SOURCE: The St. Petersburg Times DATE: Issue #654 (21), Tuesday, March 20, 2001 ************************************************************************** TITLE: Chernobyl Cleaners Keep Up Their Vigil PUBLISHER: The Associated Press TEXT: SHAKHTY, South Russia - It is day number 211 for the men camped out on a snow-packed square in the southern Russian town of Shakhty - the 30th week of their desperate plea for millions of rubles owed to them for helping clean up the worst nuclear accident in history. The day starts with wives and children of these men - dubbed "Chernobyltsy" for their work at the Chernobyl nuclear plant after the 1986 disaster - arriving with medicine, bottled water and a kiss before heading to work or school. The men, mostl y former coal miners now unable to work because of radiation-related ailments, stay behind. They talk about politics or sports. Lately, however, they have been talking about the nuclear plant that just opened 150 kilometers to the east - Russia's first new nuclear station since Chernobyl. All of them are opposed. "We understand what that means, the risk of invisible radiation," says a protest organizer, Viktor Butsev. Throughout the day, more Chernobyltsy, friends and neighbors appear at the camp with words of support, gathering beneath huge caricature portraits of top-ranking government officials. About 90 men have been taking part in the protest since July, rotating teams every week, with about a dozen men at a time sleeping in rough canvas tents and consuming only water. As day 211 draws to a close, they play backgammon on rickety cots and share stories of their children - one has brought a pink balloon to decorate the drab tent. As part of the disaster brigades that were deployed at Chernobyl, the men enjoy a special legal status in Russia and are supposed to earn monthly benefits ranging from 300 to 5,000 rubles - the equivalent of about $10 to $180. However, chronic government cash shortages often hold up the payments. Butsev says the Shakhty protesters haven't been paid since January 1999, and each is owed from 30,000 to 180,000 rubles ($1,070 to $6,400). Local officials have said that the funds have been delayed pending the passing of a new law on Chernobyl benefits. In the meantime, many cleanup workers face cancer and other ailments they cannot afford to treat. The protesters praise neighboring Ukraine for closing the Chernobyl plant in December after years of international pressure. Sometimes, the men talk about the catastrophe that unites them. "I still remember that aftertaste of metal, and how it was hard to breathe," says Vladimir Mandrikin, head of the Shakhty Chernobyl Union. "We didn't want to admit how much we were weakened." TITLE: A New Image for a Seedy Square? AUTHOR: By Vladimir Kovalyev PUBLISHER: Staff Writer TEXT: Has the death knell sounded for a major emblem of all that is ragged and seedy about St. Petersburg - the kiosks on Sennaya Ploshchad? On Friday, Governor Vladimir Yakovlev announced plans to complete the long-standing project to renovate the square by the end of this summer, and that the 140 kiosks in the area, for long a source of cheap goods with questionable sell-by dates, would have to go for good. At a meeting of the city administration, Yakovlev ordered the removal of the kiosks "immediately," said his spokesman Alexander Afanasyev in a telephone interview on Monday. "The first signs of renovation work should already be noticeable this spring," said Afanasyev. "The renovations should give the square a 'greener' character. [By the time they are finished] there will be only a small space left where metro construction work will continue underground." However, according to Vitaly Zentsov, deputy head of the City Architecture Committee, the renovation plans are still in their infancy. "It would be good if the major work on the square was finished before the end of the construction season [which stops with winter], but it is too early to put an exact date on this," Zentsov said on Monday. "As for the kiosks, they should be removed together with the metro construction site, which will be gone in May." The latter construction is for a new metro station at Sennaya Ploshchad, which will be part of a new line planned to link the city's southeast and northwest. Igor Strauman, head of the trade department at the Admiralteisky district administration, said that every operating agreement signed between kiosk owners and City Hall contained the proviso that kiosks could be removed at a moment's notice if they got in the way of construction plans. Even so, he said, it would be difficult to make them disappear overnight. "At the moment, I have no official documents [concerning the kiosks' fate]," he said by telephone on Monday. "The official papers I do have are rent agreements with kiosks that expire on June 1. I have seen no official order for the kiosks' removal [overriding that]." Strauman added that the City Property Committee earned around $500,000 a year from kiosk rental agreements. "It's a very profitable business, not only for kiosk owners but also for City Hall," he said. Kiosk workers and tenants reacted philosophically to the news on Monday. "I heard the news," said Leonid, 42, who rents and runs a cigarette kiosk on Sennaya Ploshchad, "but we have been told to pay rent for the whole of this year anyway, and I know it would be impossible to get any of it back. But I think this square has lost its importance since the appearance of other places where one can buy cheap things. I'll find somewhere else to work." "Probably it would be better if [City Hall] was to build a mall here instead of all these kiosks," said Valentina, 45, an assistant at a meat-produts kiosk. "I'll find a new job, and so will my bosses - they're clever guys." Taking the place of the kiosks - and, presumably, the lines of old ladies who peddle their wares next to them - the City Hall plan envisages a paved square lined with trees and bushes, as well as a straightening of the tram lines that bend around the construction site toward Sadovaya Ulitsa. This would be a far cry from the traditional image of Sennaya Ploshchad and the district surrounding it - a frequent backdrop to criminal activity and a permanent fixture in St. Petersburg's literary imagination, thanks to novels such as "Crime and Punishment." Raskolnikov - Dostoevsky's tortured, brooding protagonist - lived on the corner of Stolyarny Pereulok and Malaya Meshchanskaya Ulitsa (now Grazhdanskaya Ulitsa). He killed the pawnbroker, Alyona Ivanovna, at 102 Canal Griboyedova. And afterwards, he fell to his knees in remorse in front of the Church of the Assumption of the Virgin Mary - the spot where Sennaya Ploshchad metro station now stands after the church was demolished in 1960. The church's destruction added to the superstition surrounding the area, which was further fueled when a concrete overhang at the metro station's entrance collapsed during rush hour in June 1999. Seven people were killed. Another recent tragic addition to the area's dark image was the November 1998 murder of federal lawmaker Galina Starovoitova, who was assassinated by unknown killers in the stairwell of her home at 91 Canal Griboyedova. Several other murders, many of them apparently contract hits on businessmen, have taken place in the vicinity since. Yakovlev has also reportedly told city officials to look into the possibility of building a chapel on the square, or even of building a church to replace the old Assumption of the Virgin Mary. TITLE: Cancer Claims Political Poet Krivulin AUTHOR: By Vladimir Kovalyev PUBLISHER: Staff Writer TEXT: Renowned local political activist and author Viktor Krivulin - who could boast both a tutelage under poet Anna Akhmatova and friendship with the late Nobel laureate and exiled Joseph Brodsky - died Saturday of lung cancer. He was 56. Victor Krivulin was the vice president of the St. Petersburg Pen Club and published dozens of books of poetry, most of which were also printed abroad and circulated via samizdat - or self-published journals within the Soviet Union. He was also intensely politically active, serving as the deputy chairperson of the local branch of the Democratic Russia party. The last book he wrote before his death was about Russia's ongoing war in Chechnya. He also had a close friendship with Ga lina Sta ro voi tova - the State Duma deputy who was assassinated in 1998 in a murder that remains unsolved. At one point, Starovoitova suggested nominating Krivulin for a Nobel Prize in Literature. "He was a person who combined in himself high moral qualities and political persuasion," said Ruslan Linkov, chairperson of local branch of the Democratic Russia party. "There are almost no politicians of this kind left in Russia. As a creative person he was very sensitive to the Chechen War, and he also protected freedom of speech in every way possible." State Duma Deputy and former dissident Yuly Rybakov also remembered Krivulin warmly. "I new him from early '70s as a bright and powerful man, as a person who back then was one of the brightest members of the artistic underground," Rybakov said. "I will remember him as a person who always had a very intense inner spirit." Funeral services will be held at Smolenskoye Cemetery on Wednesday. An obituary of Viktor Krivulin will appear in Friday's issue. TITLE: Bulgarian Diplomats Out In Tit-for-Tat Expulsions PUBLISHER: Reuters TEXT: MOSCOW - The Foreign Ministry said on Monday that it was asking three Bulgarian diplomats to leave the country, two days after Bulgarian authorities took a similar measure. A statement from the Foreign Ministry said that the three diplomats had been "engaged in activities incompatible with their diplomatic status" - which is a standard diplomatic phrase for spying. The diplomats, who were not identified, were given until March 23 to leave the country. "Moscow is surprised and concerned to observe an unfolding new anti-Russian campaign in Sofia, including the participation of government members," the statement said. "It is regrettable that what amounts to Russophobia damages the establishment of normal, civilized relations between Russia and Bulgaria and is being presented by Bulgarian authorities as a defense of the country's dignity and sovereignty." Bulgaria's Foreign Ministry said on Saturday that it had asked Russia to withdraw three diplomats, but would not declare them personae non gratae and would wait a week to try to resolve the problem. A Bulgarian Foreign Ministry spokes man said that there was evidence linking the three Russian diplomats, also unidentified, with the arrest for alleged spying last week of Defense Ministry employee Lilyana Gesheva and retired colonel Yani Yanev. Vladimir Titov, the Russian ambassador in Sofia, has denied any Russian involvement in the case. Bulgaria was one of the Soviet Union's staunchest allies, but relations have since cooled with Moscow, not least over Bulgaria's bid to join the NATO alliance. Russia was embroiled last year in a tit-for-tat spy scandal with former Warsaw Pact member Poland, throwing out nine Polish diplomats in response to Warsaw's expulsion of nine Russian envoys on espionage charges. TITLE: Report: Ministry Wasting Tax Cash AUTHOR: By Yevgenia Borisova PUBLISHER: Staff Writer TEXT: MOSCOW - The embattled Nuclear Power Ministry, already under investigation for alleged illegal sales of nuclear equipment abroad, came under fresh attack Thursday when environmentalists accused it of cheating taxpayers of billions of dollars. The ministry is effectively forcing taxpayers to fund billions of dollars worth of foreign nuclear reactor contracts by allowing buyers like Iran and China to pay through federal loans, Moscow-based environmental groups Ecodefense and the Social-Ecological Union said in a report released Thursday. The $5 billion in deals that have been signed or are pending with other countries have interest rates as low as 4 percent and payback periods of up to 20 years, the report said. "All of this money will make it back only in 15 years to 20 years," Vladimir Slivyak, a co-author of the report, said in a telephone interview. "And we can't expect countries with unstable economies to manage to make the payments at all." "I wonder why Russia is spending billions of dollars - which is effectively the money of Russian taxpayers and is badly needed here - to fund the export of dangerous technologies," he said. A Nuclear Power Ministry spokes person shrugged off the report, saying environmentalists did not have the expertise to judge his ministry's activities. The Finance Ministry, which oversees the government's cash flow, refused to confirm the terms of the contracts, saying they are classified information. But Slivyak said all information in the report was taken from publicly available material. Vyacheslav Sotnikov, assistant to the head of Atomstroiexport, which builds nuclear power plants abroad, called the report "superfluous." "The contracts are very complex and involve some payments in cash, some in goods and some in loans," he said, refusing to give further details. He added that all of the deals had to be approved by a number of levels within various ministries before winning the government's stamp of approval. None of the nuclear reactor contracts, however, have to be approved by the State Duma - even though some of them are worth up to 10 percent of the federal budget, the environmentalists said in their report. "Even though the state effectively uses the money of taxpayers for nuclear exports, the [government's] export rules do not allow the public to participate in making the decisions," the report said. "Thus, taxpayers have to sponsor economic projects in other countries." One deal the report points to - and one that irks the United States - came in a 1995 decision to build a $850 million nuclear reactor for a power plant at the Iranian port Bushehr. Iranian President Mohammad Kha ta mi on Thursday inspected the nearly completed body of the reactor at Izhor skiye Works in St. Petersburg. It is supposed to be delivered in 2003-04. The United States considers Iran a rogue state and fears it will use the nuclear technology to develop weapons. The report said that Atomstroiexport is financing most of the project through loans it secured from banks. "Iran has paid off only 5 percent of the cost of the contract," the report said. "The rest will be paid off after the shipment of the reactor." Izhorskiye Works said Thursday that the Iranian president promised a new reactor contract as soon as the current one is completed. The report also points to a $1.5 billion contract to construct two reactors for the Lyanynugan nuclear power plant in China as an example of a deal that is costing Russia dearly. When the contract was signed in 1997, Russia agreed to provide a 13-year loan with 4 percent annual interest for all but 10 percent of the cost. China was only required to make a down payment worth $75,000, half in cash and the rest in goods, the report said. It will then pay another $75,000 when the contract is fulfilled. "We are building two blocs for China. I can say we are halfway finished," said Viktor Kozlov, general director of Atom stroiexport in an interview with Russian Ren TV on Wednesday. He added that negotiations to build two reactors for India are being conducted and a contract to build them is likely to be signed in the fall. Russia has already initialed a $2.6 billion contract to build a nuclear power plant in the Indian city Kudankulam. The terms for that deal, signed in April 1999, included an unspecified loan being disbursed over 10 years and being repaid over 12, according to Prime-Tass, citing an intergovernmental agreement. One-fourth of the credit is to be paid in kind. Russia has also promised to lend Bulgaria $150 million to upgrade the Kozlodui nuclear power plant, the environmentalists said. Interestingly, negotiations between Iran and the Nuclear Power Ministry this week were not hampered even though the Prosecutor General's Office has opened an investigation into whether a branch of the ministry illegally exported nuclear technologies and radioactive materials - items needed to build weapons of mass destruction - to Iran. Nuclear Power Minister Yevgeny Adamov headed the branch, a scientific research institute, before being appointed to head the ministry. Meanwhile, the Moscow prosecutor's office launched an investigation last week into whether Adamov improperly engaged in business activities after being named minister in March 1998, the office said Thursday. The probe was instigated by a Duma report issued March 5 that accused Adamov of engaging in such activities and of using his position to appoint business associates to key positions. Prosecutors refused to comment about the case Thursday. TITLE: Berezovsky Gets Hands on More TV6 Shares AUTHOR: By Anton Charkin PUBLISHER: Vedomosti TEXT: MOSCOW - Boris Berezovsky has increased his stake in second-tier television channel TV6 to 75 percent, a TV6 board member said. Badri Patarkatsishvili, who is widely regarded as Berezovsky's right-hand man, made the announcement at a recent board meeting at which he also called for a new board to be confirmed at a shareholders meeting March 29. The acquisition of the 75 percent stake comes almost two years after Berezovsky said he intended to raise his stake in the channel from 37.5 percent to 75 percent by snapping up TV6 founder Eduard Sagalayev's shares. A source familiar with the deal said Berezovsky paid $30 million for the shares at the beginning of March. The remaining 25 percent stake in TV6 is split between oil giant LUKoil, which has 15 percent, and the Moscow Science and Technology Committee, with 10 percent. Reaction to the oligarch's strengthened position at TV6 has been muted. Next up for TV6 will be the election of a new board at a shareholders meeting in two weeks. Igor Shabdurasulov, a longtime associate of Berezovsky's who has worked at both ORT television and the Kremlin, said Wednesday that he has accepted a nomination to chair TV6's board. Sagalayev, the current chairman, has already declared his intention to step down. Other nominees to the board include Berezovsky's daughter Yekaterina and three LogoVAZ executives. On the agenda of the shareholders meeting will be a discussion of measures to improve the channel's programming. Berezovsky is hoping to clinch a deal with Germany's Kirch Gruppe media group over an investment deal, said a source close to the tycoon. TITLE: Millionaire Program Gets Its First Winner AUTHOR: By Kevin O'Flynn PUBLISHER: Staff Writer TEXT: MOSCOW - Only a few days ago he was an unknown chemist and budding composer from St. Petersburg, and now Igor Sazeyev is a millionaire and old hand at giving media interviews. Sazeyev, like many other people, knew that Zen is a type of Buddhism rather than Judaism or Islam, but when he gave the answer he was on the game show "Who Wants to Be a Millionaire?" which aired Monday on ORT. Answering the 15th and final question correctly earned him 1 million rubles - minus 35 percent tax - and a spot on the national news of the nation's biggest channel. Armed guards brought the whole million - rather than the 650,000 ($22,700) that Sazeyev actually gets - for a presentation at the Dobroye Utro studio Thursday. The presentation was to be shown at around 7:30 a.m. Friday. Sazeyev was quickly offered the option of having the money transferred to an account at sponsor Alfa Bank for his own safety rather than leave the studio with the pile of 100-ruble notes. He was handed his own bank card - and the card was promptly handed around the family and nearly chewed on by one of his young sons. Sazeyev, who has two sons and two stepsons from his present marriage, plans on heading to Germany to visit his estranged son from his previous marriage, to take his whole family on vacation and perhaps buy a car with the money. "It will give me more freedom to do something," Sazeyev said in an interview after the presentation. "I don't feel like a star," he said. "I just answered a few questions. I think I'm just lucky." Although he won the competition on Feb. 12, he was asked to keep quiet until the program was aired. He only told a certain few people - including his wife and his mother - but left his children guessing how much he had won. Already, fame has hit, with people recognizing Sazeyev on the street and drivers offering him lifts for free. Ten minutes after the winning moment was aired on ORT, there were already five phone calls to the apartment where he is registered in St. Petersburg from various people who had tracked down his number. Unfortunately for those seeking to get hold of the new millionaire, Sazeyev's friend and not Sazeyev lives there. The relative easiness of his last question raised some suspicions in the Russian press. The program, which originally began on NTV in October 1999 with the title "O Schastlivchik!" or Oh, Lucky Man!, never produced a million-ruble winner in all its time on the channel. But just a month after its transfer to ORT and the first million-ruble winner appears. The program was transferred, its makers say, because NTV was behind in payments. Although NTV acknowledges that it was behind, it says it was normal practice. The ORT version appeared with a new host after the original host, Dmitry Dibrov, refused to join ORT saying that he couldn't leave NTV at such a critical time. Sazeyev doesn't argue that his last question was easy. "But the one before wasn't," he said. Sazeyev had to use one of his lifelines to get rid of two of the four options before guessing correctly that English writer Daniel Defoe had been a spy. By comparison the first person to win a million - dollars, that is - in the United States answered the not exactly intellectual question: Which president took part in "Rowan and Martin's Laugh-In"? John Carpenter correctly answered Richard Nixon, in a program in 1999. "Who Wants to Be a Millionaire?" is a trivia game show that has captivated television audiences throughout the world since it debuted on British television in September 1998. Beginning with a base sum - 100 rubles in Russia, $100 in the United States - contestants have the chance to double their money with every correct answer they give. Along the way, players have three lifelines when the answer eludes them: phoning a friend, asking the audience for advice or having the game producers eliminate two of the incorrect answers from the four choices. TITLE: New Russians' Favorite Car Turns 10 AUTHOR: By Valeria Korchagina PUBLISHER: Staff Writer TEXT: MOSCOW - While Russia will mark the 10th-year anniversary of the collapse of the Soviet Union later this year, New Russians could well break out the champagne a little earlier. Their favorite car, the Mercedes 600, turns 10 this month. The number 600 actually indicates only engine capacity, but it is nevertheless the number which is closely associated with Russia's drive toward capitalism. The Mercedes 600 - or more precisely, the S-class model with a W140 body - has become a fixed attribute of Russia's first decade without Communist rule. "The Mercedes 600 is gaining the status of the troika," said Katya Metelitsa, the author of "New Russian ABCs," referring to the traditional three-horse carriage that has been a symbol of the Russian persona for centuries. "The word '600th' itself is also gradually acquiring a new meaning. Now it is not only a car, but a word used to express something 'great' or 'cool,'" she said. An essential part of post-Soviet folk culture, the Mercedes 600 has also become a principal feature in dozens of jokes. However, the fame of the vehicle is owed strictly to its owners - that portion of Mercedes buyers who are known as New Russians. This upper class group emerged about the same time that the Mercedes 600 was originally launched, and for years has been closely associated with thugs and other such people whose ride to riches appeared questionable. In jokes, the driver of the Mercedes would always be a New Russian - a rather dull but very obnoxious and ostentatiously wealthy sort of person. In one old favorite, for example, a New Russian goes to a car dealer and demands a black Mercedes 600 with orange dots. The dealer replies, "But you just bought that exact model of Mercedes last week." "I know," replies the New Russian, "but the ashtray is full." Notably, Mercedes abandoned in 1998 the bulky W140 body on the Mercedes 600 - the New Russians' favorite - in favor of the more elegant W220. Car dealers said on Monday that, in a strange turn of fate, the demographic segment that buys the high-end vehicles has also changed. Most of their customers these days look a lot more like wealthy businessmen than thugs. Mercedes says that it just aims to cater to the elite. An S-series Mercedes currently comes with a factory sticker price of 97,000 euros ($87,000). "Our clients are large and small enterprises, businessmen, state organizations, diplomats and even performers. For example, a large number of celebrities own our cars," said Yelena Machurina at DaimlerChrysler Avtomobili Rus, which is the official Mercedes representative office in Russia. It is next to impossible to estimate how many Mercedes 600 cars have been shipped into Russia due to gray market sales. Machurina said that 5,700 vehicles were sold directly from Mercedes plants to Russia between 1991 and 1998. TITLE: Mourners Join Relatives To Bury Slain Stewardess AUTHOR: By Patrick Lannin PUBLISHER: Reuters TEXT: MOSCOW - Hundreds of wellwishers buried on Monday the stewardess who was killed in the hijacking of a Russian plane as officials queried whether she may have died from a Saudi rescuer's bullet rather than a hijacker's knife. Sobbing relatives were joined by hundreds of wellwishers at the funeral of Yulia Fomina, 27, after her body was returned from Saudi Arabia on Saturday. "It is so sad that on such a bright day we have to put such a young person into the earth," said Yury Sytkin, flight director of Vnukovo Airlines, owner of the hijacked airliner, paying tribute to Fomina at the graveside. Red and yellow carnations sprinkled the frozen mud track of the cemetery, where winter snow still lay all around, and a small military band played the funeral march. Moscow City Prosecutor Mikhail Avdyukov said that forensic tests carried out in Saudi Arabia confirmed that Fomina had died of a gunshot, and not a knife wound as had originally been thought. Authorities are now trying to ascertain whether the hijackers or the Saudi commandos fired the deadly shot after they stormed the plane in Medina. As well as Fomina, a Turkish passenger and one of the three hijackers were shot in the storming. Sytnik said that one of the hijackers had tried to use Fomina as a human shield as the Saudi troops stormed on board. "The Saudi troops did all they could but during such an attack anything is possible," he was quoted by Interfax news agency as saying. "We are grateful to the Saudi authorities," he added, saying the loss of far more lives had been avoided. TITLE: Airplane Hostages Return Home PUBLISHER: Combined Reports TEXT: MOSCOW - Overcome with emotion, passengers who survived a 22-hour ordeal aboard a hijacked Russian jetliner returned home from Saudi Arabia to Moscow and Istanbul over the weekend. Saudi commandos burst through the doors and windows of the Tu-154 on Friday as it sat on the runway in Medina, freeing more than 100 passengers in a dramatic assault that left three people dead: one of the Chechen hijackers, a Russian flight attendant and a Turkish passenger. The flight attendant, 27-year-old Yulia Fomina, was shot when the commandos opened fire, according to crew members and passengers. Saudi officials initially said her throat was slit by one of the hijackers as the plane was stormed and the commanders fatally shot her killer. The dead passenger - apparently hit by gunfire - was identified as Gursel Kambal, a 27-year-old construction worker whose wife is pregnant. The two surviving hijackers were dragged from the plane, wrestled to the ground and handcuffed as frightened passengers stampeded down the stairs or climbed out onto the wing, their hands raised over their heads. On Saturday evening, 121 passengers and crew who were aboard the hijacked plane were greeted at Moscow's Vnukovo Airport by groups of anxious relatives, who hugged and kissed them and gave them flowers. "I'm so glad to see you, I don't know what to say," said Valentin Malofeyev, greeting his wife, Olga, one of the passengers, with five pink roses as she clutched a handkerchief to her tear-streamed face. The Vnukovo Airlines plane had 162 passengers and 12 crew on board when it was hijacked Thursday as it took off from Istanbul. At first the hijackers asked to land in Egypt, then settled on Saudi Arabia, an apparent miscalculation given the Saudi's strict adherence to Islamic law and demonstrated willingness to respond aggressively to crime. After arriving in Medina, the hijackers allowed many of the women and children to leave the plane and asked that the jet be refueled for a flight to Afghanistan, where the ruling Taliban recognizes the efforts of Chechen rebels to achieve independence. Over the next 18 hours, the jetliner sat baking in the desert heat. Inside, passengers fell into a near stupor as the cabin filled with cigarette smoke and perspiration. One passenger told Russian television that about 15 passengers in the back of the jet managed to pry open a rear door and jump out. Russian officials praised the crew, who locked the hijackers out of the cockpit by holding a broken door handle while the hijackers chopped at the door with an emergency ax. "If the crew had acted differently, things could have been much worse," said First Deputy Prime Minister Valentina Matviyenko, who was among officials greeting crew and passengers with bouquets of flowers. Throughout the standoff, the three terrorists stood guard, armed with knives and the ax. But they also chatted in Russian with the passengers, assuring them they meant no harm, and that they only wanted freedom for Chechnya. Passenger Svetlana Yarova recalled a late-night exchange with one hijacker after her 11-year-old son fell asleep. "I said: 'Look at him, think about what you're doing before it's too late. He's not guilty of anything.' He said, 'But our women aren't guilty of anything either.'" She added that just before the storming, "There was a deadly silence. It was the worst moment." Then the commandos entered and flight attendant Svetlana Ivaniva shouted at the passengers to lie down and people dove to the floor. The hijacking appeared to be a family operation. Russian officials identified the hijackers as Supyan Arsayev and his two teenage sons, Iriskhan Arsayev and Denis Magomerdzyan. There were conflicting reports about which of them was killed. The Saudis' decision to storm the plane was not universally applauded. In Russia, and among some passengers, there was anger and frustration. But other passengers praised the Saudis. "We all could have died," said Ali Copoglu. "It was definitely a good operation." President Vladimir Putin sent a telegram to Saudi King Fahd, praising him for his handling of the crisis and asking him to turn the hijackers over to "Russian justice." Saudi Interior Minister Prince Nayef said Russia's request was being handled by political authorities in both countries, according to the official Saudi Press Agency. "Saudi is against terrorism in all its forms - especially hijacking aircraft, because there are innocent people involved and the kingdom cannot be forgiving and will deal with it according to what Islamic sharia [law] stipulates," Prince Nayef told a press conference Saturday, according to the news agency. Under Islamic law, hijacking is considered a crime punishable by death. - AP, Reuters, LAT TITLE: IN BRIEF TEXT: Chernomyrdin Crash MOSCOW (AP) - Former Prime Minister Viktor Chernomyrdin was slightly injured after losing control of his snowmobile during an Arctic expedition. Chernomyrdin, 62, was taking part in the first leg of a round-the-world expedition along the Arctic circle when the incident occurred Friday. After being checked out at a hospital in the Murmansk region, the State Duma deputy declared himself in good condition. "Nothing awful happened other than the fact that my side really hurts," he was quoted by Interfax as saying. Putin on Taleban MOSCOW (AP) - President Vladimir Putin said the destruction of statues and relics by the ruling Taleban in Afghanistan should be put on the agenda for debate in the UN Security Council, the Kremlin press service said. "The fact that priceless masterpieces of ancient civilization, which are the world's heritage, are being destroyed causes great concern," Putin said in a letter to Indian Prime Minister Atal Bihari Vajpayee. "The Taleban's actions once again confirm their hostility to the world's cultural heritage and their intolerance of values common to all of mankind," Putin said in the letter that was released by the Kremlin press service Saturday. Yastrzhembsky Moves MOSCOW (SPT) - Veteran Kremlin spokesman Sergei Yastrzhembsky on Monday was named the head of a newly formed information department within the presidential administration, the Kremlin press service announced. The department was created by presidential decree and will be responsible for "improving the administration's information policies," the duty press officer said, declining to elaborate. Since January 2000, Yastrzhembsky has been the Kremlin's mouthpiece on the war in Chechnya. Last week, the Kommersant daily quoted unnamed Kremlin sources as saying the point of the new department was largely to provide a new job for the seasoned public-relations official, who'd grown weary of focusing on Chechnya coverage. Kommersant's sources said Yastrzhembsky's job would be to "help informational cooperation with the federal ministries," but the paper speculated he may strive to regain his status as the Kremlin's mouthpiece. Putin Urges Peace BELGRADE (Reuters) - Russian President Vladimir Putin said on Monday violence involving ethnic Albanian guerrillas in Macedonia was getting out of control and only decisive international action could stop the fighting. Foreign Minister Igor Ivanov handed over a letter from Putin to Yugoslav President Vojislav Kostunica in which he said conflict could spread across the Balkans unless the violence in Macedonia was halted. Kostunica, after talks with Ivanov in Belgrade, stressed his strong criticism of NATO peace keepers in Kosovo. He said the ethnic Albanian province had become "a real breeding ground for terrorism" since Serbia was forced to cede control there to international authorities in June 1999. Ethnic Albanian guerrillas began fighting government security forces in the south of Serbia, Yugoslavia's dominant republic, more than a year ago and a similar rebel group has emerged in the past few weeks in independent Macedonia. Putin said Ivanov would try to co-ordinate Russia's position on the violence on his visit to the region. "The situation is gradually getting out of control, both the countries of the region and Russia are worried about this fact," Putin said in comments televised in Russia. Diplomat Disappears PANAMA CITY, Panama (AP) - Panama's Foreign Ministry has reported the disappearance of the Russian Embassy's cultural attache, who was to leave the Central American country in February but never arrived at the airport. The Russian government asked Panamanian officials for help in finding Igor Derychuk and "expressed their concern," the Foreign Ministry said in a statement Thursday. Derychuk, who served four years in Panama, had finished his term and had bought a plane ticket to return home. Friends reported him missing after he failed to show up at the airport to say good-bye. Minister Sacked? KIEV (Reuters) - Ukrainian parliamentary sources said President Leonid Kuchma has sacked his interior minister, Yury Kravchenko, a central figure in a scandal over a murdered journalist. But the Interior Ministry said Sunday it could not confirm or deny the reports. "We have information that President Kuchma signed an order to sack Kravchenko," a parliamentary source said Saturday. A second source said he was "99 percent sure" of the dismissal. Thousands of Ukrainians have taken to the streets in recent months after tapes were published in which voices similar to those of Kuchma and Krav chen ko discussed the kidnapping of journalist Georgy Gongadze, whose headless corpse was found in November. Both deny involvement in Gon gadze's death. The sources gave no reason for Krav chenko's sacking. The Communist Party, which has stayed aloof from the main Gongadze protest, added to pressure on Kuchma on Saturday by staging a 3,000-strong rally in Donetsk. Airspace Complaint MOSCOW (AP) - Georgia has sent a formal protest to Moscow claiming that a Russian warplane violated Georgian airspace near the border with Chechnya, officials said. Georgian officials said in the protest filed Thursday that a warplane flew over Georgia's Girevi district on Wednesday, the Russian Foreign Ministry said in a statement Friday. Moscow is investigating the claim, the report said. TITLE: Submariners Mark Anniversaries AUTHOR: By Irina Titova PUBLISHER: Staff Writer TEXT: Russia's submariners gathered on Monday to mark two important jubilees, one of them established, and the other a little more recent. Uniformed cadets, teachers and graduates of the St. Petersburg Naval Engineering Institute crowded into the institute's main hall to hear speeches by navy officers and submarine veterans on the past, present and future of the fleet. On the one hand, they were marking the 95th anniversary of the Russian Submarine Fleet since Nicholas II decided that submarines should be classified as a separate department of the navy on March 7, 1906 (according to the Julian calendar) - although the first Russian submarine, the Dolphin, was however built in 1901. But they were also there to celebrate Submariners' Day, which was only introduced five years ago by the navy at the behest of the Council of Submarine Veterans. Mikhail Chernyakovsky, deputy head of the institute, said that although Submariners' Day was a new event, and the traditions were still being worked out, the tragic sinking of the Kursk submarine in August last year had given the date an extra solemnity. Fourteen graduates of the institute were on board the Kursk when it went down in the Barents Sea. All 118 crew members perished in the accident. "For us, this is a day when we remember how we sailed in submarines as young men, [but also] when we remember those of our comrades who are no longer with us," Chernyakovsky said. Igor Spassky, head of St. Petersburg Rubin Design Bureau - which designed the Kursk - and also a graduate of the Dzerzhinka Institute, was on hand to congratulate the cadets. He also spoke about the future of the fleet. "We have new ideas and projects on the table at Rubin," he said, adding that the design bureau was looking at smaller, quicker vessels. Spassky seemed eager to avoid the dozens of journalists present and left the hall quickly after his speech. Asked about the project to raise the Kursk, Spassky would only say that he had "always been optimistic." But despite memories of the Kursk, Isai Kuznets, head of the institute's museum, told cadets that submarines were fulfilling their essential tasks of defending Russian waters and her interests. "Our situation is improving - more finances are forthcoming now than in previous years," Kuznets said. Admiral Vladimir Kuroyedov, commander of the Russian Navy, sent a message of congratulations from Mos cow, Interfax reported. The agency quoted him as saying that the Russian submarine fleet was second only to its American counterpart, "forcing the leading players of world politics to take [Russian] interests into consideration even though our country is still in crisis." "It is nice to have a day that is special to our profession," said Vladimir Serebryakov, a fourth-year cadet at the institute. Elsewhere in St. Petersburg, the Naval Radio and Electronics Institute unveiled a memorial to its own graduates who died on the Kursk, while in the naval town of Kronshtadt, sailors laid flowers at monuments dedicated to submariners. TITLE: 2 Men Given Life for Buinaksk Bombings AUTHOR: By Peter Graff PUBLISHER: Reuters TEXT: MOSCOW - A Russian court handed down life sentences on Monday to two men accused of bombing an apartment block in 1999 in the first of a series of attacks that brought on war in rebel Chechnya. The Supreme Court of the region of Dagestan, which borders Chechnya, also imposed prison terms on four other co-conspirators in the September 1999 bombing of a military apartment building in the Dagestani town of Buinaksk. That bombing was the first in a three-week wave of four blasts in Russian cities that Russian officials blamed on separatists. The blasts served as the main justification for a full-scale assault by the Russian military on Chechnya that came within days. Almost 60 people were killed and more than 100 were injured in the Buinaksk blast, at a time when Chechen-backed Islamic rebels were fighting Russian troops in several villages of Dagestan. An official at the Dagestan Supreme Court said the court had sentenced Isa Zainudinov, 62, and Alisultan Salikhov, 35, to life imprisonment for organizing the blast. Two other men, Abdulkadyr Abdulkadyrov, 41, and Magomed Mago me dov, 45, were each given nine year sentences. Another two men, Zainudin Zai nu dinov, Isa Zainudinov's 31-year old son, and Makhach Abdusametov, 33, were given three year sentences but then were immediately freed under a standing amnesty for brief jail terms. Court officials were not available to comment. Russian officials have linked the Buinaksk bombing to the three later blasts - two in Moscow and one in the southern town of Volgadonsk - in which a total of nearly 250 people died. But nobody has been charged in those other attacks. Chechen rebels have denied involvement in all four blasts. The apartment blasts built a wave of public support for the return of Russian troops to Chechnya, and for the aggressive policies of the then newly-appointed prime minister, Vladimir Putin. Russian troops had quit Chechnya after a humiliating defeat in a war with separatists than lasted from 1994 to 1996, but Putin sent them back immediately following the bomb blasts in a new bid to bring the region to heel. The new campaign helped catapult him to the presidency, to which he was elected in March 2000. Russian forces have since recaptured virtually all Chechen territory after flattening the capital Grozny and other towns and villages. Mos cow has set up an administration of loyalist Chechens and says that it wants to rebuild the region. But Russian forces have failed to restore peace, and troops continue to die each week in rebel attacks. About 3,000 Russian troops and an unknown numbers of civilians and rebels have died in 18 months of fighting. Nearly 200,000 Chechen refugees have yet to return home. TITLE: Muslim Political Party To Be Launched PUBLISHER: The Associated Press TEXT: MOSCOW - Islamic leaders are creating Russia's first primarily Muslim political party to press the interests of the country's 20 million Muslims, according to news reports. The mainstream Refakh movement has announced it was forming a party called Blagodenstviye, or Prosperity, so that its members can participate in elections. Several members of Refakh are already deputies in the State Duma, elected under the umbrella of the pro-Kremlin Unity party. Refakh leader Abdul-Vakhed Niyazov said on Thursday that the party would not be exclusively Muslim. "The priority goes to Muslims but at the same time we are open to representatives of all nationalities and confessions," he was quoted by the Mos kovsky Komsomolets daily as saying. Refakh says it unites tens of thousands of Muslims and Niyazov said the new party hopes to formally register 70,000 members by its first congress May 22, Kommersant newspaper reported. Refakh supported Vladimir Pu tin's presidential campaign. TITLE: UCSJ Report: Putin's Regime Fueling Rise in Anti-Semitism PUBLISHER: The Associated Press TEXT: WASHINGTON - President Vladimir Putin's administration received mixed reviews in a recent report by the Union of Councils for Soviet Jews. The growing power of security services under Putin and his "authoritarian instincts" are contributing to anti-Semitism in Russia, the 31-year-old Jewish and human rights advocacy group said Thursday in a 180-page report. At the same time, the stability Putin has brought to Russia, and his public vows to fight anti-Semitism, led to a noticeable decrease in violent anti-Semitic incidents last year. In some regions, authorities have launched crackdowns against hate groups, but in others anti-Semitism is entrenched, the report said. Putin is showing an increasing lack of consideration for democratic values and Western opinion and is gaining popularity by what is seen as a crackdown on widely hated, mostly Jewish, tycoons, the UCSJ said. "Putin's heavy reliance on the FSB [Federal Security Service] in his appointments, and his apparent lack of respect for democracy and a free press, may create new problems for Russia's Jews, who will never be safe until a democratic civil society develops." About 1 million Jews live in Russia, Micah Naftalin, national director of the Union of Councils, estimated. Another million Jews and their families emigrated to Israel from the former Soviet Union in the last decade. An explosive rise in anti-Semitic violence occurred during Boris Yeltsin's last two years as president, the report said. Under Putin, grass-roots violence has declined, but the dangers have changed little as he tries to revive central authority and gives an open hand "to a resurgent, strengthened and historically anti-Semitic security apparatus." Anti-Semitism in Russia often accompanies anti-Western, and specifically anti-American, sentiments, the report said. Regrettably, it said, the Russian government has concentrated on suppressing the media, religious minorities, and especially Christians, human rights groups and environmentalists, "promoting a return to the dangerous secrecy and paranoia of the Soviet past." Yosef Abramowitz, president of the Union of Councils, and Naftalin submitted the report to Secretary of State Colin Powell and Condoleezza Rice, President Bush's national security adviser. They said they hoped the document would help the Bush administration integrate human rights and religious freedom into U.S. decision-making. TITLE: Stocks Soar After BHP Announces Merger AUTHOR: By Sonali Paul and Mark Bendeich PUBLISHER: Reuters TEXT: MELBOURNE/LONDON - Australia's largest resources group, BHP Ltd., announced a $28 billion merger with London-listed Billiton Plc on Monday to create the world's second biggest minerals and metals giant. The move comes as BHP chief executive Paul Anderson looks to make BHP big enough to grab international investors' attention and Billiton looks to prevent a takeover by its old South African rival Anglo American. Shares in BHP, which will end up with 58 percent of the merged company, hit an all-time high on the news. Billiton stock jumped to a year high in London and Johannesburg amid speculation that rival miner Anglo American Plc could now make a bid for Billiton. "We have to decide whether we are going to participate in industry consolidation and lead it and define the industry, or whether we are going to watch the industry consolidating around us and be a victim of that consolidation," Anderson told Reuters. Mergers have gathered pace in the global mining industry as companies strive to boost their power and presence in the marketplace. Recent tie-ups include Billiton's purchase of copper miner Rio Algom, Rio Tinto's acquisition of iron ore miner North Ltd and an Anglo-led bid for diamond miner De Beers. Under the plan, BHP would own 58 percent and Billiton would own 42 percent of a merged group, dual-listed in Australia and London, with BHP spinning off its remaining small steel business and completing a A$1.7 billion ($850 million) share buyback by the end of 2002. Investors applauded the proposal instantly, driving BHP's shares up 5 percent to a record high of A$22.05 ($11.04) after the announcement. The euphoria eased as investors considered the risk that the deal might not go ahead, and BHP's shares closed up 2 percent at A$21.40 ($10.72) in a market down 1 percent overall. Billiton's shares soared more than 20 percent to a high of 38.80 rand ($4.86) in Johannesburg and later settled back to hover about 16 percent up around 37.35 rand ($4.67). On the London Stock Exchange, its shares were up nearly 14 percent at Pound3.30 ($4.71). The new goliath is set to leapfrog Anglo American and BHP's arch rival Rio Tinto to rank second among global mining and metals firms behind U.S. giant Alcoa Inc. The merged group would hold leading positions in aluminum, coal, copper, ferro-alloys, iron ore, and titanium minerals plus major interests in oil, gas, nickel, diamonds and silver, with footholds in the world's three major mining areas - Africa, Australia and South America. "Few if any of our competitors will be better placed to serve the commodity requirements of our diverse customer base," Billiton chief executive Brian Gilbertson said in a statement. Deutsche Bank analyst Andy Howard in London said the merger gave Billiton the financial clout to develop a raft of major mining projects and BHP a new pipeline of non-petroleum projects. "This way they [BHP] are effectively buying organic growth, which Billiton has got in buckets," he said. The merged group's $28 billion value would just about meet the magic $30 billion capitalization Anderson has long said BHP needed to land on major U.S. and European investor radar screens. While Billiton's Gilbertson said the marriage was about growing shareholder value and spreading risk and not just about getting bigger for the sake of size, BHP chairman Don Argus made it clear that BHP needed more mass to tap global capital markets. "Access to capital if you're going to continue to grow is the big issue here," Argus told reporters and analysts. BHP was at pains to reassure Australians, sensitive to a potential exodus of several of the nation's biggest companies, that the company would remain headquartered in Melbourne with a major corporate management center in London. Anderson said the natural center of gravity for the company was in Melbourne, with more than 40 percent of the group's assets and the majority of staff in Australia. Anderson was anointed as chief executive of the merged group and will serve until he retires at the end of 2002 when deputy chief executive Gilbertson will take the helm. The deal requires regulatory approvals, including from Australia's Foreign Investment Review Board, but analysts said they did not foresee any problems because there was little overlap in the companies' assets. The Australian Competition and Consumer Commission said only that it would review submissions from the companies shortly. The transaction also requires approvals from 75 percent of shareholders voting, including from Anglo American, with its seven percent holding in Billiton. While analysts viewed Anglo American as a possible counterbidder, they said an offer for Billiton would contradict Anglo's stated aim of diversifying its asset base away from South Africa, and they did not expect Rio Tinto to make a bid. TITLE: OPEC Reacts t o Economic Slowdown AUTHOR: By Peg Mackey and Karen Matusic PUBLISHER: Reuters TEXT: VIENNA - OPEC on Saturday approved new production restraints to defend oil prices against a world economic slowdown. Oil ministers ratified an agreement reducing output by one million barrels a day, four percent, to 24.2 million bpd. The Organization of the Petroleum Exporting Countries is worried that demand will be dented by a downturn in fortunes among the world's petroleum importing nations. "This agreement will keep prices at $25 for the medium term," said OPEC President Chakib Khelil. Analysts agreed and said the decision should shore up oil prices, now below $23 for cartel crudes, because it will keep global inventories lean. "A million barrel a day cut by OPEC is bullish because crude stocks will decline substantially in the second quarter," said consultant Gary Ross of PIRA Energy. Crude inventories normally build during the second quarter at winter's end, but Saudi Oil Minister Ali al-Naimi said refiners could probably survive without any increase in stocks. "I'm not sure there needs to be a stock build during the second quarter. The main thing is that there should be no supply shortage," Naimi said. But the United States, the world's biggest oil importer, said it was dismayed and that Washington would press ahead with plans to diversify energy supplies. "In light of the current world economic conditions, OPEC's decision to cut their oil production quotas is disappointing," said U.S. Energy Secretary Spencer Abraham. Saudi minister Naimi moved quickly to reassure consumers that OPEC would act swiftly to raise production again if prices rose above the $28 upper limit of its preferred price target range. "We may have to add more to the market before the June meeting," he said. "We want to make an assurance of reliable supply. There will be no shortage anywhere," he added. OPEC has scheduled talks for June 5-6. Producers already had curtailed supplies by 1.5 million bpd in January to counter a downturn in demand at the end of the northern hemisphere winter. Now it frets that its main growth markets in Asia have been hurt by the side-effects of slowdown in the United States. "If there are problems in the Asian economy, and there are already in the Japanese economy, the fall in prices could be more serious than we thought," said OPEC Secretary General Ali Rodriguez. Ministers appear content that by keeping the heat under oil prices they are not contributing to world economic woes. "This is exaggerated," said UAE Oil Minister Obaid Al-Nasseri. "There are many things that hurt the world economy, not just oil. We're being reasonable." How far oil prices rise will depend on the degree of OPEC member country adherence with the new curbs. "Many of the countries that were pushing for even bigger cuts were the ones cheating in February. They'll be the ones that might be expected to leak again," said Yasser Elguindi of New York's Medley Global Advisors. TITLE: IMF, Turkey Reach Preliminary Agreement AUTHOR: By Ben Holland PUBLISHER: The Associated Press TEXT: ANKARA, Turkey - Turkey and the International Monetary Fund have reached a preliminary agreement on measures to shore up an economy that the government expects may contract by 2 percent this year. Economy minister Kemal Dervis said Monday the government and the IMF had agreed on the framework of a new economic program to tame inflation and regain market confidence. He said the government would complete work on the program and send it to the IMF "in the next few weeks." The IMF will back the program and is looking at accelerating $6.25 billion of scheduled loans to Turkey, IMF Europe head Michael Deppler said. He did not say if the IMF would offer Turkey fresh loans. "I hope this program, whose framework we have agreed with the IMF, will bring the foreign support we need," Dervis said. Turkey is seeking international loans to recover from a financial crisis that has led to a sharp fall in the lira, widespread layoffs and price hikes. Dervis said Turkey would begin "intensive efforts" to raise money on international markets this week. IMF backing should make this easier, analysts said. "It won't be easy, but Dervis can find money," said Hursit Gunes, an economist at Marmara University. The search for funds will take Dervis to Washington next weekend. U.S. Ambassador Robert Pearson said Monday Washington was ready to help Turkey through its troubles, the Anatolia news agency reported. He gave no details. More funds will come from the domestic market, with the Treasury planning to raise up to $3.5 billion in a bond issue Tuesday. "We must definitely defeat inflation, which for years has gnawed at the Turkish economy and blocked faster growth - and we will beat it," Dervis told reporters. The program aims to bring annual inflation below 20 percent by 2002, he said. Inflation now stands at around 30 percent, but Dervis warned it would rise in the next few months. He expressed hope that the economy would recover later this year. "With a contribution from exports and tourism, we will begin to grow again, and this time on stronger foundations," Dervis said. But union leaders remained skeptical. "This program was drawn up to help the country's 500 largest firms ... I can't see a plus point anywhere in it," said Sami Evren, head of a civil servants trade union, KESK. Last week, the government announced the broad outlines of a program, including measures to speed up privatization and restructure the country's troubled banking sector. Earlier programs have "twice fallen apart because of problems in the banking system," Deppler said. "The program we're looking at addresses these issues quite forcefully," he said. "What we're trying to do is establish the basis for a new program that will not be as prone to crisis as others have been." The Turkish lira has lost about a third of its value since the latest financial crisis began last month. The fall in the lira sent prices and interest rates soaring, and companies began laying off workers to cut losses. TITLE: Weak Economy Gets Assistance From BOJ AUTHOR: By Tamawa Kadoya PUBLISHER: Reuters TEXT: TOKYO - The Bank of Japan (BOJ) stepped into uncharted territory on Monday, unveiling a radically new monetary policy to try to end two years of falling prices and support the rapidly weakening economy. The BOJ said its Policy Board, which met against a background of intense political pressure for drastic action, would scrap its traditional interest target and aim instead to increase the volume of commercial bank reserves parked at the central bank. "Japan's economy has failed to return to a sustainable growth path, and is now faced again with a threat of deterioration," the bank said. "In light of this, the Bank has come to a conclusion that the economic conditions warrant drastic monetary easing unlikely to be taken under ordinary circumstances," it said. By flooding the banking system with extra cash through purchases of government bonds, the BOJ is in effect resuming the 18-month experiment with free money it abandoned last August. "This has never been undertaken by the Bank of Japan or any other [central] bank to my knowledge," said Vincent Musumeci, an economist with ABN AMRO. The bank said it expects the key overnight money-market rate to fall virtually to zero from 0.15 percent now. What is different from the last period of free money is that the BOJ has assured financial markets that rates will remain at zero until the underlying consumer price index has stabilized at zero or above. The consumer price index fell a record 0.7 percent last year. "That's not an inflation target per se, but certainly commits the bank to a very long period of cheap money," said James Malcolm, an economist with JP Morgan. BOJ Governor Masaru Hayami had stoutly opposed either a return to zero interest rates or radical steps to pump up the money supply, fearing it would underwrite reckless spending by Japan's politicians. But after pressure mounted on the bank both from politicians at home and Japan's allies abroad to halt the economic tailspin, the central bank chief last week sent clear signals that he was relenting. In practice, the BOJ will aim to increase bank reserves, or current account deposits, parked at the central bank to around 5 trillion yen compared with around 4 trillion now. Bank reserves, along with cash and notes in circulation, form the monetary base, which is the basic building block of loan and money growth. "The Bank of Japan has decided to implement these measures with firm determination with a view to preventing prices from declining continuously as well as preparing a basis for sustainable economic growth," it said. But some economists, noting bank lending has fallen for 38 months in a row despite ample liquidity, doubt that the BOJ's move will make much of a difference in the absence of deep-seated financial and corporate house-cleaning. "The decision to raise bank reserves parked at the BOJ will have no near-term impact on macroeconomic policy, say over a year or so, because this isn't a policy that can encourage the already-withered demand for funds," said Seiji Shiraishi, an economist with Daiwa Institute of Research. But he said it helped to ease financial jitters over Japan's ailing banks, which are under pressure from the government to write off a huge volume of loans that went sour when a bubble in shares, property and other assets burst a decade ago. Kazuhiko Sano, chief strategist at Nikko Salomon Smith Barney, was also skeptical. "I doubt reserve targeting will work as expected, but probably this was the best the BOJ could do at the moment," he said. Others, though, said the ball was now firmly in the court of the government to speed up the disposal of bad loans, even if it means triggering a wave of corporate bankruptcies as banks cut off credit from unviable companies. "The BOJ appears to have decided to do everything possible," said Yasunari Ueno, chief market economist at Mizuho Securities Co Ltd. "I doubt, however, if all these measures will induce inflationary expectations in Japan as they hope." TITLE: Triple Threat to the World's Economy AUTHOR: By Peter G. Gosselin and Thomas S. Mulligan PUBLISHER: The Los Angeles Times TEXT: American economic weakness appears to be spreading to many of the world's other major economies, making it increasingly unlikely that they - and the United States - can dodge substantial slowdown or recession. Worries about global growth made a speedy round-the-world trip in financial markets last week, starting with warnings about a new round of Japanese bank trouble. The domino-like events reminded many of the frightening financial contagions of the late 1990s and put Washington policy makers on high alert. "We're very concerned that millions of American have lost money here, and we're monitoring the situation closely," said Lawrence B. Lindsey, President Bush's chief economic adviser. World investors' most immediate worry: that Japan's decade-long banking debacle may soon come to a head. That would send destructive ripples across Asia and on to the world's other shores. A new Japanese law requires that the nation's already fragile banks begin valuing their substantial stock holdings at depressed current market prices rather than at high purchase prices beginning April 1, a computation that could push many of the institutions into insolvency. Analysts warned that the triple whammy of a stalling U.S. economy, a tumbling American stock market and a Japanese financial crisis could be more than the world can take. "In the last few days we've seen a big bear market here and the return of trouble in Japan," said Allen Sinai, chief global economist with Decision Economics Inc. in New York. "That means the two biggest economies in the world are down, which spells a rising risk of global recession." Bush administration officials played down the Japanese crisis and argued that the latest fall in the U.S. stock market was one more reason for backing the president's $1.6 trillion tax-cut proposal. But economists and even some prominent Republicans scoffed at the logic. Lindsey, director of the president's National Economic Council, asserted that Japan had postponed requiring its banks to mark down stock holdings. But experts in Japanese banking said that the government had only postponed the date by which the banks have to publicly disclose the size of their markdowns. "It's like somebody doing a striptease and holding their hands over their private parts," said Adam Posen, a senior fellow with the Institute for International Economics. The banks "are naked. It's just a matter of time before they move their hands." Wednesday's stock tumble boosted pressure on the Federal Reserve to slash interest rates again to try to keep the economy from recession. Fed officials have already cut rates a full percentage point in two steps this year, and they have indicated they may be ready to cut another half point when the Federal Open Market Committee meets Tuesday. But in trading in the interest-rate futures market, investors appeared Wednesday to demand an even bigger, three-quarter-point cut. That demand puts the Fed in a quandary. If the central bank's policy makers don't respond to Wednesday's 317-point drop in the Dow Jones Industrial Average, which came on the heels of Monday's 436-point plunge, they risk prolonging a damaging cycle of shrinking wealth and contracting consumption and investment. But if the economy is not in as bad shape as investors seem to believe - and some recent statistics suggest that it is not - the Fed could end up cutting rates too much. Such a move would reignite growth, but could also spark inflation and set the stage for future trouble. Analysts said American economic and financial troubles have begun taking a toll outside the United States. They have pushed weak economies, such as Japan's, back toward recession, and have caused technology-stock boomlets, such as Europe's, to begin bursting. "Nobody expected the Japanese to be a tower of strength" in a time of trouble, said Edwin M. Truman, a former assistant treasury secretary for international affairs. "But a global slowdown and a sell-off in the U.S. stock market is going to make it much more difficult for the Japanese to get their economy going again." Only in recent days have investors and some economists begun worrying that the economic weakness that the United States is exporting may bounce from other countries back to the United States, aggravating economic conditions here in a kind of vicious cycle. Until recently, the United States and much of the rest of the world were strong enough that Japan's problems did not affect them, said Jeffrey E. Garten, international economist and dean of Yale's School of Management. "The global economy was firing on four out of five of its pistons, so Japan didn't loom very large even as it stagnated for almost 10 years," he said. But today, with U.S. growth near zero, the emerging economies of Asia in fragile health and European growth slowing, the world is more vulnerable to a Japanese crisis, Garten said. Japan is the biggest net owner of foreign financial assets in the world, according to Kermit Schoenholtz, chief economist of Salomon-Smith Barney and Citibank. Investors fear that in a crisis, the Japanese would begin selling off their foreign holdings, which could sink financial markets around the world. Japanese banks have huge holdings in the Japanese stock market - shares acquired mainly as collateral for business loans. As the nation's bellwether stock index, the Nikkei 225, has plunged in recent weeks to its lowest level since 1985, the value of this collateral has withered. The combination of the stock tumble and the new law requiring banks to mark down the value of shares to current levels has provoked deep apprehension. The risk of a Japanese bank crisis spreading to other countries is "no longer trivial," said Daniel Tarullo, economist and professor at Georgetown University Law Center. "As concerned as we were in 1997 when the dominoes began to fall, the strength of the U.S. economy allowed us to take up the slack and provide for a reasonably quick recovery," he said. But the American economy, Tarullo said, no longer has the strength it had then, and it may not offer the same protection. TITLE: Figuring Out Your Tax Cyber Presence AUTHOR: By Tom Stansmore and Gennady Kamishnikov TEXT: The exponential growth of e-commerce has left many companies wondering whether maintaining a Web site on a server can lead to a taxable presence in the country in which the server is located. For quite some time the situation has been governed on a country-by-country basis, with no consensus regarding how to tax profits generated though e-commerce and many countries, Russia included, failing to address the issue in their domestic legislation. Because the issue has arisen so recently, international double-tax treaties have offered little clarification. That is, until recently. Because most international double-tax treaties are based on the Organization for Economic Cooperation and Development (OECD) model treaty, it is hoped that a recent attempt to clarify the definition of permanent establishment (taxable presence) in the context of e-commerce by the OECD's Committee on Fiscal Affairs will bring uniformity to the issue. As Russia often looks to the OECD for guidance on treaty issues, the clarification provided by the committee may help, although current drafts of the profit-tax section of the Tax Code are silent on e-commerce taxation. The clarification took the form of changes to the Commentary on Article 5 of the model treaty. The committee made a distinction between computer equipment (servers) and the data and software (Web sites) used by the server. Because a Web site is a combination of software and electronic data which is not tangible property, the maintenance of a Web site does not constitute a "place of business" (one of the elements required in order to prove a taxable presence). A server on which a Web site is placed, however, may constitute a "fixed place of business" for the enterprise operating the server, but this would have to be decided on a case-by-case basis and a distinction need be made as to whether the activity was a "core" activity of the business, or if the activity was merely "preparatory or auxiliary." Internet Service Providers (ISPs), for example, are in the business of leasing out space on their servers fo their clients' Web sites. As the operation of servers is an essential part of their activity, the operation of a server by an ISP is a "core" activity, and the maintenance of the server will be taxable in the country in which it is located. However, it has been decided that an ISP cannot be deemed creating taxable presence for its clients by mere hosting of their Web sites. Companies which are not ISPs, but who lease space on the server or instead own the servers in the particular country, may or may not have a taxable presence because of the Web site they maintain, depending on the activities that take place on the Web site. The following activities were specifically listed by the committee as generally falling within the category of "preparatory" or "auxiliary" (and thus not creating a taxable presence): . Providing a communications links - much like a telephone line - between suppliers and customers . Advertising of goods or services . Relaying information through a mirror server for security and efficiency purposes . Gathering market data for the enterprise . Supplying information. It should also be pointed out that the changes made by the committee were made to the commentary only, and not the model treaty itself. This leads one to conclude that the committee felt that the principles already established in the treaty were adequate to deal with the advent of e-commerce. Tom Stansmore is head of the St. Petersburg branch of Deloitte and Touche. TITLE: WORLD WATCH TEXT: Lucent Lands Deal MURRAY HILL, New Jersey (AP) - Lucent Technologies, the huge telecommunications equipment manufacturer, announced Monday that it has received a $5 billion contract to supply the mobile-phone operator Verizon Wireless. The three-year deal calls for Murray Hill-based Lucent to provide equipment that could double Verizon's voice capacity and boost its wireless transmission rates by as much as 10 times. Verizon will use the equipment, designed around a wireless transmission standard called CDMA 2000, to help develop its next-generation wireless technologies. These networks require high-speed data-networking systems to support mobile Internet sessions. U.S. Confidence Down WASHINGTON (Reuters) - Nearly three-quarters of Americans think a recession is on the way, a significantly higher percentage than three months ago, according to a Newsweek magazine poll issued on Saturday. Fully 71 percent of adults consider a recession either very likely or somewhat likely within the next year, compared with 54 percent who thought so in December, the poll found. Economists usually define a recession as two consecutive quarters of contraction in the gross domestic product. Falling stock prices and uncertainty about the economy's future also appeared to be taking a toll on consumers' spending plans. The poll found that 69 percent of respondents are less likely to make a major purchase over the next year. More Daewoo Cuts SEOUL, South Korea (AP) - Ailing Daewoo Motor Co. said Monday it plans to eliminate 6,500 of the 46,000 jobs at its overseas production and sales units within this year. The move is in line with the restructuring program of Daewoo, Korea's third biggest automaker, which is trying to make itself more attractive for a takeover by U.S. auto giant General Motors Corp. Daewoo has cut its domestic work force by more than 30 percent to 10,000 in the past year. "The restructuring is inevitable for Daewoo to slim down and survive," said Kim Sang-soo, a Daewoo spokesman. TITLE: When One Side Sees an Auction Gone Bad PUBLISHER: Vedomosti TEXT: A number of oil majors, including LUKoil, have filed suit over last week's anouncement that Severnaya Neft had won an auction for the rights to develop Gamburtsev Val oil fields in the Nenets autonomous district. A few experts gve their opinions on the ultimate outcome of the struggle over the fields. The most harmful result of the scandal is that it shows not only that the participating oil companies operate in a shadow world, but that the government bodies that organize the tenders are no better. More important than a fair judgment in this particular case would be a guarantee that the government will conduct future tenders as openly and clearly as possible. Otherwise, we end up with a repetition of the auctions of 1995. Yuri Kafiyev, head of the
information-analysis department
of Regionfinans
This will all be cleared up with behind the scenes and the "offender" will probably make some concessions to those "wronged." Whoever was wronged most severely will be paid more or receive more concessions. But there won't be any real tangible compensation provided to the Russian oil-giant "Victims" resulting from official reviews. It's very unlikely that the results of the tender will be reviewed completely. Dmitry Kanayev, deputy spokesperson, AKB Kapital-Ekspress. Severnaya Neft has already demonstrated its abilities. The way it outplayed LUKoil and stayed independent is one good example. Now there's a good chance it will outplay the rest of the oil companies as well. I'm sure the present disagreement could have been prevented if the tender's terms had been clearly laid out ahead of time. Then we could say why Severnaya Neft won (although the winner probably would have been someone else). That is why I don't think that the tender should be made by auction, but there should be a more responsible attitude when conducting the tender. It's good to remember that the awarding of contracts to develop natural resources on the basis of an auction is practiced almost solely in the U.S., where the chances of an auction being decided fairly are much higher than in Russia. Sergey Ezhov, vice director, Independent Institute of Fuel-energy. With the coverage this story got, Severnaya Neft should probably expect that the results of the tender won't stand. This was confirmed when German Gref referred to the competition basically as a trick. Though there have been no official statements about a review, his statement points to the probability that the government will use its instruments to enter the conflict. Pertinent documents are already being reviewed by high-level government officials, including Alexei Kudrin. Sergey Lukyanov, head of Petroleum Argus' Moscow bureau TITLE: IN BRIEF TEXT: Tatneft To Drill in Iraq MOSCOW (SPT) - Tatneft confirmed Friday that it had received permission from the United Nations to drill for oil in Iraq. Tatneft, Russia's No. 5 oil producer, said in a statement that the UN had granted it permission to drill 33 wells in Iraq in exchange for food and humanitarian supplies. The UN oil-for-food program lets Iraq get around sanctions imposed as a result of the 1991 Gulf War. Iraq may export oil, as long as the bulk of the money goes toward food, medicine and other humanitarian goods. Russia to Pay Club St. PETERSBURG (Reuters) - Russia will fully repay its overdue January debt to the Paris Club of creditor nations at the start of April, Deputy Finance Minister Sergei Kolotukhin said Monday. "We are $310 million overdue for January," Kolotukhin told a news conference. "We will pay 50 percent of the sum at the end of the month and 50 percent at the beginning of April. From that point on, we will pay according to the original schedule of payments to the Paris Club." He added that he had signed documents for paying the first half of the $310 million three days ago. Russia's March debt to the club amounted to about $25 million, he said. Russia angered the Paris Club at the start of the year by saying it would not honor its $40.2 billion debt in full and asking to restructure the Soviet-era debt. $225M for Blue Stream MOSCOW (SPT) - A consortium of 16 European banks signed an agreement Monday that gives Gazprom a 250 million euro ($225 million) credit for the Blue Stream pipeline. The pipeline, which is already being built, will carry 16 billion cubic meters of natural gas to Turkey. Part of the pipeline will lie on the bottom of the Black Sea. The project was undertaken by the gas monopoly, which agreed with Italian oil and gas group Eni in December on a $2 billion finance package. The credit from the banks will go toward overland construction of the pipeline, and the loan is guaranteed by Gazprom's export contracts to Europe. Last year, the gas giant's export revenues totaled $11 billion. Ice Palace Debts St. PETERSBURG (SPT) - St. Petersburg Sberbank has turned to the Finance Ministry to help solve a deadlock over 400 million rubles (about $14.8 million) owed to it by the company that oversaw the construction of the city's Ice Palace, the general director of Sberbank's Northwest region operations Vladimir Shorin announced at a press conference held Thursday. Sberbank was one of four banks that agreed to help finance the $80 million construction of the arena in preparation for last year's World Ice Hockey championship. The bank put up $20 million, with the stadium itself put up as collateral. In October Sberbank filed suit in the St. Petersburg and Leningrad Oblast Arbitration Court seeking payment, with the hearings ending with an agreement by both sides to start negotiations. But Shorin said Thursday that talks with the city administration had yielded no results and that with the help of Finance Ministry he felt the problem could be solved in few months. The city owns 100 percent of the shares in the Ice Palace. TITLE: Weather Impedes Efforts To Save Rig AUTHOR: By Katherine Baldwin PUBLISHER: Reuters TEXT: MACAE, Brazil - The world's largest offshore oil rig resumed sinking as rough seas impeded efforts to salvage it four days after blasts ripped through the structure, killing 10, the Brazilian owners said on Monday. After stabilizing the 40-story platform for a day and raising hopes it could be saved, the rig sank another 40 centimeters Sunday and keeled over even further, Brazil's state oil giant Petrobras said. "There is still no estimate for how long it will take to stabilize the platform," a Petrobras spokesperson said. Three explosions rocked the rig early last Thursday, killing 10 of the 175 men aboard and seriously injuring another. Petrobras, the biggest company in Brazil, was still trying to determine the cause of the explosions. Nearly 350 engineers, divers and navy men worked all night, though the weather worsened as a cold front moved up the southern Atlantic seaboard to the northern coast of Rio de Janeiro state. Meanwhile, workers unions said Monday they were stepping up protests to demand more safety. They are only going to maintain skeleton crews on the 50 platforms in the Campos Basin off the Rio coast, which supplies around 80 percent of Brazil's oil. "The protest is for life, for health, for safety and in the memory of our lost colleagues," said Fernando de Carvalho, a regional director for the United Oil Workers Federation. The crews will only meet minimum production targets. Petrobras flew in U.S. and Dutch experts and 50 tons of European equipment to try to keep the deep-sea platform afloat and prevent an oil spill over the weekend. They are pumping in nitrogen and compressed air and trying to pump out almost 3,000 tons of water weighing down the rig. But rough seas with 1.5-meter waves complicated the operation and the rig ended up sinking further beneath the surface. It has sunk almost 4.4 meters since the explosions and keeled over 4 degrees since Sunday. But Petrobras said the weather was due to improve. The P-36 rig, which cost $350 million and is insured for $500 million, is located 125 km off Macae, the gateway to the Campos Basin. Though Petrobras President Henri Philippe Reichstul said the recovery of the bodies was the priority, officials said it was currently impossible to access the chambers where the bodies were. Only one severely burned body has been recovered and identified as a 34-year-old father. The rest are missing and presumed dead. If the rig were to sink, up to 1.5 million liters of crude and diesel in underwater pipelines and onboard tanks could be dumped into the ocean. "For the moment there is no environmental question that is worrying us," said Carlos Henrique Mendez, of Brazil's environmental authority Ibama. After two major oil spills and a series of episodes in which 81 workers died in the last three years, the accident was a fresh blow to Petrobras, which is trying to establish itself as one of the world's leading oil companies. The firm is already considered a global expert on deepwater production and the P-36 rig inaugurated last year was supposed to be the prime example of its advanced technology. TITLE: Market-Movers Meeting Draws Mixed Reviews in Big Apple AUTHOR: By Sophia Coudenhove Weinberg PUBLISHER: Special to The St. Petersburg Times TEXT: NEW YORK - More than 400 Russian market buffs gathered at the Plaza Hotel late last week during one of the worst weeks in Wall Street's history, and many seemed happy to take a day off from watching trading screens light up in red to attend a conference on Russia's investment prospects. If the day provided distraction from domestic woes, it was not necessarily a source of great comfort. One after another, speakers painted a familiar picture of poor corporate governance, lax accounting and unsatisfactory legislation. On a more positive note, they took solace in political stability, which all agreed has improved considerably, and in the new tone of realism that has come about since the 1998 crisis. And while the subject of Wall Street proved impossible to avoid, several speakers said Russia was by no means guaranteed to follow the United States into a bear market. Indeed, the MT Index of 50 leading shares only fell 2.7 percent last week, versus drops of nearly 8 percent on the Dow Jones and NASDAQ averages. "We are entering a period of no correlation as far as the NASDAQ goes," said William Browder, managing director of Hermitage Capital Management. "It couldn't be better timing." While Russian markets closely followed the U.S. indices in the second half of 2000, Browder said such parallels are relatively short-lived and typical annual correlation is about 50 percent. The RTS index is up about 20 percent in 2001, and Russia is now the only major European stock market in positive territory in dollar terms for the year. "People looking at Russia are not slaves to the NASDAQ but understand the value of companies on their own merits," said Oliver Kratz, a portfolio manager at Deutsche Bank. Others argued that since Russia did not have a dot-com-inflated boom it will not have the resulting bust that is inflicting such pain on U.S. markets. Several speakers referred to the annual event hosted by Sachs Associates and Bloom berg as a barometer of Russia's business climate, and as such it was a positive indicator. About 420 investors, lawyers, brokers and executives attended, a modest increase over last year. For the most part, company presentations were franker and more professional than in the past, investors said. "They know now that they'll be laughed at if they don't tell the truth," said Kratz. Surgutneftegaz president Vladimir Bogdanov made a rare appearance at a presentation that left investors with mixed feelings. The oil firm was recently rated at the bottom of a governance ratings index compiled by the Institute of Corporate Law and Governance, and Bogdanov's presence was in itself seen as a positive sign. "I think he was good," said Mattias Westman, a fund manager with Prosperity Capital Management who welcomed a pledge by Bogdanov to make international accounting available. "They know what they're doing. They're doing it quite well. If they also wanted to share some of their money with their investors, then everything would be fine." This was a detail that few missed on a day in which corporate governance was virtually a leitmotif. Yukos also gave a well-attended presentation and was hailed as a company that was much more investor-friendly and transparent than it had once been. "After the crisis Yukos understood that it's more profitable to be honest," said one Russian broker. But for the most part, these changes were not enough to send investors rushing for their checkbooks. "All the talk about corporate governance remains, essentially, talk," said Dmitry Simes, president of the Nixon Center think tank. "There should be a good reason for investors to come back, and so far they don't see such a reason." Others, however, pointed to more encouraging signs. "The best news from Russia is the absence of unexpected and explosive news," said former Prime Minister Sergei Kiriyenko, now the presidential envoy to the Volga region. Kiriyenko pointed to tax reform, growth, the decline in barter trade, the Duma's support for the government and the "big improvements in predictability and stability." TITLE: '95 Loans-for-Shares Deal Judged Illegal AUTHOR: By Elizabeth Wolfe PUBLISHER: Staff Writer TEXT: MOSCOW - In the first legal decision against the much criticized loans-for-shares program of the mid-'90s, a local court ruled Thursday in favor of a minority shareholder challenging Russia's largest shipping company and the Finance and Property ministries. The Basmanny municipal court in Moscow ruled illegal the 1995 credit agreement between Novorossiisk Shipping Co., known as Novoship, and the Finance and Property ministries. At the time of the company's privatization, 26 percent of voting shares, or a 20 percent stake, were handed over to Novoship in exchange for a loan to the government of $22.65 million, with guarantees provided by the now-defunct Tokobank. The lawsuit was filed against the two ministries and Novoship's management. Almost immediately following the court decision, the Property Ministry released a statement saying it would appeal. The statement also suggested that the Finance Ministry and Novoship might join the appeal. Galina Turmurfina, head of Novoship's legal department, said Thursday's decision was not the final word, but it was too early to say what the company's next move would be, as it was waiting to receive the court's full written decision. The unnamed shareholder, who Turmurfina said is from outside the company, argued that the 1995 credit agreement was signed in breach of existing legislation - in particular, legislation that said loans could be provided only by entities with banking licenses. The suit was filed in May 2000. The 12 loans-for-shares auctions in 1995, which raised about $1 billion, stipulated that after three years, those stakes must be sold through a public auction. This happened in all cases but Novoship's, said Oleg Sapozhnikov, a spokesman at the Sputnik Group, which represents the interests of foreign shareholders who, together with Sputnik, have a 10 percent stake in Novoship. Novoship's Turmurfina said the stakes were offered but that the 1998 economic crisis precluded any buying. "The shares were priced highly and they were counting on selling it." The loans-for-shares credit schemes had been criticized from the beginning for fostering insider trading and conflicts of interest, with large stakes going to investors - in most cases well connected - for a sliver of their real value. "Our view is that the state's rights have to be respected. We interpret the decision positively," said Oleg Shevchenko, a spokesman for the State Property Fund, which has 6.4 percent voting rights and a 4.8 percent stake. If the court ruling stands, then the fund could regain its shares and get a seat on the company's board, where it currently is not represented, Shevchenko said. It was not clear which government body would regain the shares and which would pay back the loan, now about $20 million, those involved said. Contesting that the state did indeed have the right to swap loans for shares, the Property Ministry argued that the municipal court failed to take into account that the 1995 deal was formed when other laws were on the books. Those include the law on banks, the Civil Code and a letter from the Supreme Arbitration Court clarifying legislation. The arbitration court's letter, dated August 1994, ruled that a banking license was not necessary to give loans if the lending is just a one-shot deal and not the regular practice of the lending institution. "The actual loans-for-shares auction was not even disputed in court," the Property Ministry said in its statement. Novoship's press secretary Arkady Murzayev said: "It was the government's decision to exchange loans for shares.... The deal was done in the framework of the government's decision, so the shipping company has not broken any law." "It would be wrong to interpret that the shipping company had bridged some regulations or laws and now the company is being punished for that," Murzayev said. The Property Ministry and the State Property Fund together have a 40.46 voting stake, not including the 26.67 percent pledged under loans-for-shares; Novoship management has 6.6 percent (without the "loaned shares"); a group of foreign investors has 10 percent; and 8 percent belongs to the company's employees and pensioners. With the starting price of $15 million at the 1995 auction, Uneximbank also put in a bid of $17.1 million guaranteed by MFK Bank, while another company, Astarta, offered $15.05 million, guaranteed by Menatep, Prime-Tass reported. TITLE: Duma Holds Debate on Governance Code AUTHOR: By Lyuba Pronina PUBLISHER: Staff Writer TEXT: MOSCOW - Nearly everyone agrees that Russia desperately needs a corporate governance code, but the government, lawmakers, business leaders and investors remain divided on exactly how it should be implemented. With this in mind, the State Duma on Friday convened a parliamentary hearing on the matter and called upon a variety of experts to offer suggestions on how to tightly regulate the relationship between corporate shareholders, managers and directors. Former Central Bank Chairman and current Gazprom deputy chairman Sergei Dubinin said he favors a one-size-fits-all code that would apply to all companies, but that such a code would require changes to current legislation. "The law on bankruptcy does not correspond to the standards of corporate governance. ... It's an absolutely nontransparent procedure," Dubinin said. Alexander Ko les nikov, a former deputy chairman of the Federal Securities Commission, who is now an official at the national power grid Unified Energy Systems said, a single code was unrealistic. With so many companies like UES immersed in a sea of conflicting [shareholder] interests, Kolesnikov said that finding a "universal" code is "practically impossible" and should be prepared by shareholders themselves rather than imposed from above. Indeed, although UES has, along with just three other companies - St. Petersburg utility Lenenergo and oil majors Yukos and Sibneft - adopted a corporate governance code, its relationship with its minority shareholders leaves much to be desired. Boris Fyodorov, a former finance minister who now represents minority shareholders on the boards of UES, Gazprom and Sberbank, blasted these companies for not providing more complete information and being too slow to communicate. Fyodorov singled out UES chief Anatoly Chubais, saying that even the most innocent questions about managers' salaries have "taken up months" of his time. "I am tired of this, I don't even want to be a member of the UES board anymore," he said. Fyodorov was also very critical of Gazprom. "For four months Gazprom's top managers have been hiding from me," he said. "Without clear-cut rules the life of a company will not be organized transparently enough for investors and we won't be able to convince them to invest in a concrete corporation and into Russia," Dubinin said. "Instability of ownership rights in Russia today is the single most prevalent obstacle to sustaining large-scale investment from the United States and within Russia itself," said Andrew Sommers, head of the American Chamber of Commerce. Vladimir Milovidov, first deputy chairman of the Federal Securities Commission, said that companies should reveal as much information as shareholders need to know about how the company is developing. "[Otherwise,] the shareholder becomes hostage to the decisions being made," he said. Milovidov also supports a universal corporate governance code. The government has asked the FSC to draw up a code before the end of the year. On Monday, the FSC will announce the winner of a tender to help prepare it. Those in the running are Baker&McKenzie, Coudert Brothers, Denton Wilde Sapte and Lovells. TITLE: SUAL To Build Railway Through Far North PUBLISHER: Reuters TEXT: CHINYA-VORYK, Northwest Russia - Siberian-Urals Aluminum Co. is taking extreme steps to link its mines and smelters by laying a railway in the freezing north, an area known better for gulag prison camps and thick taiga forest. Siberian-Urals Aluminum, or SUAL, the nation's No. 2 aluminum producer, is laying more than 150 kilometers of rail to connect a bauxite mine to one of Russia's main lines and thence to a smelter. It is to be Russia's first post-Soviet private railway. "In the previous 10 months, we have built 10 kilometers of the railway. We have also cut down trees along 80 kilometers of the line, and we have prepared terrain for another 30 kilometers," SUAL president Viktor Vekselberg told reporters at this railway station. "Laying rails is a fast process, you can lay one kilometer of rail per day. But the main work is the preparation for the laying of the rail," he said, wielding a sledgehammer to bang a piece of rail together while a military band played along. As he spoke to mark the building of the first stretch, the temperature stood at minus 17 degrees Celsius, quite mild for the north of Russia, where minus 40 is common. The aim is to connect the Sredni Timan mine in the northern Komi republic, which has estimated reserves of 260 million tons of bauxite, to the nearest railway - the main line from Moscow to the northern mining town of Vorkuta. The company stressed the location's isolation by erecting a sign at the ceremony, showing that Moscow was 1,470 kilometers away and London 5,000. Despite the difficulties of the terrain and conditions, Vekselberg was confident. "We are working strictly according to the schedule and will fulfill all our plans in time," he said. The project, which started last April, is due to be completed in December 2002. The work is to cost around $100 million. SUAL, which owns aluminum smelters in Siberia, the Urals and northwestern Russia, has a monopoly in Russia on mining of bauxite, a raw material from which alumina is derived to produce aluminum. It has enough to supply its own plants and others. TITLE: Gazprom Aims at Europe's Telecoms Market AUTHOR: By Anna Raff PUBLISHER: Staff Writer TEXT: MOSCOW - Gazprom, which already supplies Europe with a quarter of its natural gas, is prepared to offer them something else: an extensive, state-of-the-arts telecommunications network. But it remains to be seen if the Europeans will buy. Natural gas, for one, is in short supply in Europe and vital to economic development. Fiber optic cables and other means of data transmission, on the other hand, aren't so scarce. Moreover, the volume of voice and data traffic coming in and out of Russia remains relatively low. Alexander Gordeyev, Gazprom's pointman behind the telecoms project, understands both sides of the coin, but he also sees beyond it. He says his network can provide a cheaper, more efficient alternative to existing lines - and can be used merely to relay calls between European and Asian cities via Russian territory. Gazprom installs high-tech telecoms cables along its pipelines for technical reasons anyway, so why not market them to consumers as well, reasons Gor deyev, who heads the gas giant's Gaz telecom subsidiary. Gaztelecom, which is 95 percent owned by Gazprom, worked in relative obscurity until Polish newspapers discovered late last year that it had a high-capacity fiber-optic cable running through the Polish countryside. The cable caused a stir when farmers complained and demanded compensation for the use of their fields. Gordeyev just happened to be in Poland at the time. "It was unexpected having your company's name splashed all over the headlines," he said in a recent interview. The $100 million cable in question runs through Belarus, Poland and Germany along the Yamal-Europe gas pipeline. To the south, a $110 million line along the Blue Stream Pipeline from Moscow to Istanbul is nearing completion. To the east, Gazprom's pipelines - and the accompanying telecoms cable - currently go as far as Siberia. But Gaztelecom intends to lay a cable along a planned Gazprom pipeline to China and to branch out to the Far East and Japan on its own. Gazprom established Gaztelecom in 1996, and the company began to lay the Yamal-Europe fiber-optic cable in 1998. Gordeyev declined to reveal any financial information about Gaztelecom's operations. The uproar in Poland - which Gordeyev refers to more as a political than a legal phenomenon - has delayed the completion and activation of the line there, of which only a few kilometers remain to be laid. Gaztelecom is in intense negotiations with the Polish government, and Gordeyev says a resolution should be reached in the next several months. Telecoms analysts in Moscow and elsewhere are skeptical of Gaztelecom's plans, saying that a number of hurdles stand in its way, including small amounts of traffic, a bear market for telecoms and the grip national telecoms monopoly Ros telecom already has on household users. In response to these critics, Gor de yev says he pays more attention to the "potential of transit traffic." As far as investment is concerned, he reaches for a proverb: "Buy when everyone else is selling, and sell when everyone else is buying." "This backbone between Moscow and Berlin is the fastest, most technologically advanced connection between the two cities," he said, alluding to the black, 2,500-kilometer optical cable that runs underground along the Yamal-Europe Pipeline. "There are others already there, but they are run by different operators levying different tariffs through different countries. "We will offer a comprehensive package of services and a competitive unified tariff." That is, once the last kilometers of the cable in Poland are laid and the line is activated. Gazprom's creation of Gaztelecom is a reflection of a global trend: National utilities - and other companies that have already heavily invested in networks - are branching out commercially to compete with traditional long-distance carriers. Last November, Gazprom struck a deal with Italy's ENI SpA, Europe's fourth-largest oil company. Together, Gazprom and ENI will provide high-speed data services by utilizing the Moscow-Istanbul as the backbone for an even longer cable linking Helsinki to the two cities. This comes on the heels of similar moves by the Hungarian national power grid and the British Lattice Group PLC, a British gas pipeline business that plans to spend $485 million to build a telecommunications cable along its lines. Gaztelecom's business model is more suitable in countries that have more traffic volume, such as the United States or Britain, said Andrei Braginsky, a telecoms analyst with Renaissance Capital. There are also a number of other players with similar projects, he said, pointing to national power grid Unified Energy Systems, Transtelecom - a pet telecom of the Railways Ministry - and telecoms monopoly Rostelecom. "Everyone is talking about this so-called transit traffic between Europe and Asia, but no one has done any real research or made any concrete calculations," Braginsky said. "Right now the amount of transit traffic is zero, and if you also take into account similar plans by United Energy Systems, Transtelecom and Rostelecom, the number of players on the market is four." Braginsky added that existing lines that run through the Atlantic and Pacific oceans already provide more than enough capacity for total traffic. Despite the naysayers, Gordeyev remains optimistic that Gaztelecom will be able to sell extra capacity through operators working along the Yamal-Europe line. "Our business plan has been accepted by banks and foreign investors," Gordeyev said. "And the fact that we're a subsidiary of Gazprom lessens the risk for everyone." TITLE: Envoy Sees Caspian Deal Ahead PUBLISHER: Reuters TEXT: MOSCOW - Russia and the other littoral states should be able to agree on the status of the Caspian Sea before the end of the year, Russian presidential envoy Viktor Kalyuzhny said on Monday. Kalyuzhny, responsible for Caspian energy issues, has just returned from talks with Kazakh Prime Minister Kasymzhomart Tokayev. "We can't drag things out any further because people, states, companies and investors are waiting for decisions," Kaluzhny told Ekho Moskvy radio. The Caspian is landlocked and surrounded by Russia, Azerbaijan, Iran, Turkmenistan and Kazakhstan. Failure to resolve its division has delayed development of its resources. Existing agreements were signed by Iran and the Soviet Union in 1921 and 1940 when they were the only two states vying for Caspian oil and gas. The five current states cannot reach agreement on the division of the seabed, the water surface and the water itself. A summit of the states was planned for last week in the Turkmen port of Turkmenbashi but was postponed at Iran's request. Turkmen President Sapamurat Niyazov said the meeting may be rescheduled for April. The Caspian's oil and gas reserves, estimated to be up to 15 billion tons, stand to become the major economic assets of some of the surrounding republics. TITLE: New Management Restructuring GAZ AUTHOR: By Igor Semenenko PUBLISHER: Staff Writer TEXT: MOSCOW - Freshly settled into the driver's seat at GAZ, Siberian Aluminum is rolling out a revamp plan for the car maker that will lead to a 10 percent slash in production without denting revenues. "We will lower output 10 percent while keeping revenues unchanged," said GAZ general director Viktor Be lya yev, a Siberian Aluminum representative who was elected to the GAZ board just last month, at a news conference in Nizhny Novgorod late last week. Nizhny Novgorod-based GAZ saw revenues of $1.2 billion last year. But it also posted a pre-tax loss of 606.7 million rubles ($21.7 million), extending a cumulative loss, including losses from previous periods, to a hefty 4 billion rubles. "The company's production structure did not correspond to demand," said a company spokesman by telephone from Nizhny Novgorod. "The previous management team tried to prevent production from falling at any cost." "The company was in a mess," agreed an official at Siberian Aluminum, who asked not to be named. "[Former general director Nikolai] Pugin lost control over it." Intermediary companies and mobsters had the upper hand at GAZ when Siberian Aluminum took over, he added. Production of sedans will be sliced 20 percent, but the output of other goods will grow, allowing overall cuts to reach 10 percent, GAZ officials said. The car maker also builds trucks and vans. GAZ's press service also said that under the revamp it expects cash collection to increase to 95 percent from 29 percent last year. The wheels have already been rolling on making GAZ a profitable company. GAZ is now making all payments in cash, compared with a level of just 12 percent in 2000. In a bid to get rid of middlemen and unify prices for its cars, GAZ has set up 19 regional dealerships since the start of the year. About 80 percent of car sales are currently made in Nizhny Novgorod, but GAZ hopes that this figure will drop to some 20 percent with the growth of the retail network. In addition, GAZ has cut its purchase prices by 24 percent over the last three months. The changes have already led to an improvement of GAZ's bottom line. The loss-making car maker finally broke even in February. Analysts said Siberian Aluminum was clearly determined to put GAZ back on the road to profitability. "It seemed that in the past GAZ wanted to keep production at the same level no matter what," said Yevgeny Satskov, analyst with Renaissance Capital. "Now they want to make a profit." "What the new management is aiming to do is increase cash collection, so that GAZ can benefit even if production volumes fall," said Alexander Agibalov, an analyst with Aton brokerage. The company stock is currently trading at $17 to $18, a fraction of its historic high of $155 hit on Oct. 3, 1997. Last year, shares held close to $40 and even climbed to $50 on buying from Siberian Aluminum, but when the buying stopped, liquidity evaporated. Siberian Aluminum snapped up about a third of the car maker's shares on the market last year. Analysts said that GAZ's shares are likely to drop further. Renaissance Capital has set the target price at $16. Both NIKoil and Aton rate GAZ as a sell. TITLE: Pipes From Ukraine Face Duties AUTHOR: By Igor Semenenko PUBLISHER: Staff Writer TEXT: MOSCOW - After six months of hesitation, the government is finally moving to protect domestic pipe makers. A government commission chaired by Alexei Kudrin, the finance minister and a deputy prime minister, recommended Friday that Ukrainian exporters be slapped with a 20 percent import tax on pipes not available in Russia and a 40 percent tax on competitive products. If the Ukrainian side voluntarily imposes an annual quota of 480,000 tons within two weeks, however, the new tariffs will not be imposed, Kudrin said. For months, Russian producers have urged the government to slap stiff tariffs or quotas on Ukrainian pipes, which have flooded the local market. Last year, six Ukrainian manufacturers exported 788,000 tons of pipe to Russia, depriving domestic manufacturers of some $2 billion, according to the Economic Development and Trade Ministry. Pipe imports from Ukraine were up 200 percent to 101,400 tons in the first nine months of 2000, according to the State Customs Committee. The Economic Development and Trade Ministry submitted proposals on protective measures last September, but it took more than six months for the Cabinet to react. Earlier this month, local pipe makers threatened to sue federal authorities if they did nothing. Despite Kudrin's announcement, Ukraine is not yet giving up the fight. "We will have to talk to our pipe companies," Ukrainian Economics Ministry department head Vladimir Stetsenko said in an interview from Kiev late Friday. "I think we will cut a deal with Russia's [Economic Development and] Trade Ministry." Stetsenko said Ukrain had considered suing Russia for violating its own trade legislation, but later dropped the idea. Under the 1994 Free Trade Agreement signed by the Commonwealth of Independent States, of which both Ukraine and Russia are members, Russia can only slap temporary duties or quotas on imports from Ukraine. TITLE: Cultural Kinship: More Than Just a Question of Genes and Wanderings AUTHOR: By Johnjoe McFadden TEXT: LIKE other Irish emigres around the world, I saw this weekend's St Patrick's Day celebrations as an opportunity to reach back into a greener past. With shallow roots in our adopted countries, it is comforting to reaffirm the deeper ones that stretch across seas. This is not a new phenomenon. Even the writers of the Bible provided long lists of genealogies that anchored their prophets and kings in earlier days that were closer to God. The exploding popularity of genealogy, with thousands of Internet sites offering family tree searches, betrays our continuing need to underpin the uncertainties of the modern world with a surer past. And now geneticists, who can track our roots back through the dark recesses of prehistory, are constructing the ultimate in family trees to uncover the origins of us all. But as fascinating as these studies certainly are, with their fresh evidence of humankind's peregrinations around the world, they will not tell us what it means to be Irish, Jewish or American. As we track our ancestors back through time, the strands of your family tree and mine become a tangled web of relationships, which makes a nonsense of such ideas as bloodlines, genetic purity or even race. Our cultural roots are not to be found in our genes but in an entirely different kind of inheritance passed down not just from parent to child, but from cousin to cousin and from friend to friend. We are born into a culture, rather than born with one. My own roots in Ireland have been traced to a Cornelius McFadden who, in mid-18th century Donegal, was caught stealing a sheep (an easy theft to prove in 18th-century Ireland since the English owned all the sheep). The usual penalty was hanging, but Cornelius' wife, Nancy, was heavily pregnant, prompting the authorities to be merciful and impose on Cornelius the lesser punishment of having his ears cut off, his wounds bound and then being pushed out to sea on a raft with his young wife. The pair rowed along the coast, so the story goes, until they beached on the bleak Atlantic island of Innishirther, where they thrived and raised a family of 11 children. St. Patrick's Day gives me an excuse to raise a glass and drink to the fortitude of Nancy and Cornelius and to our shared history. But several Guinnesses into the evening and my mind usually wanders to older migrations. Who are the Irish with whom I claim kinship, and what brought them to Ireland - or their ancestors to Europe? Nancy and Cornelius' voyage was just one step in the long line of journeys that spread people across the globe. What paths did their forebears tread before history recorded those wanderings? And where, in the end, does this leave my feeling of kinship with old Cornelius and the people who call themselves Irish? Stories, surnames and genealogies penetrate just a few centuries. Archaeology goes further, but its artifacts are rare and ambiguous. Our past has also left traces in material that is durable and accessible - our genes - and scientists who unravel human genetic codes have begun building family trees going back millennia, revealing striking facts about where we came from and how we got to where we are today. Take the female line. Using the mitochondrial DNA we inherit only from our mothers, one researcher was able to build a genetic tree that goes back to the mother of us all - a mitochondrial Eve who lived in Africa about 200,000 years ago and whose descendants trotted (or paddled) out to colonize the rest of the world. Mysteriously, of all the females who must have inhabited the globe at that time, this one Eve appears to have been the source of all of our mitochondrial DNA. Studies of the Y chromosome have revealed similar secrets of our male ancestors. Contrary to the myth of the male warrior searching out new territory, in most populations our male ancestors seem to have been homebodies, while the female did the traveling - a finding that fits with marriage practices in many traditional societies such as the Bedouins, where the young bride travels to live in the house of her new spouse. Love was, of course, not the only reason to migrate. With the domestication of plants and animals about 9,000 years ago came an agricultural revolution that eventually brought wheat cultivation into Europe and then the British Isles. Genetic data indicates that it was not simply the practice of farming that spread, but the people - and their genes. In 1997, Luigi Luca Cavalli-Sforza of Stanford University plotted gene frequency patterns across Europe and the Near East that bore a striking similarity to the spread of agriculture. Traveling with their crops, farmers and their genes eventually reached Ireland some 5,000 years ago. Later migrations coincided with the expansion of the Indo-European languages, including Latin, German and Irish. Ever since an English judge serving in India in the 18th century pointed out the similarity between modern European languages and the ancient Sanskrit tongue, linguists have sought a homeland for the Indo-Europeans. Genetic data favors an origin on the Russian steppes with a group of nomadic farmers known as the Kurgan who domesticated the horse and rode it out to invade India and Europe. Studies of Irish Y chromosomes indicate that the Emerald Isle represents the western edge of that migration. Although the spread of genes and languages are often similar, they do not always coincide exactly. Take the case of the Lemba, a tribe of Bantu-speaking black Africans who have long believed that they are descended from Jews. Lost tribes of Israel are commonplace, but the Lemba have a stronger claim than most since they practice semitic traditions such as circumcision, kosher food preparation and the keeping of the Sabbath. Analysis of the Lemba's mitochondrial DNA did not find any differences from their Bantu neighbors but lurking in their Y chromosomes was a genetic marker found only among Jews. But there's a danger in seeing gene migrations as the source of human culture and national identity. The Jewish gene in the Lemba tribe is found in only about 10 percent of the men, yet the whole tribe practises Jewish traditions. Similarly, although Kurgan genes may have spread west from an Indo-European homeland, the Kurgan swapped lots of genes with indigenous populations along the way. By the time they reached Ireland, their genetic inheritance was heavily diluted, though their language remained thoroughly Indo-European. The differences between populations are nearly always just a matter of the varying proportions of a few (probably unimportant) genes. Germans, Celts, Latins, Jews, Polynesians, Afri cans and Americans are all blends of genes from diverse sources. My passport claims that I am Irish, but examine my genes and you will find that I, like the rest of humanity, am a mongrel. So although my Irish ancestors have left me something of their DNA, they also, and more significantly, left me their tales of Finn mac Cumail and his Fenian warriors. Language and culture provided mankind with a means of exploring the world in stories, tales and songs that could fill the dark winter nights. So let's not forget that although their wanderings have left traces in our genes, our real cultural inheritance is in the language, traditions and customs we learned from parents, relatives and friends. Johnjoe McFadden is a professor of molecular biology and author of "Quantum Evolution: The New Science of Life." He contributed this comment to The Washington Post. TITLE: U.S. Should Prepare for More Pragmatic Russia TEXT: AFTER the erratic but generally pro-Western leadership of the Boris Yeltsin era, President Vladimir Putin has brought a more nationalist tone to Russian diplomacy. In some areas, like last week's announcement of renewed conventional arms sales to Iran, his policies run directly counter to Washington's. Yet in others, like arms control and his efforts to bring Russia into the global economy, Putin hopes for cooperation. These mixed messages pose a challenge for the Bush administration, which came into office promising a tougher, more realistic relationship with Russia. When Moscow's policies collide with America's interests, Washington must oppose them. But the United States should not stop encouraging Russia's transition to a market economy and democracy and working with Putin to reduce nuclear dangers left over from the Cold War. Russia should not be offering Tehran spare parts for its planes and tanks and a new air-defense system. Nor should it be building a nuclear power reactor that could become a conduit for sharing nuclear weapons technology with Iranian scientists. Iran's military is still dominated by clerical conservatives who support terrorism, oppose peace between Israel and the Palestinians and are driving to develop nuclear weapons. Moscow is also acting irresponsibly in its relations with Ukraine, Georgia and Moldova, using its choke hold over energy supplies to press these governments for military, economic or political concessions. Further east, Russian troops are stationed in Central Asia to fight Islamic insurgencies. Putin, who spent his formative years as a Soviet intelligence officer, seems determined not only to restore the authority of the Russian state but also to rebuild some of Moscow's old ties. He seems to understand that Russia's most important security relationships are with the West, including the nuclear-arms and ballistic-missile agreements with the United States. He has recently softened his opposition to U.S. missile-defense plans and is willing to negotiate with the Bush administration about both offensive and defensive missile systems. Putin also appears to recognize that despite the lift Moscow has gotten from high oil prices, Russia's economy depends on increased trade and investment with the West. That will require sterner measures against corruption and a radical simplification of business licensing rules. The West should encourage these steps. There should be no illusions in Washington about Putin. He is steering Russia on a more assertive and independent course than his predecessor, Boris Yeltsin. But it may also prove to be a more predictable and pragmatic course. The Bush administration should encourage cooperation in areas where it is possible, for Russia's integration into the global economy and its support for arms control measures would benefit both Washington and Moscow. This comment originally appeared as an editorial in The New York Times. TITLE: How Iran Outplayed Moscow AUTHOR: By Pavel Felgenhauer TEXT: LAST fall, Moscow scrapped a secret memorandum signed in 1995 by then-Prime Minister Viktor Chernomyrdin and U.S. Vice President Al Gore and announced that it was resuming unrestricted arms sales to Iran. Since then, Washington has been trying to force Moscow to reconsider and not sell modern equipment to a regime that the United States considers to be a "state of concern." For the last several months, U.S. diplomats have been passing on the same message: Do not sell weapons to Iran if you want friendly relations with us. Period. But all this pressure seems to have come to nothing: During a visit to Mos cow by Iranian President Mohammad Khatami last week, President Vla dimir Putin publicly iterated Mos cow's determination to proceed with the sales. Iran's ambassador to Moscow, Mehdi Safari, told reporters last month that Iran may purchase up to $7 billion worth of Russian arms over the next few years. At first glance, this figure may seem extravagant, but in fact it is close to the actual value of Russian weapons sales to Iran in the early 1990s. According to official Russian reports, Russia sold Iran over $5 billion worth of defense hardware - including 1,000 T-72C tanks and 1,500 BMP-2 armored vehicles (most of the armor was assembled in Iran under license using Russian parts) - between 1990 and 1996. Iran also acquired 24 MiG-29 fighters as part of a program to assemble an additional 126 MiG-29 in Iran. The MiG-29 license contract was agreed by both sides, but was never signed because of pressure from Washington. In the 1990s, Iran also got the long-range (over 300-kilometer) S-200 strategic air-defense system, three Kilo-class submarines and various other weapons. Now Iran is interested in supplementing this equipment with S-300 air-defense missiles and modern naval weapons. Iran wants to buy advanced propelled-warhead naval mines, including those equipped with a Shkval high-speed underwater rocket. It is also seeking new torpedoes for its Kilo subs, including the Shkval, and advanced anti-ship missiles. Furthermore, Iran wants to re-equip its air force with new fighters and bombers, but it is not clear whether Tehran will resurrect the MiG-29 deal or opt to buy Su-27/Su-30 airplanes as China did. During the 1990s, Iran paid only $1 billion in cash for the arms and military technology it purchased. The rest was settled in write-offs of outstanding Soviet debts to Iran and in various barter deals, mostly Iranian oil handed over to Russia for resale. Today, Iran could certainly buy $7 billion worth of Russian weapons if Moscow is willing to accept barter deals or other surrogates. If Russia insists on cash, the Iranian arms buy will be much smaller. In any case, Tehran has already - without even spending a penny - achieved a major strategic goal: Its offer to buy has given it leverage that could effectively shift Russian foreign policy. Since the demise of the Soviet Union, Iran has opposed the division of the Caspian Sea shelf since its share would be only 13 percent in the southern, deep-water part of the sea - a region with no major proven gas or oil deposits. Initially Moscow agreed with Iran, but after oil was discovered in the Russian sector, Moscow began to favor a division. This week, however, Putin and Khatami agreed that Iran and Russia would not recognize any national borders in the Caspian until all of the Caspian nations sign an agreement. This Russian foreign-policy U-turn means that the legal status of all of the drilling concessions granted to oil companies in the Caspian Sea is now dubious, and investments into oil/gas production are highly risky - including those made by Russia's LUKoil. Military-industrial lobbyists are obviously more powerful in the Kremlin now than in the 1990s. Acting in tandem with these lobbyists helped the Iranians put Russia on a collision course with Washington and, at the same time, slowed the production of Caspian oil that would compete on the world market with Iranian crude. The Kremlin apparently believes that arms sales to Iran, China and India not only bring revenues and support Russia's defense industry, but also help create a "multi-polar world" in which American influence is diminished. In fact, the Kremlin is only giving a pretext to impose sanctions on Russia that will block any effort to truly reform this nation. Pavel Felgenhauer is an independent, Moscow-based defense analyst. TITLE: Why Doesn't Anyone Listen Anymore? TEXT: DON'T you sometimes just get fed up with politics? Goodness knows, I do. Every once in a while, I shut off my computer and look at my bookshelves, which grow more extensive and heavily laden with each passing year. There are tons of books that I am just dying to read, although ever since perestroika I have had no time for pleasure reading at all. I can hardly remember the last time I picked up anything other than a political-science monograph or the latest statistical report of some government agency. Except for the books that I read together with my daughter, I haven't just read a novel in years. "Yes," I say to myself longingly. "Fifteen years ago I would have killed to buy any one of the books that now sit gathering dust on my shelves." Back then, such books were a luxury available only to the nomenklatura via a special delivery system (which I was interested to learn still exists for the benefit of top-level bureaucrats). Even so, the really good books were only available through illegal means. I remember the night that I first laid my hands on George Orwell's "1984." It was a huge typescript in a miniscule font that I had to read overnight in order to pass along to some other hungry closet reader. My daughter leaves me notes on the table when she goes to sleep, which I find after returning from another interview or information quest: "Mom, I miss you." It is sad but true that of my jobs, I have the least time for the most important: my daughter. "Can't you talk about anything but politics?" she asked me the other day. I'm not sure. I look at her and I think about 1990, when she was just 2 years old. We had just returned from the States where I had been working at the Chicago Tribune. The Trib newsroom gave me a microwave oven as a farewell gift and my suitcases were loaded with dried milk and powered juice drink; I even brought back matches. Grocery shelves in Moscow were empty then. I remember seeing some kind of Azeri marmalade, a damp sausage that seemed to have been made of paper and rotting potatoes on offer at the store nearest my house. I remember standing in the middle of the store thinking, "What am I going to find my baby?" Nowadays, I don't even bother leaving the house to buy groceries. I just visit an Internet site and order most of what I need online. Maybe I shouldn't complain then? I survived a life that most normal people will and should never know. I have lived to see full bookstores (true, there is a lot of junk these days and I was unable recently to find a copy of Turgenev for my daughter), Western-style grocery stores and a Benetton outlet near my place. Can it be that the long-condemned consumer mentality has made me fed up with politics? I don't think so. The other day I was talking to a friend who said, "You know, it [politcal journalism] is no fun anymore. There's no passion anymore." I knew what she meant. "Yeah," I told her, "it doesn't feel like fighting anymore like it did during perestroika. No one listens and no one bothers to fight back. Those behind the Wall [the Kremlin] are too busy enjoying themselves to listen to what we have to say. The people whom we like to think we are fighting for aren't listening either." I don't know. Maybe it is just fatigue that comes at the end of winter. Maybe next week, things will look up and I'll get back on track. But now I still wonder, is it worthwhile? Yevgenia Albats is a freelance journalist based in Moscow. TITLE: World Can Help Russia In Chechnya TEXT: RUSSIA, it would seem, has dodged a bullet with the resolution of this weekend's hijacking, which, although it left three people dead, could have been far worse. The incident, unfortunately, underscores what a quagmire Chechnya has become for Russia (and, increasingly, for the world) as well as the fact that there is no satisfactory resolution in sight. President Vladimir Putin responded to the incident by asserting that "the tragedy reminded us all - Russia and the international community - who the Russian army was facing in its counter-terrorist operation." Apparently, Putin means to say that the military is struggling against unreasoning, crazed terrorists with no respect for human life. However, the incident really shows that a decade of lawlessness and war have spawned desperation and hatred that can flare up at any time in unpredictable ways. Moreover, Putin's comments strongly imply that the present military operation cannot end the violence and terror. He admitted that some rebels "are hiding in caves striking us from behind" and claimed that others "have based themselves abroad and are trying to organize hostile actions from the territories of other states." By these words, the country seems fated to an interminable grinding daily horror punctuated by periodic discoveries of mass graves and occasional hijackings or apartment-block bombings. Escaping this nightmare will demand bold, fresh leadership such as we have not yet seen from Putin on any issue. Any hope of resolution requires that the government admit its attempt to resolve the conflict militarily has led to the present dead-end. Furthermore, Putin must acknowledge that by now the situation has evolved far beyond Russia's ability to resolve it alone. As long as Chechnya is considered a purely "internal matter," it will remain an open wound sapping the country's morale, resources and international prestige. When the Kursk submarine sank last August, Putin was criticized for not reacting quickly enough. In this instance, he seems to have - cosmetically, at least - learned his lesson. He immediately cut his skiing short and set up a special crisis team. But Russia was also criticized then for being stubbornly reluctant to accept foreign help. Perhaps this is the real comparative lesson that the hijacking could teach Putin. Perhaps now is the time to declare that Chechnya is a global issue and to ask the international community to create a mediation process and an assistance mechanism that might break the stalemate. In such a situation, a bold leader would not be too proud to ask for help. TITLE: Covering Up the Mess AUTHOR: By Konstantin Preobrazhensky TEXT: WHEN it was announced in February that the FSB would be taking charge of the counter-terrorist operation in Chechnya, there was quite a bit of confusion and discussion. Never before in Russian history, even during Stalin's time, have the security services been given control of a military operation. Previously, the authorities have always been wary of conflicts between the military and the security organs. Now, however, the government is telling us that the military capacity of the separatists has been broken and it is time for the FSB - in keeping with its mandate - to take up the fight against domestic terrorism. However, combating terrorism is precisely what the FSB is least equipped for mentally and ideologically. In fact, historically, the only thing that post-Stalin Soviet security organs considered to be terrorism was attacks on government and Party officials. I remember when I was studying at the Minsk Counterintelligence School in the late 1970s. We were given the following legal question: Suppose that some madman shot at the regional Communist Party secretary and missed, killing his driver instead. Is this terrorism? The answer, it turns out, was "no." Because of this extremely narrow definition, the KGB did not even have a counter-terrorism department, and the famed Alpha anti-terrorist group had a fairly low standing in the organizational hierarchy As far as combating armed paramilitary groups, the security forces do have a certain amount of experience accumulated during and just after World War II. In this period, they were responsible for suppressing armed revolt in Ukraine, Belarussia and in Chechnya. But in the late 1950s, Khrushchev carried out a major restructuring of the KGB with the goal of rooting out the vestiges of Stalinism. The military capacity of the NKVD was liquidated and all such functions were transferred to the special forces of the defense ministry and to military counterintelligence. In keeping with this reform, it is these organizations that have been doing most of the counter-terrorism work in Chechnya in the last 10 years, including state efforts to capture Chechen leaders such as Shamil Basayev and Khattab. Admittedly, they haven't had much success so far. However, the reason for this is simply that they are not really trying. The war in Chechnya is being conducted on some sort of agreed-upon basis, and there apparently is direct contact between the "warring" sides. There has been considerable reasonable speculation that Basayev has cooperated with Russian intelligence at least since the Georgian civil war in the early 1990s The transfer of control of the Chechen operation to the FSB is clearly a political, rather than a strategic move. The operation there has been a dirty one and continues along these lines. The true mission of the FSB, then, apparently is to help the military cover up what has really happened down there over the last 18 months. In this light, it is not surprising that one of the first tasks of the FSB since taking over the operation has been the elimination of independent journalists. Novaya Gazeta reporter Anna Politkovskaya was detained in Chechnya after going there to investigate credible claims of war crimes by the Russian military. Politkovskaya wrote about how Chechens were held for ransom by Russian troops and how those who did not pay ransoms were cruelly tortured. The FSB responded by labeling all of Politkovskaya's reporting nothing but lies. An FSB general immediately appeared on national television in his military uniform and denounced all of Politkovskaya's claims, which apparently were not even worthy of serious investigation. The FSB's mission in Chechnya can also been seen as part of the larger Russian government effort to polish up its image abroad, a campaign that has been much in the news in recent weeks. From the statements of Press Minister Mikhail Lesin and from reading the newly adopted policy on patriotic education, it seems clear that a state-mandated propaganda effort on a par with anything that existed in Soviet times is in the making. True enough, after the FSB declared that Politkovskaya's reporting was untrue, the prosecutor's office did send someone to Chechnya to investigate, but he apparently was satisfied with the explanations that were provided. He was told, for instance, that the pits in which Politkovskaya claimed prisoners were kept were actually used for showers. Although the prosecutor's office pretended that it was satisfied, President Putin's human rights envoy in Chechnya, Vladimir Kalamanov, was less sanguine and made it clear in his public appearances that he did not find the military's explanations convincing. In fact, digging pits as temporary detention chambers for prisoners is a Soviet military practice dating back to World War II and also widely used in Afghanistan. I noticed that Admiral German Ugryumov was appointed head of special operations in Chechnya. Many may wonder what an admiral is doing in the mountains of Chechnya. In fact, Ugryumov did not receive his rank as a result of his exploits at sea. He is a graduate of a naval academy, but he is also a career KGB officer who worked his way up the hierarchy of military counterintelligence in the Pacific Fleet. He is the one who for the last few years has been slowly and publicly tormenting environmental whistle-blower Grigory Pasko. Immediately after being appointed to Chechnya, Ugryumov was also awarded the Hero of Russia medal. That more than anything should indicate that his mission in Chechnya will be a stunning success. No matter what happens. Konstantin Preobrazhensky is a retired KGB lieutenant colonel. He contributed this comment to The St. Petersburg Times. TITLE: The Weird World of Russian Advertising AUTHOR: By Masha Kaminskaya PUBLISHER: Staff Writer TEXT: Let's talk about commercials ... Oh no, please don't turn the page. I'm not one to sing the old lament of how fed up I am with Tide-washed white blouses, which may not be exactly the height of fashion, or how the Carefree girls constantly ruin my evening tea as I watch "Menty" on Saturdays. This one is a serious talk - if only because I'm old enough to remember how much time it took my mom to boil our bed linen on the kitchen stove, and I'm not even going to mention what life was like before Carefree. Since then, our shopping routines have undoubtedly changed, and rightly so. However, it is not so simple with us shoppers. Have you noticed that one of the teachers who recently marched the country in protest against low salaries now brags about Ariel's washing advantages standing in a bathroom which is twice the size of any of her colleagues' apartments? Isn't it, then, kind of hypocritical for her to say that her paycheck is so small she can seldom afford new clothes to wear? Thanks to Russian advertisers, we have a daily glimpse at an entirely new reality. The people living in it - the target group of the new Russian market, that is - must be new, too. My only question is: "How real are they?" Why is it, for instance, that every housewife in this country now has to look like Kathleen Turner in "Serial Mom?" Remember, Turner's prissy big-boned psychopath butchers half of her neighbors because they are not neat or polite enough for her. Her family live a happy life in a dream of a house and speak politely, without ever mentioning "the brown word" at the table. Now, the only difference I see between her and our TV housewives is that the latter are in fact in love with all their neighbors, no matter how irksome they are, because they constantly invite them to have tea with lemon pie in the kind of interiors that most of us only get to see in Mexican soap operas. So how about this for a change: An eight-room communal apartment, a drunkard sleeps at the door to the bathroom. You can hear his snores mixing with the sounds of a fight in the kitchen. In one of the rooms, a baby screams at the top of its voice. The baby's mother, in a nightgown and hair-rollers, dashes around the pigsty-like room looking for fresh diapers. You can hear her shouts as she speaks on the telephone at the same time. The baby's granny has just come home with big string-bags of food, and you can hear her complaints about how expensive potatoes have become. The baby's neighbor - at the door to the room with a dirty mop in her hands - spits a papirosa as she yells over the noise: "I want your freaking pan off my stove, now!" The baby's father, a grim bulky man, watches TV in the corner. You can hear his muffled swearing... stop. Everyone is still. Close-up on the mother. She sinks onto the couch. She takes a chocolate from a box. Her gaze is charmingly absent. Voice-over: There is always time for a little rest. Russia, the generous soul. Oh yeah, and add a beer bottle to her lap to round up the picture. Ring any bells? TITLE: Local Libraries: A Bureaucratic Nightmare? AUTHOR: By Galina Stolyarova PUBLISHER: Staff Writer TEXT: Spreading knowledge to the masses was one of the primary goals, and also one of the major achievements, of the Soviet state. Libraries once played an important role in this process, which explains the enormous number of them in Russia's so-called cultural capital. St. Petersburg boasts nearly 2,000 libraries, but the irony is that while this figure looks impressive, access to many of them is restricted and involves bureaucracy that some will find excessive. On the most basic level, St. Petersburg has an impressive number of district public libraries - there are several in each of the city's districts - but you can only get a library ticket and take books out if you have a propiska (residency registration) in the said district. If you happen to permanently live in another district, city or country, you can at best only use the reading rooms. If you don't have a local propiska, taking books out turns into a problem in almost any local library, with just a few exceptions. If, for example, you happen to be a foreigner desperate to borrow a copy of Dostoyevsky's "The Idiot," it would be easier to just go and buy one. Libraries employ this policy to minimize the risk of theft, believing that if a book is stolen, the thief would be much more difficult to catch were he not a district resident. Such is, for instance, the logic of the authorities at the Maya kov sky Central Public Library (44-46 Fon tan ka Nab., Tel. 310-36-58). Currently, only happy owners of local propiski can take books out. Those left over have to make do with the reading room alone. Located in the same building at 46 Fontanka is the Prince Galitzine Memorial Library (Tel. 311-13-33) alongside the libraries of the British Council (Tel. 325-60-74, www.britishcouncil.ru), and the Goethe Institute (Tel. 311-21-00, www. goethe.de). These libraries are of particular interest to foreigners. The Galitzine contains a collection of books about Russia in English as well as books by Russian émigré writers and a selection of Western periodicals. While access is free, readers can only consult books on the premises (Monday through Friday noon to 7 p.m., Saturday 1 p.m. to 5 p.m.). The British Council Library contains English language textbooks, British classic and contemporary literature and books about Britain, as well as a video library. For 300 rubles and two passport photos, you can buy an annual membership (Tuesday through Friday 12.30 p.m. to 6.30 p.m., Saturday noon to 5 p.m.). Annual membership to the Goethe Institute Library, which offers a similar German-language equivalent to the British Council Library (Tuesday through Friday 4 p.m. to 8 p.m., Saturday noon to 5 p.m.), is 60 rubles (30 rubles for students and pensioners). Passport photos are needed to obtain a ticket. Some of St. Petersburg's universities have extensive collections of books, but similarly it is not always possible to get permission to use them. Getting access to the scientific library of the St. Petersburg State University (Universitetskaya Nab., 7/9, Tel. 328-95-46, www.lib.pu.ru), for example, is not possible unless you study or work there or have a letter from your university or organization explaining your purpose there and confirming your identity. The restrictions have nothing to do with secrecy but are simply due to lack of space. The capacity of the library's reading room is 53 seats, and it is constantly packed. One can only imagine what happens before and during examination sessions, given the university boasts over 19,000 students, let alone its post-graduates and professors. "We hope that in the next few years the situation will change: The university is planning to renovate a building for the library to move into," said Marina Karpova, the library's deputy director. "Then we are going to create two libraries - one for students and one for researchers - and, I am sure, we will be able to provide services for all potential readers." The Library of the State Hermitage Museum (34 Dvortsovaya Nab., Tel. 110-96-64) admits no strangers. You have to either work there or present a request letter from the arts institution you work for. If you happen to be a mere admirer of baroque art with no professional interest in the field, you don't stand a chance of getting into the museum's library, not even to its reading room. The Library of the State Russian Museum (Tel. 318-16-12) has exactly the same policy. The House of Composers Libra ry (45 Bolshaya Mor skaya Ul., Tel. 312- 98-87) is less strict, however: Anyone interested can use the reading room for free and make copies of any printed matter (2 rubles per page). All that you need to enter is your passport. Most of St. Petersburg's museums and universities - even when they do have spacious reading rooms - rarely sell library membership to ordinary readers, as is often quite common in the West, although there are exceptions to this rule. Establishments such as the Library of Russian Academy of Sciences (1 Birzhevaya Liniya, 328-36-91) do not ask for any letters. Russians need to show their passport, a higher education degree, bring two photos and 7.35 rubs. to get a ticket. For foreigners things are even simpler: They just need to show their passport, and pay the same sum. If you have a short-term visa, the ticket will be arranged for the period of your stay, and if you are staying for less than a month, no photos are needed and the pass is free. Similarly, The Scientific Library of the Russian Academy of Arts (17 Univesitetskaya Nab., Tel. 323-71-78) lets everyone into its reader's hall for 20 rubles per day, if you bring passport and visa. The St. Petersburg Technical University (29 Politekhnicheskaya Ul.) is another establishment that doesn't mind making some extra cash through its library, one of the biggest in town. You can buy yourself a monthly pass for 100 rubles, and a pass for a semester for 450 rubles. It is worth checking out the long list of paid services provided by the library, as well as its electronic catalogue on its Russian-language Web site at: www.unilib.neva.ru. The music library of the St. Petersburg Philharmonic (2 Mikhailovskaya Ul., Tel. 110-49-28) has learned something about raising funds, too, but operates an interesting system: You can use it only if you buy a subscription to the Philharmonic's concerts. Even so, non-residents are not allowed to take books out. The Russian National Library (Scientific Section: 1 Ploshchad Ostrovskogo, Tel. 310-71-37. General Section: 36 Fontanka Nab., Tel. 272-39-25) may be one of the biggest in Russia, but there is no guarantee that the photocopiers will work when you need them. However, it has a most effective bilingual Web site: www.nlr.ru, which can save much of your time. However, this very efficient and useful Web site is a rare exception. Generally, St. Petersburg's libraries either don't have any Web sites at all, or haven't yet developed them to Western standards. For example, it is possible to search the electronic catalogue of the Technical University Library, but impossible to make orders unless you work there. "I think St. Petersburg's libraries should expand their presence on the Internet and create efficient Web sites with electronic catalogues available," said Francesca Arca, an Italian student whose dissertation is connected with the history of Russian ancient art. "In Italy, most libraries have catalogues on the Web, and using the electronic catalogue of the Florence Central Library you an find information on all the books printed in the country." TITLE: After 13 Tries, Agassi Finally Gets Victory at Indian Wells AUTHOR: By Ken Peters PUBLISHER: The Associated Press TEXT: INDIAN WELLS, California - At 30, an advanced age in "tennis years," Andre Agassi is playing as well - or better than - ever. His hard, accurate groundstrokes carried him to a 7-6, 7-5, 6-1 victory over Pete Sampras in their Masters Series final Sunday, Agassi's first title in 13 trips to Indian Wells. Agassi also won the Australian Open this year, and, asked if he's playing the best tennis of his life, he replied, "No question." "It boils down to my movement and fitness. I feel like I'm a better athlete than I've ever been. I have more options," Agassi said after his 13th win against Sampras in 30 career matches. "When you're physically holding up and you have the years of experience, it seems like it all comes together a bit easier." Sampras, who made 49 unforced errors to Agassi's 10, agreed that his longtime rival's game is extremely sharp. "He's playing great, not missing much. He's pretty much at a level like he was a number of years ago when he was No. 1 in the world," said Sampras, who beat Agassi in the 1995 final for the second of his two Indian Wells championships. "You look at his game five years ago to today, it's the same game. Maybe he's even in a little bit better shape. He's always been a great player in my mind," Sampras said. The two first played on the pro tour as teenagers, with Agassi taking that 1989 match 6-2, 6-1 on a clay court in Rome. He has won three of the last four meetings between the two, including a five-set victory in the 2000 Australian Open. Playing Sampras and the atmosphere their rivalry creates is overwhelming, Agassi said. "I have to fight to stay focused on what I'm doing. I'm aware of just how special it is," he said. "When you feel the rush of the crowd walking on the court, you have to quickly regroup and remember that it's about tennis." Which can be a key to winning. "The reason we both have established ourselves is because we thought about the tennis: 'Move your feet, watch the ball.' You'd be surprised how quickly it comes back to that," said Agassi, who earned $400,000 to Sampras' $211,000. The crowd of 12,063 was relatively quiet compared to a day earlier, when 16,063 showed up for the women's final, with a majority of those booing Serena Williams before, during and after her 4-6, 6-4, 6-2 victory over Kim Clijsters. The jeering was fallout from Venus Williams' last-minute withdrawal from Thursday night's semifinal against her sister. Venus said she pulled out because of tendinitis in her right knee, and a trainer with the women's tour said Venus was unable to play. TITLE: Mallorca Shuts Out First-Place Real Madrid PUBLISHER: Reuters TEXT: LONDON - It was a good weekend for all but one of the leading sides in Europe's top leagues. Manchester United, Bayern Munich, Lille and PSV Eindhoven all earned victories to stay on course for domestic glory, while AS Roma extended its lead to seven points at the top of Italy's Serie A despite drawing 0-0 at Reggina. Second-placed Juventus was thumped 4-1 by Lazio. There was a shock defeat, though, for Spain's league leader Real Madrid, who lost 1-0 at Real Mallorca on Sunday. Italy. AS Roma increased its lead at the top of Serie A to seven points despite being held to a 0-0 draw at Reggina Sunday. Second-placed Juventus crashed 4-1 at Lazio in another Sunday night game. The Turin side had a disastrous night as two goals apiece from Pavel Nedved and Hernan Crespo saw Lazio to victory. Alessandro Del Piero netted a consolation but Juventus had both Edgar Davids and David Trezeguet sent off. New AC Milan coach Cesare Maldini made a winning start as his side beat bottom club Bari 4-0 in Serie A. Ukrainian striker Andriy Shev chen ko scored twice as Milan atoned for last week's Champions League exit, which led to the sacking of Alberto Zaccheroni. Francesco Coco and Serginho were also on target for Milan. Spain. Leader Real Madrid suffered only its second defeat in the last 18 games as it went down 1-0 at Real Mallorca on Sunday. The only goal came after 39 minutes when Miquel Soler's cross was headed in by Alberto Luque. Las Palmas dented Deportivo Coruna's title hopes Saturday, with Josico and Alvaro scoring in their 2-0 win. Valencia missed out on the chance to move into second place as it lost 3-2 at Celta Vigo on Sunday. Valery Karpin was Celta's hero after netting a second-half hat trick, including two penalties. Barcelona was held to a 1-1 draw at Numancia after leading through a Patrick Kluviert goal in the first half. Ruben Navarro's equalizer left Bar ce lona in fourth place with 46 points, still 10 behind Madrid with 11 games to play. Germany. Champion Bayern Munich beat city rivals TSV 1860 Munich 2-0 on Saturday to move three points clear at the top of the Bundesliga. Second-half goals from Elber and Paulo Sergio in front of 69,000 fans at the Olympic Stadium took Bayern up to 49 points, three ahead of Bayer Leverkusen who moved up to second place with a 3-1 win at Borussia Dortmund. Leverkusen scored twice in the opening 10 minutes through Bernd Schneider and Ulf Kirsten. Christian Woerns reduced the arrears with a header, but Dortmund had Michael Ballack sent off and Leverkusen substitute Thomas Brdaric netted a third goal in stoppage time. Czech striker Vratislav Lokvenc scored twice for Kaiserslautern in a 2-1 win at Werder Bremen on Sunday which lifted the 1998 champions up to third place. England. Manchester United's lead at the top of the Premier League is 16 points after second-placed Arsenal was held to a 0-0 draw away at Aston Villa Sunday. United suffered a blow before the start of their clash with Leicester on Saturday, with goalkeeper Fabien Barthez pulling a thigh muscle in the warm-up. Reserve Paul Rachubka replaced the Frenchman and kept a clean sheet as United won 2-0 with late goals from Ole Gunnar Solskjaer and Mikael Silvestre. Third-placed Ipswich won 1-0 at West Ham, thanks to a 60th-minute goal from Martin Reuser. France. Lille and Nantes continue to lead affairs at the top of the French First Division, both scoring emphatic wins on Saturday to remain tied for the lead with five rounds remaining. Lille stayed on top on goal difference with a 2-0 win at Toulouse. Australian Mile Sterjovski gave them an early lead before Johnny Ecker sealed the points with a late, deflected free-kick. Nantes, who is chasing a domestic treble, beat fellow title-chasers Sedan 4-1. Sedan suffered a miserable day, losing leading scorer Cedric Mionnet with a serious knee injury and having Cedric Elzeard sent off. Lille and Nantes both have 53 points from 29 games. Third-placed Olympique Lyon kept its title hopes alive by winning 3-0 at AJ Auxerre. Sonny Anderson netted twice to take his tally for the season to 16. The Netherlands. The top three teams in the Dutch First Division scored 19 goals between them on Sunday. Third-placed Ajax routed Sparta Rotterdam 9-0, with Shota Arveladze netting four goals and Cedric van der Gun two. Sparta ended the match with 10 men after Nordin Boukhari was sent off. Leader PSV Eindhoven beat Utrecht 5-1 with Dennis Rommedahl scoring twice. PSV started for the first time for more than a year with fit-again Ruud van Nistelrooy alongside Dutch top scorer Mateja Kezman, who scored PSV's fifth, his 21st of the season. Second-placed Feyenoord beat Twente Enschede 5-1. PSV has 60 points, Feyenoord 56 and Ajax 50, with nine rounds of the season left. Scotland. Henrik Larsson scored a second-half hat trick to give 10-man Celtic a 3-0 victory over Kilmarnock in the Scottish League Cup final at Hampden Park on Sunday. The prolific Swedish striker scored after 47, 74 and 81 minutes to give Celtic its 12th League Cup success and take his season's goal tally to 47. In between the Swede's first and second goals Celtic's English striker Chris Sutton was sent off for a dangerous tackle. TITLE: Tiger Puts Disappointing Season on Track AUTHOR: By Doug Ferguson PUBLISHER: The Associated Press TEXT: ORLANDO, Florida - All year long, Tiger Woods has said that even the best player in the world needs a few good bounces to win. He finally got them Sunday in the Bay Hill Invitational and, along with some of his old magic, put to rest all this babble about his so-called slump. In a dramatic duel with Phil Mickelson, Woods was spared another disaster when his tee shot hit a spectator in the neck and stayed in bounds on the 18th hole. Then, he hit a 5-iron off a dead patch of trampled grass into 15 feet for birdie and a one-stroke victory. It this was Dubai, the ball would have gone in the water. If this was San Diego, the putt would have stayed out of the hole. Instead, it was a joyful journey down memory lane for Woods, a winner for the first time this year and on a roll as he makes his way north to the Masters in three weeks. "It's always nice to win," said Woods, who made three birdies on the final five holes to close with a 3-under 69 on a cool, cloudy day at Bay Hill. "Today was very satisfying, the fact that it wasn't a pretty round of golf, but I got the ball in the hole." Woods, who finished at 273, became only the second player to repeat as champion at Arnold Palmer's tournament. More importantly, he won for the first time in seven starts this year, the longest he has ever gone at the start of a season without winning. Woods won for the 25th time on the PGA Tour in just 96 starts. Better yet, he probably won't hear any more questions about a slump for a while. "I guess if I don't win next week, I don't know if it's a slump or not," he said. Still, the questions were annoying. Woods won nine times last year on the PGA Tour and won the last three majors with a combined score of 49-under par. Anything short of victory every week was unexpected. In six previous tournaments, he was in the top 10 four times and twice had a chance to win going into the last hole. He made double bogey with a ball in the water at Dubai two weeks ago, and missed an eagle putt that would have momentarily tied for the lead in San Diego a month ago. "If they believe that's a slump, then they really don't understand," he said. They might have a hard time believing this one. Woods has said he was playing well and couldn't win. On Sunday, he hit the ball all over the course and walked off holding a trophy. Go figure. Woods only hit one fairway with his driver, and his goal toward the end of his round was to keep it between the out-of-bounds stakes on both sides of the fairway. Six times he had to rely on his stellar short game to save par. But while winning requires a little luck, Woods provided extraordinary skill. It was the best show on the PGA Tour this year, two of the best players in golf going toe-to-toe even though they were playing two holes apart. Phil Mickelson, who started the final round four strokes behind, caught Woods with consecutive birdies on the 11th and 12th holes, and surged ahead with a 10-foot birdie on No. 15 that put him at 13-under. As Mickelson was lining up his eagle putt up the ridge on the par-5 16th, he could hear a roar from a kilometer away - Woods had just made a 40-foot birdie putt on the 14th to move back into a tie. Mickelson two-putted for birdie, then made a sensational par save on the 18th with a lob wedge from 82 yards that nearly went in. Woods still had problems. He hit his drive so far left down the 16th fairway that he was about 4 feet from going out of bounds, and a truck used as a platform for a TV camera had to be lowered off the jack and driven out of his way. Risking the tournament on one shot, Woods hit a 7-iron from 195 yards, high and long, over the pond and hopping up to the back shelf for a two-putt birdie and another tie for the lead. Then came the wild finish. Woods had little choice but to hit a driver on the 441-yard 18th hole, playing into a stiff breeze. He hooked it left - "a Nolan Ryan curveball," he called it - and hit a spectator in the neck, dropping next to a cart path. Woods got a free drop because his feet were on the cart path. Luck out of the way, the rest was sheer talent. He rifled his 5-iron from 195 yards, fading gently over the water and toward the back of the green, 15 feet away. While Woods talked about his victory as no big deal, the emotion he showed when the putt went in spoke for him. He let out a roar, punched the air repeatedly with his fist and hugged caddie Steve Williams. Mickelson was waiting behind the 18th green, and wasn't surprised the putt fell. "I did think he'd made it," he said, "just because he normally does that." And just like that, the world of Tiger Woods was back to normal. TITLE: Sorenstam Wins 2nd Straight PUBLISHER: Reuters TEXT: PHOENIX - Annika Sorenstam capped her history-making week with a victory Sunday, holding off South Korean Se-Ri Pak in a dramatic head-to-head duel to capture the Standard Register Ping title. Sorenstam, who became the first woman golfer to shoot 59 in the second round, was relieved and happy after surviving the final day with a two-shot victory. "I have felt really drained since shooting the 59 and I feel as though I've been on the road for 10 weeks," said the Swede after capturing her second title in as many weeks in the Arizona desert. "But I played with everything I had today and I really wanted to win." The win, worth $150,000, did not come easily for the Swede, who appeared to have all but locked up the title Friday when she bolted to an eight-shot lead with her astonishing second round. Pak, who also finished second to Sorenstam last week in Tucson, shot a sparkling 63 Saturday to trim the lead to three heading into the final round and kept up the pressure right to the end. "All credit to Se-Ri," said Sorenstam. "She really put up a great show and I was under real pressure. But now it's great to have won." With her sixth birdie of the day, the South Korean had pulled even with Sorenstam with just four holes to play. But Pak dropped her first stroke of the day when she overshot the green at the short 15th, and a Sorenstam birdie from 25 feet at 16 all but ended the dual in the sun that amounted to a matchplay final round with the rest of the field lagging far behind. Sorenstam finished with a final-round 68 for a 27-under 261 total, one better than Karrie Webb's 72-hole LPGA record set in the 1999 Australian Masters. Pak closed with a 67 for a 25-under 263. Dottie Pepper and Yu Ping Lin of Taiwan shared third place at 275 - 14 strokes behind the winner. Sorenstam kept the title in the family after younger sister Charlotta won here last year. The back-to-back titles for Sorenstam, who finished second in her other two starts this year, provided a perfect build-up for the first major of the season, the Nabisco Championship next week. Pak, who won the season-opening event, said her successive runner-up finishes just provided further incentive. "The last two weeks will just make me work even harder," Pak said. TITLE: UNC, Florida Among Early NCAA Upsets AUTHOR: By Howard Fendrich PUBLISHER: The Associated Press TEXT: A month ago, North Carolina was ranked No. 1, riding an 18-game winning streak and looking like a fair bet to make the Final Four for the second straight year. Then it all fell apart for the Tar Heels. UNC, seeded second in the South, completed a stunning collapse by losing to No. 7 Penn State 82-74 Sunday in New Orleans in the second round of the NCAA tournament. "It stings pretty good. The finality of it - it hurts," first-year coach Matt Doherty said. "Any team that's ranked No. 1 at some point in the year has a chance to do special things. Things just didn't click for us at the end." The team that beat North Carolina in the national semifinals a year ago, Florida, was also eliminated Sunday on the same court. The No. 3 Gators were beaten by No. 11 Temple 75-54. Penn State, in the round of 16 for the first time since 1955, plays Temple in Atlanta on Friday. Top-seeded Michigan State, which defeated Florida in the 2000 NCAA title game, and No. 12 Gonzaga also advanced in the South. In Memphis, Tennessee, Michigan State beat No. 9 Fresno State 81-65, while Gonzaga topped No. 13 Indiana State 85-68 to get to the regional semifinals for the third year in a row. The Midwest held to form Sunday, with the top four seeds - Illinois, Arizona, Mississippi and Kansas - heading to San Antonio for Friday's regional semifinals. In New Orleans, Titus Ivory, Joe Crispin and Gyasi Cline-Heard combined for 61 points for Penn State, which was outshot 47 percent to 44 percent and outrebounded 44-33. But the Nittany Lions had half as many turnovers as the Tar Heels. UNC has made 27 straight NCAA tourney appearances, won three national championships and produced such stars as Michael Jordan, James Worthy and Vince Carter. Penn State, by contrast, has made just three NCAA appearances in the past 35 years. UNC's first sign of trouble came Feb. 18, in a 75-65 loss to Clemson. The Tar Heels wound up losing four of their last eight games before the tournament. Temple, meanwhile, used its trademark matchup zone defense to shut down Florida's up-tempo shooters and shut off passing lanes. With six minutes left, the Gators had managed only 13 baskets and had committed 11 turnovers. In the Midwest, No. 3 Mississippi edged Notre Dame 59-56 in Kansas City, Missouri, to get past the second round for the first time in school history, but the other three game were lopsided. Ole Miss next faces second-seeded Arizona, which beat Butler 73-52. In Dayton, Ohio, No. 1 Illinois beat Charlotte 79-61 to set up a game against No. 4 Kansas, which defeated Syracuse 87-58. In Saturday's action, Duke, Kentucky, UCLA and Southern California made it to the round of 16 in the East, while Stanford, Maryland, Cincinnati and Georgetown won in the West. Four teams from the Pac-10 (Stanford, Arizona, UCLA, USC) made the final 16. The Big Ten has three representatives (Michigan State, Illinois, Penn State), and no other conference has more than two teams left in the field. Ivory and Crispin each scored 21 as Penn State (21-11) became the first team to beat North Carolina this season while being outshot. Julius Peppers led the Tar Heels (26-7) with 21 points. Quincy Wadley had 24 points and 10 rebounds for Temple (23-12). Florida's point total matched the lowest in coach Billy Donovan's five years at the school. The Gators (24-7) shot only 18-for-50 overall, including eight-for-29 on three-pointers. The Spartans (26-4) had eight players score six or more points and moved into the round of 16 for the fourth consecutive year, tying Duke for the longest current streak. Casey Calvary scored 24 points and Dan Dickau added 20, making all 12 of his free throws, for Gonzaga (26-6). Matt Renn's three-pointer for Indiana State (22-12) tied the game at 60 with under eight minutes left, but Dickau answered with a jumper and two free throws to put Gonzaga ahead to stay. The Fighting Illini (26-7) won a second-round game for the first time since 1989, the only other time they had a No. 1 seed. Charlotte (22-11) missed 13 of its first 14 three-point attempts. Drew Gooden had 17 points and a career-best 15 rebounds as the Jayhawks (26-6) ended their three-year second-round losing slide. Syracuse (25-9) had its fewest rebounds of the season, 23, to Kansas' 56. Mississippi's miniscule Jason Harrison pulled up and hit a three-pointer with the shot clock winding down and just 46 seconds left to end Notre Dame's first NCAA appearance in 11 years. Rahim Lockhart led Ole Miss (27-7) with 24 points. Troy Murphy, a two-time All-American forward, had 17 points but was just one-of-seven in the second half for Notre Dame (20-10). TITLE: WHAT IS TO BE DONE? TEXT: Last week's thaw had people out on the streets in huge numbers, perhaps glad that for the first time since December, they could walk down the street without threat of breaking their legs on the ice. However, while the city center no doubt looks cleaner without a layer of brown slush, the palaces surrounding St. Petersburg never look better than under snow. If you have not yet experienced this winter spectacle, this will be your last chance for some time. Petrodvorets is the most famous of the tsarist residences surrounding the city, although its major attractions - its naturally powered network of fountains - only operate from May to September. Also, the hydrofoils that bring tourists there by the thousands during the summer months do not run, so to visit you are limited to either a bus tour (available from travel agencies and from outside Gostiny Dvor) or going independently on an elektrichka from the Baltic Station (trains every 15 to 30 mins., 40 min. trip to Novy Petergof, from there a bus or pleasant walk to the palace grounds). Pushkin or Tsarskoye Selo is another extremely popular option, and features grounds landscaped in a far more naturalistic manner and which are wonderful to walk in. After just a 30-minute train ride from the Vitebsk Station, you alight at Detskoye Selo, from where you can take buses 370, 378, 382 or 371 to the palace grounds. Avoid the trip on Tuesdays as the palaces are closed. Right next to Pushkin is Pavlovsk. Its station is the next down the line, and if you are feeling energetic you can combine the two in one day - although Pavlovsk's Great Palace is closed on Fridays and the last Monday of the month. The park at Pavlovsk is enormous and beautiful, although badly sign-posted - so be careful not to get lost. TITLE: VOX POPULI TEXT: What worries do St. Petersburg residents have for their health? Despite the soaring number of HIV cases, Irina Titova found out that the average person on the street is far more concerned about poor air and water quality than the threat of AIDS or the growing tuberculosis problem. Indeed, none of the people asked mentioned HIV or AIDS until they were asked about it specifically. Anatoly Nikolayev, 64, former ballet dancer I don't trust St. Petersburg's water and always use a filter to clean it. As for the HIV epidemic in the city, I'm not afraid of it myself because I am confident that the people I mix with are healthy. Natalya Baklanova, 52, housewife I'm afraid of diseases that can be caught by drinking the city's polluted water. I fear AIDS, of course, but we can do nothing about it - it is the duty of local authorities to solve the problem. Lyubov Malakhova, 37, chemist I'm worried about all kinds of allergies that many people face in such a polluted city. Now people have allergies to dirt and even to dust. No wonder as soon as you get into the center of town there is no air to breathe. However, in general I'm not afraid of any particular disease. I believe that God is looking over me. I'm not afraid of AIDS because I lead a healthy life. Andrei Kulikov, 29, financial manager Polluted air is our problem - it may cause cancer and other lung illnesses. As for AIDS, there are only certain groups of people who are at danger: drug addicts and those who provide sexual services. To avoid that we should take it upon ourselves to bring up healthy and responsible families where children can be taught right from wrong. Stephan Perfilzhyev, 16, college student I'm afraid of staying in hospitals because there are different ill people who can infect you with almost anything, such as hepatitis, for example. However, you can catch it in the metro and on the street as well. Lesya, 20, student I think the major danger for the health of St. Petersburg residents is the drugs which kill our youth. It's scary because as soon as young people start using drugs they lose any serious interest in life save entertainment. This is exactly how our country loses its future. I'm also aware of AIDS and this awareness makes me behave more carefully - that is, I use protection and of course, I don't use drugs. Tatyana Achmin, 60, pensioner and former mining engineer I'm very much afraid of radiation which can cause cancer, and of cancer as a whole. I think there is enough radiation in this city - I used to work with radioactive ore and I know how dangerous it is. Besides, my mother died of cancer also after working with radioactive ore, and I know how bad it is to die from it. It's my personal obsession. It's better just to have a heart attack and die immediately than to suffer over a long period like that. Svetlana Savelyeva, 26, post-graduate student Our dangers are: tuberculosis since we have such a bad climate, eye-sight problems because we have long winter nights, and of course, criminals, the homeless and alcoholics as they can attack you late at night. As for AIDS, it is simply a problem of personal responsibility. Olga Rozhdestvenskaya, 24, student I worry about polluted air and different infectious diseases such as dysentery. To avoid AIDS I just have a permanent boyfriend. TITLE: Herzen, Hertz and the Birth of Radio TEXT: March 19 marked the 95th anniversary of the Russian domestic submarine military fleet, which was created in St. Petersburg by order of Nicholas II in 1906. March 20, 321, saw the very first Christian Sunday as instituted by Roman Emperor Constantine the Great. The move came in an attempt to stem the increasing popularity of the sun worshippers, who celebrated their holy day on the Sabbath, and Sunday has remained a holiday in the western calendar ever since. A more popular religion saw its beginning in St. Petersburg on March 20, 1912, when permission was given for the first electrically lit advertising signs. Peter the Great, traveling as simply Peter Mikhailov, set off on his first trip abroad, destined for the Netherlands and Britain, on March 22, 1697. On his trip he learned much about carpentry and boat building, which he used to great effect on his return, as well as picking up many European habits that he was to ruthlessly impose on the Russian population. March 23, 1839, reputedly saw the first ever appearance of the now ubiquitous expression "OK," which originally denoted a shortened form of the misspelled "oll korrect," in Boston's Morning Post. While this is one of the more plausible explanations for the derivation of a phrase that has become part of countless languages, philologists are not convinced and Webster's dictionary does not officially list the Post as the source. On March 23, 1807, the British House of Commons passed a bill prohibiting the slave trade in the West Indies, due largely to the campaigning efforts of evangelist and philanthropist William Wilberforce. However, the slave trade continued elsewhere and Wilberforce never lived to see the outright abolition of the institution of slavery, which came a month after his death in 1933. March 24, 1713, was the date of the Alexander Nevsky Lavra's founding. The lavra is the highest monastic institution within the Russian Orthodox Church, and only a few exist in Russia. Peter the Great named the lavra after Alexander Nevsky, whose name derives from the Neva river. However, Peter mistakenly believed that the site of the monastery was the place where Nevsky had defeated the Swedes in 1240, but this was in fact elsewhere. March 24, 1896, effectively saw the invention of the radio, when Popov transmitted the world's first wireless radio broadcast, albeit over just 250 meters at the St. Petersburg Physical-Chemical Society, consisting of just two words: Heinrich Hertz, the German discoverer of radio waves and the man who gave his name to the unit of frequency. On March 25, 1812, Alexander Herzen, Russia's original political dissident, was born in Moscow. Herzen was the founder of Russia's first revolutionary journal, "The Bell," albeit in London. Herzen's influence over both politics and literature was huge, influencing both Tolstoi, Dostoyevsky, Chernyshevsky and Lenin. March 25, 1917, was a historic day in another sense, as Stalin arrived back in Petrograd from self-imposed exile along with Kamenev, ready to join forces with the Bolsheviks already in the city, planning to steer the February revolution in their preferred direction. Europe's common market was created on March 25, 1957, which later became the European Economic Community and now exists as the European Union. TITLE: Money Well Spent? One Student's Story AUTHOR: By Nina Ronina TEXT: During the last academic year, I dedicated my time to studying for the university entrance exams - yes, I made a bold choice and decided to try for the most prestigious in the city: St. Petersburg State University. My parents began to worry - it is well known that entering such institutions in Russia is not only the school graduate's affair, but far more that of his or her parents. Thus, they questioned all their acquaintances who had something to do with the university and found out that knowledge alone, no matter how deep, was not enough and that the official preparatory course was also not overly useful. The best recommended means of entry was to take lessons from the teachers who set and marked these exams. This might equally be translated as "prepare your money." In June, a month before the three entry exams in composition, English and Russian history, I began just such a course of private tuition. The most remarkable were the English lessons - where ten aspiring students of law, economics and management convened in one of the small lecture halls at the philological faculty. During the lesson the teacher used to smoke Parliament cigarettes in a majestic manner - it was very impressive - as well as periodically speaking on his mobile phone. As a general rule, he gave us a text to read and then went out for half an hour, evidently having something more interesting to do. On coming back, our teacher attentively listened to us reproducing the text and translating grammatical sentences in turn. After two hours of this training each of us paid him $40. He had three such groups every day. During this tutoring I became acquainted with my fellow victims and learned to my surprise that many of them had taken his lessons twice a week, all year long, as well as from his colleagues in different departments. Not daring to imagine the amount of money they had spent, I asked if it gave them any guarantee of success. No guarantees had been given, but there was evidently the firm belief that such enormous sums could not have been spent in vain: instead of a guarantee, therefore, the teachers had simply promised to "help" them. Moreover, hints were often the order of the day - One girl dreaming of becoming a philologist received a gentle hint from our teacher two weeks before the exams: "It's very nice that you have been tutored all this year, but you know... one of our lecture halls needs repairing. We are only short of a few thousand dollars." My history teacher was young and not particularly experienced in "entrance tutoring," so I had the honor of having one-to-one lessons. Though her knowledge of the subject was not deep and any question of mine caused her to rummage through her papers, there was some use - she gave me the list of examination questions, some of them having nothing to do with the program, taking in the biographies of commanders and statesmen of the 16th century. In the end she declared me to be her best student and assured me of my success. The price was the same. The composition seemed to be the easiest exam, as I knew Russian literature well and didn't make grammatical mistakes, so I paid only one visit to the tutor of composition. Her way of speaking and thinking greatly impressed me - the way of the Soviet school teacher. Strange, but she was exactly one of those fossils which I believed to have long disappeared even from the secondary schools. At last the examinations started. Having done well at the composition and English, I was now dependent on the most frightful history exam, said to be the method of picking those who should be picked. Here you can be asked any question - from the color of a particular soldier's uniform three centuries ago to the precise amount of peasants in 1848. I was lucky to have the examination question I knew perfectly - at least what my tutor said about it. As you can guess, I passed. Now I am a student of the paid department, and so are many of those who effectively paid money to enter. Some of them spent a sum which would suffice for five years of paid study. Why, you ask? However strange it may seem, many people consider it to be more prestigious to study in a department of great reputation rather than one that bases entry on merit, and they are therefore ready to sacrifice money, time and their nerves. The system of "tutoring" is known to exist in all popular Russian higher education institutions, and it will doubtless continue to do so - I can hardly imagine the entrance exams being abolished or teachers' salaries considerably increasing in the near future. The only thing we can do is pay the institute cash rather than the greedy teachers and thus give even the remotest chance to the poor and gifted to join a good faculty. Nina Ronina is a student at St. Petersburg State University. She submitted this article to The St. Petersburg Times. If you would like to do so please contact masters@sptimes.ru TITLE: PRICE WATCH TEXT: This week, we compare the prices of fast food around town. Prices vary greatly depending on where you go. Despite the hamburger price fluctuations, a more traditional shaverma tends to be sold for an average price of 22 rubs. throughout the city, and Russian hot-dogs (in lavash with a spicy tomato-cream sauce) are a fairly consistent 16 rubs. Hamburger Fries Soft Drink Sauce Burger Stall 15.00 - 15.00 Free Galeo 35.00 16.00 16.00 4.00 Grill Master 18.00 16.00 15.00 3.00 Kentucky Fried Chicken 49.00* 20.00 15.00 4.00 McDonald's 15.00** 20.00 19.00 3.50 Shaurma 15.00 - 15.00 Free Prices quoted are for medium sized portions. * Price quoted is for a chicken burger ** Larger burgers (such as a Big Mac or Cheeseburger Royale are available for 33 rubs) Burger Stall - Situated outside Gostiny Dvor metro station Galeo - 2/94 Ul. Mayakovskogo., Tel: 273-35-58 Grill Master - 46 Nevsky Pr., Tel: 110-40-55 Kentucky Fried Chicken (KFC) - 96 Nevsky Pr., Tel: 279-61-36 McDonald's - 11 Bolshaya Morskaya Ul., Tel: 314-68-58 Shaurma - 43 Liteiny Pr., Tel: 272-90-73 TITLE: WORLD WATCH TEXT: Farmers Hit Back LONDON (Reuters) - British farmers in areas worst hit by the foot-and-mouth epidemic urged the government Monday to speed up its program of slaughtering and destroying contaminated animals. As the number of confirmed infected sites rose to 326 across Britain, farmers said piles of carcasses were rotting in farmyards and ministry of agriculture officials were often taking days to kill animals with the disease. European agriculture ministers were meeting in Brussels later Monday as nations across the world battled to prevent their herds from falling victim to the widely contagious disease. Farmers were due to meet the government's chief vet, Jim Scudamore, Monday to press him to get the cull of diseased stock sorted out before even contemplating a planned mass slaughter of healthy animals in the area. Israel Freezes Funds JERUSALEM (Reuters) - Israel's finance ministry said on Monday it would not hand over funds the Israeli government owes the Palestinian Authority until a six-month spate of violence ends. A ministry statement said Finance Minister Silvan Shalom told U.S. Ambassador to Israel Martin Indyk last week that the current Israeli government had no intention of transferring the money as long as the Palestinians carry out attacks against Israel. The finance ministry said it did not have exact figures for the debt. At least 347 Palestinians, 66 Israeli Jews and 13 Israeli Arabs have been killed since the Palestinian uprising against Israeli occupation began in late September. Government in Crisis NEW DELHI (Reuters) - India's warring political parties said Monday they planned to launch street protests across the country over an arms bribery scandal that has plunged the coalition government into its worst crisis yet. The main opposition Congress said the first phase of a "long haul" program to oust Prime Minister Atal Behari Vajpayee's 17-month-old administration would be launched at the weekend with public meetings in each district of the sprawling country. A secretly shot film by journalists posing as arms dealers showed politicians, military officials and bureaucrats apparently accepting money to influence a fictitious arms deal. The scandal, which has claimed the heads of the defense minister and the chiefs of two political parties, including that of Vajpayee's Bharatiya Janata Party, paralyzed parliament Monday and most of last week. Taleban Atonement KABUL, Afghanistan (AP) - Butchers with long knives sacrificed 12 cows in the courtyard of Afghanistan's presidential palace Monday to atone for the delay in destroying two giant statues of Buddha. The cows were the first of 100 that were ordered killed throughout the country by the Taleban's reclusive leader, Mullah Mohammed Omar. The meat was given to the poor. Omar issued the order last weekend, saying the cows would be sacrificed as an offering because of the tardy demolition of 51-meter and 36-meter statues of Buddha in central Bamiyan. The statues were carved from a cliff face in the third and fifth centuries. It took Taleban soldiers nearly two weeks to destroy them after Omar declared the statues idolatrous and against the tenets of Islam. Robinson To Resign GENEVA (AP) - The United Nations' top human rights enforcer announced Monday she was stepping down from her post, saying she thought she could do more outside the "restraints" of the UN system. Mary Robinson, the UN High Commissioner for Human Rights, said she would leave office at the end of her current four-year term in September. Robinson, the former president of Ireland, said she had told UN Secretary General Kofi Annan of her decision and wanted to announce it early so there would be time to find a new high commissioner. Robinson, who has been increasingly outspoken about rights violations, is the second person to hold the job of high commissioner, following the low-profile term of Ecuadoran diplomat Jose Ayala Lasso. Algerian Rebels Hit ALGIERS, Algeria (AP) - Security forces killed 22 Islamic militants during a crackdown against rebels waging a nine-year insurgency, while a clash between two rebel groups claimed the lives of 20 others, news reports said Sunday. Algeria's army killed nine armed rebels during an attack Wednesday night in a forested area of Timexi, about 354 kilometers west of Algiers, the Liberte daily reported Sunday. The militants belonged to a group that authorities had been tracking in connection with several murders of civilians in recent weeks, the report said. Also Wednesday, soldiers killed 13 rebels hiding in caves near Ouled Attia in the Collo region, 298 kilometers east of Algiers, the El Watan newspaper reported on Saturday. The North African nation's Islamic insurgency started in 1992 after the army canceled legislative elections that a Muslim fundamentalist party was poised to win. The uprising has defied army offensives and a peace effort by President Abdelaziz Bouteflika. New attacks are reported almost daily. Internet Twins Case LONDON (Reuters) - The British couple at the center of a transatlantic legal battle over the Internet adoption of American twin girls returned to court on Monday in a bid to win custody of the babies. After a two-month legal battle, Alan and Judith Kilshaw went to the High Court in Birmingham to find out whether they may take twins Kimberley and Belinda back to their home in North Wales or if the girls will be made wards of court until their long-term future can be decided. The legal hearing was being held behind closed doors and was expected to last three days. The babies were taken into care in January after it emerged that their natural mother, Tranda Wecker, had sold them twice for adoption over the Internet - to a Californian couple and to the Kilshaws. The case made headlines around the world, plunging both couples into a series of complicated legal wrangles. TITLE: Left Saves Face With Victory in Paris AUTHOR: By Elaine Ganley PUBLISHER: The Associated Press TEXT: PARIS - The Socialists conquered the French capital in municipal elections, wrenching Paris from President Jacques Chirac's conservatives and a century of nearly unbroken rule by the right. Winner Bertrand Delanoe, an unassuming, gay politician, was relatively unknown before the campaign but struck a chord with Paris' 2 million residents by focusing on improving the quality of life. He promised to reduce pollution and address concerns about the poor suburbs. But Sunday's historic victory in the City of Light, and a second prestigious win in the rightist bastion of Lyon, were dimmed by the left's loss of more than two dozen sizable towns around France. Losses by several high-profile ministers in Socialist Prime Minister Lionel Jospin's government proved a particular humiliation. The runoff local elections provided a measure of the political landscape a year ahead of presidential balloting in which Chirac and Jospin may run against each other. The Paris and Lyon victories saved the left's face. "Today, Parisians have freely decided in favor of change in the capital," said Delanoe in a victory speech at his campaign headquarters. Delanoe, 50, defeated Philippe Seguin, a candidate for Chirac's Rally for the Republic party. This Sunday, Delanoe will officially become mayor of Paris - a post held by Chirac for 18 years. He will replace incumbent Mayor Jean Tiberi, whose own candidacy divided the right. Delanoe's victory was widely seen as a cry for change at City Hall, tarnished by kickback scandals that allegedly date to the Chirac era. Tiberi's refusal to withdraw from the race got him expelled from Chirac's party and added further drama to a contest that riveted the nation. However, the left's losses in big cities they had held, like Strasbourg, tempered the humiliation suffered by the right. Seguin blamed the indirect voting system, and Tiberi's refusal to withdraw, for his loss. Some districts provide more city councilors than others. In Lyon, a right so divided that its official candidate withdrew spelled victory for Socialist Gerard Collomb. The elections, which began with a first round March 11, were the first in years in which the far-right National Front took a back seat. TITLE: EU Lends Support to Macedonia PUBLISHER: Reuters TEXT: BRUSSELS - European Union foreign ministers vowed strong political support for Macedonia on Monday as it battles ethnic Albanian guerrillas, but reacted coolly to a suggestion that Western troops should be sent there. Diplomats said the 15 EU foreign ministers had stressed the need for a cease-fire and "in-depth" dialogue between Skopje and ethnic Albanian leaders during talks in Brussels with their Macedonian counterpart, Srgan Kerim. "The ministers agreed that we have to try to get a cease-fire, to support the Macedonian government and to create the conditions for a dialogue," said a spokesman for the EU's current Swedish presidency. "There is a very delicate ethnic balance in Macedonia and we have to be very careful not to upset that balance," he said. The continuing clashes between the Macedonian security forces and the guerrillas near the mainly ethnic Albanian town of Tetovo are seen as a test of the EU's efforts to build a more effective foreign and security policy. But while offering political and economic support, the EU still lacks the military muscle to help combat the guerrillas. Its planned rapid reaction force will not be operational until 2003, leaving NATO as the key military player in the region. Austria raised the possibility of extending the mandate of NATO peacekeepers operating in neighboring Kosovo to Macedonia, but diplomats said only Greece backed that proposal. Earlier, NATO Secretary-General George Robertson also ruled out any extension of the alliance's mandate and noted that the Macedonian government had made no such request. Any change in NATO's mandate would need approval by the UN Security Council, where it would be sure to provoke a veto from China, which is still smarting from Macedonia's diplomatic recognition of its arch-rival Taiwan. Robertson was due to join the EU foreign ministers later on Monday to give his assessment of the situation in Macedonia. On Monday evening, EU foreign policy chief Javier Solana was to travel to Skopje with Kerim. Solana's spokeswoman, Christina Gallach, said he would deliver a clear message to the ethnic Albanian leaders in Macedonia that they had to isolate the "extremists." "There can be no questioning of the territorial integrity of Macedonia. Any demands, problems or wishes the Albanians may have must be raised and discussed through the political institutions [of Macedonia]," she said. Kerim said the clashes were a test of whether a multi-ethnic society could survive in the war-ravaged Balkan region. About a third of Macedonia's two million population is ethnic Albanian. The majority has close ethnic and linguistic ties to Bulgaria. "We need to show all the peoples of the Balkans that the inter-ethnic model such as we have in Macedonia needs not only to be protected but to be promoted," Kerim told reporters. European Commissioner for External Affairs Chris Patten said the EU was providing financial help to projects like the Albanian-language university in Tetovo to help cement ethnic harmony in Macedonia. EU financial help earmarked for Macedonia in 2001 totals $36.9 million. Macedonia will also sign a stabilization and association agreement with the EU next month - the first diplomatic step toward eventual membership. The EU foreign ministers separately welcomed a cease-fire between Yugoslav forces and ethnic Albanian guerrillas in Serbia's Presevo Valley, near to the Macedonian border. He said that the influence of ultra-nationalists in Bosnia was on the wane, but said they could be "emboldened" by the latest events in Macedonia. TITLE: Mir's Last Cosmonaut Mourns Station's Demise TEXT: Many veterans of the Russian space program will be sorry to see the 15-year-old Mir space station come crashing down to earth in a fiery ball next week. Among them is Alexander Kaleri, the 44-year-old cosmonaut with more than 415 days of space travel. Kaleri not only served aboard the Mir three times, but he has the distinction of being one of the last men on board. Last June Kaleri and his crew mate Sergei Zalyotin were the last manned crew to visit the station. Kaleri recently spoke to Alexander Bratersky about his last mission, his feelings about the international space station, and the riskier aspects of his profession. Q: As a three-time veteran aboard the Mir, what were you feeling when you were the last man to leave the space station last June? A: I was not only hoping, but I really believed there would be another crew coming after us. We prepared everything for them so that upon arrival they would feel at home. Of course, the Mir is rather old and in need of certain attention, but it is difficult now to change its profile. It was designed to be inhabited continuously. Sure, it is possible to use the station in a different way now - to come and go and leave it, at times, uninhabited, but that is like throwing money to the wind. Reactivating the station is a very complicated process; it takes three to four weeks to perform repairs and make the system operational. Only then can you begin the purpose of the journey - scientific experiments. Q: Did you have any problems with MirCorp, the Amsterdam-based commercial organization that invested in the Mir and hoped to market it as a tourist attraction? A: Our main boss is the Mission Control Center. They are responsible for all communications with us while we are on board. But because our mission was partly financed by the MirCorp, the company wanted us to provide information about the experiments we were performing. They also handle all the commercial activity. As the new, albeit temporary, owners they wanted to examine everything connected with the station before we took off. Q: During your three missions to Mir you served alongside several foreign astronauts. Working in such tight quarters, cultural differences can escalate into conflict. Did you have any difficulties with any of your foreign colleagues? A: Among all of my foreign colleagues, I spent the greatest amount of time with John Blaha [when we were both on board the Mir in 1996]. We always found a common language and avoided conflicts, although there were a few cases when our relationship was not easy. Before our flight, for example, we hadn't known each other at all - we hadn't had one single training session together. We [the Russian cosmonauts] were then shocked when the first words out of his mouth aboard the Mir were: 'How are we going to work together? According to my rules, we are not ready for a joint flight.' We told him not to worry, that everything was going to be all right. And later he was convinced of that. Q: Did you communicate in Russian or in English ? A: In Russian. According to flight rules foreign astronauts aboard the Mir must speak Russian. John was a very social and talkative person, and every week his Russian got better and better. But regardless of our common language, we saw that our attitude to problems was different. We were, however, united by one thing in common: We are all professionals, and we understood the need to complete our mission on a professional level. Q: How did you spend your free time together while working with Blaha? A: We didn't have anything serious to do after dinner, so we could relax a bit. Sometimes we watched films together - John had a lot of films with him and he watched them every night. I don't remember any of the story lines or actors, but I do remember watching football and baseball games - the Dallas Cowboys and New York Yankees. John was passionate about these teams. He even discussed their performances with fans on the ham radio. Q: Aboard the Mir, the Russian side called all the shots. Do you think - as many supporters of the Mir fear - that the Americans will dictate the rules of the game to the Russians aboard the International Space Station? A: It is possible. Time will tell. Everything is going smoothly right now, but as a pessimist, I am afraid to make any predictions. Q: What do you think about the fate of the Mir? A: To have one's own space program is one of the characteristics of a strong state. Only a few countries can afford themselves this luxury. While we have the Mir we are still a great power. But once we lose it, we will slip away from the club of strong nations. If it all depended on us, those of us in the space industry would do everything they could to save the station. But we can't do anything without money. Q: You were on board the Mir in February 1997 when a fire broke out aboard the space station. Later that year a more serious accident occurred when a Progress cargo ship crashed into the station while docking. How did you react to the news? A: It was not the best flight for Alexander Lazutkin and Vasily Tsibliyev [the cosmonauts on board the Mir at the time]. I know how difficult it was for them to stabilize the situation, but that is what our profession is all about: If something goes wrong, you need to overcome it. It's like being a goalkeeper who has lost the ball. Q: In Soviet times, cosmonauts were celebrities and national heroes. Has that changed today? A: Today society only has an interest in cosmonauts when something catastrophic happens. Q: What about in your hometown of Yurmala, Latvia. Do people still remember you there? A: I am still remembered in the school where I studied, and the local papers wrote something about me in the early 1990s. But I haven't been there in a long time. Once I used my name to get a Latvian visa on the train. That was when my father died. But that was all. They say most people don't remember me. Q: Does your 4-year-old son Oleg want to be a cosmonaut like his father? A: Right now he wants to be everything. Every day he invents some new idea. TITLE: RUBLE AROUND TOWN TEXT: Monday's ruble/dollar rates in St. Petersburg: Address Buy Sell Alfa Bank 6 Kanal Griboyedova 28.20 28.90 Baltiisky Bank 34 Sadovaya Ul. 28.40 29.14 Bank Sankt Peterburg 108 Ligovsky Prospect 28.30 28.90 Impexbank 58 Nevsky Prospect 28.10 28.90 Inkas Bank 44 Nevsky Prospect 28.10 29.10 MOST Bank 27 Nevsky Prospect 28.10 28.80 PetroAeroBank 10 Suvorovsky Prospect 28.60 28.78 Promstroi Bank 4 Mikhailovskaya Ul. 28.20 28.85 RusRegion Bank 54 Nevsky Prospect 28.61 28.80 Sberbank 4 Dumskaya Ul. 27.90 29.10 Average 28.25 28.93 Change from last week +0.05 +0.05