivisions of Norilsk Nickel. So we have this problem of people who came here and are now practically hostages."

Together Norilsk and the rest of Taimyr form something close to a representative picture of the North. On the one hand, it is a resource-rich land that is home to the giants of Russian industry. On the other hand, it includes vast undeveloped territories, where much of the population lives in poverty, unable to survive without extensive government assistance.

That's not to say Taimyr - whose name means "rich" in one of the native languages of the North - has no potential. Tour guides at the museum in Dudinka, the capital, proudly inform visitors that Taimyr's ground contains 130 different minerals, most of which have never been touched.

That's true of most of the North. In Magadan and Chukotka, you'll find gold and coal. Sakha has diamonds, while the Khanty-Mansiisk region prospers from its oil and gas. In total, Russia's northern territories contain an estimated one-seventh to one-sixth of the world's mineral resources.

Even with many of these deposits undeveloped, Russia already relies on the North, which comprises 64 percent of the country's land mass but is home to only 12 million people, or 8 percent of the overall population.

"The North of Russia [has] half of the world's palladium, a big part of its platinum, most of Russia's oil and all of its gas - in other words, half of Russia's hard-currency earnings," said economist Mikhail Delyagin, director of the Institute of Globalization Problems.

At the same time, settling the North, with its limited transport possibilities, is an expensive hobby. The Soviet Union abandoned many of the northern settlements that vacuum up budget funds and whose existence today is hard to justify economically.

Soviet officials lured people to the Arctic with big salaries and extensive privileges as much to stake a claim on the frontier as out of economic considerations. These settlements continue to depend on vast subsidies to survive, though the aid doesn't always arrive on time.

Delyagin and other economists advocate a rational, individual approach to each of the northern regions, instead of reflexively renewing assistance each year. First of all, they say the government must do more to enable pensioners and other non-working members of the population to leave for the "mainland" - where supporting them is cheaper. Moreover, the continued existence of cities and towns should have an economic justification, with some exceptions made for native communities and settlements of geopolitical importance.

In other words, where local industry can support entire communities, let them exist, the economists say. In places where the work is seasonal, it may make sense to get rid of permanent settlements and send workers in shifts.

But downsizing the North is not likely to be painless. Despite the two-month polar night, nine months of sub-zero temperatures and merciless mosquitoes in the brief summer, residents of the Arctic regions have a deep attachment to their land. Whether they are indigenous people, children and grandchildren of exiles or '60s-era romantics, northerners are proud of where they live and don't want to see it abandoned.



What Is the North?


The area officially known as Russia's North is a sprawling and diverse territory consisting of 28 regions. They include both the poorest and richest parts of the country.


The Khanty-Mansiisk Autonomous District, for example, is the second-biggest donor to the federal budget after Moscow and was rated by Expert magazine one of the most attractive regions for investment last month.

In contrast, Expert rated the Tuva republic one of the worst regions for investment - with high risk and "insignificant potential." More than 77 percent of Tuva's population lives below the official poverty line.

Paradoxically, Tuva, like much of the area known as the North, is south of Moscow. In reality, the North, or in bureaucratic parlance "the Far North and comparable territories," includes any region with a limited shipping period.

To be considered northern, a region, or at least part of it, must be inaccessible for more than 180 days a year, something that basically applies to any area without a railroad, said Konstantin Dotsenko, acting head of the Economic Development and Trade Ministry's department for the North. Even within this definition, accessibility varies widely among the regions.

"We have some settlements where you only have one or two weeks of high water [i.e. accessibility]," said Viktoria Morozova, Taimyr's chief economist.

Still, the basic benefits of northern status are the same. All of the 28 regions have the right to ask for a certain type of assistance from the federal government, namely financing for the so-called northern delivery. Every year the government allocates millions of dollars for the delivery of fuel and food to the North - a logistical challenge that must be met within the limited period of time that the Arctic seas and Siberian rivers are not navigable.

This year the government spent 4.45 billion rubles ($160 million) to assist 23 regions with the northern delivery, while five regions coped on their own.

The northern delivery has rarely gone smoothly in the past decade. Officials in Moscow say many regions use the money irresponsibly, trusting dubious companies to handle the shipping.

But many observers say the main problem is that the money allocated does not come close to meeting the regions' needs. According to Delyagin, the amount needed for this year's northern delivery was almost twice the 3 billion rubles allocated in the 2000 budget.

Morozova of Taimyr said the money her region received from the federal government - 178 million rubles ($6.4 million) - covered only about 40 percent of the cost of this year's delivery. The rest will be made up with funds from the region's own treasury, she said.

Taimyr can afford to make up the difference - thanks to the presence of Norilsk Nickel in its backyard. The company's main subsidiary, the Norilsk Mining Co., or NGK, pays royalties to Taimyr on the use of mineral resources and runs the port at Dudinka.

In total, NGK provides 80 percent of the revenue of Taimyr's budget, said No rilsk Nickel spokesman Anatoly Komrakov.

Where regional governments lack big, reliable taxpayers, people simply suffer. Regions such as Magadan and Chukotka have faced chronic fuel shortages over the past years. In extreme cases, the government pays for expensive emergency deliveries by air. For the most part, however, residents must get by with little or no heat.

John Round, a British geographer living in Magadan, said by telephone in mid-November that the temperature outdoors was minus 20 degrees Celsius, though that was made much worse by strong winds. Indoors, the heating was working, but just barely.

"If you touch the radiator, you can feel that something's working there, but it's not hot," he said, adding that he keeps his apartment warm with electric heaters.

Sometimes electric heaters are not even an option, as power outages are also frequent occurrences in the remote parts of the country.

Critics of the government's approach to the North say it never really gets beyond the northern delivery. Northern regions are kept alive by the annual shipments, but little is done for them in the way of economic development. And, they say, if the government began thinking more strategically about the North, the whole country would benefit.

"From the point of view of Russia's development, this is an enormous economic and geopolitical resource," said Boris Misnik, former chairman of the State Duma's committee on the North. "Many people repeat this line, but few understand what it means."

Irina Starodubrovskaya, deputy director of the Foundation for Enterprise Restructuring, a governmental organization that administers World Bank projects, said even the official definition of the North points to a lack of a coherent economic policy for the regions.

"This is absurd when the only way to consider the characteristics of a specific region is to call it 'comparable to the North,'" she said.



People of the North


Zinaida Iosifovna arrived in Dudinka, the port from where Norilsk Nickel ships its metals, almost 30 years ago from southern Russia.


"I wanted to be independent," she recalled. "I wanted to show my parents I was strong enough."

In those days, the North was a popular destination for young, headstrong types. Many were lured by high salaries, intending to stay only a few years, but for one reason or another ended up staying longer. Others say the pioneering spirit brought them to the Arctic.

"I came for the romance," said Alexei Marchenko, head of the Ust-Port administration, who arrived in the '60s from Krasnoyarsk.

Indeed, the romance of the North was a popular theme among the bards of the '60s.

"I'm heading off to the place where I'll find/The fog, my dreams and the smell of pine," goes one well-known song written by Yury Kukin in 1964.

Of course, not all northerners are pioneers and recent arrivals. Many of today's residents have deep roots in the region. There are 30 different native ethnicities in Russia's North. In total, they number about 200,000 people. Their traditional means of survival are herding domesticated reindeer, hunting wild reindeer and fishing.

Ethnic Russians have also populated the Arctic for generations. Misnik, who lives in Monchegorsk, a mining town in the Murmansk region, calls himself one of the area's "native Russians."

"My mother's family has been on the White Sea since the 13th century," he said.

But with the tremendous expense and chronic failure of the northern delivery, is it really worth maintaining all of the cities, towns and villages in the North? Shouldn't those towns without any profitable industry simply be shut down?

This logic tends to anger patriots of the North.

"We created great cities here, like Norilsk and Murmansk," Misnik said by telephone from Monchegorsk. "What, we should just leave all this behind?"

There are also geopolitical arguments for maintaining a sizable population in the North and especially in the Northeast.

On the one hand, politicians have sounded the alarm about demographic pressure from China. They worry that the difference in population density on each side of the border could result in a loss of territory for Russia, perhaps spreading all the way up the country's eastern coast.

On the other hand, there is concern that people in Chukotka are looking too eagerly toward Alaska.

"Because we are so close to the United States, American ships, especially from Seattle, often dock here. They leave behind fruits and vegetables grown by American farmers. We've gotten used to them and are gradually turning into Yankees," jokes a Web site about Anadyr, the capital of Chukotka. "After eating your fill of American potatoes and downing some whiskey, you feel like picking up a banjo instead of an accordion and singing the blues."

As for the northerners themselves, many simply don't want to move, despite the hardship.

Ust-Port resident Tamara Plotnikova can't even bear to move as far as Norilsk. The 76-year-old has spent the past few winters with her daughter there, but returns to Ust-Port for the warmer part of the year. Since she has technically moved out, local officials are supposed to take her house and give it to a resident who needs a better one, but so far they haven't had the heart to deprive her of what she considers her real home.

"I've lived here for 76 years, and I like it," Plotnikova said as she scanned the wares in the Ust-Port store recently.

Some cite physiological reasons for not moving south. People who have lived all their lives in the odd polar cycle are used to nonstop darkness or light for months at a time. They have a hard time adjusting to a less extreme cycle.

"Moving lower than Vologda is not recommended," Misnik said.



Trimming Down


Nevertheless, there are strong arguments for encouraging people - especially pensioners and other non-working members of the population - to move out of the North. The Soviet Union did everything on a grand scale, and nowhere is that scale more crippling than in the North. Today the country's remote regions must become leaner and meaner to survive.


And while many people are attached to the region, plenty of northerners would love to go if they could.

Anastasia Potyomkina, of Dudinka, receives a monthly pension of 790 rubles, 200 of which goes toward her apartment. She said she has been surviving thanks to the Red Cross, which runs a soup kitchen for pensioners and needy families in the city. Still, she has little money left over for winter essentials like warm clothes and boots.

"I have nowhere to go on the mainland," Potyomkina said.

Potyomkina's problem may be partly psychological: At her age she may be afraid to pick up and leave for a region where she has no family and no roots. On the financial side, there is help, albeit limited.

The federal government has been providing subsidies for resettlement since 1998. So far about 250,000 people across the North have taken advantage of the program, said Dotsenko of the Economic Development and Trade Ministry. Anyone who has worked at least 15 years in the North is entitled to buy housing with federal funds on any part of the mainland, he said.

But the waiting list is long. In Norilsk alone, about 20,000 people are waiting for resettlement subsidies, Dotsenko said.

Russia is negotiating with the World Bank for an $80 million loan to conduct a resettlement pilot project in three northern municipalities - Vorkuta, a coal-mining city in the Komi republic, Norilsk and the Magadan region's Susumansky district. Like the existing federal program, the pilot project would provide assistance for northerners to move to whatever region they like.

Starodubrovskaya, the project manager, said the aim of the project is to facilitate migration in such a way that it has a real effect on the local economies - by enabling the pilot cities to cut costs for housing maintenance and utilities.

The main condition for recipients is that they move their entire household, not just individual family members, she said.

"The municipalities would be able to consolidate their housing infrastructure, tear down old houses. People who live in houses that are in disrepair could move into the apartments freed up by migration," Starodubrovskaya said, adding that municipalities spend up to 70 percent of their budgets on maintaining their housing infrastructures.

Of course, even without federal aid, people are leaving the North. More than 1.5 million northerners have migrated south over the past eight years. But this flow has only hurt the region, as most of the people leaving are not pensioners, but young, able-bodied workers.

What can be done to entice them to stay?

Certainly, if the overall investment climate in the country improved, the resource-rich northern regions would be among the first to benefit. But so far, many big projects in the North have ended badly for foreign investors.

In Magadan, for example, Pan American Silver of Canada owned the rights to develop the Dukat mines, but lost out in a conflict with Russian companies and had to settle for a 20 percent stake in a joint venture. In Sakha, foreigners with shares in the oil and gas company Sakhaneftegaz got burned when the regional government, which at the time owned only a 33 percent stake in the company, organized a share dilution.

Such horror stories can happen anywhere in the country, but the perceived risk may be greater in the North.

Roland Nash, an economist with Renaissance Capital, said the country's rough investment climate is amplified by conditions in the North, which has less infrastructure, is further from federal authorities and is "less well understood" than other regions.

One idea for boosting the North that is popular with many officials is the development of the Northern Sea Route. Proponents of the idea say the Arctic waterways above Russia are a faster and cheaper route between Europe and Asia than the currently favored Suez Canal. They are heartened by reports that global warming will make the ice in the area much thinner, thereby lengthening the navigation season in the Arctic.

But here again it is unclear who will provide the large injections of cash needed to turn the Northern Sea Route into a major transit artery. Russia has 80 years of experience shipping on the Northern Sea Route and an extensive fleet of nuclear icebreakers that greatly increases the period of navigation. But the amount of cargo shipped on the route has dropped from its record of 6.7 million tons to less than 2 million tons this year, and the ports have fallen into disuse and disrepair. The route is used for the northern delivery and by Norilsk Nickel to ship both raw materials and finished metals, but east of Dudinka, the ports are mostly dead.

As for the icebreaker fleet, it is expected to need serious repairs in a few years. Even Norilsk Nickel is pondering ways to get around using the icebreakers - including the possible use of decommissioned submarines to carry metal along the Yenisei River from Dudinka and under the sea.

On a different and perhaps more easily organized level, the people of the North stand to benefit from the development of the area's traditional industries, namely fishing and reindeer herding. Northern fish, such as omul, sig and muksun, are considered delicacies throughout the country and are virtually impossible to find in Moscow. Reindeer meat, with its sharp, gamy taste, could likewise find a market - if it could find its way to the mainland.

Officials in Taimyr say the region needs factories to process and preserve fish and meat for sale in central Russia. This would allow people in places like Ust-Port to help themselves, instead of relying on handouts from the government and the Red Cross.

"I think if we could organize this, it would solve a lot of our problems," said Busovikova of the Taimyr Red Cross Committee.

Unless the large-scale exploitation of the North goes hand in hand with this kind of local development, the people of the North - both members of native ethnic groups and people who answered the call to settle the frontier - are in danger of being left behind by the much hoped-for economic boom. Geologists and engineers from Moscow will travel to the North to extract its riches, while those who live there will remain dependent and desperate.

Behind his desk in his climate-controlled office, Gabuchia, the deputy head of the copper smelter, considered the problems in remote Taimyr, a world away from Norilsk despite its physical proximity. In the past year, he has traveled 11 times to a remote Taimyr village where his factory does charity work.

"Once when I was there last year, they told me how they prepared a lot of meat and were not able to get it out. The meat spoiled," Gabuchia recalled. "They had tears in their eyes."

TITLE: Ukraine, Russia Reach Deal On Gas Debt and Siphoning
AUTHOR: By Marina Babkina
PUBLISHER: The Associated Press
TEXT: MINSK, Belarus - Russia on Friday agreed to give Ukraine a 10-year reprieve in paying off its mammoth natural gas debt in exchange for a promise to end the siphoning of Russian gas supplied to the West via Ukrainian territory. 


The deal should remove a major irritant in bilateral ties. 

The agreement, which presidents Vla dimir Putin and Leonid Kuchma reached during a five-hour meeting also provides for Russia to continue supplying gas even if Ukraine cannot immediately pay for the deliveries. 

Prime Minister Mikhail Kasyanov, who announced the agreement, said that Russia would grant Ukraine a low-interest, 10-year deferment on its gas debt to Russia, which he estimated between $2 billion and $3 billion. 

Russia also agreed to give Ukraine an eight- to 10-year break on payments for half of the future gas supplies on condition it pays for the rest in cash and stops siphoning off Russian gas. 

"We have made a well-considered decision on the deferment in payments, bearing in mind its difficult financial consequences for Russia," Kasyanov told reporters after the talks. 

"We will benefit from the fact that the Ukrainian government will no longer allow the unsanctioned borrowing of Russian gas." 

Kasyanov also said that Russia could use that debt to purchase Uk rai ni an enterprises that are being privatized. The debt, which has been run up by Ukrainian companies, will be now guaranteed by the Ukrainian government, he said, according to Russian news reports. 

Ukrainian Prime Minister Viktor Yushchenko said that he and Kasyanov would sign a memorandum in a few days that would formalize the agreement. He wouldn't comment on the terms of the agreement, but mentioned the 10-year debt relief as well as guarantees for the safe transit of Russian gas via Ukraine. 

The Ukrainian government has previously put its gas debt to Russia at $1.4 billion. Ukraine, which uses about 78 billion cubic meters of gas annually, is one of the world's biggest energy consumers. That has made it especially dependent on Russia, the closest source of gas. 

But Moscow is likewise dependent on Ukraine for use of the pipelines that carry Russian gas to European consumers. 

Kasyanov said Ukraine itself produces 18 billion cubic meters of gas a year and will get about 30 billion cubic meters from the former Soviet republic of Turkmenistan. Russia will provide the remaining 30 billion cubic meters, he said.

TITLE: THE LAW ADVISER
TEXT: BUSINESS AND THE LAW 

When Work Permits Are Required for Foreigners 


According to current Russian legislation, it is illegal for foreign nationals to work in Russia without a work permit. Presidential decree No. 2146 of Dec. 16, 1993, approved the regulation "On the Hiring and Use of Foreign Labor in the Russian Federation," which requires foreign nationals who are working in Russia to obtain work permits authorizing them to work in Russia. The decree also requires most categories of employers, including both Russian and foreign legal entities, to obtain the authorization of the Russian Migration Service for the hiring of foreign nationals.


While the regulation applies both to Russian enterprises and to foreign legal entities that employ foreign nationals in Russia, explicit exemptions are made for the latter when they send employees to Russia to assemble equipment that they deliver themselves, and for accredited representative offices of foreign firms that hire foreign nationals.

The objective of the current legislation of the Russian Federation is to provide a two-tier structure, which comprises:


. the issuing of authorizations to enterprises to permit the employer to hire foreign nationals to work in Russia, and;

. the issuing of individual work permits to foreign nationals to authorize those individuals to work in Russia.


A modified procedure applies to the employment of "highly qualified specialists" by Russian enterprises with foreign investment. Although Article 16 of the regulation removes any requirement for such an employer to obtain an authorization, the individual specialist must nevertheless obtain a work permit. For this purpose, the foreign national is regarded as a "highly qualified specialist" only if he is appointed as a "manager, deputy manager, or chief of a division." Based on a strict interpretation of Article 16, this modified procedure cannot apply to a foreign national whose job title does not contain any of these designations.

Both foreign employees and their employers in Russia should be aware that foreign nationals who are employed in Russia and who fail to obtain a work permit are subject to deportation.

While in practice such foreign employees have not been regularly expelled from Russia, under the law the relevant Russian authorities have the right to do so.



For more information or advice, please contact James T. Hitch or Elena Mo cha lo va at Baker & McKenzie's St. Petersburg office. (Tel: 325-83-08, fax: 325-60-13.)

TITLE: Kudrin Shows He's Still on Top
AUTHOR: By Olga Romanova
PUBLISHER: Vedomosti
TEXT: Vice Prime Minister and Minister of Finance Alexei Kudrin is regarded as one of the few highly placed officials President Vladimir Putin will talk to on virtually any occasion with respect to any question. 


Nonetheless, times have been tough for Kudrin lately, with the president making public criticisms and oil companies and the military virtually declaring a personal vendetta against him. 

But it seems Kudrin has mastered the situation. The oil majors are now more upset with Vice Prime Minister Viktor Khristenko's proposals to hold auctions for export pipeline access than Kudrin's struggle against corporate prices and increased export duties. And Kudrin says he will win over the military this week.



Q: There has probably never been a government official in such a key position as yours with so much happening around him. The oil majors are up in arms over transfer prices and the increasing of export duties. The State Duma lashed out at the government's revenue forecast for next year and at its proposed mechanism of distributing any extra income. Negotiations have fallen through with the International Monetary Fund and, consequently, with the Paris Club. You have been given responsibility for the export of nonferrous metals and scrap. On top of all this, you have been answering questions regarding your work in the mayor's office in St. Petersburg. What is going on?


A: Well, as I see it, nothing is going on. In addition to the deserved criticism leveled at the government - and I say deserved because only those who do nothing never make mistakes - there has been a certain amount of debate in the media stirred up primarily out of a desire to see some kind of sensation. On the other hand, the situation could have been cooked up by one of our opponents, the opposition. But there are completely different explanations for each of the issues you have mentioned. As far as the oil companies are concerned, I can say none of them is up in arms against me, rather it is the other way around. 



Q: How are your proposals being resolved with Khristenko's suggestion of auctioning export access to pipelines?


A: As far as concerns increasing export duties and payments made at auctions for access to pipelines, both positions will work. On this, Khristenko and I have no argument. We have reached an agreement and are working according to plan. 

In addition, though, I believe that we, from the point of view of the state, have insufficient control over income from what is Russia's sole, budget-forming sector.



Q: The left, the Communists, have suggested nationalizing this branch to control income. 


A: In our opinion, this is not required. It is enough to abide by the laws controlling income. It is sufficient to use the authority of the government for defining export duties if world prices have risen. This has nothing to do with a particular company's success. Given that all deposits are distinguished according to their size and productivity, then there also exists a corresponding mechanism for determining excise and differentiating other taxes. The government has the authority - it must use it. The sector should service the budget, the social sphere and the state as well as reduce the general tax burden. 



Q: Government negotiations with the IMF have been called unsuccessful by many. The Duma-approved budget has been called excessively compromising. Would you agree with this assessment?


A: As far as the budget is concerned, we feel that in the first and the second readings, its concept - its principal elements - were approved. It was adopted, though it was not so easy for the Duma to assimilate, shall we say. In the first reading, you will recall that before voting, there were all kinds of forecasts: Everything was terrible, incomes had been reduced, it didn't even satisfy the leading factions. But in the first reading, they voted it through. We convinced them. Now, there will be a third reading that will consider amendments for the individual sections and the distribution of additional revenues. The government has requested 70 percent of the additional income go to servicing the debt. The first 70 billion rubles ($2.5 billion) of additional income will be distributed 50-50 [between servicing state debt and financing other cost categories]. ... I hope this proposal will be voted through Tuesday. 

As far as negotiations with the IMF are concerned, they say we didn't manage to agree with them and didn't manage to get credits from them. What's going on - a liberal government was unable to negotiate credits, they say. I should say that all elements of this kind of criticism are somewhat inaccurate. Let's set out our tasks and goals. First, we don't want to take credits, and we held negotiations without any intention of getting credits. Second, with regard to macroeconomic policy indicators, we believe there is no exact forecast price for oil. If we set ourselves a plan for income, costs and paying off debts to the Paris Club right this instant - immediately today - then we'd take on, as it were, additional obligations. I believe that in the interests of the state, the budget and the social sphere, I can't take on increased obligations. This would mean if oil prices dropped lower than the optimistic forecasts predict, we'd have to reduce our expenses in the social sphere and pay debts. 

This is an unacceptable position for us. I've said before, the previous government and the previous finance minister put their signatures on two unrealistic programs - one of them two weeks prior to the default and the second last year. The latter was over-fulfilled in terms of the macroeconomic indicators but under-fulfilled in terms of structural measures. This year, we want to make a realistic program. We don't have such a burning need to agree on proposals we know to be unacceptable for the Russian side. As far as the Paris Club is concerned, there is a corresponding procedure. I believe there is no need to hurry into an agreement with proposals that are not sensible. We must work further and convince our opponents.

TITLE: Interest-Rate Hike Signals Central Bank Ruble Policy
AUTHOR: By Nikolai Mazurin
PUBLISHER: Vedomosti
TEXT: MOSCOW - After last week's auction that set new benchmark interest rates on the money market, the Central Bank raised interest rates on commercial banks' deposits by 0.5 to 2 percentage points.


By doing so, the Central Bank clearly showed its preference for a strong ruble, which traders did not expect to dip below 28 rubles to the dollar by year-end even without intervention by the bank. 

The Central Bank has steadily reduced interest rates paid on deposits of commercial banks this year. This, in theory, should have stimulated the banks' lending activities. Since year start the yield on deposits with three-month maturity has fallen from 20 percent to 9 percent while overnight rates have fallen from 3 percent to 1 percent. 

In an auction held last week for banks without access to Reuters-Dealing, the Central Bank paid above the market interest rates. This week the Central Bank jacked up yields on deposits to the same level. The Central Bank pays 5 percent on weekly deposits, 6.5 percent on 14-day deposits and 8 percent on monthly deposits.

Tatyana Paramonova, deputy head of the Central Bank, said "in the future [the Central Bank] will consider the possibility of equating [different] rates" on the money market. However, the Central Bank does not plan to pay a premium on deposits.

Market participants say the increased Central Bank rates are indicative only.

The bank will show the market "which way it should think," said Sergei Monin, head of Raiffeisenbank's treasury department. By soaking up ruble liquidity the Central Bank weakens the dollar, he said.

Monin suggested that the ruble will appreciate against the dollar toward the end of the year. Traditionally banks dump dollars and buy rubles before closing their books at year-end.

Gleb Sorokin, of MFK bank, said it is hard to tap the ruble market at this time since the banks are reluctant to "place deposits that mature next year."

Sorokin said the 28-ruble-to-the-dollar exchange rate constitutes "a high level of resistance" and that the ruble will not become more expensive toward the end of the year.

Dmitry Monastyrenko, of the Trust and Investment Bank, said the market does not expect the ruble to top 28 rubles per dollar since whenever the bulls step in "the Central Bank appears and scares them away," he said.

Fundamentally, the ruble remains undervalued and could further strengthen, said Oksana Osipova, expert at the Growth Center.

However, traders fear that the International Monetary Fund will not resume its lending program and the government will have to purchase hard currency in order to pay the Paris Club creditors, Osipova said. 

The government has earmarked $3.2 billion for Paris Club creditors in its 2001-draft budget. 

The ruble is unlikely to strengthen without a restructuring deal with the Paris Club.

"The demand for ruble assets evaporated by the end of the summer," Osipova said.

She forecast that the seasonal demand in January for hard currency would not lead to the traditional fall in the ruble. The trade surplus in December could come to $6.5 billion to $7 billion "so there is no reason to expect volatility on the Forex market," she said.

TITLE: MEDIA WATCH
AUTHOR: By Alexei Pankin
TEXT: Media Unions Are a Tool for Press Control 


RUSSIAN media associations have been big news lately. Last week, television star and businessman Alexander Lyubimov announced the creation of a new organization called Mediasoyuz (Media-Union), which would unite all media professionals throughout Russia. In retaliation, the Russian Union of Journalists, an organization that unites all media professionals throughout Russia, announced that it was convening a national congress next week.


All this got me thinking about the time when the Union of Journalists hauled me before a tribunal. It was September 1998, and the financial crisis had just hit. It was a hard time for the mass media, as the ruble lost its value, bank accounts were frozen, the advertising market collapsed. 

I learned about the looming expiration of this law, which grants a number of tax privileges to the media, from an article in Moskovsky Komsomolets entitled, "They Are Smothering Freedom." It argued that some deputies in the State Duma, though pretending to be supporters of press freedom, really intended to destroy the media by voting against a three-year extension of state concessions to the media. Among the villains, the article listed Grigory Yavlinsky, Sergei Kovalyov and Yury Shchekochikhin. 

A little investigation revealed that the Union of Journalists, as part of its lobbying effort on behalf of the extension, had sent a "black list" around to the media. Now, I know some of these "enemies" personally; others I have admired from afar. I have never had reason to doubt their wholehearted commitment to democratic principles. Since I had my own concerns about the desirability of tax concessions to the media, I decided to write my own article.

It happened that, in addition to defending the tax privileges, the union had recently created something called the "Grand Jury," which was a sort of professional ethics board and the brainchild of union secretary (and author of the Law on Mass Media) Mikhail Fedotov. The Grand Jury's first session was scheduled for Yaroslavl, and I was to be its first guinea pig.

The charge against me was formulated something like: "The editor of a media magazine should not contradict the corporate opinions of the industry." About 80 editors from throughout the Upper Volga region silently raised their hands in support of continued tax breaks. Only the editor of the private business paper Yaroslavskiye Novosti voted with me against them. Later though, during the smoking break, several editors shook my hand and told me they agreed with my arguments.

It simply isn't possible for one organization to found both a publishers' association and a labor union for journalists. It isn't possible for one organization to simultaneously defend the interests of both the state and the private media.

Nonetheless, I wish the union well in its upcoming congress. I'd also like to congratulate Fedotov, who was recently nominated by the Russian government for the post of OSCE representative on freedom of the media. Hearing the news, Fedotov commented: "The mere fact that I have been nominated by my country sheds a whole new light on the idea that the government has repressive intentions regarding the press." This sharply contradicts the corporate opinion of the Union of Journalists. With comments like these, Fedotov is risking exile to Vienna and a lonely existence on the meager salary of an OSCE bureaucrat.


Alexei Pankin is editor of Sreda, a monthly magazine for media professionals.

TITLE: EDITORIAL
TEXT: Debt for Equity Deal a Smokescreen 


IN November 1999, The St. Petersburg Times broke the news that Moscow had a strong legal case to win about $12 billion - $12 billion! - in debt relief. Germany, Russia's biggest creditor, has seen its share of economic horrors in the 20th century, and so has adopted some admirable laws insisting on debt relief for any nation where the economy tanks.


Russia's economy qualifies - both for the inflation of the early 1990s and for the financial meltdown of 1998 - for a 50 percent write-off of debts to the German nation and to German financial institutions. 

As we reported more than a year ago, this was the opinion of one of the Big Five accounting firms, of a leading international debt expert in the State Duma and of German legal experts.

We also reported that Mikhail Kasya nov - then the finance minister - had been informed of this window of enormous opportunity, yet had done absolutely nothing to take advantage of it.

As far as we know, neither then nor today has Kasyanov or the government ever so much as hired a good Berlin lawyer to explore the possibility.

Instead, they are now floating the idea of a murky Gazprom shares-for-Paris Club debts "swap." Why? (Why not just sell shares in Gazprom for real money, and then pay off the Paris Club debts with the cash raised?)

The idea may be all right. After all, Russia desperately needs investment. So we can imagine a truly elegant financial treaty under which Paris Club debts are written down, the French and Germans and British get shares in, say, Gazprom and Eurobank and UES - and Westerners pledge major investments in those bluechips, and the Kremlin rededicates itself to a few simple reforms (such as euthanasia in the banking sector).

Yes, we can imagine that. But we think something else is going on. It looks likely that the government is just trying to conjure up a negotiation about nothing, as a way to postpone the $3.2 billion it owes the Paris Club next year.

In fact, getting Schroeder to speak with guarded respect for the prime minister's proposal may be an effort to splash a patina of respect on bizarre debt-for-equities swap as a class. Kasyanov seems to love them. 

He is busily building a strange one in Ukraine, under which the Russian government will be able to transform Ukraine's gas debts to Gazprom into chits for use in future Ukrainian privatizations. 

When all of Kasyanov's poker hands have been played, expect to see no real change with the Paris Club - but lots of Ukraine in the hands of Russian oligarchs.

TITLE: With Joint-Currency Plan, Russia Is Buying Grandeur
AUTHOR: By Viktor Dyatlikovich
TEXT: THE leaders of Russia and Belarus have once again announced the impending creation of a unified currency between the two countries. Such announcements have become so frequent over the last few years that you almost get the impression that somewhere there is a group of bureaucrats who - in order to relax after a hard day's work - spend their evenings drafting unification fantasies. But the fact remains that, over the last eight years, not one of the common-currency proposals put forward has ever come to anything.


This time the two governments decided not to hurry. The common currency will not come into being until 2005 in order to give both states sufficient time to prepare. Skeptics, however, are already sniggering that the Belarussian economy may not hold out until then. Seemingly understanding this problem, Russia has been quick to offer cash to see its partner through the hard times. After President Vladimir Putin's visit to Minsk last week it became clear that Russia intends to extend Belarus a $100 million loan to prop up its national currency. The first tranche of this loan - $30 million - may be issued as early as this month.

It is perfectly clear what Belarus gets out of this situation. However, as far is Russia is concerned, one must look for an explanation outside of economics or even politics. It seems to me that the answer lies in the realm of psychology. In a nutshell, Russia is using its relations with Belarus to resolve its own psychological complexes, which have arisen over the last decade as a result of Russia's dealings with Western creditors.

It is not hard to feel sorry for Russia's bureaucrats. They have precious few opportunities to take spiritual comfort. Too often, they are forced to ask for favors and to explain their lapses and failures. If they aren't apologizing to the Paris Club, then it is the London Club or the International Monetary Fund or just about anyone else. For Russians who were raised on the Soviet mentality that we are much smarter than all those "yankees" and "burghermeisters," this situation is all the more difficult to bear. They must be cursing the fate that forces them to accede to the demands of creditors no matter what they ask - whether it be to restructure the banking system or to liquidate some state monopoly or to wash their hands before eating.... 

Unexpectedly Russia has been blessed with the windfall of high world oil prices and, with it, the apparent chance to get by for a while without the IMF. But this chance could not be realized. A host of claimants - from the army to the agricultural sector - appeared to demand the money. Gerard Belanger, deputy head of the IMF's Second European Department, once again flew to Russia last month. Russia once again asked for money and the IMF once again presented a list of conditions.

Just when Russia's inferiority complex seems most unbearable, Belarus steps into the picture. Imagine, a country exists that depends on Russia for help. Someone is coming to Russia with his hand out.

I'll bet Prime Minister Mikhail Kasyanov has often fantasized about what it would be like to be in Belanger's place. And now his dream has come true. Notice how even the process of extending the loan to Belarus is an exact mirror of Russia's relations with the IMF. First, they negotiate the overall plan. Then there is a list of macroeconomic indicators to be monitored. Then the loan is broken down into several tranches (which allows Russia to prolong its pleasure). They are even calling the loan a "stand-by" credit, just like the IMF does!

In reality, everyone understands that it is just a game. Russia has no hope that it will ever see this "loan" repaid. It is obvious that Belarus has no intention of even trying. After all, Belarus is just plain bankrupt.

Of course, some of the money will no doubt be used to help stabilize the Belarussian currency. After all, two months ago Belarus - under pressure from Moscow - renounced the policy of maintaining an artificial exchange rate. As a result, the country's hard-currency reserves have fallen so rapidly that they will certainly be exhausted by February at the latest. 

Moreover, Belarus has a presidential election scheduled for September 2001. Already President Alexander Lukashenko is handing out populist promises designed to drum up support for his re-election bid. Recently, he promised to raise state salaries by 40 percent.

And where is the money to come from? From Russia, of course. No one else is going to help Lukashenko. If IMF representatives go to Minsk at all, it is just to "monitor the possibility of opening talks about the possibility of beginning negotiations." The European Bank of Reconstruction and Development and the World Bank have frozen their Belarussian lines of credit.

And Russia doesn't object. The $100 million isn't really a loan. It is the price of therapy. Belarus is offering Russia a commodity that it can't purchase anywhere else - the illusion of grandeur. For that, Russia is ready to pay a high price.


Viktor Dyatlikovich is a correspondent for the newspaper Moskovskiye Novosti. He contributed this comment to The St. Petersburg Times.

TITLE: Global eye
TEXT: Invisible Republic 


The secret government has shown its face at last. And what a strange, multi-headed beast it is. On one stout neck we see the snarling visage of an angry "protester" banging on the doors of election commission offices, his pockets stuffed with campaign cash from Austin, Texas. Another head displays the jowly eminence of a grave courtier, a loyal family retainer bowing to the aristocratic clan that enriches him.


Still another meaty gourd holds forth the squinting, scowling portrait of a pundit, wildly nodding, endlessly babbling in a panicky spiel about "closure," "stability," and "the mantle of legitimacy." Finally, there is the central head - small, walnutty, a bit lost and uncertain amid the furious activity of the other noggins - opening its pursed little lips to intone, tonelessly: "I are the president now."

Yes, it was yet another week through the looking glass for the American political system. But in the middle of much muddle, a few things became clear - even naked: The owners of the country want their presidency back, and they'll stop at nothing to get it.

Having been declared the winner of the election by one of his own campaign operatives - a decision based on an incomplete vote count marred by the violence of his own hired mob - George W. Bush, the second-place candidate in the presidential race, tottered out to read a few scripted lines claiming the White House for his own. But it was evident this week that another Texan is actually controlling the destiny of the American republic: Tom DeLay.

We know DeLay - if we've been paying attention - as the puppeteer behind the hard-right's impeachment carnival a couple of years back. Ostensibly the No. 3 man in the House hierarchy, the Texas congressman - bearing the good old nickname of "The Hammer" - has spearheaded the Owners' drive to turn Congress into a corporate welfare office, while waging their well-financed war on President Bill Clinton and all his works. DeLay ousted Newt Gingrich as House speaker when that sad sack of shinola failed to dislodge the Great Satan in the White House, and installed a new mouthpiece, Dennis Hastert, a genial suit of clothes who may actually end up as president if the electoral process goes completely off the rails.

The Wall Street Journal reports this week that it was DeLay who organized the riots in Miami, when Bush supporters stormed the election commission offices and scared commissioners into suddenly calling off their hand recount of votes. DeLay "took charge of the effort on Capitol Hill," offering staffers "free airfare, accommodation and food in the Sunshine State, all paid for by the Bush campaign." More than 200 GOP House aides signed up and headed South to bang on doors, toss bricks, and make so many death threats to the local Democratic congressman, Robert Wexler, that federal authorities warned him to stay in Washington rather than risk a trip to his home.

Meanwhile, DeLay and his other hand puppet, House Majority leader Dick Armey, made it known that even if Al Gore ultimately wins in Florida, they will not allow him to take office. Armey said the GOP-controlled House reserves the right to reject any election results they don't happen to like. "It is our duty," said Armey, to take that decision away from the voters - especially the 50 million who voted for Al Gore.

And so it goes. The beast keeps barking from its several heads, the little walnut recites his lines, Daddy Bush's old cronies set up shop again in Washington, the pundits yip and yipe and bite their own tails - and the Republic slowly sinks into the swamps of Florida.



Open to Question


Speaking of Texas, a revealing glimpse into the mindset behind some of George W.'s "heartland values" was offered by Harper's Magazine this week, when they published an "employee exam" used by Rent-A-Center, a Texas-based appliance rental firm, to plumb the soul of each worker at their 2,100 stores around the country. Made up of 500 true-false questions, these are the kinds of things that concern good old-fashioned "real Americans" (as opposed to them blacks and Jews and com-symp libs in Miami who tried to steal the election by having their votes counted).


If Rent-A-Center noted 12 "deviations" from the norm, the worker could be tossed out on their pervy behinds. Anxious employees thus had to come up with the "right" answer to questions like these: "Everything is turning out just like the prophets of the Bible said it would." "I have had no difficulty in starting or holding my bowel movements." "I believe in the Second Coming of Christ." "Sometimes I am strongly attracted by the personal articles of others, such as shoes, gloves, etc., so that I want to handle or steal them though I have no use for them."

The earnest concerns go on (and on): "I have never vomited blood or coughed up blood." "I would like to be a florist." (We know the wrong answer to that one!) "I like poetry." (Ditto!) "I have diarrhea once a month."

"Evil spirits possess me at times." (Aren't those last two the same thing?) "I have often wished I were a girl."

And then there is that deep, dark secret that every employer needs to know: "The top of my head sometimes feels tender."

This line of inquiry led to a class-action suit filed by 1,200 employees, and the company eventually had to pony up $2 million for its unbridled weirdness. There was at least one true-false question, however, that made perfect sense - one which, if answered in the affirmative, would go a long way toward explaining the politics of Texas, of Florida, and indeed of America as a whole:

"Sometimes in elections I vote for men about whom I know very little."

TITLE: New Space Station Continues Legacy of Apollo-Soyuz
AUTHOR: By Yury Salnikov
TEXT: WITH a joint Russian-American crew now setting up shop on the new International Space Station, it seems fitting to look back at another landmark of space cooperation - the 1975 Apollo-Soyuz docking mission - which took place exactly 25 years ago this summer. That mission, although far from the most impressive space flight in terms of its results, really did mark a transition from international competition to international cooperation in space. Echoing U.S. astronaut Neil Armstrong's famous words, it was a small step, but the journey it began continues to this day. 


At the time this mission was proposed, both space programs were in the doldrums. Despite Nikita Krushchev's demand that the leaders of the Soviet space program must not "give up the moon" to the Americans, U.S. astronauts were the first to land there, and shortly afterward General Secretary Leonid Brezhnev shut down the Soviet lunar program entirely. 

Fate was equally unkind to the victors. After the successful moon landing, NASA saw its budget reduced year after year. From a peak of $3.5 billion in 1969, NASA's budget had been pared to just $128.7 million by 1974. Of the 300,000 people NASA employed in its glory days, just 14,000 remained. Of more than 70 astronauts in the program, only 40 remained. Work on the space shuttle was delayed and would begin in earnest only in 1977; the first shuttle flight would not take place until April 12, 1981. 

Perhaps it was because of this lull that the idea of a joint Soviet-American mission was floating around. NASA had actually begun thinking about such a mission in 1970, after the ill-fated Apollo 13 suffered a catastrophic explosion on the way to the moon and was nearly lost. As one of the controllers on that mission later said, "Unfortunately, I immediately rejected the idea of any sort of outside help. As an engineer, I knew that for years we and the Russians had been designing our programs and all our equipment independently and our ships and their docking mechanisms were completely incompatible." 

On the Soviet side, the idea of a joint mission was passed all the way up to Brezhnev, who voiced his support with the statement: "We support the peaceful conquest of space and the construction of mechanisms that will enable close approaches, docking and joint work by our crews." 

On the eve of the historic mission, American astronaut Eugene Cernan told journalists: "I don't think that any of the participants in this program has changed their political views as a result of this work. We understood from the beginning that we must emphasize not the things that separate us, but our common desire to understand, respect and trust one another." 

The Soviet mission commander, Alexei Leonov, echoed these sentiments when I asked him about the atmosphere of the times. "Tensions then were so high that even the smallest spark seemed capable of setting off a third world war. But just at that moment some wise people began asking themselves, 'where are we going?' Then the idea of developing a joint program emerged. The idea was to create a symbol of the new thinking. It would be a new beginning for both camps." 

The Apollo-Soyuz crews were announced immediately after U.S. President Richard Nixon and Soviet Premier Alexei Kosygin signed the "Agreement Concerning Cooperation in the Exploration and Use of Outer Space for Peaceful Purposes" in Moscow on May 24, 1972. 

The American crew would be commanded by Thomas Stafford, who had been an astronaut since 1962. He was serving on the backup crew for Gemini 3 in 1965 when he heard that Soviet cosmonaut Leonov had become the first man to perform a space walk. Soon after, at Stafford's suggestion, his daughter named her newborn son Alexei in honor of Leonov. In 1969, Stafford flew on Apollo 10, considered a general rehearsal for the first landing on the moon. 

The Soyuz commander, Leonov, was four years younger than Stafford. He became a cosmonaut in 1960 and in 1965, as a member of the Vostok 2 crew, was the first man to walk in space. That space walk was another of the "small steps" that led directly to the construction of the international space station. 

Stafford and Leonov first met in 1971, when Stafford was sent to Moscow to represent NASA at the funeral of three cosmonauts who died when their ship crashed upon re-entry. At that time, such sad exchanges were as close to "cooperation" as our space programs seemed to get. 

When they were named commanders for Apollo-Soyuz, Leonov and Stafford exchanged humorous drawings about the mission. Stafford drew an American spaceship straddled by the cartoon character Snoopy (Stafford's Apollo 10 lunar module had been named Snoopy) and a Russian bear astride a Soviet ship. It bore the caption "Let's go!" Leonov drew three astronauts dressed as cowboys riding an Apollo rocket into space. Stafford holds a lasso and is saying, "Well, where are they?" 

One of Leonov's crewmates on the Apollo-Soyuz mission was Valery Kubasov. In 1969, on the Soyuz 6 mission, Kubasov was the first man to weld in space. 

The oldest of the Apollo-Soyuz crewmen was Deke Slayton, a veteran of World War II who had flown 63 combat missions. One of the original seven American astronauts, he had been diagnosed with an irregular heartbeat in 1961 and suspended from space flight in 1963. Nonetheless, he continued to try to find a way into space and in 1970 was granted a new medical review board, which cleared him for flight. By then, however, he had missed the entire lunar program. But when he was offered a place on the Apollo-Soyuz project, he leapt at the chance and even began studying Russian before he was named to the crew. When he finally lifted off on July 15, 1975, Slayton had waited 5,935 days to enter space. Sadly, he died on June 13, 1993. 

The surviving crewmembers met in Russia this summer to commemorate a quarter century of cooperation in space. Leonov recalled a joke that he played on that historic mission. "Valery [Kubasov] and I agreed to prepare a little joke to greet Stafford when he first entered the Soyuz. I prepared some vodka labels in advance and brought them up with me. While we were waiting for Stafford, Valery and I took some tape and attached the labels to our food tubes, which we then laid out near the hatch. When Stafford entered, we gestured toward the 'vodka' and practically his first words to us were, in his broken Russian, 'Ladno, davai!' ("OK, let's go!"). To this day no one believes that there was really borshch in the tubes." 

We can only hope that the new crew of the international space station shares something of the spirit of their predecessors. Now it is their turn to show us how far we can go in space. Ladno, davai! 



Yury Salnikov is a filmmaker and a professor of cinema at the State Cinema Institute. He contributed this essay to The St. Petersburg Times.

TITLE: Love Wins World Golf Challenge
AUTHOR: By Ken Peters
PUBLISHER: The Associated Press
TEXT: THOUSAND OAKS, California - Davis Love III was hungry for any type of victory. He got one, and a $1 million paycheck.


Although the Williams World Challenge is a made-for-TV event, Love was delighted to win it, overcoming frontrunners Tiger Woods and Sergio Garcia by shooting an 8-under 64 on Sunday.

Woods shot 69 to finish two shots back in second, and Garcia had a 73 for third, five shots behind Love.

"It's nice to win since it's been a while. Obviously this was not a 150-man field, but it was a good field. There was the added tension when guys like Sergio and Tiger are leading," said Love, who hasn't won on the tour in more than two years.

Starting the last round at Sherwood Country Club four shots behind Garcia and three back of Woods, Love finished at 22-under 266.

Woods shot a 69 for 20 under, and Garcia 73 to finish third at 17 under.

Love's putts were falling, something that didn't go his way when he shot a third-round 71.

As Woods and Garcia were around par on the last day, Love birdied three holes on the front, then made a birdie to move in front for good on No. 10.

He sank a 10-foot eagle putt on the par-5 No. 11, added birdies at No. 13 and a 10-footer at No. 15, then parred out to wrap up a bogey-free round.

"I said yesterday that Davis was playing well but not making any putts, so I knew that he would be there. But I didn't really expect him to shoot a 64," said Garcia, who had held or shared the lead with Woods since shooting a 65 the first day and a 64 the second.

Love has 13 career titles on the tour, including the 1997 PGA Championship. He hopes the win in the Williams World Challenge, which had an elite field of 12 players, is a sign of a comeback.

TITLE: Pakistan Makes India Offer on Kashmir
AUTHOR: By Kathy Gannon
PUBLISHER: The Associated Press
TEXT: ISLAMABAD, Pakistan - Pakistan made a new offer in its long and bitter dispute with India over Kashmir, saying for the first time that it will not oppose one-on-one talks between Kashmiri separatists and the Indian government.


The statement was a significant concession from Pakistan, which in the past has said it must be included in any negotiations on Kashmir, a Himalayan region that has been a focus of bitter contention with India for decades.

The offer comes amid renewed violence in Indian-ruled Kashmir, where an explosion Monday near a bus station in Baramullah killed one soldier and injured several others. Four civilians were also hurt, officials said.

Hezb-ul Mujahedeen, a militant group headquartered in Pakistan, took responsibility and claimed 10 Indian soldiers were killed. Islamic militants have rejected all cease-fire offers, while the political wing of the Kashmiri secessionist movement has welcomed them.

In an interview Monday with The Associated Press, Pakistani Foreign Ministry spokesman Mohammed Riaz Khan said they would accept bilateral talks as long as the talks lead to three-way negotiations involving Pakistan, India and the Kashmiris.

Khan called the statement an "important initiative" and said Pakistan wants three-way talks to start "immediately after Ramadan," the Muslim holy month that began last week.

Since Britain gave the subcontinent independence in 1947, India and Pakistan have both claimed all of Kashmir and have fought two wars over it. A 1972 cease-fire line divided Kashmir between the two countries, most of it going to India.

Pakistan-based rebels have been waging a violent insurgency since 1989, fighting to carve out a separate homeland or merge Indian-controlled Kashmir, which now forms the predominantly Hindu country's only mostly Muslim state, with Islamic Pakistan. At least 30,000 people have been killed.

Pakistan's statement that it would accept bilateral talks came two days after it offered a truce along the border with India in Kashmir, where tens of thousands of soldiers from both countries are deployed.

The concession also came almost a week into India's unilateral cease-fire in its campaign against the insurgents, which took effect with the advent of Rama dan and is to last through the holy month.

Kashmir's separatist political alliance, the All Parties Hurriyat Conference, welcomed India's cease-fire as chance to seek peace talks, but the Pakistan-based guerrillas rejected it as a propaganda move and have been blamed for several deadly attacks since it began.

TITLE: WORLD WATCH
TEXT: Fox To Meet Rebels

GUADALAJARA, Mexico (Reuters) - Mexican President Vicente Fox vowed on Sunday to meet the conditions laid out by armed Zapatista rebels from Chiapas to reopen a dialogue on peace, winding down the final leg of a three-day inaugural bonanza.

In a meeting with farmers' groups in the central Mexican town of Metepec, Fox signaled he was prepared to meet the three criteria spelled out on Saturday by Subcommander Marcos, leader of the Zapatista movement that originated in the jungles of the poor southern state.

"We will look to meet the conditions they have given us so that talks are started quickly," said Fox, whose Friday assumption of power broke 71 years of rule by the Institutional Revolutionary Party (PRI).



Castro Wants Plotter

HAVANA (AP) - Cuban President Fidel Castro said that the arrested exile he wants to extradite from Panama for trial on terrorism charges would not be put to death if convicted.

Castro, who accused Luis Posada Carriles of plotting to kill him last month in Panama, said Sunday that Posada would face a maximum sentence of 20 years in prison in his home country.

The declaration was intended to assuage concerns in Panama and elsewhere that Cuba would execute Posada. Castro said there is "not the smallest excuse" for Panama to deny extradition.



Albania Rebels Attack

LUCANE, Yugoslavia (AP) - Mortar shells were fired at a Serbian police patrol in a tense area next to Kosovo, police said on Monday. Nobody was hurt.

Sunday's incident was the first reported breach of an unofficial cease-fire between ethnic Albanian rebels and Serbian security forces. Police Col. Novica Zdravkovic blamed ethnic Albanian "terrorists."

Recent attacks by ethnic Albanian militants in the Presevo Valley on the border between Kosovo and Serbia have presented a difficult challenge to the new Yugoslav government led by President Vojislav Kostunica.



Freedom Party Fails

VIENNA, Austria (Reuters) - The far-right Freedom Party lost ground in Burgenland, Austria's poorest region in a provincial election on Sunday, the second poll test in six weeks which indicated its popularity has suffered since it entered national government.

It was only the second time since September 1986, just after populist firebrand Joerg Haider became Freedom Party leader, that the anti-immigration group failed to increase its share of the vote.

Provisional official results showed the Freedom Party won 12.6 percent, down from 14.6 percent in 1996 and from the 21 percent it won in Burgenland in the October 1999 general election.

The Freedom Party, still dominated by Haider although he quit as party leader in May, has seen its opinion poll ratings fall sharply since it entered government.



Eritrea, Ethiopia Deal

NAIROBI, Kenya (AP) - Eritrea and Ethiopia have reached a deal that would end a two-year border war that has cost tens of thousands of lives on both sides, a spokesman for the Eritrean president said Monday.

The countries will sign a treaty Dec. 12 in Algiers, Yemane Gebremeskel said by telephone from the Eritrean capital, Asmara. Eritrean President Isaias Afwerki received a formal invitation over the weekend from Ethiopian President Abdelaziz Bouteflika to attend the signing ceremony, he said.

Ethiopian and Eritrean military officers met over the weekend in Nairobi with officials of the 4,500-strong UN peacekeeping mission that is deploying along the border between the two countries in the Horn of Africa.

TITLE: Violence Erupts in Bethlehem
AUTHOR: By Deborah Camiel
PUBLISHER: Reuters
TEXT: JERUSALEM - Israeli helicopters fired two missiles at Palestinian gunmen near a refugee camp in Bethlehem early on Monday during a heavy night-time clash, one of several that undermined hopes of ending two months of violence.


The army said it sent helicopter gunships into action to halt attacks on Rachel's Tomb, a flashpoint for the violence that has killed almost 300 people, most of them Palestinians waging an uprising for independence.

The Palestinians said the fighting in Bethlehem, the traditional birthplace of Christ, was provoked by an incident on Sunday in which they said soldiers shot and wounded 25 people.

Israel said on Sunday it would cooperate with a U.S.-led international inquiry into the violence. But hopes of a quick end to the violence and a long-sought peace treaty are slim.

"This is one of our [country's] toughest periods, and there may be a chance of reaching a permanent accord or a partial permanent accord in the near future, albeit not a very good chance," Justice Minister Yossi Beilin said on Sunday.

"It's no more than 20, 30, perhaps 40 percent," he told Channel One television.

Prime Minister Ehud Barak, who lost his governing majority last July on the eve of his inconclusive Camp David peace summit with Palestinian President Yasser Arafat, bowed to parliamentary pressure last week and agreed to an early election. No date has yet been set.

One of Barak's potential challengers, former prime minister Benjamin Netanyahu, was due on Monday to return from a trip to the United States, raising suspense about whether he might announce his intention to contest the election.

Violence flared during the night despite hopes the fighting had been easing in previous days.

The army said an explosive device exploded near a bus as it traveled along a road near the Allenby Bridge between Israel and Jordan. No one was injured.

It said gunmen had shot at Rachel's Tomb, the traditional burial place of the biblical matriarch, from three directions for about three hours until about 1 a.m.

The army returned fire and then launched two missiles at the area around the nearby Al-Eida refugee camp, where some of the shooting originated, the spokesman said.

"The attack on Rachel's Tomb during the night was one of the most dangerous events in the past two months because it was a very well-planned and orchestrated attack on a holy site," an army spokesman said. He mentioned no casualties.

Palestinian sources said the shooting was provoked by an incident on Sunday in the West Bank village of Husan, where Israeli soldiers shot and wounded at least 25 Palestinians.

At least 294 people have been killed since the start of the uprising by Palestinians demanding independence and an end to occupation of the West Bank and Gaza Strip. Most of them have been Palestinians.

TITLE: Kuerten Passes Safin To End Year as No. 1
AUTHOR: By Nesha Starcevic
PUBLISHER: The Associated Press
TEXT: LISBON, Portugal - Gustavo Kuerten claimed the No. 1 spot in the world, and Andre Agassi had no complaints.


"When you size it all up, it's well earned on his part," Agassi said after losing to Kuerten in Sunday's final.

Kuerten's 6-4, 6-4, 6-4 victory in the last match of the final tournament of the year also made him No. 1 in the world.

"It's been a great week, the last tournament, the last match," Kuerten said. "I had to give everything."

He wrapped himself in a Brazilian flag after the match and gave a long hug to his mother, Alice, and a pat on the head to his grandmother, Olga.

"I always dedicate my victories to someone special, and I dedicate this win to my mother," he said.

The 24-year-old Brazilian became the first South American to finish the year as No. 1.

"Guga," as he is popularly known, burst onto the scene when he became the second-lowest ranked player to win a Grand Slam, the 1997 French Open, seducing the crowds with his Technicolor outfits and gifted tennis.

His fifth title of the year earned him $1.4 million.

Kuerten led the points race for 16 weeks this year, longer than any player. But he came into the tournament trailing U.S. Open champion Marat Safin by 75 points and he had to win the season-ending event to finish first.

Safin lost to Agassi in the semifinals, but had Agassi defeated Kuerten in the final, Safin would have been No. 1.

To win the event that brings together the top eight players in the world, Kuerten also had to beat two players who have dominated the last decade - Pete Sampras in the semifinals and then Agassi.

"He finished No. 1 by winning when he had to, and by beating Pete and myself," Agassi said.

Kuerten became the first player in 10 years to beat Sampras - who finished the season as No. 1 for six straight years between 1993 and '98 - and Agassi in consecutive matches. Michael Chang did it in 1990.

"After I beat Pete yesterday, I really believed today I could do the same - surprise Andre," he said.

"It's big, it's huge for me. It's a great feeling. I really deserved to beat Pete and Andre in the same tournament. It's very, very, very big," Kuerten said.

Kuerten began the week by losing to Agassi in his opening round-robin match, but recovered by winning the next four despite battling back and hamstring problems.

The Brazilian outplayed Agassi in all aspects in the final.

Kuerten finished with 19 aces to Agassi's seven. Kuerten also hit 50 winners, 12 coming off his powerful backhand, with Agassi making only 15.

TITLE: SPORTS WATCH
TEXT: Favre Ties Marino


CHICAGO (AP) - Green Bay Packers quarterback Brett Favre on Sunday night reached 3,000 yards passing for a ninth straight season, tying the NFL record set by Dan Marino from 1984 to 92.

Favre needed 107 yards entering the game to reach 3,000. He passed the mark with a 33-yard completion to Bill Schroeder in the second quarter. 



Suspicious Death

PASADENA, California (AP) - Chris Antley, whose struggles with weight, drugs and alcohol dogged a riding career that included victory in the 1999 Kentucky Derby with Charis matic, was found dead at home in an apparent homicide.

Police said Sunday that the 34-year-old jockey was pronounced dead at the scene with "severe trauma to the head." An autopsy was pending by the Los Angeles County coroner.

Police arrested a man on Sunday on three outstanding drug warrants, and said he was an associate of Antley's.



Moscow Wants Action

MOSCOW (Reuters) - Moscow's deputy mayor, who doubles as hockey chief for the city of 10 million, called on Monday for an end to unfair contracts which he said allowed North American ice hockey leagues to buy up top Russian players on the cheap.

Shantsev said Russia must find a way for a new, more balanced agreement with the National Hockey League in order to protect its own interests, otherwise its hockey would be relegated to a support role for the North American industry. 

The Russians have lobbied hard to scrap a three-year deal between the International Ice Hockey Federation and the NHL, which was signed in 1997 and allowed the NHL to buy top European players for an average of $50,000. 

Shantsev said the one-sided deal contributed to Russia's dismal showing at this year's world championship in St. Petersburg.

TITLE: Gore Losing Battle After Supreme Court Ruling
AUTHOR: By Alan Elsner
PUBLISHER: Reuters
TEXT: WASHINGTON - The U.S. Supreme Court set back Democrat Al Gore's efforts to overtake Republican George W. Bush in Florida on Monday, putting aside a Florida legal decision that allowed the vice president to cut Bush's lead from 930 to 537 votes.


The nine justices unanimously set aside a ruling by the Florida Supreme Court that gave counties an extra week to allow hand recounts of votes to proceed in some counties and sent the case back to the state high court for further proceeding.

As a result of those recounts, Gore made up vital ground in the state that will determine the next president of the United States. Now he might lose those crucial votes. At the least, he loses valuable time.

Gore is racing against the clock to overturn Bush's slender lead before Florida selects its 25 electors to the Electoral College on Dec. 12. The way things stand now, those electors will vote for the Texas governor when the college meets on Dec. 18, giving Bush a victory and the presidency by 271 to 267 votes.

Another big decision was expected on Monday from a Florida county court on whether hand recounts should proceed in counties where Gore's lawyers argue as many as 14,000 ballots were missed in machine counts.

Leon County Circuit Court Judge N. Sanders Sauls delayed his ruling to study whether the U.S. Supreme Court ruling had an impact on his decision.

The U.S. Supreme Court decision, on the 27th day of the suspense-filled, post-election drama, was a public relations reversal for Gore, who is trying to persuade voters to remain patient for a while longer while he continues to fight.

The nation's high court, in a seven-page opinion, said it was unclear about certain key points of the Florida Supreme Court ruling at issue but did not rule on their constitutionality.

On other fronts, word was awaited from Florida's Republican-controlled Legislature on when it would hold a special session to name the state's 25 electors regardless of any court action - a move Republicans say is needed to ensure Florida has a say in the final decision on the presidency and which Democrats have decried as an attempt to hijack the election.

Bush was certified the winner of the Florida presidential balloting by only 537 votes out of 6 million cast in the state. But Gore's team argued thousands of ballots - enough to tip the state to Gore - were missed in the initial machine count and recount, and must be reviewed by hand.

In contesting Bush's certified victory, Gore hoped Sauls would order a hand recount of disputed ballots in key counties. Sauls heard 23 hours of testimony on Saturday and Sunday from experts on both sides of the argument.

The Democrat's challenge involves votes in Miami-Dade, where machines did not detect a vote for president on about 10,700 ballots. It also covers Palm Beach, where Gore wants the county's manual recount totals included in the state tally and has challenged 3,300 ballots he says were improperly rejected, and Nassau, where the elections board threw out the mandated state recount, costing Gore 51 votes.

Bush lawyers disputed Democratic claims the vice president would likely win the presidency if a recount were allowed in Miami-Dade. They also argued there was no evidence county election officials abused their authority or that punch-voting machines in question were faulty and warranted a recount.

In Washington on Sunday, Gore, aware of the country's growing frustration with the legal maneuvering by both sides, told CBS' "60 Minutes," "It won't last forever, I'm expecting that it'll be over with within the next two weeks."

Bush, the Republican Texas governor, remained at his Texas ranch focused on signing up potential cabinet members as soon as possible, while high-level players launched salvos in the continuing battle for public support.

Dick Cheney, the Republican vice presidential nominee, said it was time for Gore to concede as Bush had been certified the winner in Florida and time was running short for an effective transition.

"I do think that it's time for him to concede," Cheney said on NBC's "Meet the Press." "I think long term, history would regard him in a better light if he were to bring this to a close in the very near future."

Gore's team is under pressure to resolve the recount issue quickly because states, including Florida, select electors on Dec. 12 and the Electoral College meets on Dec. 18 to pick the next president formally.

On "60 Minutes" on Sunday Gore indicated he was aware of the upcoming deadlines and of public weariness with the unresolved presidential saga.

"If at the end of the day, when all processes have taken place, if George Bush is sworn in as president, he will be my president, he will be America's president," Gore told CBS.

Also, in Leon County Circuit Court on Wednesday, one case brought by a Democrat seeks to throw out up to 15,000 Seminole County absentee ballots on the grounds that Republican Party workers illegally altered absentee ballot applications. That would give Gore a net boost of more than 4,000 votes.

A survey published on Monday said most Americans want the disputed Florida ballots counted by hand and the legislature to stay out of the presidential election.