SOURCE: The St. Petersburg Times
DATE: Issue #640 (7), Tuesday, January 30, 2001
**************************************************************************


TITLE: Moscow Seeks Nuclear Power's Holy Grail
AUTHOR: By Charles Digges and Barnaby Thompson
PUBLISHER: Staff Writer
TEXT: Editor's note: This is the first article in a two-part series examining Russia's nuclear industry and its plans for the future.




By Charles Digges

and Barnaby Thompson


STAFF WRITERS


Plans by the Russian government to import and reprocess spent nuclear fuel have caused something of a stir in recent months. As the Nuclear Power Ministry claims potential revenues of billions of dollars, its critics have loudly voiced their concerns on safety issues, financial viability and nuclear accidents in the past. 


Meanwhile, the United States and Russia are set to implement another billion-dollar agreement to develop special fuel using weapons-grade plutonium and burn it in existing nuclear reactors.

At first glance, the two projects seem to contradict one another. Reprocessing the imported spent nuclear fuel will give Russia uranium, liquid waste, and plutonium. Yet the agreement with the United States appears predicated on non-proliferation - reducing the world's stocks of plutonium.

But interviews with experts and government officials here and in America show that Russia has a long-term vision: the acquisition - at Western expense - of an infrastructure that would allow Russia to abandon traditional uranium energy sources in favor of a more dangerous, but potentially inexhaustible, supply of plutonium fuel.

In other words, Russia is in pursuit of something that has always eluded the nuclear world: a closed-cycle, self-perpetuating nuclear energy system based on plutonium. All it needs is the cash. And both the above plans fit into that scheme.



LEFT HAND, RIGHT HAND

With the plutonium disposition agreement signed last summer by Bill Clinton and Vladimir Putin, the U.S. Department of Energy (DOE) is seeking to reduce surplus weapons-grade plutonium in both countries by destroying 34 metric tons in the U.S. and 34 tons in Russia. (Former Russian president Boris Yeltsin stated in 1997 that Russia has about 50 tons of surplus weapons-grade plutonium stored in dismantled warheads, about half of the total surplus in the world.)


While this agreement was being thrashed out, Yevgeny Adamov, Russia's nuclear power minister, was campaigning vociferously for a pet project he has been discussing for several years - the paid import of nuclear waste from other countries for disposal and reprocessing in Russia. So confident was Adamov that the Duma would support him, he struck a deal in December with a nuclear power plant in Bulgaria to import a shipment of nuclear waste from the plant, before the law allowing Russia to accept such imports had even cleared its first reading in the Duma. It passed that first reading a few days later, and it is expected to fare just as well at its final reading in February.

In a country that cannot keep up with its own mounting nuclear waste, however, such a program sounded to many activists like madness. Environmentalists demanded the question be put to a nationwide referendum, and collected 2.6 million signatures - well above the required 2 million - on a petition to get the process going.

The Central Election Commission, or CEC, however, disqualified 800,000 of the signatures over what appeared to be minor technicalities. In several instances, signatures were disqualified because the signatories used "incorrect" abbreviations for their addresses, for example.

Adamov, meanwhile, has managed to shout down any critics in government by showing the bottom line: By charging other nations a fee for taking nuclear waste off their hands, Russia's cash-strapped nuclear industry could make $21 billion over the next 10 to 15 years. The money would go on increasing the country's nuclear industry, upping its share of energy production from the current 14 percent to 30 percent in 2030, improving salaries and living conditions for nuclear workers, and programs to clean up the various leaks and spills that have blighted Russia's reputation in this field.

In interviews, the DOE said it has no argument with Russia's import plans. According to officials there, the imports would have "no connection" with the DOE's project because, among other reasons, they would do little to enhance Russia's weapons-grade plutonium stocks once reprocessed.

Officials pointed out that the United States has dibs on 94 percent of spent nuclear fuel worldwide - it either possesses it outright, or has consent rights to it in other countries. Adamov can't get his hands on a significant amount of spent fuel without U.S. say-so.

Nonetheless, the DOE's stance makes it clear that Washington will not stand in Adamov's way. The DOE's job, as it sees it, is to dispose of the agreed-upon 68 tons of weapons plutonium over the next 25 years. Whatever happens to the Russian imports is the business of Russia.


CONNECTING TRAINS AND MOX

Whether or not the DOE acknowledges it, however, its own plutonium disposition plan - when enacted in the context of the Nuclear Power Ministry's waste import program - may set the stage for a situation in which Russia not only doesn't deplete its plutonium base, but is given the basic tools by Western countries to increase its plutonium stock infinitely, and virtually for free. 


The centerpiece of the DOE's plutonium disposition plan, the organization's Web site says, is the production of a mixed-oxide nuclear fuel, or MOX, a mixture of plutonium oxide and uranium oxide. This fuel would then be burned, on the Russian side, in retrofitted VVER-1000 type reactors, a standard nuclear-power block known as a light-water reactor. Russia has seven of these.

In early January, however, the Institute for Energy and Environmental Research, or IEER, released a report that raised a number of technical and security problems with MOX. First, while MOX reactors exist in a number of European countries, they use commercial, reactor-grade plutonium, rather than weapons grade. (Both categories can be used to make a nuclear bomb, although the yield with reactor-grade material is much less predictable.)

A test to see whether weapons-grade plutonium can be used in MOX fuel is about to start at the Chalk River laboratories in Canada. Initial results will be available in four years. If successful, plans to convert Russian light-water reactors to burn MOX will likely go ahead.

The IEER report was highly critical of the concept, saying MOX experiments in Japan and Europe during the 1980s found light-water reactors increase plutonium isotopes, effectively making the plutonium unfit for repeated use as fuel.

This method of destroying the plutonium was selected by Minatom and its DOE counterparts, said the DOE's Laura Holgate, who brokered the disposition accord, because the Russian side steadfastly refused to consider immobilization - that is, burial of fuel in special ceramic chambers.

"I've sat across the negotiating table from Minatom, and they consider plutonium to be a viable resource," said Holgate in a telephone interview from Washington last week.

"The only way they will agree to get rid of it is by burning it in a reactor. If plutonium disposition is to be a reality with the Russians, immobilization is out of the question."

To take the MOX route and burn the plutonium, Russia needs approximately $1.7 billion to convert its reactors and to build, or transport from elsewhere, a plant to fabricate MOX fuel. Though more costly than immobilization, it will at least meet the disposition goal.



NOT-SO-HIDDEN AGENDA

The MOX agreement has been hailed as a route to a safer world, an aid to disarmament, a barrier to "loose nukes", as well as a way of generating more electricity in Russia and thus fulfilling Adamov's stated plans.


But experts say that these issues are a sideshow to the real plan. If Russia gets a MOX fuel production facility, it will have made serious inroads into securing a self-perpetuating, plutonium-based economy.

"The U.S. Department of Energy's MOX-producing plans would create a plutonium economy for Russia and stand the plutonium economy of the world on its head," said Edwin Lyman, scientific director of the Nuclear Control Institute (NCI), a Washington-based nuclear energy watchdog organization.

Lyman said further that Holgate's assertion that Russia won't capitulate to an immobilization plan is "a smoke screen."

"Western countries [participating in the plutonium disposition plan] see it as a business deal - with a veneer of social responsibility."

The MOX plan would give Russia a MOX production plant for free, probably by dismantling an unfinished one from Hanau in Germany and rebuilding it here. Regardless of whether or not Russia's light-water reactors are converted, Russia could earn money by selling MOX fuel to other countries. Importing spent fuel is a further source of money, at the same time as its reprocessing would produce more plutonium. In short, Russia would get the cash, the technology and the fuel, without spending a ruble. All this leads in one direction, say analysts: the construction of a new generation of Russian breeder reactors. "This has been the philosophy [of Russia nuclear agencies] going back to the Soviet Union," said Adrian Collings, an industry expert with the London-based Uranium Institute, a non-profit, non-governmental nuclear forum.



BREEDER REACTORS

Breeder reactors were built to answer the problem of what to do when supplies of uranium ran out. In short, they are designed to create more fuel than they consume by converting a non-fissile isotope of uranium into fissile plutonium, which can then be used as fuel.


However, as the IEER report states, the idea never really worked because breeder reactors proved tricky and expensive to run, while the price of uranium steadily declined, making the reprocessing of spent fuel to extract plutonium uneconomical by comparison.

With a ready stock of military plutonium, however, the breeder reactor could run on MOX fuel - technically a far better means than converted light-water reactors. As MOX fuel passes through a light-water reactor, its energy supply is reduced as the isotopic composition of the plutonium degrades.

This doesn't happen with the breeder. In fact, a breeder reactor can actually increase the purity of the plutonium during the reaction process.

Nothing about breeder reactors is written into the U.S.-Russia agreement on MOX fuel. But as stated above, in order to build a closed plutonium economy, Russia needs - aside from the Western-funded MOX-fabrication facility - breeders, and the cash with which to build them. The latter, recalling Ada mov's spent-fuel import program, could already be taken care of. According to the IEER report, the cost of Russia's only existing breeder reactor, the BN-600 located at the Mayak reprocessing facility, in the Chelyabinsk Oblast, would be $918 million if translated into today's terms. Should Adamov's plans reach fruition, Russia would feasibly have the money to build several breeders.

Nuclear Power Ministry spokesman Yury Bespalko said in a telephone interview from Moscow last week that Russia has had a so-called BREST breeder reactor on the drawing board for some years. This reactor is designed to create plutonium on a one-to-one ratio, which would make it, for lack of a better term, a perpetual-motion machine.

Bespalko would provide no further details, and Lyman was skeptical that the Russians could get the reactor to work.

But Collings at the Uranium Institute said that the Russians were well versed in breeder technology, describing the BN-600 reactor as "highly successful." "Russia has enormous nuclear-research capabilities at the laboratory level," he said.



FEW OBSTACLES

One voice of dissent, published on the Norwegian environmental group Bellona's Web site, came from Alexei Yab lo kov, a former Yeltsin environmental adviser, who said the Russians would be unlikely to attempt a breeder economy, opting instead for cheaper fresh uranium and a host of new light-water reactors.


And a DOE official, speaking on condition of anonymity, said that the United States would refuse any technical cooperation on any breeder programs in Russia as long as Russia continued supporting the development of a nuclear energy program in Iran.

Other alternatives available to the United States, said the official, were to pressure Russia's potential waste disposal client states - like Switzerland, Taiwan, South Korea and Eastern European states such as Bulgaria - into not letting go of their spent fuel.

But when the MOX plan is through, that still leaves Russia 16 tons of weapons-grade plutonium declared surplus, another 30 metric tons of separated commercial plutonium stored at Mayak, plus waste disposal contracts that may exist without U.S. knowledge, said NCI's executive director Richard Rosenthal.

Summing up their objections to the DOE's plutonium-disposition plan, Arjun Makhijani, the author of the critical IEER report, wrote:

"The net result will be that the first military plutonium will be used in the MOX plant, decreasing the military plutonium stock, while commercial reprocessing increases the commercial plutonium stock.

"Then the military-origin MOX spent fuel can be reprocessed while already separated commercial plutonium is fabricated into MOX fuel. In the meantime, more breeder reactors would be built. All but the last element would be financed with Western money.

"This seems to be the plan that Minatom is banking on."

TITLE: Mirilashvili Supporters Stage Protest
AUTHOR: By Masha Kaminskaya
PUBLISHER: Staff Writer
TEXT: Following the arrest of four employees of Mikhail Mirilashvili, a prominent Russian-Israeli businessman and vice president of the Russian Jewish Congress, around 300 demonstrators gathered Monday outside the City Prosecutor's Office to protest against what they called "illegal actions" on the part of prosecutors.


Supporters of Mirilashvili also alleged that one of the suspects in the case had been beaten after being called in for questioning.

According to Dmitry Miropolsky, a spokesman for Mirilashvili, three of his employees were summoned by investigators for interrogation and then detained on Wednesday in connection with the case against the businessman, who was arrested last week and charged with kidnapping two people in September last year. 

Miropolsky said the three were Andrei Demyenko, deputy general director of the Conti Group, a chain of casinos owned by Mirilashvili; Yev geny Kazmirchuk, described as Mirilashvili's chief of security; and Dmitry Petrov, whose job Miropolsky said he did not know.

Both Miropolsky and Yury Novolodsky, Mirilashvili's lawyer, said that Demyenko had been severely beaten by his interrogators after his arrest late on Tuesday. Demyenko's lawyer, Yevgenia Golubeva, refused to comment on Monday.

Novolodsky also alleged that Demyenko was beaten again the following day after being summoned for questioning by the St. Petersburg Anti-Organized Crime Division, or RUBOP.

"We filed a lawsuit against the Prosecutor's Office on Wednesday, as well as a demand that [all four] be immediately examined by doctors," he said in a telephone interview on Monday. "But we have received no answer as yet."

Some local reports said that RUBOP spokesman Yury Klishev had made an official statement calling Novolodsky's words libelous, and said that RUBOP would file a lawsuit of its own.

Klishev would not confirm or deny this on Monday. "I have no comment on this," he said in a telephone interview. "This case is being investigated by the prosecutors, so let them comment."

The fourth person held by prosecutors, said Miropolsky, was a military doctor called Mark Hidler. Miropolsky said Hidler has no ties to Mirilashvili or any of his businesses, and that his detention was a surprise to both Hidler and himself. 

City Prosecutor spokesman Gennady Ryabov refused to give details of the detentions. He said, however, that Demyenko was still under arrest, and that "he cannot possibly have any wounds." He did not elaborate.

Meanwhile, the heads of 40 orphanages in St. Petersburg published an open letter in local newspapers saying that they were "bewildered and worried by the arrest of Mirilashvili [who is] responsible for the well-being of more than 5,000 orphans [in the city]."

Mirilashvili, who runs a wide spectrum of businesses, is known for his support of a number of Jewish charitable organizations, including the Russian branch of the Jewish International Sports Association "Makkabi."

Representatives of the approximately 400,000-strong Jewish community in St. Petersburg earlier requested the release of Mirilashvili, on a guarantee that he would not leave the city.

On Monday afternoon, these and other supporters of Mirilashvili were outside the City Prosecutor's Office on St. Isaac's Square with slogans saying "Prosecutors, you are being used!" and "You can't beat witnesses!"

Pensioner Ida Kaprun, 87, said that Mirilashvili "has always helped us old and handicapped people, and given us care packages [at the city's Jewish center]. I'm sure he's an honest man and cannot have committed a crime."

Among the demonstrators were director Vladimir Popov and actor Mikhail Boyarsky. Popov expresed admiration for the Conti Group which, he said, runs the only three successful concert halls in the city, and often puts on shows at a loss.

"I know [Mirilashvili]," said Popov, "he is a man of strong principle. And I'm sorry that [Gov. Vladimir Yakov lev] has not given a fair and public evaluation of the situation. I hope that we learn what is really going on."

Boyarsky said he has known Mirilashvili's family for years. "I am waiting for concrete charges from the prosecutors," he said. 

Several demonstrators said they worked for Mirilashvili's businesses, and his conviction would seriously affect their jobs. "We're standing up for Mikhail, hoping prosecutors will discover the truth," said Mikhail Kosarev, 50, a Conti employee.

Ryabov said that prosecutors would continue with their "unpopular task."

"People are always outraged when a well-known figure is arrested. Later on, it turns out everything was done correctly," he said.

TITLE: City Blood Banks Running Low
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: St. Petersburg is facing a critical shortage of blood and plasma in its medical reserves, which are running at 40 percent usual capacity and are rapidly depleting, City Health Committee head Anatoly Kagan told lawmakers last week. 


To increase the flow of donations, Kagan appealed to lawmakers to consider a 129-million-ruble ($4.4-million) program to help attract donors and get hospitals and blood reserves back up to safe levels. 

Lawmakers accepted the program on its first reading last Wednesday. It must now pass a second and third to be accepted as law. The next readings have not yet been scheduled. 

Kagan's program - entitled "St. Petersburg Blood Service Development 2001 to 2004" - calls for money that would help boost the number of donors by increasing the honorarium they are paid for donating. Money would also be spent on posters and advertising, inviting healthy people to come in and donate. 

Since the end of the Soviet era - when blood reserves were always well supplied - hospitals and blood reserves have seen a steady decline in the amount of blood available for crucial medical procedures, Kagan told legislators. In the past 10 years alone, the number of donors has dropped off by six times, health department statistics show. 

Old hands at the city's 15 blood-transfusion sites have noticed the drop, too. 

"In the 1980s, we routinely had 200 to 300 donors a day," Galina Mikhai lo va, head of the donor department at the City Central Blood Station, said in an interview Monday. 

"Now it's not more than 35 to 40 people a day." 

City health personnel say that the drop-off in donations reflects both the financial and physical health of the country as a whole. Currently, donors are paid 112 rubles for the 450 grams of blood they donate, plus another 100 rubles for food later in the day following the blood withdrawal. Plasma donors give 920 grams and in return receive 325 rubles. 

The body takes two months to regenerate the blood or a month to regenerate the plasma, and many people don't see the point for such an amount. 

Other would-be donors fear infections like hepatitis or AIDS - neither of which you can get from giving blood under the supervision of nurses using sterile equipment. 

But it is these sorts of misunderstandings that advertising and literature campaigns could address, said Alexander Makeyev, head of blood donations at the St. Petersburg Institute of Hematology and Blood Transfusion. 

Yury Orlyukov, head doctor of the City Central Blood Station, said that another factor was the quality of the blood that comes in. Common donors include ill and homeless men and women, former prisoners who have been malnourished in jail, and alcoholics and drug addicts, whose blood is too unhealthy to take. 

Most donors are repeat givers who could use any financial boost, as well as other benefits that come from donating. 

"I donate because my job doesn't pay a stable salary and extra money for plasma helps me to survive till the end of month," said Vladimir Smirnov, 27, a house decorator, in an interview Monday. He has donated plasma more than 40 times, which has earned him the status of an "honored donor," entitling him to free public transportation and a 50 percent discount on his utilities.

TITLE: Ferry Sinks in Black Sea, Survivors Found
PUBLISHER: Reuters
TEXT: SEVASTOPOL, Ukraine - The Ukrainian coastguard found 14 corpses and 32 survivors marooned for two days in lifeboats and rafts in the Black Sea after a storm engulfed a small ferry, officials said on Monday.


Five people were missing.

Two survivors told Reuters that the ferry, carrying mostly shuttle traders taking Turkish goods for sale at Ukrainian markets, sank in minutes on Friday.

They spent two days shivering aboard an overcrowded life raft which itself was gradually sinking. Sea temperatures at this time of year are around 6 degrees Celsius.

The 790-ton Pamyat Mercuria (Memory of Mercury) was carrying 49 Ukrainians and two Russians from Istanbul to Yevpatoria on the Crimean peninsula.

"The boat listed over to the right, and the crew tried to save it, but it was clear pretty quickly that it was listing further and we would capsize," said the ship's 30-year-old doctor, Igor Grant.

Third mate Vitaly Bondar, 29, said the 36-year-old Polish-built vessel went down in less than 10 minutes. 

"There were women among the passengers. Everyone jumped in the water to swim for the raft," he said.

"There was no panic, but we were on a raft designed for 10. At the beginning there were 24 of us, but one passenger had been in the water too long and died quickly. We had to throw him in the sea."

Ukraine's Emergency Situations Ministry said the ship had broken safety rules. "As an old vessel of small tonnage it should have skirted around the western shores of the Black Sea, but instead took a shorter direct route across the sea," it said in a statement.

Emergency services said no distress signal had been received, although Bondar said the crew had issued one before the ferry sank.

The 23 survivors plucked from Bondar and Grant's life raft were taken to the main hospital in Sevastopol. The head doctor, Natalya Belenko, said most were suffering from exposure and a few risked developing pneumonia.

TITLE: Novosyolov Case To Go to Court
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: After more than a year of near silence on its investigation into the assassination of lawmaker Viktor Novosyolov, the Prosecutor's Office has said it is ready to take the case to court, Interfax reported. 


According to an anonymous Prosecutor's Office official quoted by Interfax, prosecutors are ready to charge four men in connection with the October 1999 slaying of Novosyolov "in the near future." The case will be sent to the City Court for arraignment proceedings, the report said. 

The Interfax report, which broke just as the Prosecutor's Office was closing for the day, did not mention the names of the suspects. But investigative reporter Alexander Gorshkov, who has followed the case closely, said two of the alleged assassins are Artur Gurkov and Alexander Malysh. 

Novosyolov was decapitated by a bomb placed on his car at a stoplight near his home at the corner of Moskovsky Prospect and Ul. Frunze. Gurkov, who allegedly put the bomb on the car, was arrested at the scene after being injured by one of Novosyolov's bodyguards. 

Novosyolov maintained an open friendship with Vladimir Kumarin, who local press reports have described as a crime boss in the notorious Tambov organization, and it was speculated at the time that his murder was part of a gang-style war in the city. 

According to Gorshkov, prosecutors spread the information that Gurkov had been killed at the scene so as to silence press speculation about his whereabouts during the investigation. 

Malysh was arrested in December, 1999, after the Agency for Journalistic Investigation - the only group that knew Malysh's whereabouts - convinced him to give himself up to police, Gorhs kov said. Malysh allegedly drove Gurkov to the crime scene, he added.

As for the other two allegedly involved in the murder, Gorshkov described them as "insignificant." 

The announcement from the Prosecutor's Office notwithstanding, Gorshkov was skeptical that those who ordered the assassination would be caught. 

"Those who set the crime in motion did not order the crime themselves," he said in a telephone interview Monday. "They used go-betweens." 

After prosecutors leaked the information that they were ready to take the Novosyolov murder case to trial, representatives could not be reached for comment, despite repeated attempts. 

If the case holds up, it could prove to be a minor coup for police who have an embarrassing record solving high-profile murders: The cases of City Property Committee chief Mikhail Manevich, killed in August 1997, or the murder of Duma Deputy Galina Starovoitova, shot in November 1998, remain unsolved. 

"It is hard to judge [the situation in general] by the one or two cases [that make it to court], when hundreds or even thousands of cases have not been solved yet," said crime analyst Yakov Gilinsky in a telephone interview Monday.

TITLE: Putin Has Talks With NTV Journalists
PUBLISHER: Reuters
TEXT: MOSCOW - The general director of Russia's independent NTV said on Monday that President Vla di mir Putin favored Western investment to keep the embattled station in operation in its present form, Russian news agencies reported. Yevgeny Kiselyov told the agencies after NTV journalists met Putin for more than three hours in the Kremlin that the president had written to CNN founder Ted Turner in connection with his proposal to invest in NTV. 


Turner has expressed an interest in the stake if Putin guarantees the Kremlin will not interfere in editorial matters. 

U.S. financier George Soros told Reuters at an international economic meeting in Davos, Switzerland, that he had joined a bid led by Turner for a 25 percent stake in the station.

Debate over the future of NTV and investigations into its parent company, Media-MOST, have focused on Putin's commitment to a free post-Soviet press. 

NTV is Russia's only independent national television channel and a frequent critic of Kremlin policy.

It is the most prestigious part of the Media-MOST empire, which is seeking a Western investor to ward off an attempt to secure control of it by a branch of state-dominated gas giant Gazprom.

Kiselyov showed reporters a letter to Turner in which Putin did not refer directly to NTV but thanked him for his interest in investing, and said he shared "your convictions that the media must be honest and balanced in helping to create a civil society. 

"I view with optimism the prospects for investing foreign capital in Russian companies. I look forward to productive cooperation in the future."

Kremlin spokesman Alexei Gromov told the agencies after the meeting that Putin believed it was "vital to maintain the NTV reporting team regardless of who will hold the controlling package of shares or who will be on its board of directors."

Kiselyov, one of Russia's most prominent journalists, said the meeting with Putin, which took place in the Kremlin library and lasted for an hour and 40 minutes longer than planned, had been "long and difficult and emotional at times."

TITLE: IN BRIEF
TEXT: Platimum Theft

ST. PETERSBURG (AP) - Four thieves broke into the Vavilov Optical Research Institute early Monday morning and made off with 18 platinum molds worth 104 million rubles ($4.9 million), police said Monday. 

According to police press spokesman Alexander Rostovtsev, four men entered the institute shortly before 3 a.m. dressed in camoulflage and wearing ski masks.

"They climbed the fence and then tied up the institute's security guards," Rostovtsev said.

"They then used the guards' keys to open the compound's gates, took the molds and loaded them into a car that they drove through the gate." 

The molds are used by the institute to make optical lenses. 

Rostovtsev said police curently have no leads, but added that the peculiarity of the items stolen could help in the investigation. 

"There is a very limited number of potential customers for these items so, by checking these, I expect that the case will be solved very quickly," he said.



Rebels Holding Gluck?

MOSCOW (AP) - Contacts have been established with a Chechen rebel leader whose forces are believed to be holding a kidnapped American aid worker, the Itar-Tass news agency reported on Sunday. 

The report quoted Gen. Valery Baranov, commander of Russian troops in the rebel republic, as saying that intermediaries have been in touch with a Chechen warlord called Yakub and held preliminary negotiations over ransom for Kenneth Gluck. 

Chechnya's chief prosecutor, Vse vo lod Chernov, also was quoted by Interfax on Saturday as saying that no trace had yet been found of the American, but that a suspect had been detained. 



AIDS Cases Rise 

MOSCOW (SPT) - The number of new HIV and AIDS cases in Russia tripled in 2000, with Moscow and the Moscow region having some of the highest concentrations of infection, Interfax reported. 

The report did not give any figures, but the Health Ministry said in 1999 that it had registered 23,000 cases of HIV and AIDS since 1987.

Deputy Health Minister Gennady Onishchenko said Thursday that 90 percent of those who have contracted the disease are intravenous drug users. Onishchenko said that the majority of new cases are in the 16- to 29-year-old age group.

The highest ratio of infected people is in the Irkutsk region of Western Siberia, where the ministry has registered 7,945 cases. Kaliningrad is in second place.



Oilman Killed 

ST. PETERSBURG (AP) - Alexander Volkovsky, president of the Russo-Balt Petroleum company, was shot to death in St. Petersburg, the city prosecutor's office said. 

Volkovsky was shot several times in the chest in the entranceway to his apartment building Thursday, said prosecutor's office spokesman Gennady Ryabov. Police said they found a discarded pistol magazine at the site. 



Aeroflot Emergency 

MOSCOW (AP) - An Aeroflot jetliner carrying 112 people on their way from Siberia to Moscow made an emergency landing Friday in the second such incident in a week at the Tolmachevo airport in Novosibirsk, a spokesman for the Emergency Situations Ministry said. 

The pilot decided to make the emergency stop after the left wheel of the TU-154B failed to retract following takeoff from the city of Kemerovo, spokesperson Viktor Beltsov said. The plane had 103 passengers and nine crew members onboard. A week before, a plane traveling from Irkutsk to Moscow was forced to make a similar emergency stop in Novosibirsk for the same reason. No one was injured in either incident.

TITLE: U.S. Magistrate Refuses Bail for Borodin
AUTHOR: By Tom Hays
PUBLISHER: The Associated Press
TEXT: NEW YORK - A federal judge denied bail Thursday for Pavel Borodin, a high-ranking Russian official arrested by the FBI last week on a Swiss warrant alleging he laundered multimillion-dollar kickbacks from Swiss companies that renovated Kremlin buildings. 


U.S. Magistrate Viktor Pohorelsky refused to release Borodin despite guarantees by top Russian diplomats - including the ambassador to the United States, Yury Ushakov - that Borodin would go to Switzerland voluntarily. 

At the close of a two-hour hearing in Brooklyn federal court, Pohorelsky also denied a request to put Borodin - now held in a Brooklyn jail - under house arrest in the Russian consulate until the court ruled on whether he should be extradited. Defense attorneys had argued that he needed to be free to continue his official duties. 

"It is true that these are unusual circumstances," Pohorelsky said. But the judge ruled that defense attorneys had not met strict legal standards for granting bail to an international fugitive. Pohorelsky set a Feb. 5 deadline for both sides to submit motions on extradition. 

Borodin, 54, who is among the members of former President Boris Yeltsin's inner circle, was intercepted at Ken nedy Airport last week while on his way to celebrate the inauguration of President George W. Bush. 

Borodin had sought to obtain a U.S. visa using his diplomatic passport, but the application was delayed, his attorneys said. Not wanting to miss a private inauguration bash - and unaware of the Swiss warrant - he made the trip carrying his regular Russian passport. 

The arrest of Borodin, who managed the Kremlin property administration under Yeltsin, has drawn protests from the Russian Foreign Ministry and conspicuous silence from President Vla di mir Putin, who has pledged to crack down on corruption. 

Putin dismissed Borodin from his Kremlin post just days after taking over from Yeltsin on Dec. 31, 1999. 

Russian prosecutors last year closed their investigation into the Kremlin corruption case after more than two years, saying Swiss authorities failed to provide evidence. But Switzerland kept the case open and issued an international warrant for Borodin, the secretary of the Russia-Belarus Union - a largely ceremonial position that guarantees him legal immunity in Russia. 

In Geneva, chief prosecutor Bernard Bertossa said Thursday his office would widen its probe of Bo ro din's activities to investigate the refurbishment of the airplane used by Yeltsin. 

"In addition to the two contracts concerning the renovation of the Kremlin, there are similar phenomena in the context of the presidential plane," Bertossa said in an interview with the Swiss weekly L'Hebdo. 

He declined to elaborate. 

A Russian newspaper last week reported that Borodin was among Kremlin officials who allegedly received big sums from the Swiss-based Mercata company as kickbacks for a project to turn a presidential plane into a flying hospital. It said that while the project cost about $13 million, the Russian government had been charged $39 million. 

The daily Segodnya claimed that this was in addition to the $25 million "commission" paid by the head of Mercata for a contract to renovate the Great Kremlin Palace. The Lugano-based Mabatex is the other Swiss-based company involved. 

"We can show that Mr. Borodin contracted two Swiss companies in the name of the Russian Federation and that he received big commissions from these companies," Bertossa told L'Hebdo. 

"If it could be proved that these funds were used to the profit of Russia and not Mr. Borodin, then that might change our view of the matter. But for the moment, that's far from being the case." 

Swiss prosecutors have said their Russian counterparts were sluggish in pursuing corruption investigations against highly placed officials, while energetically prosecuting Kremlin opponents. 

On Thursday, defense attorneys claimed that Borodin was only wanted in Switzerland for questioning and had not been charged with any crime. 

"I want to make it clear that Mr. Borodin is innocent of all charges and denies them," said defense attorney Barry Kingham. "He should be released immediately." 

Ushakov, the Russian ambassador, appeared in person, telling the judge that Borodin "is an important Russian official" who "has duties he needs to perform." 

But prosecutor Thomas Firestone argued that placing Borodin in Russian hands at the consulate "would put him beyond the reach of American law."

TITLE: Putin Slams Foreign Ministry as Shortsighted
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW - After more than a year in the Kremlin, President Vladimir Putin paid his first visit to the Foreign Ministry and criticized diplomats for what he said was a lack of foresight and their failure to defend Russia's economic interests abroad.


The president began his speech Friday by addressing global security issues and indicated that the Kremlin may eventually agree to modify the U.S.-Soviet 1972 Anti-Ballistic Missile Treaty. 

He said Russia would like to preserve the treaty, but is "eagerly looking forward" to a dialogue with the new U.S. administration of George W. Bush, which wants the ABM treaty modified to allow the United States to deploy a shield against ballistic missiles.

Putin earlier had warned that Russia would abrogate both START I and START II as well as other arms control treaties if Washington violated the 1972 accord to deploy a national missile defense system, or NMD. 

While Bush's predecessor Bill Clinton showed some willingness to compromise, Putin now has to deal with a U.S. administration determined to push ahead with NMD regardless of Russia's position. On Friday, Putin made no mention of scrapping any strategic arms treaties over NMD. 

The president only noted that Russia has done what "the international community had long been expecting from us" by ratifying both START II and the Comprehensive Nuclear Test Ban Treaty.

While taking a rather conciliatory stand on ABM, Putin also made no mention of the previously trumpeted danger of a U.S.-dominated world order, which Russian diplomats have vowed to counter by pushing for a "multi-polar world."

Putin reiterated Russia's criticism of NATO's eastward expansion, however, and he called for international cooperation in combating terrorism.

In his speech, the text of which was carried on the Strana.ru Web site, Putin outlined Russia's strategic foreign policy course. He emphasized integration into the international community and the creation of a "stable and secure" situation around Russia. 

Speaking for the first time in the Foreign Ministry's Stalin-era sky scraper, the president went on to criticize diplomats, accusing them of showing too little foresight.

He also demanded that Foreign Minister Igor Ivanov and his subordinates pay more attention to promoting and defending Russia's economic interests abroad. 

"Economic diplomacy should account for a growing share of work at the Foreign Ministry," Putin said. "Sometimes, the Foreign Ministry's central staff does not have a full command of the situation regarding trade and economic ties.

"It is necessary to make efforts to create conditions for our entrepreneurs abroad that would be at least as good as those enjoyed by foreign businessmen in Russia," Putin said, saying the ministry should help mineral-rich Siberia and the Far East gain access to international markets.

The president also called on the ministry's consular service to champion the rights of tens of millions of ethnic Russians living in former Soviet republics. "We obviously do not do enough to protect our diaspora, to protect Russian culture and the Russian language," Putin said.

TITLE: Canada Requests Immunity Waiver for Russian Diplomats
PUBLISHER: Reuters
TEXT: OTTAWA - Canada said on Sunday it had asked Russia to waive the immunity of two diplomats involved in Ottawa traffic accidents, one of which killed a pedestrian, and both allegedly caused by drunken driving.


Foreign Minister John Manley told reporters the Canadian government officially expressed concern about the weekend incidents, but could do little if Moscow refused to waive the diplomats' immunity.

"We've made it clear we consider this to be a very serious case," Manley said.

Ottawa police said a 45-year-old Russian diplomat had exercised his diplomatic immunity after the first accident, which killed one pedestrian and injured another.

If Russia lifted immunity, the diplomat would face five traffic charges, including criminal negligence and refusing to undergo a blood alcohol test.

Police said the second accident also took place in Ottawa, but nobody was hurt. They gave no names for people involved in either accident.

Canada's Foreign Affairs Department said its officials met with Russian Ambassador Vitaly Churkin on Sunday afternoon and requested that immunity for the two diplomats be waived so they could be prosecuted in a Canadian court.

"We are waiting for an official response from the Russian authorities within the next 24 hours," Foreign Affairs spokesman Patrick Riel told Reuters.

He said Churkin had expressed his deepest regret for the incidents and had sent condolences to the victims' families.

Police Staff Sergeant Murdock Macleod said a car driven by a Russian diplomat veered off a road in an Ottawa suburb on Saturday afternoon, killing a 50-year-old woman walking her dog and injuring a second woman. The second victim was taken to a hospital with multiple but not life-threatening injuries.

The dog, a golden retriever, was later killed for humane reasons.

Macleod said the 45-year-old diplomat had been summoned to appear in court on March 7 and released to the embassy. "He has not been charged. We have to go through the Department of Foreign Affairs," he said.

Under the Vienna Convention, diplomats and their families can be charged with crimes, but are immune from prosecution and civil liability. If they have broken the law of their host country, they can be expelled.

TITLE: Yeltsin Tells of a Hectic Life After Presidency
PUBLISHER: Reuters
TEXT: MOSCOW - Former Russian President Boris Yeltsin, who quit suddenly on New Year's Eve in 1999, has kept himself busy since leaving office - so much so, he says, that he "almost didn't notice" the passing of 2000. 


His comments, shown on state television on Saturday, are part of a documentary on Yeltsin, to be shown on the state-owned RTR channel on Thursday, Yeltsin's 70th birthday. The film shows the life Yeltsin has led since he left office. 

"For me, the year was not so difficult," Yeltsin said in the documentary clip, which showed how the former president and his family prepared for New Year's Eve of 2000. 

"I thought it would be more difficult. But what with the book, the various councils I gave, telephone calls... It went by, it went by... and then it had gone, and I almost didn't notice it," Yeltsin said in his trademark gravelly voice. 

Yeltsin released the third part of his memoirs in 2000, which dealt in part with his choice of Vladimir Putin as his successor. He has also spoken with Putin and given his opinion on certain issues, including his disagreement with Putin's choice of the old Soviet anthem as Russia's new national song. 

The clips showed Yeltsin in a luxurious house and a large dining room, apparently ready for New Year's Eve celebrations. 

Yeltsin's decision to step down months ahead of the official end of his term took the world by surprise but gave Putin time to prove himself before a presidential election in March 2000. 

Yeltsin's effectiveness was undermined by constant health problems, including a multiple heart bypass in 1996. 

Yeltsin, known officially as Russia's first rather than former president, has kept a low profile, though he has said he wants to travel more and play an indirect role in politics. 

Unlike his own predecessor, Soviet President Mikhail Gorbachev, Yeltsin has generous retirement benefits and - so far - immunity from prosecution under a decree signed by Putin on December 31. The Duma is now, however, considering a draft law that would limit that immunity.

TITLE: MARKET MATTERS
TEXT: Why Did the Prosecutors Finally Choose To Arrest? 


AS you will by now be aware, the highly influential and extremely rich St. Petersburg businessman Mikhail Mirilashvili was arrested last week by the City Prosecutor's Office, on charges of kidnapping two people.


As with many of the new Russian capitalists, it was only a couple of years ago that Mirilashvili started to care about his public image. At the moment, he is the owner of the city's biggest casino chain, Conti, and has interests in construction and real-estate development, medicine and pharmaceuticals, import operations and the retail business. 

Mirilashvili family members control St. Petersburg's biggest department store, Gostiny Dvor, Viking Bank, the Lomonosov port, a daughter company of oil giant LUKoil, as well as a local television channel. And Mikhail himself has also earned a reputation as something of a philanthropist, who has made donations to a number of foundations that support the Jewish community, war veterans, sick children, students and a whole lot else besides. 

One has to say that the real reason for Mirilashvili's arrest will never be revealed, whatever city prosecutors may say. To be honest, I have little faith in the version being put about by his close associates that their leader is suffering because of his tight connections to Media-MOST head Vladimir Gusinsky and the activities of the Russian Jewish Congress, where Mirilashvili serves as vice president. That's because one should trust such claims about as much as one should trust the same people when they say that the casino business is a low-profit affair that the family runs as a sort of hobby for its own satisfaction.

The prosecutors have also hinted that the investigation they began in September last year is connected to the mysterious kidnapping of Mirilashvili's father - a kidnapping that only lasted one day, after which he was handed over apparently unharmed.

Shortly after this incident, two alleged gangsters were shot to death in front of the Astoria hotel, where a round table on the city's investment climate was underway, under the patronage of Mikhail Mirilashvili. 

Mirilashvili used to be known as Misha Kutaissky, and his criminal connections are beyond doubt. However, he has never been arrested before. Unquestionably, law-enforcement agencies have always had enough material on Misha to make a move, as they have always had evidence on a great many other former criminal bosses who are now running successful businesses. So the question is this: Why on earth have prosecutors only arrested Mirilashvili now?

According to sources in the local business community, the moment came to arrest Mirilashvili when he started to cross certain lines and try and extend his businesses to new levels.

For example, he made a move on Moscow, where the family opened a line of slot machines. He looked for partners in some of the powerful Moscow-based banks. He quarreled with the president of LUKoil. In a country where criminal allegations are often used as a club with which to beat one's competitors, and given his background, it is perhaps not surprising that Mirilashvili ran into trouble. And relations between him and Viktor Cherkesov were reportedly not going smoothly, either.

Yet rumor has it that Mirilashvili was still eager to dive into big regional investment projects, and his arrest could therefore be owing to someone's attempts to keep the region's economy out of the tainted hands of the Mirilashvili family.

While Misha sits in jail waiting for his trial to start, other businesses will be busy on the investment front. It's not all gloom and doom for him, for his brother and father will keep the family businesses afloat. But they will no doubt be keeping fairly quiet, too.



Anna Shcherbakova is the St. Petersburg bureau chief of Vedomosti.

TITLE: THE TAX ADVISER
TEXT: Some Welcome Tax Proposals 


RUSSIAN law requires that, for new taxes to become effective, they must be passed the year before they go into effect and be published at least one month before the beginning of the new tax year. So, if the government wanted a new tax to take effect this year, the cut-off date for the enabling law for that tax was December 1, 2000.


That isn't to say, however, that existing taxes can't be tampered with. Since the beginning of the new year it seems that just about everybody involved in the legislative process has suggestions on how to best improve the system. I thought it would be interesting to take a look at what some lawmakers are saying.

Boris Grizlov, the leader of the Unity Party, recently announced that party deputies were going to propose a five-year moratorium on changes to the rate of Individual Income Tax. The purpose would be to convince taxpayers to come into the system by guaranteeing the flat tax rate of 13 percent for an extended period. This would go a long way in calming the fears of many who believe that the rate was intended to be fleeting, serving as a lure to bring people into the system only to clobber them later.

Alexei Kudrin, the Minister of Finance, said that advertising expenses would soon become more deductible for Profit Tax purposes. According to Kudrin, the issue would be resolved within the next two to three weeks.

This issue has long been the source of complaint by foreign and domestic business alike (not to mention the advertising industry). Russian law currently places severe restrictions on the amount of advertising expenses that can be deducted in calculating profit tax. The deduction is based on a percentage of turnover generated by the entity. However, because that percentage currently varyies between 1 percent and 5 percent, Russian rules often overstate a company's profit.

Legislation like this would certainly be a step in the right direction towards encouraging investment. There is, however, an on-going battle between those who prefer generating immediate budget revenue over long-term economic growth. I'm keeping my fingers crossed.



Tom Stansmore is head of the St. Petersburg branch of Deloitte and Touche CIS. For more information or advice call Deloitte and Touche at: 326-93-10.

TITLE: IN BRIEF
TEXT: Japan's Numbers Better

TOKYO (AP) - Industrial production in Japan rose a greater-than-expected 1.5 percent in December from the previous month, according to preliminary data released by the government on Monday.

The increase in output reversed a month-on-month decline of 0.8 percent in November and exceeded the 1.2 percent rise forecast by analysts in a survey by Dow Jones Newswires.

However, the Ministry of Economy, Trade and Industry downgraded its outlook for production by Japanese industries, forecasting that production will rise 0.7 percent in January from December.



NYSE Goes Decimal

NEW YORK (AP) - The New York Stock Exchange began trading all of its stocks in decimals Monday, the last step in a government-mandated move that has been planned for three years.

Nearly 3,400 stocks that until now were traded in halves, quarters, eighths and sixteenths were switched to decimals when trading began. NYSE officials reported a smooth transition, largely because they'd already had some practice - 159 issues were traded in decimals as part of a pilot program that began last summer.

The same change occurred Monday on the smaller American Stock Exchange, which also launched a pilot program last summer. An estimated 1,500 stocks and options were affected there.

But the switchover doesn't involve all U.S. stocks, at least not yet. The NASDAQ Stock Market, home to more than 4,600 companies including Intel and Microsoft, plans to start converting its trading to decimals in March and finish by April 9, the deadline set by the Securities and Exchange Commission.



Gates Pledges $100M

DAVOS, Switzerland (AP) - Microsoft's Bill Gates pledged $100 million to the search for an AIDS vaccine and challenged the rich at the World Economic Forum to pitch in as well.

Yahoo! on Saturday also promised $5 million over three years - the first corporate sponsor of the International AIDS Vaccine Initiative.

Noting that more than 5 million people were infected with the AIDS virus last year alone, Gates said the private push was meant to correct "an unbelievable market failure" of not developing a vaccine 20 years after the first cases.

"The one thing that would really change the picture would be a vaccine," he said. But with most of the new infections in the developing world, "there's no way commercial companies are going to see this as a priority."



Ericsson Reorganizing

STOCKHOLM, Sweden (AP) - LM Ericsson, unable to duplicate the success of Scandinavian rival Nokia, will stop making handsets and focus on developing technology and network equipment to Web-enable mobile devices.

The plan, disclosed Friday as Ericsson reported a 63 percent plunge in fourth-quarter earnings, calls for the company to sell its handset factories to an outside manufacturer and hire that contractor to produce Ericsson-brand phones.

The company announced a deal under which Singapore-based Flextronics International will take over Ericsson's mobile-phone factories in Brazil, Malaysia, Sweden, Britain and parts of a U.S. plant in Virginia. The deal with Flextronics will include the transfer of 4,200 employees and the layoff of about 700 others.

TITLE: BP To Sell its Stake in LUKoil
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Oil giant British Petroleum announced Monday that it will sell its equity stake of 7 percent stake in LUKoil, Russia's No. 1 oil company, but said that the decision did not mean it was pulling back from its other investments in Russia.


BP inherited the stake through the acquisition of U.S. oil company Atlantic Richfield last April. 

The shares are worth about $650 million.

LUKoil's shares fell a sharp 10 percent to $10.20 on Monday following news of the sell-off, but oil analysts said the company's long-term prospects remained stable and many reiterated their buy recommendations.

BP was also quick to dismiss investor jitters. Peter Henshaw, head of external affairs for BP Russia, said BP's relationship with LUKoil remains "bigger and healthier than at any time in the past."

"We do regard LUKoil as a strategic partner," Henshaw told a news conference. "The list of projects we operate together is a witness to the important relationship we have."

Henshaw said BP decided to sell off the equity stake in LUKoil because his company is not a portfolio investor and the share packet is too small to carry any decision-making weight.

The stake will be disposed of by selling $150 million worth of common shares and $500 million in exchangeable bonds, BP announced. The five-year bonds will have a yield of 3.25 percent to 3.75 percent and will also be exchangeable into ADRs at a 17 percent to 22 percent premium during their lifetime.

Funds from the sell-off will be used for projects in Russia and elsewhere.

LUKoil greeted news of BP's sell-off calmly.

"We don't see anything threatening in BP's decision," a LUKoil spokesperson said by telephone. "We understand their wish to invest money into their projects, and most likely these will be projects in which LUKoil will be a partner." 

He shrugged off the dive in share prices, saying that investors probably did not fully understand the BP decision.

Both the spokesperson and BP said that demand for the 7 percent stake would far exceed the amount on offer.

Henshaw said demand for the bonds has already reached $3 billion to $4 billion.

BP's offer will come ahead of a plan by the Russian government to float a 6 percent stake in LUKoil later this year.

Gennady Krasovsky, an oil analyst at NIKoil, said that the market's negative reaction on Monday was psychologically driven and not the start of a trend that would scar LUKoil's value.

"The fact that investors are ready to buy bonds and the interest they have for the 6 percent stake that will be placed on the New York Stock Exchange supports the fact that LUKoil is the most attractive Russian oil company for investors," he said.

"Placing $650 million in stock which is many, many times oversubscribed demonstrates the strength of the LUKoil share because there's not a single company in Russia that you could achieve this in," said Stephen O'Sullivan, an oil analyst at United Financial Group.

He said that BP was probably putting the stake up for sale at this time because they want to make sure that the share package will be unloaded well in advance of the government's placement of its own LUKoil stake.

Aton was one of the few brokerages that took the BP decision negatively, issuing a report late in the day downgrading its recommendation on common and preferred shares from buy to hold.

"The long-term threat from the overhang created by the exchangeable bonds, the upcoming sale of another 50 million shares by the Russian government, and the possible placement of another 15 million to 17 million shares by LUKoil itself makes us extremely suspicious regarding LUKoil's ability to outperform the market in the next three to six months," Aton wrote in Monday's report.

BP is in a partnership with LUKoil in the Caspian region through the Azerbaijan International Operating Co. and the Shah Deniz gas project. When it acquired Atlantic Richfield, it also got the Lukarco joint venture operating on Kazakstan's Tengiz oil field and a 12.5 percent stake in the Caspian Pipeline Consortium.

BP also owns a 10 percent of the Sidanko oil company.

As an example of the two companies' thriving partnership, Henshaw said that they recently reached a product-supply agreement for Getty Petroleum Marketing, which LUKoil took over last year.

TITLE: Airbus Enjoying Success, but Still Falling Short of Boeing
PUBLISHER: The Associated Press
TEXT: PARIS - European aircraft maker Airbus Industrie said on Monday it had received firm orders for 520 planes in 2000, capturing 46 percent of the market but falling short of its arch-rival Boeing Co.


Despite coming in second to Boeing and the likelihood of a drop in orders this year as the U.S. economy cools, Airbus officials were optimistic at a news conference, still basking in the successful launch of the company's 555-seat superjumbo.

Revenues for 2000 were $17.2 billion, compared to $16.7 billion the previous year. The 520 new orders were worth $41.3 billion and Airbus delivered 311 planes. Boeing said earlier this month it recorded 611 orders last year.

Airbus chief executive officer Noel Forgeard forecast a drop in orders this year to between 350 and 400. He said the company had a record backlog of 1,626 planes at the end of last year, representing four years of production.

But behind the figures, the big news in 2000 was clearly the launch of the A380 superjumbo - the world's largest passenger plane and Airbus' new weapon in the battle for the skies.

Forgeard pointed out that the total orders figure for 2000 did not include 50 firm commitments for the mammoth plane, which can be equipped with gyms, lounges and even casinos.

The $10.7 billion A380 project is a direct challenge to Boeing's domination of the long-haul, high-capacity market. Orders now stand at 60.

Airbus chief commercial officer John Leahy told The Associated Press that he expected another 50 orders this year for the double-decker superjumbo, which costs $235 million.

Boeing is planning to develop a stretch version of its 747 - dubbed the 747X - but so far there have been no takers for the plane, which will cost around $4 billion to develop.

Airbus predicts there will be a market for some 1,200 planes with more than 400 seats over the next 20 years, while Boeing foresees more interest in smaller planes with the range to bypass major hubs.

TITLE: EU Seeks Measures To Combat Beef Crisis
PUBLISHER: Reuters
TEXT: BRUSSELS - The European Union's huge agriculture budget could be strained to its breaking point by the mad cow disease crisis as consumers turn their back on beef, the EU's farm policy chief said on Monday.


Franz Fischler told EU farm ministers, meeting to debate new emergency public-protection measures designed to shore up confidence in the beef market, that the position was worse than thought.

"The crisis on the beef market goes further than one might think. The latest market indications are alarming," he said in remarks released to journalists.

He said EU beef consumption had dropped by an average of 27 percent and many non-EU countries were banning imports from the EU, threatening to create a huge market surplus with no outlet.

The European Commission could then be forced to buy unwanted beef into publicly funded cold storage at huge cost.

"Buying into public intervention is not only no solution for budget restrictions but also for storage capacity limitation. If we do this, farm expenditures would simply explode, which would lead to cuts in other agriculture sectors," Fischler said.

The 40 billion euro-per-year (over $36.9 billion) farm budget swallows half of EU centralized expenditure.

Fischler urged member states to take advantage of the so-called purchase-for-destruction scheme, a special six-month program that pays farmers to have their older cattle destroyed.

"The scheme is simply a lesser evil. It is cheaper and offers a solution to farmers who cannot sell their animals," he said.

"It disposes of the lowest-quality beef at the lowest price and hence reduces the surplus, and it creates a minimum price on the market for the benefit of producers."

The optional purchase scheme had only been used fully in France and Ireland and, to a lesser extent, in Spain and Luxembourg, Fischler noted.

German farmers, in particular, have been reluctant to use the scheme. Britain, which has long had a ban on meat over 30 months entering the food chain, has an exemption.

Fischler presented the latest beef market indications, which showed that the reduction in consumption over the year may be more than the 10 percent envisaged at the end of last year.

He estimated the cost to the EU budget of the purchase for destruction scheme at 1,400 euros (over $1290) per ton, with a further 1,190 euros-per-ton cost to national budgets.

However, the cost of intervention, coupled with the eventual destruction of meat because there was no market, was around 3,800 euros (about $3500) per ton, his figures showed.

TITLE: AT&T Announces $1.7Bln in Losses
AUTHOR: By Jessica Hall
PUBLISHER: Reuters
TEXT: NEW YORK - Telephone and cable- television giant AT&T Corp. on Monday announced losses of $1.7 billion in the fourth quarter due to falling prices in the long-distance telephone market and one-time charges, and said profit margins in its consumer and business units would fall in 2001.


"We were expecting a bad quarter and a bad year in 2001 and it's going to be worse than we expected," said Anna-Maria Kovacs, a Boston analyst with the Janney Montgomery Scott brokerage. She has a "sell" rating on the stock.

Separately, Rick Roscitt, head of AT&T's Business Services unit, left to become chairman and chief executive of equipment maker ADC Telecommunications Inc. Roscitt's departure marks the latest high-level executive to leave the company in the past three years.

AT&T, which plans to break into four separately traded companies, said it lost $1.7 billion, or 45 cents a share, in the quarter, including one-time charges and gains. That compared with a profit of $1.15 billion, or 36 cents a share, a year ago.

Excluding those items, AT&T's profits fell to $978 million, or 26 cents a share, from $1.7 billion, or 53 cents a share, a year ago. On a per-share basis, the fall was 51 percent. On the basis of millions of dollars, the drop was 42 percent.

The results matched Wall Street's reduced expectations, according to research firm First Call/Thomson Financial. New York-based AT&T slashed its growth outlook several times last year, citing weakness in the long-distance telephone market.

Fourth-quarter revenue increased to $16.9 billion, while operating expenses jumped 52 percent to $21.2 billion.

Shares of AT&T lost 43 cents, or 1.8 percent, to $22.88 in midday trading on the New York Stock Exchange.

AT&T said it expects revenue growth in the first quarter to be similar to the fourth-quarter level. Cash flow, or earnings before interest, taxes, depreciation and amortization, excluding other income, will be in the mid-$4 billion range.

Under AT&T's restructuring plan, which was announced in October, the company will split its major units - consumer, business, broadband, and wireless - into separately traded companies.

The move dismantles three years of acquisitions and reverses the company's strategy to become an "all-distance" communications company that sold packages of local, long-distance, wireless- telephone and Internet access services.

AT&T's wireless-telephone unit's fourth-quarter revenues increased 39.1 percent to $3.0 billion as it added 865,000 new subscribers. It had 15.2 million subscribers at the end of 2000, an increase of 58.5 percent compared with a year ago.

The wireless unit expects service revenues to grow at the high end of the 30 percent to 35 percent range for the full year 2001. Growth in earnings before interest, taxes, depreciation and amortization, excluding other income, is expected to be in the mid-60 percent range.

Wireless subscribers additions will grow by mid- to high-20 percent rates in the first quarter. Full-year wireless subscriber growth is expected to be around 20 percent.

TITLE: Automaker To Make Cuts in U.S., Canada
AUTHOR: By Jim Suhr
PUBLISHER: The Associated Press
TEXT: AUBURN HILLS, Michigan - DaimlerChrysler AG announced plans Monday to cut 26,000 jobs, or about 20 percent of its North American work force, over three years at its struggling U.S.-based Chrysler division as part of a sweeping bid to curb losses.


DaimlerChrysler chairman Juergen Schrempp has said Chrysler would lose money this year, and that rehabbing the troubled U.S. unit could take two to four years.

Chrysler group president and chief executive Dieter Zetsche, tapped in November to lead the division's turnaround effort, already has asked for 5 percent price cuts from Chrysler suppliers. Chrysler also plans to slash hundreds of millions of dollars in advertising and showroom subsidies to its 4,400 dealers.

Monday's plan calls for six manufacturing plants to be idled through 2002. Chrysler said it expects a large part of the job-cutting to be done through retirement programs, achieved within the framework of existing union contracts.

The plan will reduce overall production capability by 15 percent.

The vaunted 1998 trans-Atlantic merger of equals appears to be entering another crucial stage.

Chrysler's performance hasn't met Stuttgart-based DaimlerChrysler's expectations, with sales incentives erasing profits and production of the hot new PT Cruiser falling short of demand. Daimler and Chrysler also have been reluctant to share parts to cut costs, which might change with a new emphasis on saving money.

Chrysler said the job cuts will involve 19,000 hourly workers and 6,800 salaried employees. United Auto Workers union spokesperson Paul Krell declined to comment immediately Monday. The union represents Chrysler's hourly workers.

The job cuts will be made through a combination of retirements, special programs, layoffs and attrition.

Chrysler expects that three-quarters of the overall reduction will be achieved this year. Company officials would not comment on how much the automaker will save as a result of the job cuts. U.S. workers covered by the United Auto Workers will receive 95 percent of their regular pay through the length of their contracts.

Plants slated to be idled include the Toluca transmission plant in Mexico, and assembly plants in Cordoba, Argentina, and Parana, Brazil.

Chrysler also plans to shift production from a Detroit engine plant to two other sites. In Mexico, Chrysler will shift production from its assembly plant in Lago Alberto and close its Toluca engine plant.

Production will be scaled back at plants in four states and Canada, including plants in Detroit; Belvidere, Illinois; Toledo, Ohio; Newark, Delaware; Brampton, Ontario, and two sites in Windsor, Ontario.

"The only consolation is that many people at Chrysler have faced this before and responded well," Zetsche said.

About 22 percent of Chrysler's Canadian workers would lose their jobs, compared with 18 percent of U.S. Chrysler workers, said Canadian Auto Workers President Buzz Hargrove.

Zetsche said Chrysler will unveil its complete plan to turn around the unprofitable division on Feb. 26.

In the long run, what matters most is Chrysler's ability to develop and make vehicles that people want to buy, said analyst David Garrity of Dresdner Kleinwort Benson in New York.

He said he was encouraged that the company was leaving its product development budget relatively untouched.

But he said it was shortsighted for the company to cut production the most in Mexico and Canada, where costs are lower, while shielding higher-paying jobs in the United States. The Chrysler-UAW national contract contains safeguards against job cuts.

Last year, Chrysler posted a third-quarter loss of $512 million and warned that its fourth-quarter loss could more than double that amid a downturn in the U.S. auto market.

TITLE: Kudrin: Russia To Honor 100% of Paris Club Debt
AUTHOR: By Alexei Kalmykov
PUBLISHER: Reuters
TEXT: DAVOS, Switzerland - Russia will fully service its $38.7 billion Soviet-era debt to the Paris Club of creditor nations and will try to make missed payments soon, Deputy Prime Minister Alexei Kudrin said Friday.


Kudrin also said after talks with IMF First Deputy Managing Director Stanley Fischer that the Fund's forecasts for the world economy and Russia were better than Moscow had expected and this would be worked into Russia's own plans.

"In the next month and a half, I hope we shall be able to solve the problem of the delay and will service debts in full," Kudrin told a seminar at the World Economic Forum in Davos, Switzerland.

"We currently have delays [in payments], and we shall try to liquidate them before too long."

Russia has missed some debt payments to the Paris Club since the beginning of the year, saying state coffers could only afford to service part of the $1.6 billion debt due in the first quarter because it had urgent domestic needs to be addressed.

The Paris Club says it expects full payments and Moscow should have the money due to strong prices for energy exports.

Kudrin said Russia was not refusing to pay sovereign debt, but would like creditor nations to lessen the burden of payments.

He also said that reforms could be endangered and social tension increased without some form of debt relief.

"The Russian Federation will not unilaterally refuse to pay its debts. But Paris Club principles allow the possibility to pay debts without hurting social interests and halting reforms. That's what we mainly talk about now," Kudrin said.

Russia's 2001 budget does not provide for all $3.8 billion for payments to the Paris Club falling due this year.

The country wants to restructure its $48.6 billion debt to the Paris Club, including $38.7 billion in Soviet-era debt, with the aim of getting a partial write-off and rescheduling the rest over a longer period of time.

Formal negotiations with the Paris Club cannot start until Russia has an agreement with the International Monetary Fund.

Kudrin confirmed government plans to revise this year's budget to allow for the Paris Club payments, but gave no details. However, Kudrin said after meeting Fischer that he and the IMF official had discussed the Fund's outlook for Russia, as well as an IMF mission to Moscow, due to begin early February.

"The [IMF] forecast is better than we expected," he said.

"The forecast for the world economy is good, including for Russia. In this light, we will also fine tune our forecast in the direction of a favorable outlook," Kudrin told reporters.

TITLE: WTO Rules Usher in Changes in Import Law
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - A revised Customs Code designed to meet World Trade Organization requirements and reflect the needs of the economy is almost ready to go to lawmakers, Mikhail Vanin, head of the State Customs Committee, said Friday.


Speaking at a news conference on International Customs Day, Vanin said the committee and the Economic Development and Trade Ministry intend to finalize a new draft of the Customs Code at a meeting Tuesday.

Vanin said the current code was introduced in 1993, but needs to be revised. The Economic Development and Trade Ministry will approve the draft only if all procedures are in accordance with WTO norms, he added.

"The new Customs Code could become an instrument of direct influence and will reflect the nation's trade relationships," Vanin said.

He said the outstanding differences between the ministry and the committee related to the committee's status.

Economic Development and Trade Minister German Gref had foreseen a reduction in the status of the State Customs Committee, but "customs reminded him that it is a law enforcement authority and asked that to be taken into account: We have since found an understanding," Vanin said.

Yaroslav Lissovolik, economist at Renaissance Capital, said the State Customs Committee is a "large and sluggish" organization that is famous for its conservatism. It has 60,000 employees, including 5,000 administrators. When the Philippines was battling corruption in its Customs Ministry in the '80s, neither reorganization nor new employees improved performance, and the government eventually had to disband the whole ministry, Lissovolik said.

The committee has barely been touched by the economic reforms being led by Gref's ministry, he said.

"The committee tries to show its participation in reforms, but being so conservative it is very hard for them to create a new, liberal and reformed code," Lissovolik said.

Vanin did not say when he expected the new code to come into force, but said that the committee plans to simplify customs procedures and customs control. In particular, it is planning this year to establish two large customs offices in the Moscow and Northwest regions to create express clearance of some goods, he said.

Only respectable companies will be able to use the express service, while other companies will face stricter controls, Vanin said.

He said more than 25 percent of all goods imported into Russia are "gray," meaning that either no import duty is paid on them or they are incorrectly classified so as to pay much less than the correct duty.

In 2000, the committee collected $12.6 billion, 16 percent more than its target, Vanin said.

"We collected $5.2 billion more in duties than in 1999," he said.

The committee collected $2.3 billion of import duties, 27 percent more than in 1999, and $5.89 billion of export duties.

Last year, customs officers swooped on more than $247 million worth of smuggled goods. More than 200,000 customs breaches were revealed, and more than 3,000 criminal cases were opened, 2,341 of them for smuggling.

TITLE: New Index Pans Local Business
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - PricewaterhouseCoopers unveiled an opacity index at the Davos summit Thursday that places Russia next to last in a group of 35 countries measured for the transparency of their economies.


Russia gauged 84 on a scale of 150, while China fell in last with a score of 87. By comparison, the United States rang in at 36 and Singapore - used as the benchmark for the calculation - had an opacity factor of 29.

"Our study correlates highly with other findings, but whereas they focus on uncovering the problem, the opacity index examines and quantifies its effects, namely increased capital and investment costs," said Rhico Hove, partner with PricewaterhouseCoopers Russia.

Russia's ranking of 84 implies that businesses operating here indirectly agree to pay bribes and other work-related expenses that are 43 percent higher than in lower risk Singapore.

"Many developing countries are eager to cut tax rates in order to boost investment, often by offering tax concessions to attract foreign investment," the study states. "[But] domestic reforms that reduce opacity may be as effective as a tax cut in boosting direct investment and attracting foreign investment - without sacrificing tax revenues."

The premium risk that borrowers take in Russia is 12.25 percent higher than the United States and benchmark Singapore.

The borrowing risk premium amounts to 7.2 percent for Poland and 6.4 percent for Argentina and Brazil, both of which have an opacity factor of 61. 

Also, Russia was ranked last among the 35 surveyed countries in the areas of corruption and economic policy.

The opacity index consists of five equally weighted sub-indices in five areas - including corruption; laws governing contracts or property rights; economic policies, including fiscal, monetary and tax-related issues; accounting standards and business regulations.

Russia ranks last among the 35 surveyed countries in the areas of corruption and economic policy.

TITLE: Energy Group in Baghdad To Discuss New Oil Deals
PUBLISHER: Reuters
TEXT: BAGHDAD, Iraq - Russian Minister of Energy and Fuel Alexander Gavrin arrived in Baghdad on Monday leading a delegation on an official visit to Iraq, the official Iraqi News Agency (INA) reported.


INA said the Russian delegation arrived at the recently reopened Saddam International Airport in mid-afternoon and that delegation members would stay "several days."

"We hope we will have the opportunity to discuss with senior Iraqi officials means of developing joint cooperation in different fields," Gavrin said through an interpreter.

Gavrin declined to answer a question on the fate of contracts signed between major Russian oil companies and Iraq to develop the West Qurna oilfield in southern Iraq, simply saying: "We have to hold talks and discussions."

Gavrin said any delays in the signing or implementation of any contracts with Iraq had not come from his ministry, as it was Russian oil companies themselves who were responsible for signing such contracts.

"The Energy Ministry has every interest to see contracts signed between Russian oil companies and Iraq be implemented," he said.

Analysts have said that Russia and its oil companies are anxious to be among the first in the door if the sanctions regime is relaxed.

Russia's largest oil company LUKoil signed a $3.5 billion contract in 1997 to develop the West Qurna oilfield with partners Zarubezneft and Mashinoimport once sanctions are lifted.

West Qurna reserves have been put at up to eight billion barrels.

Political and economic analysts have said that Moscow is testing the limits of the sanctions regime with its flights to Baghdad and strong signals of friendly intentions to Iraq.

Russia favors easing the sanctions and a cut in reparations that Baghdad has to pay to victims of the 1990 invasion of Kuwait.

Moscow also regularly criticizes Britain and the United States for air raids on Iraq in enforcing a no-fly zone imposed since the 1991 Gulf War which drove Iraqi troops out of Kuwait.

Before the invasion of Kuwait that prompted the introduction of sanctions against Iraq, Russia had supplied Baghdad with military goods worth up to $8 billion, to be repaid with oil.

Russia's only chance for recouping at least some of the outstanding debt is if sanctions are lifted and Russian firms are then allowed to invest in Iraqi oilfields.

TITLE: Audit Chamber Slams Gazprom Loan Record
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Gas giant Gazprom handed out hundreds of millions of dollars in interest-free loans from 1999 to 2000 while borrowing more than $1 billion with interest rates of 10 percent to 15 percent, the Audit Chamber found in a scathing report.


The 75-page report - the result of a five-month investigation that was released Friday - also found that state-controlled Gazprom's debt to the federal budget soared while its output fell sharply last year.

Mikhail Beskhmelnitsyn, a co-author of the report, lashed out at the gas monopoly Friday, saying its management had failed the state, its main shareholder.

He said a review of Gazprom board meetings had found that management had not once put on the agenda any issues that addressed the interests of the state.

The Audit Chamber, a watchdog group within the State Duma, holds advisory status with the government, for which it wrote the report.

Officials from Gazprom were not immediately available to comment.

The report criticized Gazprom for not putting enough effort into calling in overdue loans.

One of the largest loans handed out over the reviewed period was for 5 Bln rubles to Media-MOST. That loan came on top of a Gazprom guarantee on a $160 million loan from Credit Swiss Financial Products in February 1998 and a $172 million loan from Swiss First Boston (Cyprus) Ltd. in July 1998.

The 5 billion ruble loan came due in October 1999 and was settled for a 16.7 percent stake in Media-MOST. However, Gazprom is disputing the actual value of those shares, accusing Media-MOST founder Vladimir Gusinsky of asset stripping and leaving it with a stake in a shell company. Gazprom is currently suing Gusinsky for fraud and trying to seize another stake in Media-MOST.

In all, Gazprom gave out loans worth more than 24 billion rubles, mainly on interest-free terms and to unrelated companies such as resorts, banks and media, according to the audit. By Nov. 1, 2000, nearly 4 billion rubles in interest-free loans were overdue.

Even as Gazprom was doling out loans, the company borrowed more than $1 billion and 30M Deutsche marks ($484 million) at 10 to 15 percent interest rates in 1999, the audit found.

At the same time, its own debt to the federal budget soared to 39.1 billion rubles.

Gazprom also managed to cheat the state and the regions out of millions of dollars in taxes, the report said. Auditors slammed a special tax agreement that Gazprom struck with the government a couple of years ago under which it got a reprieve on some excise taxes.

Describing the deal as an interest-free loan, the Audit Chamber said the budget had lost nearly $800 million and called for an inquiry into why the tax authorities had allowed the scheme to be implemented in the first place.

Auditors also said Gazprom had cost the regions millions of rubles in property taxes by registering all of its property across the country at its headquarters in Moscow.

While Gazprom saved on taxes and took out loans, its production tumbled to 10-year lows. Production slowed by 22.5 billion cubic meters to 523.1 billion cubic meters in 2000. In comparison, output only fell from 569.2 bcm in 1992 to 545.6 bcm in 1999.

TITLE: Local World Bank Chief Not Ruling Out Loans in 2001
AUTHOR: By Alexander Bekker
PUBLISHER: Vedomosti
TEXT: MOSCOW - While the majority of analysts have written off the possibility of Russia receiving foreign loans this year, the World Bank apparently has not. 


Andrei Bugrov, World Bank director for Russia, said Sunday his organization's work on its fourth structural adjustment loan, which could total as much as $1 billion, "is halfway completed" and that "the ball is in the government's court."

In preparation for the expected arrival Tuesday of the next International Monetary Fund mission, the Finance Ministry has reassessed its sources of income and cut $3 billion worth of loans from the budget as unrealistic, including those from the IMF, World Bank and Japan's Eximbank. 

Last week, however, the World Bank's executive director for Russia, Julian Schweitzer, announced that the parties were building a new mechanism for assessing the course of reform. In saying this, he left the door open for the fourth structural adjustment loan, or SAL-4. 

SAL-category credits go directly into the federal budget and are earmarked for specific issues - reforming the pension system, for example. They also have a number of conditions attached.

The World Bank's first such loan was for $600 million and it was released in 1997. The $800 million SAL-2 was released in 1998. And of the $1.5 billion SAL-3 loan, a tranche of $400 million was issued in 1999, but it was closed last September at Russia's request after it failed to make required reforms in the banking and natural-monopolies sectors. 

SAL-4 was christened the "Christmas Tree" by the government because it came loaded with conditions, which German Gref's Economic Development and Trade Ministry has been working on for five months. 

Gref adviser Arkady Dvorkovich said three groups of figures are being used to determine if Russia qualifies for the loan. The first group shows the level of market competition, the second the extent to which the economy has been deregulated, and the third social-security reform.

"Essentially [the ministry and the World Bank] agreed on the first two groups, with the exception of some technical details," said Dvorkovich. 

For the third group - the extent to which the government subsidizes the economy - Dvorkovich said his team needs about a month to work out the indicators. 

Structural loans are considered a "budget substitute" and consequently are integrated into the general economic program of the government and the Central Bank. In other words, they need IMF approval and relations with the fund are far from smooth, mainly due to problems with debt servicing.

Assuming a framework agreement with the IMF can be worked out by March, the official loan application could reach World Bank headquarters as early as June. Normally such applications are considered for a month, so if all goes well, the bank's board of directors could be looking at it in July.

TITLE: Kidnapping in Chechnya: A Thriving Business and Political Tool
AUTHOR: By Nabi Abdullaev
TEXT: AMONG the tank barriers that mark the Gerzel checkpoint between Dagestan and tormented Chechnya, a ritual is repeated with oppressive regularity.

In one particular instance, a black Jeep Grand Cherokee inched its way into the no-man's land area from the Chechen side, and was met midway by a white Volga from Dagestan. From the Jeep emerged a girl of about 14 and two unshaven men. After a brief conversation and the exchange of a plastic bag full of money, the girl ran to the arms of her waiting mother, who was standing and sobbing near the Volga.


Kidnapping in Chechnya and the adjacent areas is as common today as it was before the Russians began their "counter-terrorist operation" in 1999. Despite the torments of the war, Chechnya's notorious kidnapping gangs have been thriving and, in the process, helping to undermine Chechen attempts to win sympathy in the face of the overwhelming Russian military machine. 

Witnessing a kidnapping in the southern Caucasus is a frighteningly common occurrence for local residents, many of whom live with the fear that they or their family members might be the next victims of cross-border body snatchers.

The practice has become so common, in fact, that Russian border guards at the frontier are blase by the exchanges that take place in front of them.

"Did you see that?" asked Yury, an OMON officer who was checking my car a few weeks ago when the scene described above took place. "They just paid the ransom for that girl. Sometimes I see [this scene] several times in a day."

When I asked why the authorities don't get involved, Yury shrugged. "This is probably an unreported case, so the police have no authority. Don't you know about these things?"

Unfortunately, I do know.

Three years ago, my brother-in-law was kidnapped in broad daylight and kept in Chechnya for 80 days until my family collected $30,000 to pay for his release. I tried to get the Dagestani Interior Ministry to investigate the case. They filed my report and did nothing. 

No case was ever even opened. I got the impression that the authorities were trying to maintain the republic's good image during a rare period of peace. 

Despite the fighting in Chechnya, kidnappings continue. In fact, the conflict may have increased such activity. As proceeds from the region's black-market trade in oil - now under Russian control - have dried up, kidnapping has become more attractive.

Since people who might be particularly attractive to kidnappers tend to stay away from Chechnya itself, the body snatchers have taken to grabbing their victims in the neighboring regions of Russia, particularly Dagestan and Ingushetia. In the past seven years, the Dagestani Interior Ministry has registered almost 600 cases of kidnappings, with about 30 people presently in captivity. But these figures are misleading because hundreds of kidnappings go unreported out of fear of reprisals from hostage-takers. 

My brother-in-law was himself held in the far reaches of the mountainous Vedeno region of Chechnya, along with four other hostages - two Dagestanis, one Armenian and one Azeri.

"I was kept in a dark pit along with my fellow victims, and we were often beaten. The local population guarded the compound and used us as slaves in turn. Nobody there considered us as human beings," he said.

I still have the videotape that the kidnappers sent me when my brother-in-law was captured.

It shows Rashid's bruised face looking up from the bottom of a dark pit. He looks spiritually and physically broken, monotonously repeating, "Father, Mother, don't report this to the police or I will be killed. They don't like jokes. Give them what they want. I am miserable here."

The Chechen government's inability to put a stop to these kidnappings has contributed to its isolation and hampered its ability to build support internationally. Even the bravest international relief agencies have pulled out of the Caucasus because their workers were repeatedly targeted.

The Russian media - which was highly critical of the 1994-96 Chechen campaign - has also felt the sting of kidnappings.

Chechen hostage-takers kidnapped NTV star Yelena Masyuk, a crew from ORT, Vladimir Yatsina of Itar-Tass and Dmitry Balburov of Moskovskiye Novosti, among others. That bitter experience may help explain why Russia's media has been far less critical of the Russian military push this time around. 

The Russian government has extensively used videotapes of hostages being mutilated and executed to keep anti-Chechen sentiment high throughout Russia and to deflect criticism from abroad. I remember seeing Emergency Situations Minister Sergei Shoigu practically forcing a Council of Europe delegation to take some of these tapes when they were in Dagestan last year.

In another memorable case, then-Prime Minister Vladimir Putin played a particularly gruesome tape at a special screening for Western journalists that took place during a visit to Oslo, Norway, in late 1999. One journalist even fainted.

This reputation for savagery merely makes the kidnappers more fearsome and compels people to pay ransoms promptly. The head of Dagestan's anti-organized crime unit, Imamutdin Temirbulatov, told journalists the story of Herbert Gregg, an American evangelist who lived with his wife in Makhachkala. 

On Nov. 11, 1998, Gregg was hustled off to Chechnya and held for $3 million ransom.

In order to speed up the payment, his captors sent a videotape to Moscow that showed them cutting off one of Gregg's fingers. That film was shown several times on Russian television.

In recent months, kidnappers have focused their attention on local elites. The 20-year-old son of the deputy rector of the Dagestani Medical Academy, Arsen Abusuev, was recently released after 18 months in a hole that was so small he was unable to stand. It is rumored that his family paid $300,000.

Among other high-profile kidnap victims are the son of a former Dagestani prime minister, the nephew of the mayor of Makhachkala, several deputies of the republican parliament, the head of the Kizlyar Cognac Factory, the son of the Caspiisk town prosecutor, and many others. Last August, 11-year-old Dzhamal Gamidov, son of a former Dagestani finance minister, was kidnapped while playing soccer in front of the building where he lived. 

Of course, the preferred victims remain foreigners, especially aid workers and journalists who command the highest ransoms.

Mogomed Tolboyev, former head of the Dagestani Security Council, told journalists that a $4 million ransom was paid for the release of UN humanitarian relief worker Vincent Cochetel in 1998. Such kidnappings - including that of Kenneth Gluck of Medecins Sans Frontieres this month - have done much to prevent assistance from reaching those who so badly need it. It is tragedy piled on top of tragedy with no end in sight.


Nabi Abdullaev is a freelance journalist from Dagestan. He contributed this essay to The St. Petersburg Times.

TITLE: COMMENT
AUTHOR: By William Safire
TEXT: How China and Russia Are Reacting to NMD 

WHILE the U.S. State Department warned Americans about traveling to the World Economic Forum in dangerous Davos, intrepid opinion-mongers trekked into the Alps to learn how Chinese and Russian leaders react to Bush administration plans for missile defense.


At Davos, a Chinese position is being explored to agree to a level of U.S. missile defense that would counter blackmail from rogue states - but, in return for inspection rights given to the U.S., would not be overly effective against what China likes to think of as its own nuclear deterrent.

In Russia, a similarly happy outcome is possible, but the impetus is different from China's, because the Russian regime is supremely confident of its political stability, whereas China is not.

Vladimir Putin is building a corporate state along Peron-Pinochet lines. The KGB, the army and a selection of oligarchs rule through an elected president who maintains popularity by tight control of the mass media. This command combination will maintain power so long as the people have bread.

Bread is now on Russian tables mainly because OPEC has nearly tripled the price of energy, Russia's major export. Add this to the delayed effect of the pre-Putin ruble devaluation, which killed imports and revived local industry, and Russians have a sense of not-so-hard times. The Chechen War can never be won, but casualties are down and international pressure is weakening. Even Russia's democratic reformers have taken to differentiating between Chechen "bandits" and suffering Chechen people.

Those reformers are dispirited because they represent less than a fifth of the Russian electorate. The only two democratic leaders left standing - Grigory Yavlinsky and Boris Nemtsov - are the best long-term hope for a peaceful and prosperous nation, but they grind their teeth as Putin visits a monument to the Stalinist Andropov in the morning and honors the dissenter Sakharov in the afternoon. 

As the KGB-military-oligarch clique consolidates power behind Putin, it faces a new U.S. president with firm ideas about a national missile defense. Putin will now have to deal with an inexorable Bush decision, not a forlorn Clinton hope.

And his current stability means Putin will be able to negotiate a major revision of the ABM treaty or its replacement with little internal dissent. Russia's president can gain points with Americans by deploying reformers, thereby jump-starting arms control, or he can string out negotiations by demanding the U.S. abandon NATO coverage of the Baltics, which we won't buy. 

In any case, insecure leaders in Beijing and too-secure leaders in Moscow will have to adjust their policies to America's missile defense - the new fact on the strategic ground.


William Safire is a columnist for The New York Times, where this comment originally appeared.

TITLE: DEFENSE DOSSIER
AUTHOR: By Pavel Felgenhauer
TEXT: Could Stalin Win in Chechnya? 

LAST week President Vladimir Putin announced a radical overhaul of the "counter-terrorist operation" in Chechnya. According to the plan, Russian army units will be partially pulled out of Chechnya while overall command will be taken over by the Federal Security Service, or FSB, the successor organization to the Soviet KGB.


Officially the Kremlin says that such dramatic changes are the result of its overall success in the fight against separatism. The Russian army, they say, has quashed the Chechen resistance, and from now on efficient FSB operatives and special-operations units will be used, instead of tanks and heavy guns, to "mop up" the last remnants of the opposition.

Last March, Russian troops officially occupied all of Chechnya's territory, but as was the case in 1995-96, occupation does not equal victory. On the contrary, it has turned into a bloody quagmire with casualties continuing to mount.

The endless war is becoming less and less popular with the Russian people, with approval ratings dropping from more than 70 percent to less than 50 percent.

The price tag is also growing. Prime Minister Mikhail Kasyanov has stated that in 2000 the war cost "an extra 2 billion ($70 million) to 3 billion rubles a month." This does not include the cost of lost military equipment and other supplies that were taken out of old Soviet stockpiles. As these reserves are depleted, new procurements become inevitable, adding to the total cost of the war.

The change of direction announced by Putin is not a sign of strength, but an act of desperation. While Russian troops in Chechnya continued month after month to bomb hills and villages without any sign of progress, security officials were arguing in Moscow that a change in tactics would bring victory. It became fashionable to recall the experiences of the 1940s and 1950s, when Soviet forces successfully put down separatist guerrilla movements in both the Baltic republics and in western Ukraine.

Last spring I participated in a round-table discussion on anti-guerrilla warfare with some former KGB officers. One of them was a veteran who had served as an undercover agent during the Stalinist anti-guerrilla campaign waged against nationalist Ukrainian rebels.

This worthy old gentleman said: "It's easy to win an anti-guerrilla war: Just put a company of soldiers in each Chechen village and give them a KGB operative as chief."

Now, it appears that the Kremlin has acted upon this advice. Not only has overall command been given to the FSB, but a new plan of troop deployment is being implemented: Some 200 Chechen villages and towns will now have permanent Russian garrisons, consisting of 150 to 500 solders. These troops will be supported by local pro-Moscow Chechen militias, while operatives from the FSB will be in overall control.

But copying Stalin's approach may not work today. Stalin's security services were highly disciplined and they knew failure to obey orders or any corrupt practice would be most severely punished. Today, in contrast, army officers in Chechnya openly disobey orders coming from the FSB or the Interior Ministry and vice versa, while rebels often bribe their way through check-points.

Moscow may be using Stalinist tactics in Chechnya, but it lacks Stalin's means or his bloodthirsty determination. Stalin would have swiftly ended the war by sending all Chechens - loyal or otherwise - to freeze in Siberia, without even paying any lip service to human rights.

Nonetheless, the Stalinist victories in the Baltics and Ukraine turned out to be defeats in disguise. When Mikhail Gorbachev tried to reform the Soviet Union, it was precisely in these regions that the most vicious separatist movements emerged. Today Russia has lost Stalin's acquisitions in the Baltics and Ukraine, while the Chechen deportation in 1944 is one of the main inspirations for the present rebellion there.

Today, there are up to 80,000 servicemen from various Russian military and security services in Chechnya. In the coming months, some of them may be withdrawn, but enough of them will stay and continue to pillage, fueling further resistance. The unruly pro-Moscow Chechen militia will most likely do the same.

So what happens when the new tactic turns out to be as ineffective as the old one? Will the Kremlin accept the inevitable and begin to seek a serious resolution to the Chechnya problem or will it instead copy Stalin's bloody endgame?


Pavel Felgenhauer is an independent Moscow-based defense analyst.

TITLE: EDITORIAL
TEXT: So Much for Taking on The Regions 


"Respected citizens, you know better than I do that government laxity hits millions of ordinary people hardest. The price we pay for lack of discipline is our personal security, the inviolability of our property and homes, and, finally, our prosperity and our children's prosperity. That's why we need a strong and responsible government."


- Vladimir Putin on the need for federal control over the regions, 
May 17, 2000.



WHEN President Vladimir Putin went on national television eight months ago to announce a radical plan to tighten federal control over the regions, we found ourselves agreeing with much of what he said.


Yes, we agreed, it is unacceptable for governors to be able to violate the constitution with impunity. Yes, it is absurd that governors should double as legislators, passing the laws that they are charged with executing.

So as Putin moved swiftly to limit the power of regional leaders, we were eager to see how far he would take the reforms. While we sometimes wondered whether Putin would simply replace Russia's multiple authoritarian regimes with a nationwide one, we couldn't help hoping that Putin was sincere about ending the chaos in the regions.

That hope was gradually chipped away as the Kremlin made concession after concession to the regional elite. Putin kicked the governors out of parliament's upper house, but replaced them with the governors' direct appointees. He said federal law should come before the whims of bureaucrats, but continued to ignore numerous legal breaches.

The last flicker of hope was snuffed out last week when, with the apparent consent of the Kremlin, the State Duma passed a bill that would allow 69 of the 89 regional leaders to run for a third and, in some cases, a fourth term. (Currently, the law limits them to two terms.) A disturbing precedent is being set: If a federal law rubs regional leaders the wrong way, don't enforce the law, just revise it.

According to pro-Kremlin analyst Sergei Markov, Putin has offered the governors a deal: "You lose your federal influence in exchange for full control over your regions." 

In other words, as long as the governors don't challenge Putin's authority, they can continue to rule as they have been - bullying the local media, manipulating the courts, determining who can and who can't do business in their regions.

And what of the "millions of ordinary people" hoping for "strong and responsible government?" Thanks to Putin, we already know what this deal will cost them: their personal security, the inviolability of their property and homes, their prosperity and their children's prosperity.

TITLE: POWERPLAY
AUTHOR: Yevgenia Albats
TEXT: Kremlin Prefers Payments Made Under the Table 


THE Prosecutor General's Office - the main state body overseeing the rule of law in Russia - has distributed a list of journalists who received loans from Media-MOST. This list has been widely circulated around Moscow and is currently being studied by top Kremlin officials. Tongues were wagging all weekend: "Did you hear that so-and-so received $120,000?"


Leonid Troshin, the prosecutor's press spokesman, gave an angry interview in which he chewed over the details of supposedly secret (at least until they are presented in court) documents obtained during the latest search of Media-MOST's offices. "Journalists who have been generously fed by this fugitive entrepreneur [i.e. Media-MOST owner Vladimir Gusinsky] are insulting investigators who are just doing their job."

Aside from the fact that the prosecutor's list includes some journalists who did not work for MOST's own media - which indeed raises questions about their integrity - it is hard to understand what has Troshin so riled up.

During the post-Soviet period, I have worked for numerous Moscow media outlets, including NTV in 1997 and Russian State Television (RTR) during the summer of 1998. I received salaries from both organizations and, therefore, I know this subject very well.

In the case of NTV, I received my salary by direct deposit into my bank account. All the proper paperwork was completed and submitted to the tax authorities.

Russian State Television had an entirely different scheme. My salary came in two portions. About 10 percent of my actual salary was paid to me directly from their cashier in rubles. The other 90 percent was not recorded anywhere and was handed to me in a plain envelope. Repeated efforts to legalize this situation (in order not to feel like a criminal each month) were rejected by the then-RTR bosses, which included current Press Minister Mikhail Lesin and current Culture Minister Mikhail Shvydkoi. They simply gave me the usual reply: The company must pay a 38.8 percent (as of Jan. 1, 2001, this was reduced to 35.6 percent) tax on employee salaries. Why give this money away? Such systems of double accounting exist in many state and non-state companies and are certainly no secret to anyone.

Of course, NTV used its own strategies to avoid paying taxes, as do virtually all businesses operating in Russia. But none of these schemes directly concerned and implicated the journalists.

The RTR system, which is similar to those used by many media and non-media companies, included "envelopes" for loyal employees and low salaries for disloyal ones. 

NTV, to its credit, did not involve its journalists in such a system, and journalists caught engaging in this practice were summarily dismissed. But this didn't happen often for the simple reason that their salaries were sufficiently high and they had little incentive to earn money on the side. Ironically, however, these journalists are now being threatened by the prosecutor.

The message from the prosecutor and his Kremlin bosses, then, is clear enough. Use double accounting if necessary. Use all the "envelopes" you want. Avoid taxes. But don't put anything on paper. And you'll have no problems.


Yevgenia Albats is an independent Moscow-based journalist.

TITLE: A Failed Economic Model
AUTHOR: By David Kotz
TEXT: NINE years ago Western economic advisors were certain that their plans for Russia's rapid transition to the market would bring prosperity and progress. After the 1998 financial debacle, no one could deny the abject failure of the Western-inspired "neoliberal" economic model for Russia. Recently, a new dogma has arisen in the West to explain why such excellent advice led to crime, corruption, and economic collapse. It seems that nothing was wrong with the advice - the problem was a missing element in Russia, namely "rule of law." That is, Russia lacked a law-based state and its key associated features, clear property rights and impartial enforcement of contracts.


This flaw in Russia's institutional make-up is traced to the Soviet inheritance, to centuries of despotism, or to something about Russian culture. Just reform the legal system to create a law-based state, while "staying the course of economic reform," and foreign investment will pour into Russia while Russia's domestic investors will turn from asset stripping and capital flight to productive investment in Russia's future.

This latest piece of Western advice fails to grasp the cause of Russia's economic and social woes. While rule of law is certainly desirable, its absence is not the underlying cause of Russia's economic debacle. It is the very economic model urged on Russia which has brought both economic collapse and a lawless society.

The neoliberal model is based on the triad of liberalization, privatization, and stabilization. The first means eliminating government regulation of economic activity, the second means privatizing not just government enterprises but also responsibility for individual economic welfare, and the last means stabilizing the price level by cutting public spending and keeping money and credit scarce.

This economic model has made productive investment generally unprofitable in Russia. The first act in January 1992 suddenly freed prices, setting off runaway inflation that expropriated savings and drove real incomes to subsistence levels, shrinking the domestic market virtually to nothing. Continuing cuts in public spending and public investment have further reduced domestic demand. The rapid opening of Russia's market to imports assured that what little remained of the domestic market would be dominated by powerful Western firms, with their superior marketing and financial resources. Tight monetary policy has kept credit scarce and expensive, assuring that only investments promising a very high and quick return will be attractive.

Under such conditions, those who obtained property from the privatizations typically found that they could generate profits only by unproductive and often illegal activities. The Western-inspired policies impoverished state employees, rendering them unable to resist bribes or effectively prosecute law-breakers. These conditions - produced by the neoliberal model, not something in Russia's culture - explain why extortion, skimming revenue from enterprises and sending capital abroad have flourished while productive activity and living standards have plummeted.

Ironically, U.S. history exposes the shallowness of the currently fashionable "rule of law" hypothesis. During the Robber Baron era of the late 19th century, neither clearly defined property rights nor effective rule of law prevailed. Big capitalists maintained private armies that fought one another, stole from the state and from each other, paid judges to rule in their favor and had their own captive newspapers and politicians. Yet these same capitalists were lacing the country with railroads and building giant, efficient steel mills and oil refineries. The reason was that, despite the absence of effective rule of law, conditions were favorable for making great profits through productive investments.

Why? Superior foreign competition was kept at bay by a protectionist government, which levied high tariffs against those imports that most threatened America's newly developing industries. The relatively high wages that prevailed in the United States despite its underdeveloped economy during that period, along with the presence of a large class of prosperous farmers, created a potentially large domestic market. The government financed the building of a canal and rail transportation system to make that large internal market a reality. Thus, the absence of effective rule of law did not deter a large volume of productive investment, which soon made the United States the world's leading manufacturing nation. 

Contemporary China provides another example. Western analysts decry the absence of rule of law or clearly defined property rights in China. China's developmental state has followed policies that are the opposite of the neoliberal model, including expansionary monetary policy, growing public spending and public investment and significant regulation of the domestic economy as well as of international trade and financial flows. Under such policies, China's economy has grown at nearly ten percent per year for the past two decades. Despite the absence of a law-based state, China has become the largest recipient of foreign direct investment of any developing country.

Russia's population would benefit from a law-based state, but that aim can never be attained under the neoliberal model. Overcoming Russia's dead-end trajectory requires the abandonment of that model, not just in words but in deeds. It is not enough to speak of building a strong Russian state while economic policies are changed only marginally and capital flight accelerates.

The precise shape of an effective development strategy varies from one country to another, depending on a country's history, culture, natural and manmade endowments, and place in the international order. But history teaches that some form of developmental state, capable of stimulating, promoting, and guiding economic recovery and development, is a necessary basis for economic progress in a country facing powerful foreign competitors.


David Kotz is professor of economics at the University of Massachusetts at Amherst and co-author of "Revolution from Above: The Demise of the Soviet System." He contributed this comment to The St. Petersburg Times.

TITLE: Astrologer Fortells Fate of Unpredictable Land
TEXT: In Russia, it's hard to predict what will happen next week, let alone next year. For those cursed to live in interesting times, the stars are as good a place to turn as any to find out what the future holds. Astrologer Pavel Globa - the rector of Moscow's Institute of Astrology and former television prognosticator - has turned the country's doubt and uncertainty into his own personal good fortune, becoming one of the country's best-known experts on the fate of a land. Globa talks to Kester Klomegah about 2001's catastrophe lineup, colors to wear in the Year of the Snake, and why even star-readers can't predict a bad marriage. 


Q: What's behind your popularity?

A: The thing is, I was lucky to become Russia's "famous" astrologer. Before me, nobody knew about astrology. It's like the saying: "He who scores the goal becomes the most popular" - why is Pele so popular? It's just because through the years I have tried to satisfy my clients and they, in turn, have gained confidence in my prognoses. 




Q: Do you have a lot of clients?

A: For some reason, Russians are the kind of people who believe in predictions about the future. They are people who like to consult someone to find out what will happen next. Based on this, politicians, businessmen and ordinary people all periodically come looking for guidance. It's possible that the number of clients will increase even more; Russia is becoming very unstable, a trend that's pushing people to turn to astrological consultations. Anytime there's an unusual occurrence, people will rush to find out what the future holds for them. 




Q: What brought you to astrology in the first place?

A: Maybe I was luckier than many people in the former Soviet Union. My grandfather was an astrologer who spent 15 years in the Stalinist camps, not only for practicing astrology during that time but also for other reasons. From childhood on, I was influenced by my grandfather and this branch of science. So it started out as more of a childhood hobby than receiving formal instructions from a teacher. 




Q: At what age did your interest in astrology begin?

A: In 1965, when I was about 6, my grandfather began to tell me a lot about astrology, about how to use the movement of light, clouds, stars and constellations to determine people's fates and environmental events. It was something that he had learned from his grandmother. 


They both had extrasensory perception and the analytical ability to predict anything using nature. This aroused my interest in astrology. 



Q: Do you still work with your ex-wife Tamara [Globa, also a well-known astrologer]? Did you predict that your marriage would collapse?

A: She was my second wife. It's true, we worked together in harmony. But conflicts were a large part of our social lives and there was no way to escape from that. 


What unites us now is our son and nothing more. We realized that we weren't going to be together, and we saw the signs. 



Q: What were the main reasons for your divorce?

A: We aren't accustomed to speaking about our divorce ... probably we were just different ... but maybe there were other, bigger reasons. But the main problem was that we just had different interests and a different approach to pursuing our individual goals. 


We never quarreled, in spite of all the rumors that spread through business circles. Take the case of Bill and Hillary Clinton - wouldn't it have been much more honest for them to just file for divorce? And our story wasn't even nearly as horrible as the Monica Lewinsky scandal.


Q: What kind of education do you provide at your school?

A: My institute has existed for 11 years and handles a lot of different courses. The most significant part comprises astrological science, which is obviously what we put the biggest emphasis on. 


We have about 1,500 students overall in Moscow and St. Petersburg, and in our affiliates in Kiev, Minsk and Kazakstan. We educate future astrologers. The curriculum is quite serious. 



Q: How would you describe 2000, the last year of the last millennium?

A: In previous predictions, I said that there would be a lot of catastrophes toward the end of the century. 


The situation in Chechnya would be intensified, there would be air disasters, earthquakes and many other accidents. 

The planets were in Taurus, and as a result most of these incidents took place both in the air and in the water. The sinking of the Kursk submarine, the fire at the Ostankino TV tower and a number of plane crashes were the most disheartening of these. 

Many of these disasters, I think, could have been avoided if people had taken information about these predictions seriously. 

These were deeply significant catastrophes and I think it's only the beginning; there are many more to come. 



Q: Did you also make predictions about Russian politics?

A: In the beginning of 1998, I predicted that there would be a crisis in August, and there was. 


I also said that Russia would have early elections and that Boris Yeltsin would leave power before his term expired. Many people marveled at this information. 

Another interesting forecast was my prediction that Yeltsin's successor would definitely be a KGB, or Federal Security Service, official who would be plucked from relative political obscurity. This indeed occurred in the summer, exactly as I predicted it - although I didn't name Vladimir Pu tin specifically. 



Q: Do politicians and businessmen consult you regularly?

A: Many people in Russia and the other CIS countries come to me for business and political consultations, but secretly. They ask different questions related to their social and political lives. 


They are also interested in knowing about their family and state of health. But in general I don't talk about political and business strategies. That's something that can't be predicted. 



Q: What does the new year hold in store for us?

A: It's a very frightening time, as we usher in the new year and third millennium. First of all, there are constellations that point to the necessity for severe reforms in Russia; an economic crisis much like the one in August 1998 is still looming over the country. During the 20th century, the years of the snake [according to the Chinese calendar] were 1905, 1917, 1929, 1941, 1953 and so on - all connected with revolution and crisis. 


Of course, there won't be a revolution in Russia, but the expectation is that there will be a critical situation, and possibly the death of prominent political figures. 

Russia won't fall apart, but serious bloodshed is possible. Without doubt, southern Russia will see an escalation of tension, and heightened military clashes in Chechnya. President Putin will reshuffle the Cabinet next summer. Little-known people will come to the political fore and go on to play great roles.

This will be a year of crisis in Ukraine, Central Asia and Kazakstan. The crisis will hit sharply, and create deeply unpleasant conditions. There will be another submarine accident near the coast of Japan or in the Pacific Ocean. 

Also, revolutionary situations will escalate abroad, especially in Islamic countries. Many political figures in the Islamic world will retire. 

In the United States, the next two years will be hard for George W. Bush, who will receive a threat on his life. It may be connected with the fact that the year in which he was elected ended with the number 0. Unfortunately, statistics support this fact. 

A president will be assassinated in 2003 as the result of a serious terrorist act. 2003 is the beginning of the age of Aquarius, which threatens the Earth and our lives as well. 

In Russia, there will be political instability. We will see, if not civil war, then a coup similar to that of October 1993, when the opposition stormed the White House. 



Q: Are there any limitations in the practice of astrology?

A: We need proper information in order to reduce errors in our forecasts. The rapid environmental and climatic changes also make it hard for us to predict things accurately. 


Winters have now turned into springs, so to speak. Global warming is a factor limiting accurate astrological prognoses.



Q: Which color do you recommend for this year and why?

A: White is a good color for the Year of the Snake, regardless of what fashion designers might recommend. And bright colors are a very good way to start a new century.




Q: How should we try to behave this year?

A: With great compassion and sympathy. We should think clearly and avoid rushing into decisions. I think it's important for everybody to know his individual sign in order to know how to live and behave in relation to others. 


This is the Year of the Snake and we have to be extremely careful in order to avoid being bitten. Snakes are dangerous. This year will be a dangerous one.

TITLE: Judge Orders Arrest of Pinochet, Forces Trial Closer
PUBLISHER: Reuters
TEXT: SANTIAGO, Chile - A Chilean judge on Monday reordered the arrest of ex-strongman Augusto Pinochet on charges of his alleged involvement in the murder and kidnap of leftists during his 1973-1990 dictatorship, brushing aside a bid to stop any trial of the aged general on health grounds.


Human rights lawyers said that Judge Juan Guzman, who has been investigating Pinochet for more than three years, ordered the arrest of the Chilean military's father figure in a document filed to a Santiago court.

Guzman overlooked a bid by Pinochet's lawyers to halt any prosecution of the 85-year-old retired general because of his frail health, preferring to carry on with his attempt to force Pinochet to face trial.

Lawyers for Pinochet, who remains holed up in his coastal estate about 80 kilometers southwest of Santiago, are expected to try to block the court order with an appeal. But there was no immediate reaction from his defense team.

Human rights activists, who have long held the belief that Pinochet was responsible for the more than 3,000 deaths and disappearances during his authoritarian 17-year rule, hailed Guzman's decision to go ahead with the prosecution.

"Without doubt, this is an historic day," human rights lawyer Carmen Hertz told reporters at the packed courthouse where Guzman's decision was leaked to the media. "The road to justice opens in our country."

"The result is wonderful," said Communist Party leader Gladys Marin, whose husband was one of the victims of the Pinochet-era violence. "After so many years our fight was not in vain."

Pinochet was discharged from Santiago's Military Hospital on Saturday after being rushed to the clinic on Friday with a severe headache and a slight, transitory loss of consciousness. Doctors said he was at risk of suffering a stroke.

A hospital report said he had a slight loss of strength on his left side and congestion with water retention and a transitory blockage of a blood vessel to the brain. But he was released when his doctors said he could continue any treatment and recovery at home.

Guzman first ordered Pinochet's arrest on Dec. 1 for his alleged involvement in the disappearances and deaths of more than 70 leftists who were victims of the so-called Death Caravan military squad that swept across Chile in the weeks after Pinochet's 1973 coup.

Chile's Supreme Court blocked that arrest and told Guzman he first had to interrogate Pinochet and also allow psychological tests to be carried out on the general to ascertain his mental state - a right for those over 70 facing trial in Chile. If he were declared insane or demented he could avoid trial.

Guzman complied with the Supreme Court's requirements when he questioned Pinochet at his Santiago residence last Tuesday. Mental tests were carried out in mid-January.

The results of those tests have not been published but one of Pinochet's doctors, Sergio Ferrer, who observed the examinations, said two weeks ago that Pinochet had some dementia, which included a loss of memory.

TITLE: Quake Relief Effort Races Time
AUTHOR: By Maria Abraham
PUBLISHER: Reuters
TEXT: BHUJ, India - Rescuers picking through the rubble of India's worst earthquake found a small boy trapped alive Monday, but three days after the quake many towns and villages struggled to cope without help from the outside.


Prime Minister Atal Behari Vajpayee arrived in the ancient town of Bhuj in Gujarat state, western India, which bore the brunt of Friday's quake, and complained that villages in the region were not getting necessary help fast enough.

"Relief work needs to be speeded up," he told reporters. "The government is surveying the villages. There is a lack of relief work in the villages."

The disaster has killed an estimated 20,000 people. The World Bank said it would immediately release $300 million for quake relief. Finance Minister Yashwant Sinha said the government planned to ask for $1 billion from the World Bank and $500 million from the Asian Development Bank to help rebuild. Vajpayee announced federal aid of 5 billion rupees ($107.6 million) for Gujarat.

Differences between India and its estranged neighbor Pakistan surfaced over the issue of aid. Pakistan's military ruler said India had declined its offer of aid. Indian officials denied specific aid had been offered.

In Anjar, a town to the south east so far bypassed by the main rescue effort, the smell of decomposing bodies hung in the air.

But Vajpayee said there had been no reports of disease breaking out thus far in Gujarat, which has grown prosperous as the nation's second most-industrialized state.

Rescue teams from India and abroad raced against time to clear decomposing bodies in the major centers such as Bhuj and Gujarat's main city Ahmedabad. Fear of collapsing buildings, fresh tremors and disease hampered their every move.

Rescue workers in Bhuj said Monday evening a three- or four-year-old boy had been found alive but they feared they would have to amputate a limb to get him out.

"They have asked for surgeons for an amputation," Mike Thomas, a member of a British rescue team, told Reuters. The boy's brother was already dead and his mother died beside him soon after rescuers arrived.

In New Delhi, people thronged a Red Cross building to donate blood for those injured in the quake, which the U.S. Geological Survey put at 7.9 on the Richter scale.

Survivors of the disaster, which injured tens of thousands of people and drove hundreds of thousands from their homes, wavered between fear and numb resignation as the full impact of the tragedy unfolded.

Jayantibhai, an automobile parts trader, had been waiting near his wrecked home in Bhuj since Friday to ensure a proper cremation for his mother, whose body was trapped under rubble.

"That is all I want to do now," he said.

Many people spent another night in the open around bonfires, some with white bundles next to them containing bodies of relatives and friends. Smaller tremors continued to hit parts of western India Monday evening.

In Bhuj and in villages nearby, trucks ferried firewood for cremations. One television report said the air force was flying in wood for funerals as local supplies dwindled.

Rebuilding after the quake was expected to cost billions of dollars. The Federation of Indian Chambers of Commerce and Industry put building and construction losses across Gujarat at 150 billion rupees ($3.2 billion).

"It's obviously a major, major earthquake comparable to Armenia in 1988 and Turkey in 1999," British rescuer Andy Burns told reporters.

TITLE: WORLD WATCH
TEXT: Sharon Leads Polls

JERUSALEM (Reuters) - A new opinion poll on Monday put Ariel Sharon firmly on course to become Israel's next prime minister after peace contacts with the Palestinians were put on hold and violence flared in the Gaza Strip.

Israeli troops shot dead a 21-year-old Palestinian during a clash near a Jewish settlement in Gaza and shooting erupted during the night after a relative lull in fighting.

Prime Minister Ehud Barak on Sunday called off peace contacts with the Palestinians until after the election on Feb. 6, halting efforts to arrange a summit this week with Palestinian President Yasser Arafat. Barak took his decision after Arafat accused Israel of waging "a savage and barbaric war" in a speech at the Davos economic summit.



Spice Island Riots

PEMBA, Tanzania (Reuters) - Tanzanian security forces regained control of the "spice islands" of Zanzibar on Monday after three days of street battles with opposition protesters that left at least 37 people dead.

The fighting began after the opposition Civic United Front (CUF) called demonstrations to demand a rerun of widely discredited elections on Zanzibar last October. The government declared the protests illegal and arrested CUF Chairman Ibrahim Lipumba.

Soldiers and police, some with bayonets on their rifles, roamed in pickup trucks on Monday and set up roadblocks to discourage fresh demonstrations.



Neo-Nazis Held

OSLO, Norway (AP) - Five neo-Nazis have been detained in connection with the weekend stabbing death of a black teenager, which prompted a rally Sunday denouncing what was seen as a racially motivated slaying. 

Hundreds of people rallied Sunday at the site where 15-year old Benjamin Hermansen was killed late Friday in the multiracial suburb of Holmlia as he was swapping cell phone covers with a friend. 

Police detained three men in their 20s and two 17-year-old girls on Saturday, saying the suspects were active in the neo-Nazi group known as Bootboys, which has about 200 followers. 

All five were charged with murder, which carries a sentence of up to 21 years. They were caught in an Oslo apartment filled with Nazi paraphernalia, police said. Police confiscated books by Rudolf Hess, posters for "white power" concerts, and a pitbull and a snake. 

Police said all five had criminal records, ranging from attempted murder to robbery and vandalism. 



Davos Counts Cost

ZURICH, Switzerland (AP) - Switzerland counted the cost Sunday of mayhem unleashed by anti-globalization protesters outraged at being the target of the country's biggest security operation since World War II.

As political controversy mounted over whether police themselves were to blame for Saturday night's violence, newspaper commentaries likened Switzerland to a dictatorship for banning demonstrations against the World Economic Forum meeting.

Demonstrators gathered peacefully Sunday afternoon in Zurich - the scene of pitched battles late Saturday between riot police firing tear gas and water cannons and protesters prevented from reaching the meeting in the Alpine resort of Davos, about 150 kilometers away.

Police arrested 121 people, mostly Swiss and Germans. Two policemen were injured by stones and one soldier was trampled to the ground and his weapons stolen. Authorities said the damage ran into the hundreds of thousands of dollars. 



Anti-Wahid Protest

JAKARTA, Indonesia (AP) - Police fired tear gas and warning shots as thousands of rock-throwing demonstrators stormed the gates of Indonesia's parliament on Monday in the largest protest yet against the country's president. 

Three students were badly beaten by police as running battles broke out on the lawns of the heavily guarded legislature. 

The estimated 10,000 protesters had marched through the streets of the capital, demanding that President Abdurrahman Wahid quit over two corruption scandals. As the mob broke down the gates, lawmakers met in a closed session inside the legislature to hear the results of a long-running investigation into the two affairs that have bogged down Wahid's 15-month administration.



Critical Paper Bombed

HARARE, Zimbabwe (AP) - A series of blasts rocked the printing works of Zimbabwe's main independent newspaper Sunday morning, wrecking its printing press and possibly putting the fierce government critic out of action for weeks. 

Six men, one of them armed, arrived at the Daily News printers outside the capital of Harare, according to guards. Three attackers forced the guards onto the ground while the others smashed their way into the main building. At least three explosions were heard, and the saboteurs fled in two pickup trucks, the guards said. 

Police spokesman Wayne Bvudzijena said police had been deployed to protect all media institutions around the country to prevent similar incidents. 

The attack came hours after Information Minister Jonathan Moyo threatened to close the newspaper, which has an audited circulation of 50,000.

TITLE: No End in Sight for Dual-Pricing System
AUTHOR: By Tom Masters
PUBLISHER: Staff Writer
TEXT: TROUBLE SHOOTER 

In the on-going battle of wills between St. Petersburg's foreign residents and some of the city's most sacred institutions over so-called "foreigner prices," it can safely be said that the latter still have the upper hand, despite a constitutional ban on discrimination.


The dual-pricing system - according to which foreigners were charged often enormous mark-ups for anything from museum entry to plane tickets during the 1990s - for years outraged and angered in equal measure.

Articles 19 and 62 of the Russian Constitution both specifically guarantee legal equality for all, "irrespective of ... race, nationality, language [and] origin," forcing theaters, galleries and museums in St. Petersburg to resort to loopholes to keep the lucrative foreign ticket revenue rolling in.

An evening at the Mariinsky Theater will still cost any Russian citizen 8 to 500 rubles ($0.25 to $17), while even a seat in the third tier will set a foreigner back a hefty $20, and a good seat $100 or more.

The theater's press secretary, Marina Shtager, is eager to point out that there is no discrimination involved, however. "All tickets cost $60 to $100, but there is a discount for Russian citizens, that's all. It's not discrimination, it's just a concession," she explained.

By dressing up a disparity in price as a benevolent concession rather than a sly markup, St. Petersburg's museums and theaters avoid the charge of illegality. This savvy loophole thus allows the Hermitage, Russian Museum, Mussorgsky and the Philharmonic, among others, to continue the dual-pricing system legally - something that is a source of bad blood between the otherwise highly respected institutions and the expatriate community.

While the concessions are also often available to long-term foreign residents who work or study in St. Petersburg, this is only the case when they are able to present the correct documentation, which is frequently easier said than done. Given the onerous nature of Russian bureaucracy, foreigners working here often do not have official work permits.

In a detailed statement, Mariinsky marketing director, Yekaterina Sirakanian, explained that a foreigner able to produce documents such as "a work permit or business visa, i.e. any document showing that they work and live in Russia," may also get discounted tickets. But this is unconvincing as business visas do not always denote long-term residency in Russia and in the past have been rejected by Mariinsky ushers. Moreover, they do not pacify the fierce ushers at the theater, who are renowned for their foreigner-spotting sixth sense.

What are the institutions' excuses and how much do they earn from the dual-pricing system?

Take for example the Hermitage, which charges a flat rate of 250 rubles ($9) per visitor and, like the Mariinsky, gives a "discount" of more than 90 percent to Russian nationals and foreigners who can prove that they work or study in St. Petersburg. The museum has, according to its own statistics, 2 million visitors a year. Of these, 300,000 are foreigners who generate some 75 million rubles ($2.7 million). 

The Russian Museum also slaps on an incredible 1,100 percent markup on tickets for foreign citizens, under the guise of a "Russian concession."

"By mid-No vem ber last year we had 28,000 foreign visitors. The money they bring in is just a drop in the ocean, but it's all money, it's all important," said Tatyana Pchelyanskaya, the museum's press secretary. 

Philharmonic Great Hall director Leonid Sats bristles at the suggestion of unfairness. "As a rule, the [Russian] intelligentsia who come to our concerts have very little money and for this reason we give them concessionary rates, which we also offer to foreign students and workers with permits."

The standard defense is that St. Petersburg offers world-class art, opera and ballet and therefore charges world-class prices. 

"[$60 a ticket] is cheaper than the Metropolitan Opera or Covent Garden and in the opinion of critics, our productions are no worse ... they are no cheaper to stage and our government gives no money to support our art," explained the Mariinsky's Sirakanian.

Legislative Assembly lawmaker and head of the Culture and Education Committee Leonid Romankov agreed that the system of discounts is "regrettable but legal," adding that "as the average Russian income rises, the practice will probably become far less common."

These words are hardly soothing for those who continue to suffer from a system that most consider racist, unfair and reflecting a now-defunct financial dichotomy between rich foreigners and poor Russians that existed in the early '90s. 

While it may not be ridiculous to assume that the average visitor from Western Europe or North America can afford the price hikes - and indeed, may not even notice that they are being charged inflated prices - the system also affects people from countries far poorer than Russia, including those from the ex-Soviet Republics who are usually not entitled to any discount.

And though there is no doubt that cultural institutions all over Russia suffer from a lack of funding, there can ultimately be no justification for a system that penalizes people due to their nationality. If Russia is to conform to international conventions, it will have to find other means of financing its museums, theaters and concert halls.

As to what foreigners can do when affected personally by foreigner prices, advice varies. Legally, there is nothing amiss in employing concessions for Russian citizens; a legal infringement has only been made when prices are marked up for foreign nationals. Letters of complaint are unlikely to do more than alert the management of visitor disgruntlement, and judging by the reaction from most press services when asked to comment on the issue, this is a problem they are conscious of.

By far the best system to avoid paying extra is the simple-yet-effective one of keeping quiet and getting a Russian friend to do the talking.

Legally, this is an ambiguous situation to place yourself in, but suffice to say, nobody has been jailed for impersonating a Russian citizen to date and it could even be argued that such subterfuge adds a little James Bond-style excitement to even the dullest opera productions in town.

TITLE: Agassi, Capriati Triumph At Year's First Grand Slam
AUTHOR: By Steven Wine
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia - Jennifer Capriati's astounding Grand Slam breakthrough and a stunning stumble by Venus Williams at the Australian Open left the balance of power scrambled atop women's tennis.


Seldom, if ever, has the WTA Tour enjoyed such a depth of championship talent. Five players have won the past six Grand Slam titles, and that group doesn't include top-ranked Martina Hingis.

The jumble will make tournaments delightfully difficult to predict.

"It's going to be a great year," Capriati said.

She was speaking for herself, but fans are in for a treat, too, especially if Capriati can sustain the brilliant play in Melbourne that resulted in her first major title. She beat Hingis 6-4, 6-3 in Saturday's final.

The victory will vault Capriati to seventh in next week's rankings. It's the first time she has been in the top 10 since early 1994, when she had abandoned the tour at age 17 because of drug and personal problems.

Now she's a happy, mature, confident 24-year-old who seems determined to make up for lost time.

Her upset victory came only 48 hours after another shocker - Williams' 6-1, 6-1 loss to Hingis. Just when it appeared the Wimbledon, U.S. Open and Olympic champion was ready to dominate women's tennis, she instead endured the most lopsided loss of her career.

Serena Williams played better than her sister in the early rounds before losing to Hingis in the quarterfinals.

For Hingis the victories were doubly significant, because she beat both sisters in the same tournament for the first time. In response to their overpowering strokes, she has gotten stronger herself and improved her serve.

It's two years and counting since Hingis' fifth and most recent Grand Slam title, but she remains the most consistent player on the tour and a threat to win any event.

But there will be more obstacles than ever with the inclusion of Capriati, who is capable of winning on every Grand Slam surface. She reached the semifinals at Wimbledon, the French Open and the U.S. Open by age 15.

Capriati's first Grand Slam title was no fluke. In the final three rounds her opponents - winners of a combined eight Australian Open titles - were seeded fourth (Monica Seles), second (Lindsay Davenport) and first (Hingis).

One player not surprised by Capriati's breakthrough was Hingis.

"She's a great player," Hingis said. "I've always said that. When she's on a roll, she's really tough.


*********

A few hours after winning the Australian Open, Andre Agassi returned to his hotel soaking wet.


Not because of the match - he hardly broke a sweat in beating Arnaud Clement 6-4, 6-2, 6-2 Sunday. Agassi celebrated with a private swim, apparently duplicating Jim Courier's dive into the nearby Yarra River after winning the title in 1992 and 1993.

"We took a dip," said Agassi's coach, Brad Gilbert, who was soaked to the skin, too.

Agassi and Gilbert showed up late for a post-tournament photo shoot and told Jane Fraser, a representative of the International Tennis Federation, the delay was because of an impromptu splashdown.

With seven Grand Slam titles, Agassi is looking for new ways to mark them. The most naturally gifted baseline basher of his generation gives the impression he's improving with age.

Agassi was an international celebrity at 18, a Grand Slam finalist at 20 and a Wimbledon champion at 22, so he's not exactly a late bloomer. But on Sunday he joined a rather exclusive club of Grand Slam champions in the 30-and-over division.

Boris Becker, Stefan Edberg, Ivan Lendl, John McEnroe and Mats Wilander never won a major title after turning 30. Neither did Courier or Bjorn Borg, who both retired before reaching the milestone birthday.

Projections are always dangerous with Agassi because his career has been so erratic. He won the 2000 Australian Open, then didn't win another tournament or reach another Grand Slam final the rest of the year. Injuries and illnesses in his family were factors in the slump.

His experience, baseline power and exceptional fitness are a formidable combination that allows him to wear opponents down. He did it to Patrick Rafter in the semifinal and then to the 23-year-old Clement in the final.

TITLE: On Sieges, Poets, and Business Rankings
AUTHOR: By Tom Masters
PUBLISHER: Staff Writer
TEXT: The weekend marked the lifting of the Nazi blockade of Leningrad, which came to an end 57 years ago on Saturday. Despite the city coming out victorious, over the course of the 900-day siege more than half a million people died of starvation, illness and from bombing raids. In memory of their suffering, a new monument was last week unveiled next to the Anchikov Bridge on the Fontanka river, marking the spot where the city's inhabitants collected water.


By order of the Russian Supreme Soviet, 49 years ago the Vyborgsky District in the north of the city was renamed Stalinsky in homage to the ailing dictator. By 1952, Stalin was suffering from the extreme paranoia that anybody responsible for the deaths of tens of millions might reasonably expect. In a letter to Nikita Krushchev, the generalissimo admitted: "I trust nobody, not even myself." While Stalin had just over a year left to live, it would be a decade before Stalinsky District reverted to its former name.

Another loss to the city came in the form of poet Josef Brodsky's death, five years ago on Sunday. Despite being exiled from the Soviet Union in 1972, and never returning to his homeland, Leningrad was his home town (he, too, went through the blockade as a small child), and a plaque to the Nobel laureate can be found marking his former apartment on Ulitsa Pestelya.

Brodsky died of heart failure in New York, and despite a vocal campaign led by the late Du ma deputy Galina Sta ro voi to va to have his ashes buried in his home town, the poet was eventually buried in Venice.

As the strife in Chechnya gradually became the First Chechen War in early 1995, the St. Petersburg Soldiers' Mothers Organization won recognition for its work from the International Peace Bureau in Geneva. The organization's head, Ella Polya kova, traveled to Chechnya with a BBC film crew to discover the truth about conditions there. The footage later horrified viewers when it was shown on television worldwide.

Also making the headlines in January 1995 was the publication of a Swiss rankings table of desirable business destinations. St. Petersburg came in at an amazing 114th out of 118 (although still managing to beat Moscow). Outraged city tourist authorities claimed it was based on peoples' perceptions rather than reality. Pia Johnson, of Destination Services Russia, added that in Cairo, Istanbul and Rio de Janeiro - all of which beat St. Petersburg - "buildings are blown up and people are shot every day," perhaps herself inadvertently backing up the tourist authorities' original complaints. 


HISTORY'S WEEK

TITLE: RUBLE AROUND TOWN
TEXT: Monday's ruble/dollar.
rates in St. Petersburg:

TITLE: PRICE WATCH
TEXT: Zagorodny Prospect is well known as one of the best shopping streets for electronics in town, where a dozen or so technology stores compete, keeping prices relatively low.
This week, Price Watch compared prices for a television, CD player and VCR there, on Nevsky Prospects and at the Arkos outdoor market in Avtovo. The results revealed a strange combination of large price differences and strangely uniform ones, depending on the product. However, it proved that whatever you might do on Nevsky Prospect, bargain-hunting isn't really an option.

TITLE: Where the Kids Drop In For a Place of Their Own
AUTHOR: By Desmond Tumulty
TEXT: ONE IN 4.7 MILLION 

This is the first of a revolving column in which different authors describe their experiences of living in St. Petersburg.


Being greeted with a shy "privyet" might not be a particular joy for most people, but working with some of the most deprived children in the city makes any small gesture of trust very significant.


I began working at Caritas, a Catholic charity helping all underprivileged segments of St. Petersburg society, more than 15 months ago now, full of idealism and convinced that I would single-handedly be changing lives irrevocably for the better.

Further down the line, inevitably some of that idealism disappeared as the scale of the problems faced both by the children themselves and those of us working with them has become very apparent.

The project itself is a fairly small-scale affair: a youth club or "drop-in" center, where about 20 children - mostly teenage boys desperate to be New York rappers - drop in on a daily basis to eat and hang out with their friends. Caritas finds the children with the help of the police, whom we ask to send us those who are regularly in trouble, with the aim of preventing them from ending up in young-offenders camps.

When resources allow, medical assistance is financed and clothes can be bought for the children - although in some cases this can backfire, as one boy for whom we had bought new boots told us that his mother had immediately resold them and kept the money for herself.

To begin with I was shocked, but not because of the children's appearance, which is actually fairly normal - bristling with hormones and attitood and unsurprisingly scruffy - who wouldn't look scruffy on a diet of cigarettes and rare visits home? 

What shocked me was to see their problems close-up. Most are faced with a dizzying cocktail of social ills at home, and the consequences are disappointingly predictable: drug abuse, alcohol abuse, and an utterly matter-of-fact attitude to violence and sexual activity at an incredibly early age.

School attendance is low and the children have often been held back for more than one year. Indeed, my hopes that the children would all be speaking (or rapping) at least basic English in minutes soon withered.

Despite the very real problems, the drop-in center is far from depressing. As it is "their" place, the children are normally at their happiest there and we often have incredibly good fun. They are entertaining, wise and surprisingly innocent at the same time. They are normally cagey at first, perhaps even more so with some odd-sounding foreigner. At least my Russian is often a source of laughs that the children really enjoy; sometimes mispronouncing words will be cause for hilarity, but the trust you eventually gain - not from all, but from some - outweighs the harsher aspects of the job. 

There's still nothing quite like opening a door and having a gaggle of scruffy teenagers giving you a riotous welcome. To think that you are one of the very few adults whose company they enjoy and whom they trust and are glad to see is also very rewarding.

The gloom factor accounted for, going into work has never yet inspired dread or fear, as it ultimately amounts to spending time with friends. The fact that the friends are almost always teenagers less than half my age makes the friendship no less rewarding. Perhaps the opposite is true.

There are bad days, of course, when, for example, you've found one of the kids on the street beaten up by all the others, or someone has told you of another dreadful episode in their home life, more often than not at the hands of their parents. Moreover, the tougher kids - nearly always the girls, who are far, far tougher than the boys, usually owing to the sexual abuse that most of them have had to cope with - take far longer to trust anybody.

It is particularly rewarding then, when a particularly damaged one, who has looked at you with suspicious eyes every day for almost a year and a half, coyly and with pre-rehearsed special social effort, finally says, "Privyet."



Desmond Tumulty is a charity worker for Caritas.

TITLE: Taking Pride in Cultural Label
TEXT: VOX POPULI 

Do the city's residents consider St. Petersburg to be the cultural capital of Russia? Irina Titova took to the streets to find out. Photos by Segey Grachev.




Vadim Popov, 35, firefighter, St. Petersburg Fire Department:

"Of course I do. When Peter the Great founded the city, St. Petersburg was meant not only to be the cultural capital of the country, but the capital of the nation in all senses. The first Russian university was built here and, accordingly, the whole intellectual elite of the country has always been concentrated in the city."


Diana Parfeyeva, 18, student:

"I think St. Petersburg has more to do with cultural status than Moscow. We have so many theaters, museums. It seems to me as if we have a museum on every corner."


Yekaterina Antonova, 30, publishing editor:

"I don't think Piter is the cultural capital of the country because when we compare the cultural level in St. Petersburg and in other cities, it doesn't seem to be any higher. 


For it to be the cultural capital, the city should have more hotels, concert halls, more direct cultural ads on TV and the desire of the city authorities to participate in it. None of that exists at present. We really need a good cultural administrator.

Meanwhile, most of the information about cultural events comes from Moscow, and we hear nothing about provincial cities such as Krasnoyarsk, Novosibirsk, Omsk and Kazan - where very extraordinary cultural events take place."



Yury Gerlikh, 91, pensioner:

"I think Piter is the cultural center not only because you see cultural sights everywhere but mostly because of its people. When I was in Moscow and asked different people in the street for directions, they usually answered either with a snarl or unclearly. In Piter you hardly ever witness such a reaction."


Alexender Yarmola, 66, assistant of the State Duma deputy, Yuly Rybakov:

"There is much proof of St. Petersburg's culture, including strong cultural values and the human factor. Although the latter, of course, can't be compared with the 1950s and 60s, when people were extremely helpful to one another. The broader picture of Piter's culture is still better than in many other places in Russia, whereas it's worse than in Europe. You can see that just by looking at the transport and the streets."


Boris Deryugin, 74, pensioner working for the 'Unity' faction:

"All my life I worked as a pilot and flew through the whole country - so, I can tell you that I never saw a city more beautiful than this one. More than that, wherever we landed people got very excited when they discovered that we were from Leningrad. Muscovites never received such a reaction.


I think they reacted that way because many of them had been to Leningrad and had witnessed the great hospitality of the local people and told their friends about it."



Masha Luzgina, 12, schoolgirl:

"I think it's the center because we have many monuments, Vla dimir Putin often comes here and we have many deputies. We also have many kind people and my friends and I always give up our seats to old people. I'm always sorry for old ladies."

TITLE: WHAT IS TO BE DONE?
TEXT: Snow is forecast again this week. Before winter passes us by completely, have a go at cross-country skiing at Kavgolovo. From the Finland Station take the elektrichka to Kavgolovo - any train with the final destination of Priozersk, Sosnovo or Kuznechnoye will get you there (trains every 30 min., 8 rubles - just follow people with skis once you start to see them). A path through woods from Kavgolovo station leads to a series of trails where skis can be rented at every turn (look for signs: "prokat lyzh"). Prices range from 10 rubles to 100 rubles per hour, depending on quality. Best to go from 10 a.m. to 5 p.m., though a newly opened, more pricey slope for downhill (gorniye) skiing at Orlinaya Gora has lights and is open later into the evening. Allow about an hour and a half to get there, and check train schedules for return times or you might become fodder for the local wolves. 


Less far afield, and a perfect place to take the kids, is the Mikhailovsky Gardens behind the Russian Museum. As well as plenty of snow and a frozen pond, the steep sides of which make for some good sledding themselves, a large, wooden sledding ramp has been constructed, allowing children (and hardy adults) to sled at break-neck speeds down a ramp and across an ice path through the park. It's all absolutely free, and for parents too afraid to join in, just a few minutes walk from Nevsky Prospect. Bring your own sleds, although small plastic "seats" are available to buy from business-minded babushki.

Ice skating is also possible all over the city (once temperatures sink again). Recommended locations include Park Pobedy (20 rubles entry, 20 rubles skate rental, Tel: 298-32-49) and a small rink at the Tavarichesky Gardens (M. Chernyshevskaya).

Alternatively, for a more unusual night out, try the night-time skating at the SKA Palace of Sport on Friday and Saturday nights. To the strains of Russia's finest estrada, skate the night away. (Entry costs 80 rubles, with skate rental at 60 rubles per hour. 2, Ul. Zhdanovskaya, M. Sportivnaya. Tel: 237-20-73)

TITLE: Favorites Ousted From FA Cup
AUTHOR: By John Mehaffey
PUBLISHER: Reuters
TEXT: LONDON - West Ham striker Paolo Di Canio outwitted the Manchester United defense with a memorable 75th-minute goal to send the favorites crashing out of the English FA Cup.


Di Canio defeated the off-side trap after a shrewd pass from Frederic Kanoute left him with only goalkeeper Fabien Barthez to beat in the Sunday match.

Bizzarely, Barthez stood rooted to the spot, with his right arm in the air, indicating he thought Di Canio was offside. But the linesman's flag stayed down and Di Canio coolly slid the ball into the net with the outside of his right boot.

West Ham had lost on each of its previous 11 visits to Old Trafford, including an abject 3-1 defeat on New Year's Day which could have easily been in double figures.

Cup holders Chelsea repulsed a spirited Gillingham side 4-2 for its first away win of the season only to be rewarded with a trip to Highbury to meet the 1998 winners Arsenal in the fifth round.

The day's other match featured a hat trick of three headers from Dean Holdsworth as first-division Bolton defeated third-division Scunthorpe 5-1.

West Ham travelled to Old Trafford with high hopes despite their depressing record over recent years.

Kanoute was a constant threat and the creative midfield of Joe Cole, Frank Lampard and Michael Carrick was outstanding while the defense adequately protected goalkeeper Shaka Hislop, who was clearly hampered by a leg injury.

United had plenty of opportunities, with Ryan Giggs a constant danger on the left. A Teddy Sheringham shot was cleared from the line and David Beckham had a free kick tipped over the bar.

But although they lifted the tempo to a frantic pace over the final minute they could not grab the equalizer.

"That's the nature of Cup ties," manager Alex Ferguson said. "I have said it time and time again over the year that it's sudden death and if you don't take your chances then you run the risk."

Ferguson said he though Di Canio had been onside and West Ham manager Harry Redknapp was generous in his praise of the Italian.

"It was a great finish from Di Canio," he said. "You wouldn't want anyone but him in that position. They are the best side in Europe, but we deserved it."

Chelsea cruised to a 3-0 halftime lead at the Priestfield stadium, with former Ajax midfielder Jesper Gronkjaer scoring twice after Iceland's Eidur Gudjohnsen had been gifted a third-minute goal.

The match changed character after the interval when Gillingham introduced Iffy Onuora into the attack.

Onuora troubled the Chelsea defense immediately and was instrumental in Paul Shaw's 50th-minute goal.

Gillingham surged back and in the 66th minute Chelsea's unsettled French defender Frank Leboeuf brought down Shaw. Carlo Cudicini deflected Nicky Southall's free kick but Onuora was on hand to score.

Gillingham pressed hard but with a minute of injury time to play Gudjohnsen put the result beyond doubt with his second goal.

Liverpool, which hosts Manchester City in the next round to be played on Feb. 17 and 18, has now been installed as Cup favorites at 11/4.

Arsenal is second-favorite at 4/1 and Chelsea is 11/2.



******

Italy. League-leading Roma won 3-0 at home against Napoli and is three points ahead of runner-up Juventus in Serie A. Defending champion Lazio, in third place, ended Fiorentina's seven-game unbeaten streak with a 4-1 rout. It was Lazio's third consecutive win under coach Dino Zoff.

Spain. Real Madrid increased its lead to seven points with a 1-0 victory at Valencia behind a goal by Raul Gonzalez in the 82nd minute. Real Madrid stretched its unbeaten streak to 11 games. Deportivo la Coruna, which tied Athletic Bilbao 2-2 on Saturday, is in second place.




Germany. Berti Vogts' debut with his new coaching staff was a big success as Bayer Leverkusen routed Stuttgart 4-0 in the Bundesliga. Vogts put together a four-man staff of former German stars during the winter break, each with specific duties. Schalke leads with 37 points, with Bayern Munich and Borussia Dortmund a point back.




France. Lille thrashed Saint-Etienne 4-1 on Saturday to take the lead in the First Division. The victory gave Lille a lead on goal difference over Nantes. St. Etienne is caught up in a passport scandal and has recently changed coaches.




Portugal. Boavista was held to a scoreless tie at Leiria but stayed in first place. Defending champion Sporting Lisbon moved into second place, beating Guimaraes 3-1.


- AP

TITLE: 10 Killed in Oklahoma St. Plane Crash
AUTHOR: By Jennifer Brown
PUBLISHER: The Associated Press
TEXT: STILLWATER, Oklahoma - It was supposed to be a day of Super Bowl Sunday revelry in this college town, with the only worry being whether stores would run out of popcorn, beer and peanuts.


Instead, the mood was as cold and dreary as the rain soaking the streets after the crash of an airplane bringing people home from Oklahoma State University's basketball game against Colorado.

"It's like a part of the school died," said Justin Battista, a freshman walking in the rain toward Sunday morning Mass.

Ten people were killed in Saturday's crash in a field 60 kilometers east of Denver, including two reserve basketball players and six staffers and broadcasters. The pilot and co-pilot also were killed.

The crew made no distress call before the crash, said Arnold Scott of the National Transportation Safety Board.

The school scheduled a memorial service for 3 p.m. Wednesday in the campus' Gallagher-Iba Arena.

At Eskimo Joes, a normally rowdy off-campus hangout, one student couldn't keep from crying as she seated the few customers on the quiet Sunday morning. At a bagel shop near campus, there was no laughter.

"Everyone is pretty melancholy," said freshman Chris Shumake. "They're just walking around like zombies, sort of. You hear of airplane crashes like in Europe and overseas, but you never think of it hitting home."

The hostess at Eskimo Joes, student Crystal Kelso, knew the two players who died, Dan Lawson Jr. and Nate Fleming.

"Nate, he was that walk-on that everybody wants to see get in the game," she said. "I just remember chanting his name a couple weeks ago so they would put him in the game."

Kelso said Fleming planned to help her start a community outreach program with other student athletes. Fleming, who also excelled academically, was going to talk to young athletes about staying out of trouble.

She said Lawson was a good friend, even though they didn't always get along.

"It's always hard when you didn't get a chance to say good-bye, or didn't get a chance to say sorry for yelling at you a day ago or whatever," she said.

Katie McCollon, a high school senior who also attends Oklahoma State, said she and her parents knew many of those killed.

"I grew up in Stillwater," she said. "OSU is like three blocks from my house. It's really close to home. OSU basketball is one of the highlights of the year for my family."

Sports information director Steve Buzzard said he expected the other players would spend the day in seclusion.

"I would be remiss to tell you I know what they're doing today because it's a private time," he said. "They were together last night for most of the night and I would guess they'd be together today."

The campus woke up slowly Sunday, although Sara Byerly was up earlier than most to attend church and check her e-mail at the library.

"Everybody is going to go back to life," she said. "But there are some people who are pretty upset still."

TITLE: Austrians Kept Out of t he Medals in Super-G
AUTHOR: By Erica Bulman
PUBLISHER: The Associated Press
TEXT: ST. ANTON, Austria - France's Regine Cavagnoud won the super giant slalom title and the powerful Austrians were shut out Monday in the opening event of skiing's world championship.


Cavagnoud, who won the last three World Cup super-G races, had a winning time of 1 minute, 23.44 seconds on the Gertrud Gabl course for her first major international title.

Italy's Isolde Kostner was .05 seconds behind in second and Germany's Hilde Gerg took the bronze in 1:23.52. Megan Gerety of the United States was fourth.

Another American, Kirsten Clark, was ninth. She was followed by Canada's Melanie Turgeon, the runner-up at the last two World Cup super-Gs.

Facing big expectations on home snow, the Austrians failed to place a skier in the top seven. Former World Cup overall champion Alexandra Meissnitzer, who struggled in her comeback this season following knee injuries, finished eighth in the top Austrian performance.

In this Alpine resort in the nation's skiing heartland, Austria had strong hopes for overall and super-G World Cup champion Renate Goetschl and Michaela Dorfmeister.

But Dorfmeister, who won the opening super-G in Aspen, Colorado, and is second in the discipline standings behind Cavagnoud, finished out of the top 20. Goetschl, who won in Lake Louise, Alberta, and is ranked third, crashed.

Cavagnoud has struggled during her career, recovering from serious knee ligament injuries in 1987 and 1999. Last year, she finished third in the overall World Cup.

TITLE: Calcavecchia Sets PGA Records
AUTHOR: By Tim Dahlberg
PUBLISHER: The Associated Press
TEXT: SCOTTSDALE, Arizona - Mark Calcavecchia's day started early with a five-shot lead and an 8-iron he couldn't wait to hit. It ended 28 holes later with a spot in the PGA Tour record book and the Phoenix Open trophy secure in his grasp.


Calcavecchia birdied four of the last five holes Sunday to win the Phoenix Open with a 28-under-par 256, breaking a record held for 46 years by Mike Souchak for lowest 72-hole score.

Calcavecchia also set a record for most birdies in 72 holes, making 32 of them over four days on the par-71 TPC of Scottsdale course to win by eight shots over Rocco Mediate.

He did it on a day when neither Tiger Woods nor anyone in the rest of the field was much of a threat. Calcavecchia returned from Saturday's suspended third round to hit an 8-iron close for birdie on the ninth hole en route to a 64, then turned around and shot a 67 in the final 18 holes.

The only suspense remaining in the final round was whether Calcavecchia would break the record for lowest score set by Souchak in the 1955 Texas Open. By the time he ran off four straight birdies beginning on the 14th hole to secure the mark, much of the huge crowd had already left for home to watch the Super Bowl.

Calcavecchia, who took command of the tournament with a second-round 60, played 28 holes Sunday after the third round was suspended because of lightning, with Calcavecchia in the ninth fairway waiting to hit his second shot.

Much of the crowd was on hand to watch Woods, who rewarded them with a 65 that left him 15 shots off the pace. It was the furthest behind Woods finished in a tournament in nearly three years, though he finished tied for fifth.

It was the fifth straight tournament that Woods has failed to win, and he had his streak of 52 straight rounds of par or better snapped with a 73 in the second round. 

Calcavecchia, who has a home in the Phoenix area, was relaxed throughout the final day, laughing and joking with playing partners Mediate and Scott Verplank. He walked down the ninth fairway chatting with a young boy who was a standard bearer, and was still smiling when Mediate crept within four shots at one point on the back nine.

"To win here for the third time, it just keeps getting better and better," Calcavecchia said.

Calcavecchia got to 28-under on the 17th hole, hitting a drive short of the green, then hitting a chip to within tap-in range. He drove it into a fairway bunker on 18, but put his second shot on the green and two-putted for the record.

TITLE: Defense Leads the Way as Ravens Topple Giants
AUTHOR: By Dave Goldberg
PUBLISHER: The Associated Press
TEXT: TAMPA, Florida - This Super Bowl was a roll in the mud, not a grand passing duel between future Hall of Famers.


No one in Baltimore cares.

The city without a football championship since the old Colts won a Super Bowl 30 years ago got another one Sunday, when the Ravens beat the New York Giants 34-7 behind a smothering defense led by Ray Lewis.

"If you put this in a storybook, nobody would believe it," said Lewis, who was voted the game's MVP.

It certainly was for Lewis, who was arrested last year on murder charges in the stabbing deaths of two men at a Super Bowl party in Atlanta. He subsequently pleaded guilty to a misdemeanor charge of obstructing justice.

"We didn't just break records, we shattered them," Lewis said. "We dominated literally. This is what you work your whole life for. You come from childhood, dreaming whatever you want it to be, but now, at 25, to be a world champion, what else can I dream of?"

Lewis, the defensive player of the year, led a defense that intercepted four Kerry Collins passes and held New York to 149 yards of offense, fitting for a team that allowed the fewest points ever in a 16-game season.

Duane Starks returned an interception 49 yards for a touchdown, the first of three TDs on three plays late in the third quarter. The other two were back-to-back kickoff returns for scores by Ron Dixon of New York and Jermaine Lewis of Baltimore, the first time that's happened in a Super Bowl.

"I feel our defense is the best ever," said offensive tackle Jonathan Ogden, a sentiment echoed by every one of his 52 teammates after the game.

The victory gave 75-year-old Art Modell his first Super Bowl victory in 40 years as an owner. He won one NFL title in 35 seasons in Cleveland before moving his franchise to Baltimore in 1996, but he had never been to a Super Bowl, losing two close AFC title games in Cleveland.

Modell won by beating his good friend Wellington Mara of the Giants, who has 75 seasons in the NFL.

"I'm a very happy man," said Modell, who insists he has no hard feelings about Cleveland, even though the city still has a lot of hard feelings about him.

So effective was Baltimore's defense that the New York offense never got inside the Ravens 29. Baltimore would have had the first shutout in a Super Bowl if the special teams had not allowed Dixon's 97-yard kickoff return for a touchdown.

The game might as well have been stopped after Trent Dilfer's 38-yard touchdown pass to Brandon Stokley with 6:50 left in the first quarter gave the Ravens a 7-0 lead.

"I don't put the blame on anyone but myself. I just got beat," said Giants cornerback Jason Sehorn, who had been a standout throughout the playoffs.

This was hardly a game between classic quarterbacks like Johnny Unitas, John Elway, Joe Montana, Brett Favre or even the Giants' Phil Simms, who 15 years ago set a Super Bowl record by completing 88 percent of his passes in a victory over Denver.

Before the game Dilfer said all he wanted to be was the quarterback of a team that won a Super Bowl despite its quarterback. He completed 12 of 25 passes for 153 yards, in his return to Tampa Bay, where he was released by the Buccaneers after last season.

"I didn't throw the ball very well," Dilfer said. "But we talked about making big plays and we made them when we needed them. We aren't pretty, like St. Louis, but we got the job done. This is a team that puts wins ahead of stats."

Collins, who threw for 381 yards in the NFC title game against Minnesota, was 15-of-39 for 112 yards with those four interceptions.

"There wasn't a whole lot good about what I did today," Collins said.

This was punt-o-rama for most of the game, the 11th straight victory for Baltimore.

Brad Maynard of the Giants and Kyle Richardson each ended up breaking the record of nine punts - Maynard had 11, Richardson 10. By contrast, the Giants had just one punt in their 41-0 win over Minnesota.

It was still 10-0 late in the third quarter when the game exploded.

Starks started it by stepping in front of Amani Toomer on a first down, grabbing the ball and racing 49 yards untouched to the end zone to give Baltimore a 17-point lead.

Dixon, who returned the opening kickoff for a touchdown in New York's playoff victory against Philadelphia, returned another one for a score.

But then Jermaine Lewis took Brad Daluiso's kickoff, weaved through the Giants and ran up the sideline for an 84-yard TD and another 17-point lead, 24-7.

Jamal Lewis, who carried 29 times for 102 yards, added a 3-yard run in the fourth quarter and Matt Stover, who had a 47-yard field goal in the second quarter, added a 38-yarder in the fourth.

Neither team had a first down in its first two possessions, but Baltimore kept inching closer to the New York goal on the exchange of punts.

The Giants got a first down on their third possession, when they were pinned back against their goal line. But they had to punt and the Ravens got a 34-yard return from Jermaine Lewis that gave them a first down at the New York 41 to start the series.

On the second play, Dilfer found Stokley behind Sehorn for the game's first score. But that was one of the few times the Baltimore quarterback was on target, twice missing open receivers behind the Giants' secondary.

Five minutes into the second quarter, New York's Jessie Armstead picked off a poorly thrown Dilfer pass and ran it into the end zone. But the Giants' Keith Hamilton was called for holding on the play, negating the interception.

The Ravens got their second big play late in the first half, a 44-yard pass from Dilfer to Qadry Ismail that set up Stover's 47-yarder that made it 10-0.

The Giants mounted their first threat after that, as Tiki Barber ran 27 yards to the Baltimore 29. But on the next play, Collins went for the end zone and Chris McAlister intercepted to send the Ravens into intermission with the 10-point lead.

"I didn't expect to turn over the ball five times," Giants coach Jim Fassel said. "You can't play football like that. When you do that against a team like that, this is what happens."

TITLE: SPORTS WATCH
TEXT: Rockies Sign Walker

DENVER (AP) - Second baseman Todd Walker, who had filed for salary arbitration, has agreed to a three-year, $6.55 million deal with the Colorado Rockies.

The contract was to have been announced Friday, but the team delayed it because Walker was undergoing corrective eye surgery.

Walker, who made $322,500 last year, had asked for $1.4 million and was offered $950,000.

Walker, 26, will receive $1 million this year, $2 million next year and $3.4 million in 2003, along with a $150,000 signing bonus.

An incentive package will pay him between $10,000 and $50,000 if he starts between 100 and 150 games.

Walker, who admits his defense needs some work, spent much of the first half of last season in Triple-A Salt Lake City. The Rockies acquired him last July from the Minnesota Twins.



Rider Misses Flight

NEW YORK (AP) - In his latest episode, Isaiah Rider missed the Los Angeles Lakers' charter flight to New York and had to pay for his own ticket on a cross-country commercial flight.

Rider arrived in New York late Saturday and was in uniform for Sunday afternoon's game against the New York Knicks.

Rider also was fined an undisclosed amount, coach Phil Jackson said.

"I was supposed to be there at 9:00, got there at 9:05 and the plane was still there, but that's the rule. No big deal," Rider said. "I got here and life goes on. I wasn't penalized for it - a couple hundred bucks I think."

He has been late for practices and games several times this season, including once in San Antonio when he missed the team bus and showed up at the arena with a note from the manager of the team hotel explaining that Rider had not received his wake-up call because of a hotel employee's mistake.

In this case, the Lakers' charter flight was scheduled to leave at 9:00 a.m., and Jackson said the team left after waiting five extra minutes. Rider's agent called Lakers general manager Mitch Kupchak at 9:07 a.m. to say that Rider had arrived late, Jackson said.



Casinos Win Big

LAS VEGAS (AP) - Las Vegas' sports books came up nearly as big as the Baltimore Ravens in the Super Bowl.

"We did great. We came out on the plus side this year. Overall most places did well," John Avello, sports book manager for Bally's and Paris-Las Vegas, said after Baltimore's 34-7 victory over the New York Giants in Tampa, Florida.

Although it will be days before the betting results are finally totaled, oddsmakers say they believe what they took in from the biggest sports betting event of the year will be about $70 million - down slightly from last year's $71 million.

"We had a lot of money come in this weekend, but we are down from last year and that's we expected with two teams that don't score a lot," Lupo said. "Our largest wager wasn't as large as in the past."

But this year was better for the sports books than last year when the game ended just how the oddsmakers predicted. That meant most of those betting on the game broke even and Nevada sports books had to refund millions of dollars in bets.