SOURCE: The St. Petersburg Times
DATE: Issue #646 (13), Tuesday, February 20, 2001
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TITLE: HIV Taking Grip on Petersburg
AUTHOR: By Molly Graves and Irina Titova
PUBLISHER: Staff Writer
TEXT: Some say you can catch it by eating off the same plate as an infected person. Others say it can be transferred through sweat, being coughed on, or using the same towel as a sufferer.
And as the numbers for HIV and AIDS cases in St. Petersburg rocket at a terrifying rate, it is precisely these kind of misconceptions, thanks to the paucity of public information, that are helping the spread of the syndrome, say experts.
In the last year alone, St. Petersburg registered 5,417 new HIV cases - compared to 440 cases recorded in 1999.
According to the Health Ministry's department of AIDS prevention, Russia' s total number of those registering positive for HIV - the virus that causes AIDS - leaped in 2000 from 26,414 in January to 80,351 on Dec. 31.
The advance on previous years is startling: 15,652 registered in total by 1999, and "only" 4,399 by 1997. Many fear even these figures may represent a fraction of the real number.
During a Duma session in November last year, Vadim Pokrovsky, the head of the Federal Center for AIDS Prevention, commented: "In our country, every week about 1,000 new cases are registered - this is the official number - as a real figure, about 10,000 people are infected every week. And if we don't stop the epidemic's development, we will have more than 1 million infected with HIV in a year's time."
And St. Petersburg is now in the lead, both for cases registered and for the rate at which the HIV virus is spreading. Local doctors are warning of an "emergency situation with HIV and AIDS in the city," saying that the most recent figures could fall short of the real count since only 600,000 St. Petersburg residents have been tested, out of 4.7 million.
SEX, DRUGS AND ...
Valentine's Day was the occasion for a student visit to the St. Petersburg AIDS Center for a talk on the HIV problem.
Many of the questions concerned the basics. "What are the symptoms of AIDS?" asked Yuliya, 17, when the talk was open to questions. "Is there any cure?" asked Alexander, 16.
But the students professed to being embarrassed to ask more about sex and protection from HIV. "We want to have more information about it from adults, but our teachers say there are limits," said one of the boys.
Sex education is not part of the school curriculum, despite the fact that at least 86 percent of those aged 17 and older are sexually active, and that over the past two years, Russia has been witnessing one of the fastest-growing rates of HIV infection in the world.
But Alla Davydova, head of the AIDS prevention and control department at the St. Petersburg AIDS Center, stresses that safe sex - while a crucial factor - is not the main issue.
"Actually, the most powerful reason [for the spread of the virus] is drugs and dirty needles, which account for more than 90 percent of the present HIV-carriers," she said.
The problem is spreading fast. As Joseph Smith, regional officer of the Salvation Army's St. Petersburg branch, explains, the HIV virus "spreads exponentially at a phenomenal rate ... not like the flu, where you have a one-to-one contact, but more like one-to-ten," owing to extensive needle sharing.
During a series of AIDS-awareness campaigns by MSF from 1997 through 2000, surveys of 15- to 25-year-olds - members of the most "at-risk" group for contracting the virus - living in Moscow and the surrounding area revealed confusion over what causes AIDS and how HIV is transmitted.
In an earlier survey, 29 percent said that eating off the same plate as an infected person was enough to contract the virus, for example. In the fall of 1999, almost half didn't consider themselves to be at risk of contracting the virus, and most felt condoms were not necessary for sex with a long-term partner.
In the second city, almost half of the students present at the AIDS Center talk said that although they don't use drugs, they have a number of friends and acquaintances who shoot up.
Some of them have tried to talk their friends out of it, but with little success. "Instead, they suggest that we try the stuff," said one of the girls.
Davydova said she had proposed to the City Education Committee organizing AIDS seminars for teachers who would carry this information to schools. Among her ideas were encouraging art and composition projects on AIDS-related issues, and encouraging students to organize special awareness days, such as International AIDS Day on Dec. 1, and AIDS Victims Memory Day on May 3.
"This [kind of event] would make children and youth consider AIDS and learn its dangers," Davydova said.
But she has had little reaction.
"As far as I can see, this problem only worries medical workers but doesn't seem to bother the national education system," Davydova said.
LEARNING BLOCK
However, the City Education Committee says that its hands are tied when it comes to sex education - by the parents.
"If we talk about HIV and AIDS at schools, we inevitably have to discuss the ways in which it can be transmitted sexually, and we can't do that without parental permission," said Valentina Iva nova, a committee specialist.
"Parents have different views on having their children informed about sexual questions," said Irina Ozerskaya, press secretary of the City Education Committee. "Some of them are religious and don't want their children to be involved in such discussions.
Meanwhile, Ivanova also said that AIDS is still more of medical issue. "We are not the specialists to talk to," she said.
But Vatanyar Yagya, a deputy in the Legislative Assembly who was a member of City Hall's committee on sexual issues under the Sobchak administration, said that, on the contrary, a campaign to spread awareness of AIDS was crucial.
"In schools, they don't want to talk about the problem because the teachers are just too pious. Teachers should also be ready to speak privately to students about it, and families should also discuss it," he said in an interview on Monday.
OFF THE AIR
However, it seems that the media is as shy as the teachers.
"Last year, I faxed all the local TV channels asking them to help, but none of them answered," Davydova said.
Galina Volkova, head of the Health Committee's department of infectious diseases, agreed that public information was vital. "We need systematic information, piling up in people's minds and [ads] every half an hour," she said.
However, she added that televised advertisements needed the money to be staged, and to be carefully thought out.
"If we are going to show that the major reason for transmitting HIV comes down to drugs, we need to find a way that won't make children want to try them."
Ilona van de Braak of MSF's Mos cow office said by telephone on Monday that the organization had worked to target youths through television, radio, metro ads, magazines and billboards, the controllers of which together volunteered over $9 million in free advertising.
But, she added, it had taken a shift of attitude on the part of all those involved to achieve this.
Smith of the Salvation Army, itself a supporter of similar campaigns promoting education as a preventative method, said that their program has received an overwhelmingly positive response.
However, he said, the government "definitely doesn't want [AIDS awareness programs] to go on the agenda. ... It's not seen as a priority."
IN DENIAL
One of the first steps to solving any problem is admitting that there is one.
Smith cited an example of a visit by heads of the United Nations' AIDS project to St. Petersburg in 1999, where Russian government officials, "talked about [AIDS in Russia] as if it were not a problem at all - basically they sat there and said, 'There is no problem.'"
Around the same time, according to Smith, Peace Corps volunteers produced and distributed 25,000 copies of an AIDS information pamphlets - only to be told by the Education Ministry to stop.
In April 1999, the charity-funded NAMES Foundation said that not only did the St. Petersburg administration refuse financial backing for its AIDS awareness event, but it also tried to charge them to hold it.
People like Davydova, Smith, and van de Braak say that AIDS in Russia is in many ways more of a social problem than a medical one.
"This country has many other priorities, and can not see [the severity of the AIDS problem] - it's not visible in society yet, and it's hard to get a different attitude for something that's not visible," van de Braak said on Monday.
"It could have been stopped years ago, when the numbers were much lower," Smith said. "Now, things have been ignored to an extent that the situation is desperate."
TITLE: Protests Greet Latest Spent Nuclear Fuel Deal
AUTHOR: By Charles Digges
PUBLISHER: Staff Writer
TEXT: Officials have confirmed plans for a U.S.-backed nuclear fuel waste shipment from Taiwan to Russia three days before a bill that would overturn a ban on such imports to Russia is due to be debated in the Duma.
The plan, which was leaked Sunday to the Moscow-based environmental group Ecodefense - who in turn released it to local and international media - sparked protests in front of the Duma, headed by the liberal Yabloko political faction, and drew dozens of demonstrators from at least 10 regions in Russia, Interfax reported.
The controversial waste-import bill - which has its second reading Thursday - would allow for the import of spent nuclear fuel from foreign countries, and has been a pet project of Nuclear Minister Yevgeny Adamov, who says the country stands to net $21 billion dollars for storage and reprocessing fees over the next 10 years.
Adamov has said the money would be used to improve Russia's nuclear facilities and boost output.
The first reading of the bill passed without a hitch with 318 votes for and 32 against, and is expected to fair just as well this Thursday. Environmental activists said that a third and final reading may happen the same day.
Against this background, the Nuclear Safety Working Group of the Group of Seven leading industrialized nations has sent a letter to presidential adviser Andrei Illarionov, voicing concerns over the increasing marginalization of Russia's nuclear safety regulatory body, Gosatomnadzor, or GAN, the Kyodo news agency reported Monday.
At issue in the letter is a bill pending in the Duma next month that would hand over all of GAN's licensing and safety controls to the Nuclear Power Ministry, or Minatom - the structure responsible for building Russia's civilian nuclear installations.
"The NSWG holds the strong view that an effective independent nuclear regulator is essential to nuclear safety," Kyodo quoted the letter as saying.
The import plan and the decreasing role of GAN, among other things, have led many international and Russian experts to speculate that money garnered from imports would be put to use in developing a plutonium-based nuclear economy in Russia.
Indeed, two days before news of the Taiwanese plans broke, Sverdlovsk Oblast Gov. Eduard Rossel and Minatom announced they would resume construction of a $1.2 billion reactor, known as a breeder - a special type of reactor that produces nuclear fuel at the same time as consuming it.
Russia has one other breeder reactor.
The Taiwanese import plan - and its U.S. blessing - was confirmed by both U.S. and Minatom officials. Entitled "Foreign Spent Fuel Storage and Geological Disposal in Russia," the report outlines plans for shipping 7,500 metric tons of spent nuclear fuel from eight Taiwanese reactors to Russia for disposal.
It was commissioned by the U.S. Department of Energy (DOE) and produced by the Lawrence Livermore Laboratory at the University of California, Berkeley.
"[Taiwan] is a potential client, and certainly it would be conducting studies on shipments" of spent nuclear fuel, said Minatom spokesperson Yury Bespalko in a telephone interview Monday.
America's involvement stems from the control Washington has over nuclear proliferation, said a DOE official who spoke on condition of anonymity.
Some spent fuel, the official said, can be reprocessed and used for nuclear weapons. Therefore, since the building of the eight Taiwanese reactors in question, the U.S. has insisted on controlling the disposal route of any of the nuclear material originated in America, which most of Taiwan's has.
This has proved embarrassing for Washington, said the official, since few countries, including America, are willing to store foreign nuclear waste - with the exception of Russia, which sees vast business opportunities in the waste.
According to the DOE official, the report details the transportation of the Taiwanese fuel by sea to the Far Eastern ports of Vanino and Vladivostok, and then by rail to Krasnoyarsk in Siberia.
The report further stipulates, the official confirmed, that the fuel must leave Taiwan in 2007, and will be stored until 2020 when a repository built near the Mayak nuclear reprocessing plant will begin operation.
But Adamov's plans are unpopular throughout Russia, which can barely deal with its own waste. According to Ecodefence co-chair Vla di mir Slivyak, 94 percent of Russians are opposed to the plan.
And a nationwide Greenpeace petition drive last fall to get the question put to a referendum produced 2.6 million signatures - 600,000 more than required. The Central Election Commission, however, disqualified 800,000 of the signatures.
"It wouldn't have mattered had 5 million signatures been submitted," said Alexander Yablokov, former environmental adviser to Boris Yeltsin, of the signature drive. "The [CEC] would have just thrown them out anyway. The whole process has flown in the face of the law from the beginning and Minatom is confident it will win."
Indeed, in the days before the import bill even had its first reading, Minatom struck a deal with a Bulgarian plant to accept several tons of its waste.
"It is not even legal for the Taiwanese plans to be in the works," said Yablokov. "No laws have been passed yet."
Svyatoslav Zabelin, who co-chairs the Moscow-based environmental group Social Ecological Union, agreed.
"Both governments - Russia and America - seem intent on turning Russia into the world's radioactive toilet."
TITLE: 'Tell Them They Can't Get Infected by Talking To Us'
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: "Every day, we get between three and five new patients, men and women, who have HIV and who didn't know it," said Tatyana Penchuk, who works at the Botkina Infectious Diseases Hospital.
Penchuk's job focuses on a particular section of the population. She is in charge of the hospital's maternity ward for HIV-positive mothers, the only one of its kind in St. Petersburg, and one of the very few in the country.
According to Penchuk, the first case of HIV the ward had was in 1988 - the only case that year. In 1997, eight mothers or mothers-to-be were admitted. The following year, that figure had doubled, and in 2000, Botkina took in 54 HIV sufferers.
This January alone, 12 infected women gave birth at the hospital.
Only 30 percent of patients are from St. Petersburg, Penchuk said. The rest come from far and wide, from places such as Murmansk, Krasnodar, Tver and Kaliningrad.
Half the women contracted HIV through sexual intercourse, the rest mostly through drug use.
The hospital offers these women some sort of hope that antiviral drugs will prevent their babies from being born with the virus.
One such drug, produced by British pharmaceuticals giant GlaxoWellcome, is called Retrovir, and is administered to women during labor, and to the newborn babies. It costs around 1,500 rubles ($54) per month, and is paid for either by the patients or by the government when a mother does not have the money.
Some women, however, particularly those with a history of drug abuse, come to the maternity ward too late for treatment to be effective - and are not careful enough about following it even if they do start the course.
The dark corridors of the hospital lead to simple rooms, containing two beds, bedside tables and small cribs next to each.
Marina, 33, is eight-months pregnant. She discovered she was HIV-positive only after becoming pregnant and having the standard test. Marina said she was infected by her husband, who she believes contracted the virus by helping somebody who was injured in a car accident.
"I wasn't able to get pregnant for 10 years, and when I finally did I was so happy," she said tearfully at the hospital on Monday.
"When I found out about the [HIV-positive] diagnosis, I had second thoughts about giving birth, but the doctors have said there's a high possibility I will deliver a healthy baby. Now, I just hope everything will be okay."
"I always thought this happened to drug addicts or prostitutes, not to those of us who lead normal lives."
Svetlana, 20, is expecting to give birth any day now. She said she got infected from her boyfriend, adding that both of them had been drug users.
"He knew that he had HIV before we met, but he never wanted to believe it and he never told me," she said.
"When I knew that I had the virus I started taking drugs to treat it, but he still doesn't want to believe in his diagnosis and doesn't go to the doctor," she said.
The women in the hospital said that they knew that unprotected sex with, or sharing needles with, an infected person were the two main ways of catching HIV. But, they said, their knowledge stopped there.
"They should lecture kids in schools about AIDS, because young people are most at danger," said Tatyana, 20. She was due to give birth Monday.
"Young people won't read any pamphlets until AIDS is a reality for them," said another woman, who asked that her name not be given.
According to Penchuk, an important way to help fight the spread of HIV was to test the entire population at least once a year.
"It's all very well talking about human rights, but what we need to do is to stop the virus spreading," she said.
Penchuk said that she avoids telling her friends what kind of patients she works with. "[Russians] are so ignorant when it comes to AIDS that they are afraid to come into contact with those who deal with such patients," she said.
Marina, who said she makes an effort to read anything and everything that describes the research into a cure for AIDS, has never told her family that she is HIV-positive.
"Please, tell people about us," said Marina. "Please tell them they can't get infected just from talking to us, as many think. We don't want to be isolated."
TITLE: Putin: Iraqi Airstrikes No Solution
PUBLISHER: Reuters
TEXT: MOSCOW - President Vladimir Putin said on Monday that U.S. and British airstrikes on Iraqi targets were "counter-productive" to efforts to resolve Baghdad's standoff with the West on weapons inspections, the Krem lin said.
The Kremlin's press service said Putin had agreed, during a telephone conversation with French President Jacques Chirac, that the raids last Friday were "counter-productive for the process of a political settlement." Pu tin's comments were his first since the attacks on targets near Baghdad.
The Kremlin statement said the two leaders agreed, in a conversation lasting more than half an hour, to work together to re-establish contacts between Iraq and the United Nations.
Russia has been forthright in seeking an end to UN sanctions against Iraq, imposed to punish Baghdad for its 1990 invasion of Kuwait. But it has also urged Baghdad to resume dialogue with the United Nations on arms inspections.
France stepped up its criticism of Friday's raids, saying they had "no legal basis."
Friday's raids have further exacerbated anti-Western sentiment in Russia, and triggered a chorus of condemnation which united Russia's often fractious political class.
Parliament will consider a resolution on Wednesday asking President Vla dimir Putin to abandon UN sanctions against Iraq in protest at the raids, Dmit ry Rogozin, chairman of the State Du ma lower house's foreign affairs committee, said.
"After the absolutely unmotivated aggression towards Iraq ... Russia should consider the possibility of unilaterally withdrawing from the international sanctions regime against Iraq," news agencies quoted Rogozin saying.
As the armed forces commander-in-chief, Putin decides defense and foreign policy issues and can ignore the non-binding vote, even if the Rogozin resolution wins majority support.
Nationalist politician Vladimir Zhi ri novsky, an outspoken supporter of Iraq, said in televised comments before leaving on a trip to Baghdad, that Bush was trying to prove his credibility through an "act of aggression."
TITLE: Kuchma Comes Under Fire Again in Case of Missing Journalist
AUTHOR: By Kate Kelland
PUBLISHER: Reuters
TEXT: LONDON - Valery Ivasyuk, the doctor who helped to identify a headless body found in Ukrainian woods as almost certainly that of the crusading journalist Georgy Gongadze, has gone to ground in Britain in fear of his life.
The Ukrainian opposition, and many ordinary citizens, are demanding that President Leonid Kuchma step down after a tape was played to parliament in which a voice that sounds like his appears to tell officials to "deal with" Gongadze.
Ivasyuk was determined to identify the body, even though it lacks a head, hands and two-thirds of its skin.
"They have done everything to make identification in the future impossible," he told Reuters on Monday in his first interview from his British hiding place since he fled his homeland last month.
He asked that his location be kept secret.
"I am frightened for my life in Ukraine," he said.
"I have left behind my family, my son, daughter, wife and mother there. It is very dangerous."
"I am scared here too," he says. "I cannot talk to the Ukrainian Embassy because it is too dangerous."
Ivasyuk, who was appointed as the medical expert to lead a parliamentary committee investigating the journalist's disappearance, calls Gongadze "a very, very good man, and a close friend for years."
DNA tests conducted in Russia but published in Ukraine showed a 99.6 percent probability that it was him, but Ukrainian authorities would not confirm that he was dead.
Ivasyuk pushed for an acknowledgment nonetheless.
He visited Gongadze's mother, whom he said authorities had already tried to "brainwash" into signing a statement saying her son was killed by people to whom he owed money.
"This is a woman who for months has been on a knife edge every day, who does not know whether her son is dead or alive, and does not know who this body is," he said. "She was hurting so much in her heart. I could see it as a doctor.
"After I spoke to her for four hours she agreed to give me a sample for the tests and said 'Here is my vein, take my blood.'"
Ivasyuk collected the mother's blood, tissue samples from the corpse and a third sample of Gongadze's blood which had splashed onto a medical injury form, sending them to Germany for new tests.
Last week Kuchma, who denies any link with the disappearance, finally acknowledged that the body was almost certainly that of Gongadze.
But Ivasyuk's reward has been a threat of prosecution.
He said that in Kiev, his home had been watched over constantly, he had been followed when he traveled around, and he had been stopped by men who falsely accused him of failing to have valid tickets and threatened to arrest him.
Once, he said, he agreed to go with them, but started to make a telephone call to his office. At the sight of the phone, the men disappeared.
On Jan. 21, Ivasyuk left, booking his flights in France and flying via Zurich to hide his tracks. He said two men had tailed him, one of them all the way to London.
Kuchma insists he had nothing to do with Gongadze's disappearance and that those who oppose him are criminal or mad.
"Just imagine the absurd situation when a president calls in several ministers and gives them an order to eliminate a journalist," he told The Washington Post at the weekend.
But the United States has slammed Kiev for not doing more to find out who killed Gongadze. The Council of Europe, a Strasbourg-based governmental human rights body, has agreed to analyze the tape recordings and publish the results. Demonstrators in Kiev have called for Kuchma to resign.
Ivasyuk has applied for political asylum in Britain. Until his application has been processed, he has no passport, no money and no authority to work.
TITLE: Borodin Maintains Innocence While Awaiting Ruling in U.S.
PUBLISHER: Reuters
TEXT: NEW YORK - Former Kremlin aide Pavel Borodin, held in the United States on Swiss charges of money laundering, said in an interview published in the New York Times on Monday that he was innocent of any wrongdoing.
Speaking from the U.S. detention center in Brooklyn, New York, where he is awaiting a ruling on Geneva's extradition request, Borodin told the Times he would never have traveled abroad if he thought he was at risk of being arrested.
"I would never have gone outside Russia if I thought I was guilty of anything," Borodin said. "If I weren't sure of my innocence, why would I have come to the U.S.? I would have gone to Finland or something."
Borodin had been head of the Kremlin's extensive property empire under former president Boris Yeltsin, but left the post after the election of Vladimir Putin last year.
Geneva prosecutors have alleged that Borodin received kickbacks in connection with contracts awarded to two Swiss-based companies, Mabetex and Mercata, for Russian building projects, including one involving renovation of the Kremlin.
Russia dropped the case last year after a two-year inquiry.
Borodin was on his way to a presidential inaugural ball in Washington when he was arrested on Jan. 17 by three U.S. federal agents at passport control during a layover at New York's John F. Kennedy International Airport. He was detained at the behest of Switzerland, the Times said.
Borodin told the Times the charges were "pure politics," concocted in the tradition of Russian scandals by enemies that he would not identify, with the Swiss as unwitting, if zealous, accomplices, he said.
Russian Foreign Minister Igor Ivanov has said Moscow would continue to press to have Borodin released.
The Times asked Borodin if Putin could exert more pressure on the Swiss to drop the case.
"It's actually up to the Swiss to drop this," interjected his lead attorney, T. Barry Kingham of Curtis, Mallet-Provost, Cold & Mosle.
His lawyers expect the next hearing on the extradition sometime in mid-April. Meanwhile, he would most likely stay in detention, the Times said.
The Kremlin said on Jan. 31 that Putin and U.S. President George W. Bush included Borodin's case the first time they spoke about U.S.-Russian ties, but no details were released.
Borodin praised his treatment at the detention center. He told the Times that he called Russia daily, talked to his family and directed work at his office. He was also rereading Russian crime novels, watching television and shooting baskets.
He added that he also enjoyed his view of the Statue of Liberty from his window.
TITLE: IN BRIEF
TEXT: Editors Clipped
ST. PETERSBURG (SPT) - Three local media heavyweights - one of whom is married to Gov. Gen. Viktor Cherkesov - were involved in a car accident and slightly injured on their way to Pulkovo airport Monday, Interfax reported.
According to traffic police, Nevskoye Vremya editor Alla Mani lo va, Cherkesov's wife Natalya Chaplina, who edits the daily Chas Pik, and St. Petersburg's RTR bureau chief Marina Fokina, were struck by a Lada as they traveled with a chauffeur to Pulkovo airport, the agency said.
Chaplina and Fokina suffered minor bruises. Manilova, who was in the front passenger seat, suffered a concussion and a cut to her face the report said, citing paramedics on the scene. Police said the accident occurred when a Lada they were pulling over for speeding swerved toward the curb and hit the Nevskoye Vremya-owned Volvo in which the three women were traveling.
Kidnappers Caught
MOSCOW (SPT) - Novosibirsk police have arrested four people suspected of the kidnapping and possible killing of up to 60 girls, including five who disappeared last summer in Barnaul, in what could shape up to be the bust of one of the biggest Russian kidnapping rings ever.
Novosibirsk prosecutors detained and will press charges against the three men, aged 20 to 27, and a 27-year-old woman in connection to the disappearance of up to 60 girls.
Roman Kuminov, a senior investigator in the Altai territory, was quoted as saying that the four have been charged with forcing girls into prostitution and soon will be charged with kidnapping.
Barnaul is located about 200 kilometers south of Novosibirsk.
Robertson Visits
MOSCOW (AP) - NATO Secretary General Lord Robertson arrived in Moscow late Monday for a two-day visit timed for the reopening of NATO's information office in Moscow, which Russia shut down in spring 1999 in protest at the NATO air campaign against Yugoslavia.
He also has a broad agenda for talks with Russian officials, including peacekeeping efforts, Russia's military doctrine and the alliance's strategic concept and arms control.
But his toughest task will be to calm Russia's alarm over NATO's eastward expansion.
The Baltics have lobbied hard to join the Western alliance ever since they regained independence following the Soviet collapse in 1991. While individual members like the United States have supported their ambition, the alliance as a whole has not made any commitment.
Lenoblast Car Bomb
VOLKHOV (SPT) - A car belonging to Viktor Popov, general director of the Volkhov Aluminum firm in the Leningrad Oblast town of the same name, was blown up late Sunday night by unknown suspects, Interfax reported.
Popov's vehicle - an Audi - was blown up by a powerful explosive that the police have not yet identified, the report said.
A police source, however, informed Interfax that the explosive's power was equal to about 150 grams of dynamite.
TITLE: Gusinsky Backs Plans For Western Investment
PUBLISHER: Combined Reports
TEXT: MADRID, Spain - Vladimir Gusinsky said he would sell his stake in NTV television to foreign investors if its independence was guaranteed, a Spanish daily reported Sunday.
"Provided that it is guaranteed 100 percent that a deal will never be reached with the Kremlin authorities that would call into question the independence of NTV or allow impositions, I would accept," he told ABC in an interview.
Gusinsky remains under house arrest in Spain. Russian prosecutors have charged him with fraud, but Gusinsky says the case is an attempt to silence his Media-MOST group and he is fighting extradition to Russia.
Gazprom-Media, which has 46 percent of NTV and has announced its plans to take full control of the station, said Friday it held talks in Moscow on Thursday with a Western consortium interested in buying a stake in NTV. The consortium is led by CNN founder Ted Turner.
Gazprom and Media-MOST are suing each other in a complex dispute over a decisive 19 percent stake in NTV, which Gusinsky pledged to the gas company as collateral for a loan that comes due in July.
The 19 percent share holding is part of the 49 percent stake held by Media-MOST and would give state-dominated Gazprom control.
Media-MOST said in a statement it welcomed the announcement of talks between Gazprom and the Western consortium.
"Media-MOST reiterates its already stated position that a controlling stake should not be held by one shareholder," the statement said. "Media-MOST is now ready to further decrease its stake [in NTV]."
Gusinsky aims to use cash generated by selling the stake to pay a $262 million debt to Gazprom. Turner and billionaire U.S. financier George Soros have already expressed interest in the investment, along with Sweden's Modern Times Group.
Kommersant said the consortium wanted to buy a controlling 65 percent stake in NTV for $170 million, although previous reports spoke only of a blocking stake of 25 percent.
The newspaper said the foreign investors wanted to buy 11 percent from Gazprom-Media and the remainder from other shareholders.
Kommersant said the consortium representatives had expressed a desire to buy out Gusinsky's holding as soon as possible and get involved with the running of the company.
Both Turner and Soros have said that the station's independence is an important consideration for their involvement. Soros said last month that the two men would drop their plans if Gazprom seized majority control of NTV.
Media-MOST confirmed Friday that Boris Berezovsky has begun to provide aid to Gusinsky's beleaguered holding.
"He began to fulfil his promises," Media-MOST spokesman Dmitry Ostalsky said. He refused to give further details. Earlier this month, Berezovsky promised to loan $50 million to Media-MOST.
Taking another approach in its battle to keep NTV out of state hands, Media-MOST announced plans Friday to sue the federal government for defaulting on treasury bonds during a 1998 financial crisis, Interfax reported, citing Ostalsky.
Media-MOST holds state bonds with a face value of about $300 million, he said. The Finance Ministry defaulted on the bonds in August 1998.
- Reuters, AP, SPT
TITLE: Russian Military Flexes Its Nuclear Muscles
PUBLISHER: Combined Reports
TEXT: MOSCOW - Firing from the land, sea and air, the military tested an array of missiles in a show of nuclear strength that came at a time of increasing tensions with the United States over its plans to build a national missile defense system.
Even as the test missiles were being fired on Friday, a top Defense Ministry official denounced "anti-Russian" posturing by U.S. President George W. Bush's team. It was one of several sharp Russian retorts to American criticism last week that Russia is "part of the problem" of nuclear proliferation.
The launches also came just days before a planned visit by the head of NATO, whose eastward expansion worries the Kremlin.
Friday's launches showed that "Russian strategic forces are capable of overcoming any anti-missile defense, be it a currently existing or potential one," said Col. Gen. Valery Manilov at a Kremlin ceremony.
The missiles ranged all across Russia's vast territory in exercises apparently also designed to suggest that Russia, despite its aging nuclear arsenal and deep cuts planned for its forces, is still capable of waging a full-scale war.
At 1:28 p.m. Moscow time, according to official accounts, a submarine in the Barents Sea fired a strategic missile aimed at the Kamchatka Peninsula in the Far East.
Exactly 15 minutes later, a land-based Topol intercontinental ballistic missile was launched from the Plesetsk base in northwestern Russia at the same Kamchatka target.
From the air, a Tu-95 "Bear" bomber fired another strategic missile.
All the missiles hit their targets, the military said.
Two tactical missiles also were tested Friday. ORT television showed a shining Tupolev Tu-22M "Backfire" swing-wing bomber take off from the Shaikovka air base in the Kaluga region southwest of Mos cow. The bomber was on course for Russia's south, where two 300-kilometer range missiles were fired.
On Wednesday, unannounced Russian air exercises near Norway and Japan prompted their air forces to scramble in response. Japan claimed Russian bombers intruded into its air space, which Moscow denied.
The military exercises appeared to have been planned before the latest heated rhetorical exchanges with Washington, but Russian officials made clear that they were meant to influence the political debate over missile defense.
Just before the military announced the missile tests, Col. Gen. Leonid Ivashov, the Defense Ministry's foreign relations chief, held a news conference to denounce an "information war" that is being mounted by the United States. "The rhetoric of the new administration's officials is taking on anti-Russian overtones," he said, referring to U.S. Defense Secretary Donald Rumsfeld's remarks on Wednesday that Russia is contributing to the proliferation of nuclear missile technology.
Rumsfeld also said Russia's opposition to a national missile defense "is not really serious."
Dmitry Trenin, a military analyst with the Moscow Carnegie Center, said that Russia launched the missiles to demonstrate to Rumsfeld and others in the Bush administration that they cannot simply ignore Russian concerns.
"A lot of people in Russia - especially among the top brass and in state security bodies - feel angry and embittered over the fact that people in the new U.S. administration act and talk as if they have already discarded Russia. There are things that are even worse than enmity and hostility. There is oblivion, and there is being ignored," Trenin said.
- WP, AP, Reuters, LAT
TITLE: Truckers' Moscow Nightmare Continues
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Hundreds of truck drivers hauling wares into Moscow joined the thousands of trucks already stranded on the weekend as a 1 1/2-month crackdown on illegal imports appeared to be spiraling out of control.
The Central Customs Department, which ordered the crackdown, said a decree promised last week to end the pileup would not be implemented as advertised.
Drivers said they are exhausted after waiting in line for up to two weeks to get their loads cleared with customs. In addition to just sitting on their hands, they are fighting off attacks by thieves and Muscovites infuriated by the growing snarl caused by the pileup.
"It is unlikely that any [of the drivers] will last more than a week under these conditions," said Olga Gavrilova, director of the Viba customs terminal, one of 460 operating in the city and surrounding region.
"Before the new decree, customs clearance took no more than two hours," she said, adding that some drivers at her terminal have been in line since Feb. 2.
The decree in question was issued by the Central Customs Department on Jan. 3 as part of a widespread bid to clamp down on the gray import market. That decree required each customs terminal to inspect every crate being shipped into the city. It also stated that documentation for every shipment could only be signed by Alexander Zhe rekhov, the acting head of the Central Customs Department.
After imports dived 75 percent as the line of trucks awaiting clearance got longer and longer, customs said they had decided to soften the rules by, among other things, allowing four more customs chiefs to sign off on shipments and ending the mandatory inspection of all crates.
But the Central Customs Department said Thursday the new order issued Feb. 5 had only allowed the four new officials to also approve documentation.
"The [Jan. 3] decree is in force and there are no plans to suspend it," said Viktor Sokolov, spokesman for the Central Customs Department.
Viba director Gavrilova said that more than 30 trucks pull into her terminal each day and no more than 10 get cleared. By Thursday afternoon 148 trucks were in the waiting line at Viba.
Other terminals even have lines of up to 420 trucks, she said.
Gavrilova said she felt bad for the drivers, many of whom have complained to her about being robbed or beaten up by angry Muscovites.
In a bid to calm down irate residents, customs ordered hundreds of drivers this week to park in the city's outskirts while they wait their turn.
A group of about 60 foreign drivers who have been waiting more than a week to pass through the Voikovskaya terminal were ordered wait at the Severny Port warehouse near Rechnoi Vokzal.
"We are still waiting, it is horrible," said Standa Bruchansky, a driver from the Czech Republic. "We were sent away from the terminal and told that this was a normal procedure. But it is not normal." Bruchansky has been waiting since Feb. 4 and still has no idea when it will be his turn to enter the terminal. He said that in his nine years of trucking cargo to Moscow the longest he has ever had to wait before now was two days.
TITLE: Debt Plan Gets Nod After a Little Tuning
PUBLISHER: Combined Reports
TEXT: MOSCOW - The State Duma's budget committee has approved a key plan to raise extra revenue this year to pay off part of Russia's massive foreign debt.
The plan, which would raise the money needed to allow Russia to make payments on about $3.5 billion due this year to the Paris Club of creditor nations, will have to be approved by the full parliament and signed by President Vladimir Putin before it becomes law.
On Friday, the committee introduced a change in the manner in which revenues would be disbursed, and other changes are likely as the document winds through the system.
The committee's version allocates the first 41 billion rubles ($ 1.4 billion) in extra revenues for debt service. Subsequent additional revenue would be split evenly between debt payments and social spending.
The Duma is due to consider the amendments Thursday.
Finance Minister Alexei Kudrin informed the committee before the vote that the government would support an alternative plan proposed by the Duma if some changes were introduced before it was voted upon by the full chamber.
"If some conditions are met, the government will support the Duma's bill. If these conditions are not met then the government will oppose the bill, and the result will be that neither plan will be approved," Kudrin said.
He did not specify what changes were needed for a compromise.
The government plan had called for boosting revenues by 108 billion rubles ($3.8 billion) and spending a fixed amount on debt service and a fixed amount on other spending. The plan foresaw the extra revenue coming from privatizations, improved tax collection and possible borrowing from the Central Bank.
Kudrin encouraged deputies to pass the amendments quickly to meet payments due this spring.
About $1.6 billion falls due in the first two months of the year, but the Paris Club loans also have grace periods which are not disclosed by the club.
(AP, Reuters)
TITLE: Russia Rises on Foreign-Fund Attraction List
AUTHOR: By Maxim Trudolyubov
PUBLISHER: Vedomosti
TEXT: MOSCOW - Russia has raised its attractiveness as a destination for foreign investments, rising from 49th position to 32nd in six months, according to a survey by management consultants A.T. Kearney.
Russia failed to make it into Kearney's list of the top 25 most attractive countries for foreign investment, but Kearney analysts said that interest in Russia is rising in raw materials and many other sectors.
Kearney asked top managers from 1,000 of the world's biggest corporations which countries they would consider investing in or making acquisitions over the next 12 to 36 months.
Only 135 managers responded.
"The results of countries at the end of the list differed only by tenths and hundredths of units. It would have been unfair to compare countries placed so closely to one another," said Eulalia Sanin-Gomez, analyst with A.T. Kearney.
The volume of direct foreign investment over the entire world grew from $209 billion in 1990 to $865 billion in 1999, according to data compiled by the United Nations. Preliminary estimates put global direct foreign investment at $1 trillion for 2000.
Despite positive performances by emerging markets in general this year, investor interest in Central and Eastern Europe appears to have dropped off.
Poland, which had the highest levels of direct investment of all former Soviet bloc countries, moved from fifth to 11th place in the survey, while Hungary fell from 20th to 21st. The Czech Republic consolidated its position slightly, rising two places to 16th position.
Eastern European countries are the favorites of European managers, who plan to channel more than half of their planned investments into the region.
Top international managers are particularly interested in Asian and Latin American markets, which have righted themselves after the crisis.
"Brazil, China, Mexico and India head the list of countries most attractive in terms of initial investments," Kearney reported.
TITLE: Putin Calls For Merging Regulatory Agencies
AUTHOR: By Anatoly Vereshchagin
PUBLISHER: Reuters
TEXT: OMSK, Western Siberia - President Vla dimir Putin, keen to show he is tackling a protracted heating and electricity crisis, discussed utility rates with local people during visits to two Siberian cities this weekend. He also announced that the government should unify the country's two remaining price-regulating bodies.
Television reports Saturday showed Putin, switching between a casual blue sweater and a suit and tie, conducting meetings aboard the overnight train once used by the Soviet Communist Party leadership as he traveled from Tomsk to Omsk.
Against the background of ornate lamps and plush seats, discussion focused on tariffs for utilities and public services, with Putin lamenting the country's failure to set uniform rates.
"Unfortunately, right now we don't have this at all for railways, for UES [the national electricity utility Unified Energy Systems] or for [gas monopoly] Gazprom. We know absolutely nothing about what is going on there," he was shown as saying on television reports. "In many countries, these regulatory functions are centralized in a single body. In Russia, they are all dispersed."
Putin said Friday, during his visit to Tomsk, that the government should unify the two bodies regulating prices to put an end to damaging squabbles.
He said there was a constant tug-of-war between the Federal Energy Commission, which regulates tariffs in the domestic energy market, and the Anti-Monopoly Ministry, which controls telecommunication and railway transportation tariffs.
The result, he told a news conference, was that these organizations tended to serve their own interests rather than those of the state and often accused each other of hiking tariffs, a situation he was no longer prepared to tolerate.
"It seems to me it is necessary to think about creating a unified tariff center, though it would require changes to existing laws," Putin said.
Heads have started rolling over the energy crisis, which trapped tens of thousands of people in the Far East for much of the winter in freezing, unlit apartments.
Putin forced the resignations of Energy Minister Alexander Gavrin and Primorye Gov. Yevgeny Nazdratenko earlier this month and sacked Federal Energy Commission head Andrei Za der nyuk on Friday.
During the Tomsk visit, Putin said people were no longer willing to tolerate increases in state-controlled prices for heat, electricity and maintenance.
"People don't understand why they should have to pay higher and higher prices for worse and worse service," he said. "For dirty entranceways to their buildings, for electricity that shuts off all the time."
The following day Putin was mobbed by well-wishers on the streets of Omsk.
He visited Omsk Bacon, which was described as Russia's largest pork-producing plant, and was challenged outside by a worker who asked whether big changes were in the offing.
"We've already had plenty of changes," Putin shot back. "Let's try to do it quietly, without rash changes."
TITLE: Tacis Unveils $2.3M in Funding To Monitor Environment
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Europe has always had its suspicions about the state of Russia's environment, but now it's about to find out for sure.
Tacis, the European Union's technical assistance program to the Commonwealth of Independent States, on Thursday unveiled plans to unify and coordinate ecological monitoring conducted by various government agencies.
The 2.5-million-euro ($2.3 million) program will last two years.
"There is a lot of information out there, but its usefulness is limited," said Olga Novosyolova, a representative from the department of ecological monitoring at the Natural Resources Ministry. "A lot of it can't be taken out of context or compared across regions."
In the first year of the program, both Russian and foreign experts will assess the level of ecological monitoring, redundancies in data collection among some agencies and the extent of cooperation between federal and regional bodies.
After gaining a better understanding of what needs to be done, expert teams will introduce new environmental standards and the means to disseminate results to a wide audience.
Since the 1986 Chernobyl nuclear disaster, international attention has increasingly focused on the environmental legacy of the Soviet Union. Tacis has spent 37.39 million euros on environmental protection since 1991, a large portion being dedicated to nuclear safety.
However, recent moves by the administration have cast doubt on Russia's dedication to protecting the environment. Last year, President Vladimir Putin shut down the State Environmental Committee and transferred its duties to the Natural Resources Ministry, which licenses the development of the nation's mineral resources.
TITLE: IPA Lists Directors for the Little Guy
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - With a string of annual shareholder meetings looming in the coming months, the Investor Protection Association has drafted a list of directors it would like to see elected to the boards of nearly 60 companies.
"We can see that some changes are gradually feeding in at the micro-level," said IPA executive director Alexander Ikonnikov. "People are beginning to understand corporate governance issues."
Last year, directors representing minority shareholders were elected to the boards of 25 out of an IPA list of 32 companies.
"This time, we hope to get representation in at least 40 out of 62," Ikonnikov said.
The IPA on average has gathered only about 2 percent of votes of the 58 companies it can use to support its candidates, so it will now enter a phase of laborious bargaining to gather sufficient support before the various elections.
"The whole idea is to combine the efforts of outside investors," said Anatoly Chabak, head of investor relations with NIKoil Asset Management and a candidate to the boards of BashkirEnergo, Kazan City Telephone, Mosenergo, Permenergo, RostovElectrosvyaz and NizhNovSvyaz.
The main reason why stock market investors resolved to lobby for their interests is frustration with government policy.
"The state gives virtually no support to minority shareholders," said Yelena Krasnitskaya, corporate governance analyst with Troika Dialog brokerage. "IPA is the first example of investor self-defense in Russia."
The two problems that the IPA faces in choosing candidates are the low compensation and minority shareholders' conflicting interests.
"It is widely held [in the IPA] that a director must act only in the interest of the shareholders who voted for him [instead of acting on behalf of all shareholder groups]," Krasnitskaya said.
In most companies, outside directors either do not get paid at all or receive token salaries.
Chabak says he was paid 1,200 rubles ($42) as a director with Permenergo last year, while UES spokesman Yury Melikhov said UES board members get no remuneration.
TITLE: As Siberia Fades, Northwest Set for Oil Boom
AUTHOR: By John Varoli
PUBLISHER: Special to The St. Petersburg Times
TEXT: Russia's Northwest Federal District, an area consisting of 11 regions from Novgorod in the west to the Nenets Autonomous Okrug in the east on Russia's Arctic shores, may be set to become the country's next major oil producing region and reap huge profits.
While nearly all of the region's reserves are in the Timan Pechora district, lying on the border between the Komi Republic and the neighboring Nenets AO, the windfall will also be felt in St. Petersburg and the Leningrad Oblast as investments are made in pipelines and oil terminals on the Gulf of Finland.
Russian and foreign oil companies are already grappling with the region's inhospitable climate and onerous bureaucracy, but they believe the potential reward is worth it, should oil prices hold their current high levels of about $26 a barrel. This was the conclusion of oil industry leaders and analysts last week during the conference, "Investment 2001: New Realities and New Opportunities in Northwest Russia."
"Over the next ten years, we plan to invest no less than 130 billion rubles ($4.6 billion) in Northwest Russia,'' said Vagit Alekperov, president of LUKoil Holding, Russia's No. 1 oil producer. "LUKoil views Northwest Russia, and I say this without exaggeration, as the region with the most potential in Russia. The reasons are obvious - the region has huge natural resources, an advantageous geographical situation, combined with the immense scientific and cultural opportunities of St. Petersburg.''
LUKoil says Timan Pechora has known reserves of about 2 billion tons (about 15 billion barrels) and that figure will certainly grow when more exploration is done offshore in the Barents Sea.
LUKoil, as well as other Russian companies, is facing declining production in older fields in western Siberia and to compensate will tap new oil fields. Besides Timan Pechora, the other prime spot is the north shore of the Caspian Sea, shared by Russia and Kazakstan.
Today, Timan Pechora produces about 11 million tons of oil a year in Komi and Nenets AO, but according to oil executives, it has the potential to produce around 40 to 50 million tons a year.
LUKoil's investments in output will account for half the total, with the other half going toward building transport systems, refinery capacity, environmental protection, and meeting the social needs of the local population.
LUKoil plans to increase output at the Ukhtinsky oil refinery in Komi, investing about $100 million in it last year, and will soon build a refinery in the Murmansk region. LUKoil also said it will spend $600 million to clean up the environment by 2005.
"One large set of projects, to be done with foreign partners, will be in the Nenets region,'' said Alekperov. "Among these are Northern Territories, which will drill 100 million tons of oil and which requires $3 billion in investment."
Another possible project is the Timan Pechora Company, with known deposits of 160 million tons and which requires $50 billion in investment to revive, Alekperov said. This project, however, was one of the earliest efforts to exploit Timan Pechora. In the mid 1990s, a consortium of Russian and foreign companies, including Texaco, Exxon, Amoco, and state-owned Rosneft collapsed as oil prices plunged in the mid 1990s, reaching a low of $12 a barrel in 1998.
And indeed, analysts remain cautious about current efforts.
"Though most reserves in the Caspian are below the sea, it is still cheaper to drill there because the northwest has more difficult climatic conditions and lacks a developed infrastructure," said Lev Savulkin, senior analyst at the Leontief Center for Economic Research. "If oil prices remain high, then drilling in Timan Pechora will be justified, but prices may fall by summer."
At what level prices must remain is still unclear. According to a recent report by the consulting company Arthur Andersen, the Caspian project prices need to stay above $19 a barrel.
Still, Conoco Inc., the United States' fourth-largest oil company, expects to sign a production-sharing agreement (PSA) with Russia by the end of this year to invest about $1.5 billion over three years to develop Timan Pechora.
"We're working with the government commission to resolve the differences - part is about wording of the agreement, but the main thing is how profit will be split," said John Capps, president of Conoco Russia. "We're confident we'll work through the differences by end of the year."
Western companies prefer PSAs, which split production between the government and the companies instead of paying taxes, to avoid Russia's complex tax regulations. The State Duma approved the PSA for the Conoco project in 1999, but the Kremlins till must approve the plan.
To date, Conoco has invested about $600 million in its Russia operations, including Polar Lights, a project in Northwest Russia already operational. The fields Conoco wants to develop with LUKoil, called the Northern Territory project, hold 100 million tons (990 million barrels) of crude oil and 63 billion cubic meters of natural gas. Conoco will own a 40 percent stake in the project.
Earlier in 2000, Conoco said it expected to sign the agreement by the end of 2000. However, the Russian government's decision last fall to transfer negotiations of the PSA from the Fuel Ministry to the Economics Ministry has delayed the process, said Capps.
But there are more serious hindrances in this battle for northwest Russia's oil. According to Savulkin, part of the problem is bribing the right officials for the right amount, as well as Russian companies divvying up the profits and orders that go along with the PSA deal.
Russian engineering companies are fighting for the orders to provide equipment to projects such as Conoco's, and then there are the ambitions of governors, such as Vla dimir Butov of Nenets, who want a piece of the action.
"LUKoil is at odds with Butov in Nenets and he is slowing LUKoil and Conoco plans [to develop Timan Pechora] since he has his own idea which oil company should be there, and which may be Sibneft," said Savulkin. The latter is believed controlled by the powerful Russian oligarch, Roman Abramovich.
Getting the oil to market will be another major problem, and there are two projects under construction.
The Baltic Pipeline System (BTS) will give Russia new export potential of 12 million tons of oil a year, and it calls for the reconstruction and enlargement of the oil pipeline between Kirishi (the oil refinery in the Leningrad region owned by Surgut Holdings, Russia's third largest oil producer) and the city of Yaroslavl, located on the upper part of the Volga river. Also, a new pipeline, about 280 kilometers in length, will be built from Kirishi to the port at Primorsk (on the Gulf of Finland), and finally, an oil terminal at Primorsk is under construction, to be partly open at the end of 2001, and which will be able to export 12 million tons of oil a year.
"BTS will have a significant influence on the overall economy of northwest Russia," said Syemon Veinshtok, head of RAO Transneft, the state-owned company that owns most of Russia's oil pipelines, during the conference.
The cost of this first stage is about $460 million. As a result of the reconstruction and enlargement of the pipeline between Kirishi and Yaroslavl, it will be able to pump 30 million tons of oil a year, of which 12 million tons will be exported through Primorsk. Whether the rest will go through an even more enlarged Primorsk port is not clear. Finland, for instance, is pushing to run a pipeline to its port at Porvoo.
"We constantly feel pressure from our Finnish colleagues to have the BTS go through Porvoo, and not Primorsk," said Veinshtok. "If we send our oil there, Finnish refineries will be able to process our oil, which will hurt our oil refineries."
Together with Conoco, LUKoil has its own plans to build the Northern Transport System, which will allow transport of 7.5 million tons of oil annually.
"We support the idea to build BTS which will help us to develop oil deposits in the southern parts of Timan Pechora,'' said Alekperov. "Still, careful analysis of the situation shows that the best way to transport oil from the northern regions of Timan Pechora is by sea."
TITLE: Putin Orders Utilities Payment Revamp
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - The government has announced it is moving to drastically revamp the municipal housing sector to avert a looming wave of power blackouts and water shortages.
President Vladimir Putin said Friday that he has ordered the government to come up with a plan by mid-August under which upper-income households pay their utility costs in full, while poorer families would still see those expenses subsidized.
"One cannot push the responsibility for all problems, including theft and disorder, to the population," he said during a trip to the western Siberian city of Tomsk. "We have no moral right to do so."
Putin said the revamp would be discussed by the government in April and May, adding that steps must be quickly taken to root out corruption in the sector.
"Otherwise, the crisis in the Far East will spread," Putin said, referring to the power crisis that has left many residents in the Far East without heat or lighting.
He said that only 10 percent of funds earmarked in the budget for housing maintenance reach their targets.
The idea of putting the housing sector in order is far from new, but Friday's comments marked the first time that government leaders have addressed the massive corruption and incompetence in the sector as opposed to merely paying lip service to pushing ahead with market reforms.
"The whole system is like a black hole," said an official at Gosstroi who spoke on condition of anonymity. "Even the Economic Development and Trade Ministry does not know exactly how the money from the budget is spent."
The costs of housing maintenance - which in addition to building upkeep includes gas, power, water and sewage systems - reached 297 billion rubles ($10.35 billion) in 2000, according to Gosstroi, the former Soviet federal ministry now in charge of the housing infrastructure.
Last year, households were supposed to cover 70 percent of total housing expenses, but their contribution amounted to a meager 39 percent (117 billion rubles) due to generous exemptions, Gosstroi said.
Federal, regional and municipal budgets made up another 39 percent of the costs, or about 38 billion rubles each.
The remaining 22 percent represents the gap between costs and revenues.
TITLE: IN BRIEF
TEXT: Trading Enquiry
MANILA (Reuters) - Philippine prosecutors Monday formally questioned 14 foreigners, 11 of them British, held by police since Friday on suspicion of illegal trading in U.S. stocks.
Senior state prosecutor Archimedes Manabat of the Justice Department said he would officially submit his findings on Tuesday to the department's chief prosecutor, who will decide whether or not to file charges.
"Yes," Manabat said when asked by reporters if he had found a prima facie case against the foreigners, who also include a Canadian, a Czech and an Italian.
Saudis Talk Oil
RIYADH, Saudi Arabia (Reuters) - Saudi Arabian negotiators held talks with oil giants ExxonMobile and BP Amoco Plc on Saturday on investment plans in the kingdom's gas sector.
Influential Foreign Minister Prince Saud al-Faisal, who heads the team negotiating investment projects with oil firms, told the official Saudi Press Agency that the team met ExxonMobile's Lee Raymond in the Saudi capital Riyadh.
"The meeting was positive and fruitful and comes at an important stage in negotiations and aims to evaluate progress made and discuss the next steps," Prince Saud said.
Clinton Controversy
New York (NYT) - The Morgan Stanley Dean Witter executive who selected former president Bill Clinton to give a speech that later set off a controversy said yesterday that he had resigned.
Michael L. Rankowitz, a managing director who oversaw Morgan Stanley's junk-bond business, said that hiring Clinton to speak at a junk-bond conference in Florida last week "was 100 percent my idea."
Philip Purcell, Morgan Stanley's chairman, apologized last week to some of the company's clients who threatened to take business away because the firm had paid Clinton a fee that was reported to be $100,000 to $150,000.
Bakery Buy
ROTTERDAM (Reuters) - Canadian food group George Weston Limited bought the U.S. baked goods activities of Anglo-Dutch Unilever on Monday for $1.77 billion in cash, expanding its U.S. footprint.
Unilever acquired the unit, Bestfoods Baking Company, when it took over U.S. Bestfoods last year, but the bakery activities were not considered core, Unilever said in a statement.
Nikkei Tumbles
TOKYO (Reuters) - Political uncertainty rattled Japan's financial markets on Monday as speculation mounted that Prime Minister Yoshiro Mori may be forced to resign next month, sending stocks to 28-month lows.
"What we want to know is who's going to replace Mr. Mori. This is critical because we have passed the stage where a mere change of leadership would bolster the economy," said Kunihiro Hatae, general manager at Tokai Tokyo Securities.
The benchmark Nikkei average slid below 13,000, a key psychological barrier, to a fresh 28-month low in early trading, surrendering 1.43 percent to 12,986.99, as the yen eased against the dollar and government bonds enjoyed flight-to-safety buying.
TITLE: Little New at Investment Conference
AUTHOR: By Andrey Musatov
PUBLISHER: Staff Writer
TEXT: The name chosen for the economic conference that opened Thursday and ran through Saturday at Tavrichesky Palace was "Investment 2001 - New Realities in the Northwest Region." But, to many, there seemed to be little new on offer.
Thursday's program brought addresses from a wide range of speakers, with the main part of the conference - organized under the patronage of Viktor Cherkesov, governor general of the Northwest region, and St. Petersburg Gov. Vladimir Yakovlev - slated for round table discussions held Friday and Saturday.
According to a press release issued before the conference, the aim was to bring together a variety of specialists to exchange ideas and experience and promote effective investment legislation in Russia and the Northwest region. The discussions dealt mostly with the traditional litany of barriers to increased investment in Russia, including the lack of guarantees of political and economy stability, unclear tax and customs laws, and widespread bureaucracy and corruption.
Each round table presented a resolution outlining the results of their work, but the content of the resolutions was contained in drafts prepared beforehand.
"The final variant of these resolutions will not be much different from the drafts," Natalia Kudryavtseva, executive director of the St. Petersburg International Business Association (SPIBA), which also played a significant role in organizing the conference, said Friday.
And, though the majority of the content in the resolutions was known beforehand, there was skepticism as to the extent that any of the suggestions offered to federal and regional governments could expect to garner any real attention.
According to James Hitch, chair of SPIBA's legislative and social policy committee, the organization is still waiting for an answer of some kind to a list of proposals they submitted to the St. Petersburg Legislative Assembly last October.
"After the list of suggestions we also sent two separate letters and got no reply," Hitch said Thursday. "It shows a basic lack of interest in the opinions of foreign businessmen."
"Investors, especially foreign, should feel some support from the administration," he added. "Hopefully this conference will represent a first step in that direction."
And the difference in priorities between legislatures and federal and regional administrations was also singled out as a problem.
"The legislative bodies tend to focus more on creating better conditions for investors, while executive bodies focus more on collecting taxes to provide for the budget," Aris Marsanich, Moscow representative of Banca Commerciale Italiana said at the "World Market of Foreign Direct Investments" round table Friday. "Until that contradiction is solved the laws can't be made more effective."
For many involved in the conference, the event was a success, if not in the sense the organizers intended.
"The promotion of investment projects or laws at the exhibition is only a minor concern for most participating companies," Anton Popov, financial director at Eco Phoenix holding company, which maintained a booth in the conference's exhibit hall, said. "What's more important is that the big names in the Northwest met all in one place."
"What I heard in the speeches by officials was nothing new, but the event allowed me to make some good contacts."
And Popov held out hope that government representatives might some day come around.
"I met two officials, one from the tax committee of the State Duma and one the deputy property minister, who understand the essence of business problems," he said "Both understand simple questions such as that profit tax should be determined only by the company's profits and not it's turnover, as is the case now."
"If only 30 percent of those in government understood such things, economic conditions and the investment climate would be brighter."
TITLE: G7 Adds to Pressure on Debt, Russia Issues Promise To Pay
PUBLISHER: Reuters
TEXT: PALERMO, Italy - The Group of Seven leading industrial nations over the weekend strongly urged Russia to meet its financial obligations in full, and France and Italy said Moscow had pledged to meet its debt payments.
"We call upon the Russian authorities ... to implement a credible program of reform, and create the essential market institutions and infrastructure for sound growth," the G7 said Saturday in a statement issued after a meeting of finance ministers and central bankers.
Deputy Prime Minister Alexei Kudrin, who is also finance minister, attended the meeting as an observer and had bilateral meetings with G7 finance ministers.
Bank of France Governor Jean-Claude Trichet told a news conference after the G7 meeting ended that Russia had pledged at the meeting to reimburse its debts.
"The Russian delegation pledged to pay its debt," Trichet said, adding: "They said that if things worsened in the future, they could make new requests."
Russia, seeking a restructuring that would involve some debt relief, last month drew a sharp response from the Paris Club of creditor nations when it said it would pay only a small part of the $1.6 billion it owed the group in the first quarter.
French and Italian officials said Saturday that Russia had assured G-7 powers that it would meet all its debt obligations.
TITLE: Europe Steel Merger Creates Sector Giant
AUTHOR: By Noah Barkin
PUBLISHER: Reuters
TEXT: PARIS - France's Usinor, Luxembourg's Arbed SA and Spain's Aceralia announced a 3.4 billion euros ($3.11 billion) merger deal on Monday to create the world's largest steel firm, with estimated annual output of 46 million metric tons and sales of 30 billion euros ($27 billion).
The merger comes as the European steel industry faces its toughest outlook for nearly a decade from global overcapacity and plunging prices and the three made clear the need to rationalize lies at the heart of the merger.
Analysts said that the deal would allow the companies to cut costs and capacity in Europe, gives them the base necessary to follow the globalization of their big customers and could also herald further consolidation of the global steel industry.
The deal is effectively a takeover by Usinor of the two smaller companies with the French group paying approximately 3.4 billion euros for the pair, based on Usinor's closing share price of 14.05 euros on February 15.
Under the all-share deal the three companies said that they will create a new group in which Usinor shareholders will hold 56.5 percent, Arbed 23.4 percent and Aceralia 20.1 percent.
Aceralia shareholders will get eight shares in the new group for each seven Aceralia shares held, Arbed holders will get 10 shares for each share held, and Usinor holders get one share for each share held.
The exchange ratios represent a 56 percent premium for Aceralia holders and a 57 percent premium for Arbed holders based on the average stock prices of the two companies over the past three months.
"These are substantial premiums, but I would argue they are justified because Aceralia and Arbed are both very weakly valued in relation to the sector," said analyst Julien Onillon at HSBC.
"It is a very nice deal although it will require significant asset sales, particularly in flat steel, to satisfy European Commission regulatory authorities," he said.
Shares in the companies have been suspended since Friday.
The trio said the deal was designed to bring big cost savings, raising the possibility of capacity shutdowns and even plant closures.
"These gains are estimated based on the best performance of each company independent of the merger," the companies said.
"They will come in large part from the progressive rationalization of production toward the most efficient sites."
The companies said the deal would be neutral for Usinor shareholders in 2000 and earnings enhancing from the first year, before estimated synergies totaling 2.0 billion euros ($1.83 billion).
Roughly 300 million euros in annual costs are expected to be cut by the end of 2003, rising to a total of 700 million euros by 2006. Investment savings are seen at 350 million euros over the 2002-05 period.
Combined, the three groups will dwarf the current world steel leader, Japan's Nippon Steel Corp, which produces approximately 26 million metric tons of steel each year and with which Usinor already has formed a strategic alliance.
The deal comes amid ongoing consolidation in the fragmented European steel industry and builds on existing cross-holdings and cooperation pacts involving the three companies.
Ever since the merger of British Steel and Hoogovens to form the Anglo-Dutch steel giant Corus there has been speculation that more of Europe's disparate steel interests would merge.
Usinor Chairman Francis Mer has said that a good size for a global steel company over the next five years would be an output of between 40 and 80 million metric tons.
TITLE: OPEC Hints at Production Cut
PUBLISHER: Reuters
TEXT: CARACAS, Venezuela - OPEC Sec. Gen. Ali Rodriguez said on Monday there was "almost a conviction" in the oil exporting cartel to cut production ahead of a forecast drop in demand in the second quarter of the year.
Speaking in a live radio interview from London, Rodriguez said the supply cut could be up to a million barrels per day (bpd) "in the worst-case scenario."
Asked whether OPEC had already decided to announce a further reduction in output next month, he replied, "Not yet, but in any case there is an inclination, almost a conviction, that we have to cut production because normally in the second quarter there is a sharp drop in demand and of course prices."
The OPEC cartel, which controls two-thirds of world oil exports, has a target price band of $22 to $28 per barrel, and an informal mechanism to keep prices in the band by adjusting supply. Its reference crude oil price stood at $24.90 on Friday, according to the group's secretariat.
Rodriguez said global oil demand normally falls by two million bpd from March to June, although OPEC's supply cut of 1.5 million bpd in February meant the next cut would be smaller.
"In the worst-case scenario, the maximum [cut] would be of a million bpd," Rodriguez said.
The 11-member group supplies about 40 percent of the planet's daily 77 million bpd demand.
TITLE: G7 Gets First Look at new 'Euro Group' Head
AUTHOR: By Paul Geitner
PUBLISHER: The Associated Press
TEXT: PALERMO, Sicily - Belgian Finance Minister Didier Reynders made his debut at the Group of Seven gathering - the first chairman of Europe's 12-nation "euro group" from a non-G7 nation. He said his presence was a hint of greater respect for Europe's fledgling currency.
Reynders wasn't even invited to stay for the whole one-day G7 meeting Saturday, and the most attention was paid to a different new face - U.S. Treasury Secretary Paul O'Neill. But Reynders wasn't complaining.
"It's a good evolution," Reynders said at a news conference Saturday night in this Mediterranean port city.
The euro has been represented at the G7 table since its introduction in 1999 by three club members: Germany, France and Italy, which are all in the single currency. European Central Bank President Wim Duisenberg is also regularly invited.
But Reynders' appearance was the first by a nonmember finance minister on behalf of the euro. The meeting also marked the first time a euro-group official helped draft the final statement.
"It's normal that with the same currency, we must do that, we must have one point of view," he said.
Reynders, a 42-year-old Liberal Party member, sometimes described as brash, took over the rotating presidency in January of the group of nations who use the euro and will hold it for a year.
He quickly started making waves with ideas including calling for enhanced cooperation between the dollar, yen and euro currency areas, which he said would be useful in managing major financial crises.
Asked last month if he was advocating an elite G-3 club, Reynders replied "Why not?" Reynders is seeking ways to boost the political clout of the euro group, with the chairman as its voice.
He scolded the once-mighty German central bank last month for warning against political interference in euro zone monetary policy.
While he respects the European Central bank independence, Reynders said there should be "more efficient and permanent dialogue" between the bank and the euro group. He regularly attends ECB meetings, and invites the ECB president to euro-group meetings.
The euro group meets ahead of each month's meeting of European Union finance ministers - something that has raised hackles in London, which fears being shut out of decision-making.
Britain's Treasury last week expressed its resolve to "resist any attempt" to usurp the full group's authority.
Others have questioned whether U.S. policy makers will accept talking to a Belgian - or whoever the rotating president happens to be - instead of their usual partners.
TITLE: O'Neill's Plans For U.S. Dollar Questioned
AUTHOR: By Alister Bull
PUBLISHER: Reuters
TEXT: PALERMO, Italy - Europe's common currency should be cheered by a weekend Group of Seven meeting at which an influential forecast for U.S. growth was slashed and speculation over Washington's long-standing strong-dollar policy refused to die.
New U.S. Treasury Secretary Paul O'Neill warned reporters he would not be repeating attempts to explain Washington's carefully woven mantra that a strong dollar was in the national interest.
But analysts took this as confirmation that his comments to a German newspaper had been candid, signaling that the U.S. would not back political rhetoric with policy action to oppose market forces if these drove the currency down.
"O'Neill has realized any effort to explain dollar policy is ill-fated and has learned a first lesson in the sensitivity of foreign exchange markets," said CSFB currency strategist Joe Prendergast.
"But we're left with the impression that he has got a pragmatic approach to dollar policy and would not oppose a decline in its value for its own sake," he added.
A weaker dollar would help the country sell more exports, but it has a huge current-account deficit and any serious decline would make refinancing this foreign debt much more expensive.
The controversy arose over an interview O'Neill gave to the influential Frankurter Allgemeine Zeitung, published on the eve of his maiden talks with fellow masters of the world economy.
"We are not pursuing, as it is often said, a policy of a strong dollar. In my opinion a strong dollar is the result of a strong economy," the interview quoted him as saying.
Subsequent confusion in currency markets robbed the dollar of almost 1 percent against the euro on Friday, with it closing around 91.40 cents to the single European currency.
To make his point, O'Neill then issued the rather unusual personal assurance to reporters following the G7 talks that he would rent the New York Yankee baseball stadium to announce publicly if the policy were ever altered.
His comments chimed with G7 indications that slower growth in the U.S. would be met by more interest-rate cuts, whereas the European Central Bank's wait-and-see policy was still in place, and adds up to a negative outlook for the dollar, Prendergast said.
News on Saturday that the International Monetary Fund had almost halved its forecast for U.S. growth this year to 1.7 percent, from 3.2 percent, adds to the currency's worries and followed a tide of negative data last week that reinforced the slowdown picture.
But the headline number would suffer closer scrutiny and might not be all that bad after all, analysts warned.
Juergen Pfister, a senior economist at Commerzbank, said he could imagine that the euro would rise on Monday in a knee-jerk reaction to the IMF's downward revision of U.S. growth.
"That figure is shocking at first sight and I think markets may misunderstand it at first. But in reality it's quite a positive sign because it shows the IMF expects U.S. growth to pick up to a rate of 2.5 to three percent in the second half of the year."
TITLE: Police Break Up Protest at Daewoo Plant
AUTHOR: By J.H. Yun
PUBLISHER: The Associated Press
TEXT: BUPYONG, South Korea - Thousands of riot police raided Daewoo Motor Co.'s main plant Monday, using forklifts to break down the front gate and end a four-day sit-in protest by 600 laid-off workers.
Workers fought back, hurling rocks and firebombs before dispersing and hiding inside the sprawling plant in Bupyong, 18 miles west of Seoul. At least one worker was taken to the hospital.
As helicopters clattered overhead, police searched assembly lines and support buildings for workers and union leaders. Within an hour, most workers had left. About 60 protesters were detained by police.
Late Monday, about 100 workers regrouped at a cathedral, but police did not intervene.
Police moved in after previous clashes with workers that left a dozen people injured.
The government of President Kim Dae-jung considers layoffs necessary for streamlining the nation's big businesses and regaining investor confidence.
Daewoo Motor, South Korea's third-largest carmaker, collapsed in the 1997-98 Asian economic crisis. It has been surviving under court receivership since it filed for bankruptcy in November under an estimated bank debt of $10 billion.
Daewoo officials said they did not think the protest would spread because 5,000 workers at the company's two other plants in Kunsan and Changwon were not expected to join in.
Police were trying to arrest 30 union leaders who organized the protest after the company laid off 1,751 workers as part of its restructuring program.
The layoffs were part of efforts to make Daewoo Motor more attractive to General Motors Corp. GM began negotiations to take over Daewoo in September but it is reportedly reluctant to continue without layoffs.
Last week's dismissals reduced Daewoo's total work force by 44 percent to 10,655. Most of the layoffs came from the company's main plant, which was inefficient because of its outdated facilities.
About 300 laid-off workers and their families began a sit-down protest Friday inside the Bupyong plant. Early Saturday, they were joined by 300 workers who slipped past police lines.
About 4,000 riot police with helmets, batons and plastic shields blocked all gates into the plant. In clashes over the weekend, at least two workers and three police were slightly injured.
Authorities on Monday indicted 34 Daewoo Group executives and accountants for alleged involvement in operating a multibillion-dollar slush fund. Seven were arrested, including Chang Byong-joo, former president of Daewoo Corp., on suspicion they helped raise the fund through the group's London office between 1997 and 2000.
Prosecutors say Daewoo raised $20 billion by taking out illegal foreign-exchange loans and pooling funds from its subsidiaries through falsified trade documents.
TITLE: How Can the Budget Recoup Its Lost Petroleum Revenues?
TEXT: First Deputy Finance Minister Sergei Shamalov estimates the lowering of oil export duties could cost the government 4 billion rubles ($1.4 million) in revenue per month. Moscow very well might try to compensate for this loss through other measures aimed at oil companies. The questions are: will it, and how?
The philosopher Yury Krizanich said the worst tyranny is not that which is arbitrary, but which creates strict laws and then enforces them too energetically. The Energy and Economic Development Ministries as well as the Khristenko commission have each come up with options. One option would mean that, if the world price is above $32.50 per barrel, there would be a corresponding export rate of 79 euros ($73) per ton. Another suggestion is no less tough. This is that by more strictly enforcing present rules the government can get more from oil producers honestly and legally. I foresee strong opposition to the latter, although they could give some concessions to the oil companies. As far as more oil can be extracted, they should take another look at the balance between export quotas and how much has to be delivered to the domestic market. At the end of it all, they could end up with a situation where there is more to go around for both the government and the oil companies.
Yury Kafiev
Head of research at Regionfinance
The government's decision shows a sensible group working there and that stable growth is more important than an immediate victory from what is a violation of agreements with the representatives of the oil industry. The greatest likelihood is that the government will try to compensate for the loss in profits to the oil firms. It's almost certain that the rate of change in export duties for oil products will change more slowly than for oil itself. But it's unlikely that any different method would be able to compensate for the loss to the budget by the reduction in export duties.
Dmitry Avdeyev
analyst at UFG
Of course the government will be forced to somehow compensate for the fall in export duties on oil. Especially as additional revenues have already moved from the virtual to the real realm with the ratification of the budget. The sources of theses additional revenues may vary - from so-called "inflationary" taxes to the increase in tax discipline. In this matter, the oil companies will be at the center of the government's attention. It's possible we'll again hear the idea of a more precise definition of the internal and contract prices for exported oil, and suggestions of the sale of additional quotas for its export. However, in my view, the most realistic way to compensate for the lost revenues would be simply to increase exports.
Yelena Matrosova
Director of the center for macroeconomic research
Yunikon/MC
TITLE: And, Unlike Bank Cards, You Can Sleep on a Pillow
TEXT: "What do Russians have against plastic cards?" was a question put to me recently by a British colleague of mine. We were discussing a story about the employees of one company who were unwilling to have salaries wired to bank accounts and to use debit cards to get their cash, rather than taking it home in an envelope. "What's the difference," he wondered, "if you have to take it out of a bank machine before stuffing it under your pillow?"
The answer I gave was, "Three hundred years of development of the British banking system." Nothing else.
The collapse of many of the oligarchs' banks following the financial crisis of 1998 was only one episode in the long and sad tale of the Russian financial system. Another bitter chapter concerns the St. Petersburg-based Severny Torgovy Bank, which unexpectedly went under in the summer of 1995, dealing a major blow to the region's financial reputation.
This is why "banks are not trustworthy" has become such a cliché for those among the Russian population.
As for plastic, I remember a story I heard several years ago about a Russian and an American who decided to travel throughout the most desolate parts of Siberia. The American, who bore the entirety of the trip's expenses, wasn't overly worried about planning, and the trip began in a "we'll-just-follow-our-nose" manner. No thought was spared for where and when their cash would run dry, and when the travelers reached a village - hungry, tired and rubleless - the American triumphantly waved his American Express card and cried "Saved!" What he didn't anticipate is that with few exceptions the only places you can use AMEX in Russia are in Moscow, St. Petersburg and a few other cities. Eurocard/Mastercard, Cirrus Maestro and Visa have more outlets, but in general, only one or two percent of the population use banks.
This also means many effective marketing instruments do not work here. The director of one St. Petersburg theater once related how Western colleagues advised him to analyze regular visitors by looking at the data on card ticket purchases at the box office.
Dozens of companies transfer their employees' salaries to debit accounts, but people prefer to do what my British colleague suggested - withdraw the entire amount and keep it at home. Two St. Petersburg banks each have 100 ATM machines while the rest have between one and 10. At the same time, banks here are brazen enough to charge a commission of between 0.5 and 0.7 percent even for withdrawals from their own machines. Or they charge for receipts, taking approximately 100 rubles for every meter of paper used to issue them.
So, the man on the street reckons that banks are liable to collapse at any moment; they don't really care about the needs of those with small accounts; and that out of the 1,500 registered banks only a few dozen offer retail services anyway, for the simple reason that they are not as lucrative as corporate banking or serving a government budget. I think my friend has his answer.
TITLE: Make Arbitration Crystal Clear
AUTHOR: By James T. Hitch and Igor Gorchakov
TEXT: ARBITRATION procedure is well known as one of the most common forms of business dispute resolution. It is preferred to litigation by businesses that feel a state court will not be impartial, fair, and efficient in resolving their disputes with another party. This is especially true for businesses that operate in a "hostile" environment, such as, for example, a foreign country.
While, in the case of litigation, the competent state court is generally designated in the law, in the case of arbitration the parties are free to determine in their agreement the appropriate individuals who will act as the sole arbitrator, or the arbitration tribunal, which will resolve disputes. This can be either a separate arbitration agreement or a separate arbitration clause in their agreement.
So, by concluding an arbitration agreement clause, the parties agree to refer all disputes, both current and future, to the arbitration tribunal, and not to a state court, for resolution. However, sometimes the parties do not spend enough time analyzing their arbitration agreement or clause before signing; rather, they rely more on their "understanding" of it and not what they have actually put on paper. For example, the arbitration clause may provide that "disputes between the parties shall be resolved by the International Commercial Arbitration Tribunal in St. Petersburg."
However, there are at least two international commercial arbitration tribunals in St. Petersburg: the Arbitration Court of the St. Petersburg Chamber of Commerce and Industry and the St. Petersburg International Commercial Arbitration Court. Which one is competent to resolve their dispute? It's possible that, with such an arbitration clause, both arbitration tribunals could refuse to take this dispute.
Of course, this problem may be resolved if some procedural rules pertaining to this kind of problem exist in the relevant legislation.
For instance, the Geneva European Convention on International Commercial Arbitration of April 21, 1961, to which most European countries, including Russia, are parties, provides that, if the parties have agreed upon the arbitration procedure but have failed to clearly determine the arbitration tribunal and procedure, then the plaintiff may apply to the chairman of the chamber of commerce of the place of arbitration (if such a place is agreed upon by the parties), or to the chairman of the chamber of commerce of the defendant's location, or to the special committee, asking them to appoint the tribunal and rules of arbitration procedure applicable to the dispute.
However, this may take a lot of time and effort, and may lead to a significant delay in the resolution of the dispute. Moreover, the provisions of the Geneva Convention do not apply if the country of one of the parties to the dispute is not a signatory. So, an unclear arbitration clause may cause a dispute between, say, a Russian company and a US company to result in a "deadlock."
Therefore, it is highly recommended that businessmen should not neglect the arbitration clause in their contracts, in order to avoid any unnecessary wasting of time and money on trying to resolve the dispute.
Actually, the best way to avoid any problems with the arbitration clause is to take a ready-made clause recommended by one of the international arbitration tribunals.
For example, if the parties will agree to refer their disputes to the International Court of Arbitration in Paris (ICC), they should use the following standard language recommended for the arbitration clause by the ICC: "All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said rules."
James T. Hitch is Managing Partner and Igor Gorchakov an associate at Baker & McKenzie's St. Petersburg Office.
TITLE: Release of Genome Data Report Marks Great Day in History of Science
AUTHOR: By Stephen Jay Gould
TEXT: TWO groups of researchers released the formal report of data for the human genome last Monday - on the birthday of Charles Darwin, who jump-started our biological understanding of life's nature and evolution when he published "The Origin of Species" in 1859. On Tuesday, and for only the second time in 35 years of teaching, I dropped my intended schedule - to discuss the importance of this work with my undergraduate course on the history of life. (The only other case, in a distant age of the late '60s, fell a half-hour after radical students had seized University Hall and physically ejected the deans; this time at least, I told my students, the reason for the change lay squarely within the subject matter of the course!)
I am no lover, or master, of sound bites or epitomes, but I began by telling my students that we were sharing a great day in the history of science and of human understanding in general.
The fruit fly Drosophila, the staple of laboratory genetics, possesses between 13,000 and 14,000 genes. The roundworm C. elegans, the staple of laboratory studies in development, contains only 959 cells, looks like a tiny formless squib with virtually no complex anatomy beyond its genitalia, and possesses just over 19,000 genes.
The general estimate for Homo sapiens - sufficiently large to account for the vastly greater complexity of humans under conventional views - had stood at well over 100,000, with a more precise figure of 142,634 widely advertised and considered well within the range of reasonable expectation. Homo sapiens possesses between 30,000 and 40,000 genes, with the final tally almost sure to lie nearer the lower figure. In other words, our bodies develop under the directing influence of only half again as many genes as the tiny roundworm needs to manufacture its utter, if elegant, outward simplicity.
Human complexity cannot be generated by 30,000 genes under the old view of life embodied in what geneticists literally called (admittedly with a sense of whimsy) their "central dogma": DNA makes RNA makes protein - in other words, one direction of causal flow from code to message to assembly of substance, with one item of code (a gene) ultimately making one item of substance (a protein), and the congeries of proteins making a body. Those 142,000 messages no doubt exist, as they must to build our bodies' complexity, with our previous error now exposed as the assumption that each message came from a distinct gene.
We may envision several kinds of solutions for generating many times more messages (and proteins) than genes, and future research will target this issue. In the most reasonable and widely discussed mechanism, a single gene can make several messages because genes of multicellular organisms are not discrete strings, but composed of coding segments (exons) separated by noncoding regions (introns). The resulting signal that eventually assembles the protein consists only of exons spliced together after elimination of introns. If some exons are omitted, or if the order of splicing changes, then several distinct messages can be generated by each gene.
The implications of this finding cascade across several realms. The commercial effects will be obvious, as so much biotechnology, including the rush to patent genes, has assumed the old view that "fixing" an aberrant gene would cure a specific human ailment. The social meaning may finally liberate us from the simplistic and harmful idea, false for many other reasons as well, that each aspect of our being, either physical or behavioral, may be ascribed to the action of a particular gene "for" the trait in question.
But the deepest ramifications will be scientific or philosophical in the largest sense. From its late 17th-century inception in modern form, science has strongly privileged the reductionist mode of thought that breaks overt complexity into constituent parts and then tries to explain the totality by the properties of these parts and simple interactions fully predictable from the parts. ("Analysis" literally means to dissolve into basic parts). The reductionist method works triumphantly for simple systems - predicting eclipses or the motion of planets (but not the histories of their complex surfaces), for example. But once again - and when will we ever learn? - we fell victim to hubris, as we imagined that, in discovering how to unlock some systems, we had found the key for the conquest of all natural phenomena. Will Parsifal ever learn that only humility (and a plurality of strategies for explanation) can locate the Holy Grail?
The collapse of the doctrine of one gene for one protein, and one direction of causal flow from basic codes to elaborate totality, marks the failure of reductionism for the complex system that we call biology - and for two major reasons.
First, the key to complexity is not more genes, but more combinations and interactions generated by fewer units of code - and many of these interactions (as emergent properties, to use the technical jargon) must be explained at the level of their appearance, for they cannot be predicted from the separate underlying parts alone. So organisms must be explained as organisms, and not as a summation of genes.
Second, the unique contingencies of history, not the laws of physics, set many properties of complex biological systems. Our 30,000 genes make up only 1 percent or so of our total genome. The rest - including bacterial immigrants and other pieces that can replicate and move - originate more as accidents of history than as predictable necessities of physical laws. Moreover, these noncoding regions, disrespectfully called "junk DNA," also build a pool of potential for future use that, more than any other factor, may establish any lineage's capacity for further evolutionary increase in complexity.
The deflation of hubris is blessedly positive, not cynically disabling. The failure of reductionism doesn't mark the failure of science, but only the replacement of an ultimately unworkable set of assumptions by more appropriate styles of explanation that study complexity at its own level and respect the influences of unique histories. Yes, the task will be much harder than reductionistic science imagined. But our 30,000 genes - in the glorious ramifications of their irreducible interactions - have made us sufficiently complex and at least potentially adequate for the task ahead.
We may best succeed in this effort if we can heed some memorable words spoken by that other great historical figure born on Feb. 12 - on the very same day as Darwin, in 1809. Abraham Lincoln, in his first inaugural address, urged us to heal division and seek unity by marshaling the "better angels of our nature" - yet another irreducible and emergent property of our historically unique mentality, but inherent and inviolable all the same, even though not resident within, say, gene 26 on chromosome number 12.
Stephen Jay Gould, a professor of zoology at Harvard, is the author of "Questioning the Millennium." He contributed this comment to The New York Times.
TITLE: Sports: Last Frontier of U.S. Global Expansion
TEXT: THE New York Yankees announced a marketing alliance earlier this month with Manchester United, the English soccer club. The deal between two of the world's most valuable sports teams signals their desire to become truly global franchises, and their inability to do so on their own. Baseball has an avid following in the Caribbean and in Japan, but it is not clear that America's pastime will catch on elsewhere. Nor is it clear whether soccer, the world's most popular game, will ever conquer America.
Sports remains the final frontier in the global expansion of American mass culture. Whether people live in Nairobi, Frankfurt or Kuala Lum pur, they are increasingly likely to listen to American music and watch Hollywood films. But when it comes to sports, the ever-shrinking global village follows the likes of soccer powers Barcelona, Manchester United and A.C. Milan. Every so often American athletes like Tiger Woods and Michael Jordan become global celebrities, but people in much of the world do not follow American teams the way they watch American TV shows and movies - not to mention England's Premier League.
The New York Yankees, whom we like to call "world champions," recognized this in negotiating a marketing deal with "Man U." The details remain sketchy, but the alliance entails the two franchises, winners of their respective leagues in three of the last four seasons, selling each other's merchandise, exploring joint sponsorship opportunities and television deals. The Yankees would like to own their own TV channel, as Manchester United already does, so the day may come when each franchise televises the other's games.
The Yankees will be especially eager to gain exposure throughout Asia, where the English club's games are regularly televised. As John Krimsky, the president of YankeeNets Properties, expressed it: "Manchester United is the single best-marketed franchise in the world, with about as many fans in Thailand as it has in England." That explains why the team is valued at more than $1 billion and why Nike, the sportswear company, has signed a 15- year, $440 million licensing deal with Man U.
None of this is to imply that this new alliance is a one-way street. Manchester United bypassed America's fledgling professional soccer league to make a deal with the Yankees because it hopes that the association will make it a recognizable brand in what remains the world's foremost consumer market.
Still, Man U fans reacted to the news with a who-needs-them disdain. Yankee faithful are equally offended by the idea that a soccer team is needed to help spread the gospel of Babe Ruth, Joe DiMaggio and Derek Jeter.
They'd better get over it. Given today's global marketplace, an all-out merger between such franchises is a distinct possibility.
This comment originally appeared as an editorial in The New York Times.
TITLE: A Suicide Note Signed by the Oligarchs
AUTHOR: By Yevgenia Albats
TEXT: A MASTERPIECE of early 19th-century Russian literature was a play by Alexander Griboyedov called "Woe From Wit." The publication in an open letter by the so-called "trade union of oligarchs" last week made me wonder whether there isn't a contemporary Griboyedov capable of writing "Woe From Money." I think this title is appropriate, because the members of the All-Russian Union of Industrialists and Entrepreneurs control half of the country's economy, and because I find no "wit" in their statement.
The oligarchs have never come out so openly in expressing their distaste for democracy, civil society, the independent media and real business competition as they did in this statement. The real message of their letter is "Love those in power, regardless of what they do, and you will prosper."
In their eagerness to please the Kremlin, the oligarchs even managed to slight their own business-development interests. "We do not believe in 'public television,' 'public oversight boards' and the like. We believe in private property," they wrote. If their companies ever go public, I wonder how much they will have to pay PR firms to make potential investors forget their disrespect for anything "public."
The oligarchs' statement came in response to Boris Berezovsky's earlier appeal to the union to pay off Media-MOST's debts in order to save its media outlets (particularly NTV) from being de-facto nationalized under Gazprom's control. As much as I am skeptical that any noble idea could come from Berezovsky, I think that his proposition sounded quite reasonable. Basically, he proposed that the Russian oligarchs join the ranks of their foreign counterparts, such as Ted Turner and George Soros, and make Media-MOST truly independent of any single interest, public or private.
For the oligarchs, such a move would have been brilliant PR, enabling them to seem like responsible citizens instead of just huge parasites sucking up the country's riches. But not only did they decline, they did so openly. They couldn't help themselves.
And their response was clearly not addressed to the public, but aimed directly at the Kremlin. It is a loyalty oath to those who have the power to take back what the oligarchs grabbed during the years of "wild" privatization. A loyalty oath to those who are now punishing the disloyal Vladimir Gusinsky.
However, this effort to obtain a pardon may backfire on the "industrialists." Their letter is pretty clear about the kind of game they prefer: opaque and ruled by behind-the-Kremlin-walls dealing. Such rules envision neither accountability (to creditors or investors) nor control from the public, whose natural resources are being steadfastly converted into the oligarchs' private fortunes.
Obviously, there is no place for independent media in such a game. They are dangerous as a means of control and not useful in promoting business interests. There is no need for media in a system where tête-à-tête agreements with the authorities are all that is needed to secure and expand business interests. For the same reason, there is no need for real political parties as channels for lobbying interests other than those of the state and its associates.
Even worse for Russia is that such rules will multiply difficulties for new businesses trying to emerge and survive. Small and medium-sized businesses need an open arena (i.e. they need independent media and genuine political parties) to gain a toehold and compete on merit rather than connections. Such non-oligarchic business could theoretically become a foundation for a powerful civil society that potentially could limit the oligarchs and their friends in the Kremlin. But not under these rules.
I am not so naive as to expect the oligarchs to care about civil society. But it's surprising to see them so stupidly damaging their own interests. After reading the rules of the game in this manifesto, only lunatics would dare invest here. The 1998 financial crisis taught investors that the promises of the oligarchs and the guarantees of the state are worthless. Only transparency and accountability can provide real insurance and bring outside investment into Russia. And, clearly, they are not on the cards.
Yevgenia Albats is an independent, Moscow-based journalist.
TITLE: Aid That Works
AUTHOR: By John Dooley
TEXT: THE news lately in the United States has been full of reports that the new Bush administration will take a tougher line in its relations with the Russian government. In part, the perceived new direction is simply an extension of campaign criticisms of the Clinton administration's performance and particularly Vice President Al Gore's involvement. In part, it is fueled by the Bush administration's decision to go forward with a missile defense system despite the impediment of the 1972 Anti-Ballistic Missile treaty.
As someone who has been involved in rule-of-law programs in Russia for the past 10 years, I fear that the exuberance for a "new direction" presents a serious risk that we will discard elements of the assistance program that are working either in order to seem "tough" or just for the sake of doing something different. In January, analyst Michael McFaul of the Carnegie Endowment wrote in the Washington Post that the new administration should "cut all democratic and economic aid to the [Russian] state and redirect these funds to Russian society." Similar proposals have surfaced in the United States Congress. From a rule-of-law perspective (and, I suspect, many others), such a policy would be a serious step backward - accomplishing exactly the opposite of what is apparently intended.
Initial United States assistance to the Russian legal system focused primarily on promoting the rule of law and American values and principles. There is now widespread agreement with those principles in Russia, at least at the level of theory. Reforms have separated the Russian courts from direct executive-branch control. The Duma has enacted numerous laws to support and regulate private commercial activities in virtually all parts of the economy.
As a result, rule-of-law assistance has entered a more mature phase. Rule-of-law principles are not self-executing. They must be applied competently and predictably in the millions of cases, criminal and civil, that are presented to Russian courts each year, and those court decisions must be enforced. "Millions" is not hyperbole - in 2000, 16,742 Russian judges disposed of 5.5 million cases. The challenge of U.S. assistance is to help historically weak institutions, like the courts and private lawyers, thrive and grow to a position in Russian society comparable to the one they occupy in the United States. In order to do this, assistance must be focused on less glamorous issues like court administration, the use of technology to increase efficiency, alternative dispute resolution, effective judicial and lawyer training and ethics. And, yes, much of that assistance must go directly to the relevant parts of the government of the Russian Federation, not to non-governmental organizations that can advocate reform, but not actually bring it about.
The West tends to have an inconsistent and ambivalent response to institution building. On the one hand, we recognize that development of the legal system, particularly the courts and the mechanisms for enforcement of judgments is essential for a market economy and the protection of Russian and foreign investment. On the other hand, if Russia fails to take some of the political or economic policy actions we desire, we threaten - as McFaul has - to cut off assistance to the very institutions that must be strong in support of the market economy. Somehow, multi-track diplomacy must learn to distinguish between responses that encourage desirable action and those that make that action more difficult.
One of the ironies about some of the current proposals is that the West now provides just a fraction of what it once did in assistance to Russia, including assistance to non-governmental organizations. It used to be common to hear American diplomats explain that fundamental change in Russia will take at least a generation and that our goal is to support incremental progress to that fundamental change. Now, with greatly reduced assistance funding, the undercurrent is that if fundamental change doesn't happen overnight, assistance dollars are bringing no value and are being wasted. We must not let that undercurrent become official policy.
We should think carefully about how difficult the desired change will be and set realistic goals in light of our own experience. In the last 40 years or so, American courts have gone through many of the changes currently facing Russian courts in order to deal effectively with larger and larger caseloads of increasingly complex cases with very limited resources. I am reminded of the observation of Chief Justice Arthur Vanderbilt of the New Jersey Supreme Court that court reform in the United States "is not for the short-winded." It also cannot be for those who lack commitment and who respond primarily to political concerns unconnected with whether or not substantial court reform is actually occurring.
Legal reform is occurring in Russia, although this progress gets far too little acknowledgement in the West. The court system is better funded; judges are better paid and better trained. The judiciary is in control of its destiny and has leaders with a vision of the future that is, in part, based on American models. We must continue to support that reform with direct assistance to the Russian courts and other parts of the legal system, even as we engage the Russian government on other issues.
One of the strengths that has developed in our relationship with Russia is that it is built on a diverse range of contacts, mutual projects and personal interactions. That relationship can be managed only by sophisticated policies that promote and financially support institutional development that benefits both our countries. Hopefully, when the current rhetoric matures into the new administration's policies, that truth will prevail.
John Dooley is a justice for the Vermont Supreme Court who has participated in rule-of-law programs in Russia for the past 10 years. He contributed this comment to The St. Petersburg Times.
TITLE: Is a Professional Army Feasible?
AUTHOR: By Pavel Felgenhauer
TEXT: DEFENSE Ministry officials insist they are already actively implementing a comprehensive military reform plan that will reduce the number of active servicemen while simultaneously improving troop quality. It has been reported that President Vladimir Putin has approved the reduction of about 365,000 servicemen and 120,000 civilian personnel from the Defense Ministry over the next three years. At the same time, the Kremlin has pledged that a reduced Russian military will receive the same budget allocations as it currently does. The Kremlin hopes this plan will motivate generals to make genuine cuts and create a smaller, better-financed force.
But will a disciplined professional army just appear? Are Russia's military chiefs - all of whom were trained in Soviet military academies - ready to depart from tried-and-true methods to create a truly different military force? I fear that this latest military reform plan may turn out to be just another ill-conceived and badly executed post-Soviet reform scheme that will end up doing the nation no good - an endeavor to "optimize" and scale back a failed system without rooting out fundamental flaws.
This week at a Russian-American seminar on military education and training in Moscow, the first deputy chief of the Defense Ministry General Staff, Gen. Valery Manilov, announced that 47 out of 102 Russian military academies have been closed since 1998 and that "now we are entering the second phase of military reform, so 10 more academies should also go." Manilov proclaimed that the closings will improve quality, but in fact, the opposite is happening.
Three-star Gen. Leonid Zolotov - commandant of the Frunze Military Academy in Moscow - told me that the quality of officers that opt to study there is poor, adding that the best men leave military service because of bad conditions and overall low morale.
The students at the Frunze Acade my are mostly married men with children, with the rank of captain or higher, aged just under 30. These students receive such small stipends that they are forced to make money on the side by moonlighting. "At the academy, they often sleep during lectures out of exhaustion. Many secret maps and documents have also been lost by drowsy officers in the Moscow metro," lamented Zolotov. "The Defense Ministry ordered us to reduce the academy program from three years to two and calls this 'reform.' It's not reform - it's just a senseless cutback."
Without a well-trained and educated officer corps, Russia will never have a modern military. Without responsible professional sergeants and other noncommissioned officers, Russian troops will never be disciplined. Officially, Putin has announced that his long-term goal is a modern, professional army. But at present, Russian sergeants are soldiers that have been trained for just three months in a sergeant school. Gen. Anatoly Si do ren ko, chief of the Defense Ministry's military education directorate, told me that there are no plans to change this system and train professional NCOs.
In fact, Sidorenko announced at the seminar that "a professional is a person who makes a living by exploiting some profession, say, a highly professional hairdresser" and that "it does not matter really what kind of education this professional has." Sidorenko added that the Russian armed forces are already all professional: They consist of professional generals, officers, contract solders and even professional conscripts.
Sidorenko argued that since many disgruntled young officers are leaving service early, the ministry should produce more lieutenants to compensate for the loss.
Since the mid-'90s, the Defense Ministry has been running specially reduced six-month courses to make lieutenants out of soldiers. Si do ren ko told me that these men are not true officers and that they are an embarrassment for the military, but six-month lieutenants are still being commissioned.
It is apparent that many Defense Ministry chiefs do not understand what military professionalism means, and what is more, actually do not want to learn. Commanding generals are not "reforming" anything within their domain for the simple reason that they genuinely believe the Soviet military machine was the best in the world and it doesn't need reform, but restoration.
The result is chaos and continued degradation. Instead of patiently building the foundation of a new, truly professional army, our military chiefs are spending their time, effort and money just propping up the old one.
Pavel Felgenhauer is an independent, Moscow-based defense analyst.
TITLE: Yakovlev Has The Power To Save City
TEXT: Dear Gov. Vladimir Yakovlev!
As you will be aware, the number of people in St. Petersburg infected with HIV, the virus that causes AIDS, is increasing rapidly. It appears that we have reached the point where this city is, numerically at least, the country's AIDS capital.
The federal authorities are doing little to deal with the problem, even though it affects the whole nation, from Kaliningrad to Vla divostok, and even though the government admits that Russia's demographic situation is precarious.
The media is largely silent, and the state is not using its considerable influence over certain television outlets to explain to people the dangers and consequences of HIV and AIDS.
But doctors and charity workers in this city, the city that you govern, say that the problem is getting out of control. At the heart of the issue is ignorance: People do not know how HIV is transmitted, and this ignorance is perhaps the virus' most dangerous weapon at the moment.
But it is also an easy weapon to negate.
Vladimir Anatolyevich, we ask you to use whatever influence you have in Petersburg Television to help begin an AIDS awareness campaign.
We ask you to talk to the city's celebrities, actors, television directors and heads to offer their services free to produce a series of advertisements to educate people about AIDS - and, if necessary, scare them into action, as was the policy of many Western governments when the virus was discovered.
We also ask you to divert city budget funds to help those few hospitals and doctors who are involved in the fight against AIDS, and to finance an awareness campaign, not only on television but also in the press, and by distributing pamphlets and other materials in schools, universities - even in offices and factories.
HIV sufferers interviewed by The St. Petersburg Times have asked their fellow citizens to be careful, and not to treat infected persons as outcasts. AIDS is a killer, but it is not a punishment. We hope that you will promote tolerance in any campaign you choose to launch.
Vladimir Anatolyevich, your education officials and the city's teachers are in denial. They are turning a blind eye to the problem. You, as governor, are in a unique position to slow and even halt the rise of HIV and AIDS.
By fighting ignorance, you will be fighting this terrible virus. With the 300th anniversary of St. Petersburg coming up, there could be no better present to the city than saving the lives of its people.
TITLE: WORLD WATCH
TEXT: Iraqis Protest Strikes
BAGHDAD (Reuters) - Iraq voiced defiance as it reported Western warplanes carrying out fresh patrols of its skies following last week's U.S. and British air strikes near Baghdad.
Thousands of Iraqis demonstrated in Baghdad on Sunday against Friday's air raid, which Washington and London said targeted five Iraqi radar installations in an operation to protect their planes policing no-fly zones.
Iraq said U.S. and British planes patrolled the south of the country on Sunday for the second time since the Western air attack. The first patrol was on Saturday within hours of the raid.
In a striking reminder of the 1991 Gulf War, after which the no-fly zones were set up, the Israeli army announced joint exercises with the United States to fire Patriot missiles used a decade ago to try to intercept Iraqi Scud missiles that hit targets around Tel Aviv.
Immigrant Mafia
FREJUS, France (AP) - Criminal gangs operating in Turkey and Iraq were behind the smuggling of hundreds of Iraqi Kurds who landed in France after a weeklong journey in a decrepit freighter without toilets or provisions, border police said Sunday.
The burgeoning trade of immigrant smuggling hit French shores in an unprecedented way Saturday, when hundreds of Kurds desperate to leave Iraq successfully slipped into France on the East Sea, a decrepit ship that ran aground off the country's posh Riviera.
"It's an Iraqi-Turkish mafia ring that brought 910 people on the boat," said Daniel Chaze, deputy central director of the French border police.
Gangs specializing in people smuggling recruited the Kurds from their homes in northern Iraq, he said. A Turkish smuggling ring then loaded the refugees onto a Cambodian-registered freighter. The refugees were charged up to $2,000 each for the trip. They had no idea where they were going.
One Nation Gains
SYDNEY, Australia (AP) - Australia's conservative government was shaken Sunday by a disastrous defeat in a key state election as many of its supporters flocked to a right-wing, anti-immigrant party.
The opposition Labor Party, which won overwhelmingly in the Queensland state elections on Saturday, was favored to repeat its victory in federal elections expected by November.
But the worst blow for embattled Prime Minister John Howard is the loss of support among traditional conservatives, who are among those most angry about his government's policies.
Many conservatives switched to One Nation, a right-wing group headed by Pauline Hanson advocating limiting everything from immigration to farm regulation.
Prison Riot Ends
SAO PAULO, Brazil Security forces quelled on Monday Brazil's biggest riot which left at least 15 dead and 7,000 hostages were released as a search for bodies and guns was carried out.
Troops dressed in body armor and carrying rifles swept through Latin America's biggest prison, Carandiru, in what appeared to be a negotiated end to the bloody 25-hour siege.
They started a cell-by-cell search with prison guards in the biggest of the 29 prisons but pulled out of the decrepit compound before nightfall, saying they would complete the search Tuesday. Independent observers and police will stay overnight to prevent more bloodshed.
The uprisings broke out on Sunday when some 20,000 rioting inmates took relatives, friends and prison guards hostage during visiting hours in Brazil's wealthiest and most populous state of Sao Paulo. By Monday afternoon, 29 prisons had joined the massive rebellion.
Lovers Busted
KUALA LUMPUR, Malaysia (AP) - Islamic police turned Valentine's Day into a fright night for 208 Malaysian couples, raiding hotel rooms and lovers' lanes to enforce rules against illicit sex and cuddling.
The officers work under the Islamic Affairs Department and enforce religious laws affecting the Muslim majority among this Southeast Asian nation's 22 million people.
The Sun and Star newspapers reported Friday that teams swooped on sites where they suspected couples might be violating laws against unchaperoned touching between unmarried couples.
They intruded in hotel rooms, parked cars, university buildings and parks and disturbed the affections of 208 couples, 44 of whom were charged with violations punishable by up to two years in jail and a $80 fine.
Palestine 'Anarchy'
UNITED NATIONS (Reuters) - The special United Nations envoy to the Middle East warned Monday that without urgent economic aid, the Palestinian Authority might soon collapse, leading to "chaos and anarchy" in Palestinian areas.
The Palestinian Authority is fast running out of funds and within a few weeks will be unable to pay its salaries, the envoy, Terje Rod-Larsen, said at a news conference. Much of the authority's problems are brought about because in the recent months of violence, Israel has begun to withhold value-added tax and customs revenues that it agreed to give the Palestinians.
The authority is going to need about $50 million a month in international aid, beginning this month, to keep it afloat until the local economy can start recovering, Rod-Larsen said.
Cholera Hits S. Africa
DURBAN, South Africa (AP) - South Africa's worst cholera epidemic in more than 15 years has killed 111 people and sickened more than 50,000 since August, health authorities said Friday.
More than 1,500 people were diagnosed with the disease over a 24-hour period from Thursday to Friday alone, raising the number sickened in the epidemic to 50,614, the provincial health department in KwaZulu-Natal said.
The cholera epidemic is South Africa's worst since the early 1980s, when more than 105,400 people contracted the highly contagious waterborne disease over a four-year period. More than 340 people died in four consecutive epidemics.
Myanmar Officials Die
YANGON, Myanmar (AP) - A Myanmar army helicopter crashed Monday, killing the No. 4 general in the country's ruling military council and two cabinet ministers, government officials said.
The helicopter, carrying Lt. Gen. Tin Oo and about a dozen other officials, crashed in southeastern Myanmar because of engine trouble, the government officials said on condition of anonymity.
They refused to name the ministers who were killed along with Tin Oo, known by the title of Secretary 2 in the ruling State Peace and Development Council.