SOURCE: The St. Petersburg Times
DATE: Issue #662 (29), Tuesday, April 17, 2001
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TITLE: Help Yourself at the Kaliningrad Amber Factory
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: KALININGRAD, Western Russia - Each morning after a storm 28-year-old Yury Zamotkin grabs his diving suit and heads for the Svetlogorsk beach to see if the Baltic Sea has coughed up any amber.
Not far off shore and dozens of meters down runs a massive vein of the "northern gold" that has been feeding Zamotkin and his family for years.
"It is really tough work, but I like it and have been doing it for as long as I can remember," Zamotkin says of his amber hunting along the strip 30 kilometers west of Kaliningrad.
"You've got to go to the shore in all weathers if you want to find something. And it doesn't matter if there are gale-force winds or sub-zero temperatures. I just put on my diving suit and mask and head for the water," he said, grinning at the fortune nature has provided.
Russia's isolated Baltic enclave between Poland and Lithuania is well known for being home to the world's largest underground amber deposits.
An enigmatic object of beauty, amber is considered both a mineral and a semiprecious stone. It started forming in this region about 50 million years ago when sap from trees growing in the then-warm climate flowed into the rivers that eventually emptied into the Baltic. Now there is a solid stretch of amber several kilometers long and 50 meters underground.
Zamotkin is just one of about 2,000 local residents who search for amber along the region's coast.
Depending on the frequency of storms that churn up the underground river of fossilized tree resin, he says he earns about $5,000 a year, making his "hobby" his primary source of income.
But Zamotkin's main competitor, the state-owned Kaliningrad Amber Factory, a production monopoly that sits atop 90 percent of the world's amber, is currently in crisis.
'EVERYBODY STEALS'
The global amber market is estimated to be as much as a quarter of a billion dollars a year. Yet the Kaliningrad Amber Factory posted only a couple of million dollars in profit last year. Why?
The cause of the crisis, say government officials and local businessmen, is the massive number of thefts at the factory - thefts they claim are organized by the local mafia, which has had a stranglehold on the factory for years.
"Almost every day there are jeeps leaving the factory full of amber stones," said one local businessman who asked not to be identified. "The security company guarding the quarry is run by several notorious criminals who have already been in jail for a few years," he said. "The police guard only the front entrance and can't do anything to stop them."
"Everybody steals at the factory, workers and regional administration officials alike. But I don't want to talk about it. I have a family - and children. And two of my cars have already been burned. I don't want to be shot through the window," he said.
Just last month some 730 kilograms of select amber stones were found in one of the factory's mines, apparently hidden there in order to be smuggled out later, according to local reports.
An analysis by the federal government completed last month estimates that roughly $70 million worth of amber was looted from the factory last year, or 60 percent of its total annual output. At the same time, the factory estimates it made 100 million rubles (about $3.5 million) in profits last year.
The factory's deputy director, Nikolai Petukhov, admits that pilfering is widespread, but claims that the losses are significantly overestimated.
"Everyone steals, including workers and especially guards. Amber has been stolen at all stages of the output process - during output itself, then during grading and during reshaping. But $70 million, that sounds like nonsense," Pe tuk hov said in an interview this month.
"We don't even put out that much amber," he said.
Petukhov said people are looking to steal mostly big stones, which weigh 300 grams or more and sell for about 7,500 rubles (about $260) per kilogram, including the most expensive stones, which weigh over 1 kilogram and cost $1 per gram.
Only about 40 tons "of the most expensive stones" were mined last year, comprising only 14 percent of the total output, he said. According to management, most of these were for the renovation of the amber room at Tsarskoye Selo, Catherine the Great's summer palace near St. Petersburg.
Businessmen and local officials, however, say the factory's management lost control over the factory years ago.
"Under the official name of the state-owned Kaliningrad Amber Factory ... large-scale theft of raw material is thriving, with most of the material then being smuggled into Poland and Lithuania," said Sergei Kozlov, the deputy speaker of the Kaliningrad Duma.
SHUT IT DOWN
In March, German Gref's Economic Development and Trade Ministry announced that the factory may need to be temporarily shut down to figure out what happened to all that amber and money.
"The quarry and the factory itself should be divided to make control over the amber mining more effective. It is possible to envision the temporary closing of the quarry [for a period of time ranging from two to three years] to improve the current level of amber prices ... and to prepare more effective measures for amber output control," the ministry said.
"There's a real mess in the factory. Until now we have only been talking about police measures to at least stop the contraband," Natalya Popova, deputy head of the ministry's regional department, told Vedomosti last month.
But Vladimir Gromtsev, the general director of the plant, said the federal government's plans to close the plant don't make sense.
"That means that the quarry would be filled with water and then it would be necessary to dig a new quarry. In other words, a completely new factory would need to be organized instead, which is a huge amount of money," he said.
If the factory closed, there would be nothing left of the equipment ... people would steal it," he said.
Workers, too, are not happy about the possibility of losing their jobs. The factory, in Yantarny, is 50 kilometers from Kaliningrad city and employs about 1,000 of the town's 7,000 residents.
"Closing the factory would mean poverty and disaster for us. This is the only place we can work here," said Yelena Birychinskaya, head of the factory's external affairs department.
"I have a family and it would be hard for me to support them if they close us down," said Andrei Cheremysh, another worker.
PRIVATIZATION ... NOT
Gromtsev said the factory started suffering difficulties in 1996 - three years after ownership was turned over to management and staff during privatization - when it was returned to state hands after the Supreme Court ruled the privatization illegal because the federal property committee never signed off on it.
As a result, the factory lost its reserve fund of more than 250 million rubles (about $70 million at the time), which was used to purchase privatization vouchers from the state in order to exchange them into shares in the factory, said Petukhov, the factory's deputy director.
"We spent the money that was supposed to go to purchase gold [to make amber jewelry]," he said.
During the Soviet period and up until 1993, jewelry production was the factory's main source of profit.
Petukhov said the previous management team borrowed from banks to pay salaries, but when it couldn't pay back the loans it started selling off equipment used to make gold and amber jewelry.
"They even repaid one of the local banks with an unique armored Iveka car that was used to deliver gold to the factory," Petukhov said.
But Gromtsev, the director, says the situation has improved. He says the factory's total debt dropped from 30 million rubles in 1996 to 10 million rubles in 2001.
"This year, we can pay back all the debt and start working with loans to develop the factory," Gromtsev said.
"We need about $7 million to cancel our debt and to purchase new equipment. If we succeeded in doing so, in two or three years we could be making a profit of 1 billion rubles annually," he said.
Kozlov, the deputy speaker of the Kaliningrad Duma, disagrees.
He says thefts at the factory are out of hand and military units from the Interior Ministry need to be called in to guard the quarry. He said each year 90 percent of the amber stones suitable for producing high-quality jewelry disappears from the factory, a loss of at least $30 million annually.
Kozlov suspects that factory management is involved in large-scale smuggling.
According to factory's own statistics, amber output has dropped from 800 tons in 1995 to 441 tons in 2000. At the same time, amber exports to Poland actually increased from 51 tons in 1990 to 154 tons in 1998.
"Up to 70 percent of this is contraband," Kozlov said.
From these figures, Kozlov believes the Polish and Lithuanian amber industries are gaining from Russia's loss.
THE POLISH CONNECTION
In 1997 the total turnover of the amber business in Poland was estimated at $100 million, according to a publication by the International Amber Market in Gdansk, Poland. Over the last 10 years, the export of amber jewelry from Poland increased 50 times, with a retail value of all items estimated at $300 million.
"I've got just one telling example for you," said Michael Simukov, head of Jewelry Crown, a Kaliningrad-based amber company.
"When I go to Gdansk, I see amber stones there that obviously were taken from Kaliningrad. They cost $60 a kilogram. Here, the same kind of stones cost $65, without all these taxes and customs fees, which should have been paid if it was exported legally through the border. Why is there such a difference?"
Regional customs officials in Kaliningrad interviewed for this article denied the existence of an amber mafia. Last year, only about 150 cases of smuggling were recorded by Kaliningrad customs - mostly vodka and cigarettes. Only about 100 kilograms of amber were confiscated.
"I wouldn't say there is organized [illegal export] of amber taking place. There are only occasional cases, and we put an end to them immediately," said Oleg Sipyukov, head of the Kaliningrad Border Customs.
"Because of the criminal influence in the Kaliningrad Amber Factory, the region turned out to be a raw-material appendix to the Polish and Lithuanian amber industry," Kozlov said.
But businessmen polled in Gdansk do not agree. They say there is a completely different reason the amber business in Kaliningrad is stagnant. They say there is plenty of amber in Poland, and the quality is much higher than in Kaliningrad.
"The reason is that the amber field in Kaliningrad is different from the one we have here [in Poland]. Kaliningrad amber is deeper in the ground and that's why it is not wet enough to make forms out of it. Such stones start to break into pieces as soon as I start polishing them," said the head of a Gdansk amber company who asked not to be identified.
"The last figure I made from a Kaliningrad stone was six years ago, and I don't work with them any more," he said.
There are hundreds of workshops and retailers in the central part of Gdansk dealing in expensive, high-quality amber jewelry, compared to just one amber shop located on the central square of Kaliningrad. It's a clear sign of how successfully the amber industry has developed in Poland, compared with the area boasting the biggest deposits in the world.
Polish businessmen say it is mostly experience rather then external conditions that makes their amber more competitive.
"Russians don't make a good product very often, and that is not because they can't work. It's because there was no tradition of amber manufacturing there. My father and my grandfather were amber manufacturers too, and taught me how to do this. You can't make things look perfect with only 30 or 50 years of experience," said another amber dealer who asked not to be named.
Jewelry Crown's Simukov said that Polish amber dealers have the advantage of more business-friendly legislation.
"It would take me a few months to get permission to export the jewelry I produce. I would have to go to Moscow several times to sign papers, while it is enough for a Polish businessman to put the jewelry in an open box, show it to customs officials and then send it by Federal Express," said Simukov.
"I get the impression that Russian authorities are getting a salary from Polish businesses to stop the competition," he said.
TITLE: Media-MOST Under Siege
AUTHOR: By Anna Raff and Andrei Zolotov Jr.
PUBLISHER: Staff Writer
TEXT: MOSCOW - Top managers of TNT television found themselves facing charges of tax evasion Monday, two days after taking in defiant journalists from NTV television after Gazprom-appointed management finally took total control.
The charges were reported by Vladimir Gusinsky's Media-MOST holding company, which lost control of NTV over the weekend to Gaz prom and is struggling to hold onto the second-tier channel TNT.
"By putting pressure on the leadership of TNT, the authorities are trying to keep the former NTV team off the air for good," Media-MOST said in a statement.
In another blow to Gusinsky's media empire, Tuesday's edition of Segodnya newspaper was kept from going to press late Monday, editor Mikhail Berger told Ekho Moskvy radio. Berger and the rest of his staff were sent on a two-month paid vacation in light of upcoming mass layoffs, Interfax reported.
Gazprom, which guaranteed hundreds of millions of dollars in loans to Media-MOST, acquired enough shares in NTV and the publishing house that puts out Segodnya to exert its control. If Media-MOST fails to pay up on a $262 million loan due in July, Gazprom will gain a controlling stake in TNT.
NTV general director Yevgeny Kiselyov and other high-profile journalists left NTV on Saturday after new general director Boris Jordan and new board chairman Alfred Kokh - also general director of Gazprom-Media - took over operations that morning. Their appointment at a shareholders meeting on April 3 led to a two-week standoff that ended when Gazprom-Media's guards took control during the early hours of Saturday.
Kiselyov's team moved over to TNT and began broadcasting news programs from there. At the same time, Kiselyov accepted an offer to head another channel, TV6, and said he will try to work out a deal to bring the ousted NTV team with him.
The two channels have been considering a merger, but the invasion by NTV journalists has caused a strain at both. TV6 news chief Mikhail Ponomaryov said he would leave the channel if Kiselyov was brought in.
Late Monday, TV6 announced that Kiselyov was appointed deputy general director at a meeting with station employees. Originally he had been offered the post of general director at the Boris Berezovsky-controlled station. Interfax said an extraordinary TV6 board meeting has been scheduled for May 4.
As NTV journalists look for a new home, Media-MOST announced that Moscow Tax Police had charged TNT chief accountant Yelena Metlikina with tax evasion and intended to charge general director Pavel Korchagin with the same crime later this week.
Media-MOST lawyer Pavel Astakhov said the charges were old and already taken care of. In September, the Tax Police accused TNT of evading 191,211 rubles ($6,800) in taxes. Astakhov said TNT did not owe the money but paid it anyway to avoid trouble.
Tax Police spokeswoman Yelena Pavlova said she could not confirm that such charges were brought against TNT managers. "Our leadership is in a meeting right now discussing the issue," Pavlova said Monday evening.
Speaking on Ekho Moskvy, Korchagin predicted the tax authorities will not take the case to court because they understand they have no case.
Media-MOST called the charges far-fetched. "The authorities are continuing their unprecedented efforts to destroy the former NTV team and other Media-MOST companies," its statement said. "It's completely obvious that the Tax Police's activities are related to the events surrounding NTV and the switch by some employees to TNT."
TNT spokeswoman Natalya Zavyalova said the company has already amended its program schedule to include the news programs prepared by Kiselyov's team. On Saturday and Sunday, the rebel journalists had only two programs made in makeshift TNT studios. Beginning Monday, "Segodnya on TNT" is scheduled for 1:30 p.m., 4 p.m., 7 p.m., 10 p.m. and shortly after 1 a.m.
Kiselyov's Itogi and Viktor Shenderovich's Itogo programs are also in the emergency lineup, which was released on TNT's Web site (www.TNT.ru).
Back at NTV, evening news anchor Tatyana Mitkova was elected chief editor by the journalists who decided to stay, and Leonid Parfyonov now is host of the show "Hero of the Day."
Unlike NTV, which reaches about all of Moscow and St. Petersburg, TNT can be seen in about 60 percent of Moscow, Zavyalova said. Throughout Russia, the company claims a potential audience of 78 million people, compared to NTV's 112 million.
Unlike NTV, TNT relies on local affiliates and may have difficulty enforcing the new schedule. For example, Pioner station in Krasnodar refused to broadcast Kiselyov's "Itogi."
But the current situation - in which former NTV journalists cannot fit in the few rooms or work on the computers TNT has to offer - can last no longer than a week, Zavyalova said. "Kiselyov and TNT leadership are in constant talks trying to resolve the problem," she said.
Former NTV executive director Ser gei Skvortsov, however, said that NTV could stay on at TNT "indefinitely."
The events of the past couple of days have changed the playing field for CNN founder Ted Turner. He has been negotiating a deal to buy a stake in NTV since last year, but the channel's value changed after the exodus of journalists. The NTV that now exists is not the same NTV that Turner bargained for. Turner and his team are re-evaluating their positions, said Turner spokesperson Brian Faw.
It was still unclear how many people have left NTV. Oleg Sapozhnikov, Jordan's spokesperson, said 46 had quit by noon Monday. However, according to NTV's Web site, 200 to 250 employees had officially submitted letters of resignation, and Interfax reported that Jordan wasn't letting anyone else go until he was able to speak with them personally.
One resignation did not go through. Oleg Dobrodeyev, head of state-run RTR television who earlier announced his resignation in light of the NTV scandal, on Monday met President Vladimir Putin, who refused to accept it.
TITLE: Russia Commits to Iran Reactor
AUTHOR: By Karl Emerick Hanuska
PUBLISHER: Reuters
TEXT: MOSCOW - New Atomic Energy Minister Alexander Rumyantsev committed Russia on Monday to completing work on Iran's Bushehr nuclear power station, but was non-committal on plans to build a second reactor there.
The United States, which opposes the sale of nuclear technology to what it considers a "rogue state," had expressed alarm at suggestions that Mos cow could build more reactors for the Islamic republic.
"If we are lagging behind schedule on the construction of the first Bushehr nuclear power plant, then we will catch up," Rumyantsev, who replaced Yev ge ny Adamov late last month, told a press conference.
"We must fulfill our contractual obligations," he said. The minister repeated Russia's view that the 1995 Bushehr contract did not violate Mos cow's international treaty undertakings as the nuclear cooperation was of a strictly civilian nature.
Russian specialists were in talks on constructing a second reactor at Bushehr, he said. But Itar-Tass news agency quoted him as saying that "no documents have yet been signed."
Moscow analysts said Adamov had been sacked for his "excessive enthusiasm" in reaching deals with Iran, which only aggravated Russia's already fraught ties with the United States.
Washington has slammed Russian sales of nuclear technology to Iran and has cited potential nuclear proliferation to justify its desire build a $60 billion national missile defense shield that has been strongly denounced by Russia.
Russia insists it is only providing technology with civil uses, but the United States fears it will help Iran develop nuclear weapons. Rumyantsev said he expected both sides to find a compromise on the issue.
Washington has also sharply criticized Moscow's decision to ship nuclear fuel to India's Tarapur reactor, but Rumyantsev said Russia intended to build a nuclear power station on the sub-continent, despite international concerns.
"India is our strategic partner. We want to ensure that there are no reproaches [from the international community] in this regard," he said.
Rumyantsev, previously the head of one of Russia's top nuclear laboratories, also backed a plan to earn billions of dollars by importing nuclear waste for treatment.
He dismissed the fears of environmentalists by saying Russia had the technology to handle the waste safely and would earn substantial income from the work.
TITLE: Radio Report: Publisher Ends Segodnya Funding
PUBLISHER: The St. Petersburg Times
TEXT: Tuesday's edition of the Segodnya daily newspaper, part of Vladimir Gusinsky's Media-MOST empire, was unexpectedly kept from going to press late Monday evening, the paper's editor Mikhail Berger told Ekho Moskvy radio.
Berger said the order to stop the presses came "in oral form" from Dmitry Biryukov, president of the Sem Dnei publishing house, which puts out the paper. Interfax reported that Berger and the rest of his staff were sent on a two-month paid vacation in light of upcoming mass layoffs.
In a statement issued to Interfax late Monday, Sem Dnei said it was cutting off funding for the paper as of Tuesday.
Last month Segodnya fell victim to the conflict between Media-MOST and its shareholder and creditor state-run gas giant Gazprom, when Biryukov announced that his company would drop the daily.
Biryukov said the decision was made because the paper is a money-loser. Media-MOST, however, contended that the true reason behind the decision was government pressure resulting from Segodnya's criticism of the Kremlin.
The paper was set to cease publication as of May 1, but Monday's closing came as a surprise.
Ekho Moskvy quoted Berger as saying the decision was the logical "conclusion" of Gazprom's recent takeover of NTV and the "destruction of media critical of the powers that be."
Biryukov and Gazprom's media arm, Gazprom-Media, together hold a 50 percent plus one share majority stake in Sem Dnei, which also publishes the weekly Itogi current affairs magazine.
In its statement, Sem Dnei said it would hand over its stake in Segodnya to the paper's staff free of charge, in keeping with an earlier decision. The handover is to be confirmed at an extraordinary shareholders meeting set for April 26.
Berger said the paper's journalists were considering an offer made Saturday by their colleagues at the Noviye Izvestia daily to publish some of Segodnya's stories on its pages.
TITLE: NTV-St. Petersburg Jumps Ship
AUTHOR: By Masha Kaminskaya
PUBLISHER: Staff Writer
TEXT: Journalists from NTV-St. Petersburg have joined their Moscow colleagues and started broadcasting news programs on another channel, after Gaz prom-appointed managers took over operations at NTV in the capital on Saturday morning.
As of Monday, the St. Petersburg team - which is legally a separate entity from national NTV - was broadcasting city news bulletins on Russkoye Video-Channel 11, a branch of the TNT network.
However, NTV's local bureau - part of the Moscow set-up, and distinct from NTV-St. Petersburg - was continuing to work as before. The bureau, which produces 30 to 40 local news reports a week for NTV's national broadcasts, is still undecided whether to split as well.
"This is a transitional period," said Andrei Radin, presenter and editor-in-chief of NTV-St. Petersburg, referring to the move to TNT on Monday afternoon. He announced the move publicly in a recorded statement that was shown on NTV, replacing a usual local news slot.
The St. Petersburg journalists have been making similar moves to those of NTV staff in Moscow. On Saturday, many of the station's high-profile anchors went over to the TNT network, while the TV6 station announced that Kiselyov would come on board as its interim general director.
Like NTV, TNT is part of Vladimir Gusinsky's Media-MOST holding company, and is now giving its airwaves to former NTV journalists. TV6 is majority owned by tycoon Boris Berezovsky, and there has been talk of merging TV6 and TNT.
But any way they look at it, NTV journalists both in St. Petersburg and Moscow are facing a drop in viewers. Before its takeover, NTV was the only non-state channel that broadcast nationally. While it is possible to pick up TV6 in St. Petersburg, reception is unreliable. Channel 11 can be picked up by around 80 percent of television sets in the city, according to Andrei Mokrov, the director of NTV-St. Petersburg.
"The TV6 frequency is very poor [in St. Petersburg], and we don't want to lose the audience we have in the city," said Radin by telephone on Monday.
"Switching to TV6 has not been seen as an option here," said Mokrov.
Radin said that the five local daily news slots, entitled NTV in St. Petersburg, would now shrink to three, to be shown on Channel 11 as "Segodnya v Peterburge," (Today in St. Petersburg).
While the programming schedule was still being worked out Monday morning, Channel 11's broadcasting manager Irina Plotnikova said that the former NTV team's news will be presented at 7 p.m., 9:15 p.m. and around 10:40 p.m. Starting from Tuesday, a transmission will air at 11:30 p.m.
However, the early-morning entertainment show "Prosypaisya, Piter" (Wake Up, Piter), which ran every weekday, has been suspended.
While the change in NTV management does not directly affect the St. Petersburg team in theory, the two organizations had close ties.
NTV-St. Petersburg is part of the Moscow-based stock company Grass+, which in turn is part of Media-MOST. NTV used to buy news programs from NTV-St. Petersburg, airing them after the national news to city viewers instead of Moscow-oriented commercials and weather reports.
Channel 11 - as part of the TNT Network - is also part of the Media-MOST empire, and regularly buys programs from NTV-St. Petersburg. One example is "Segodnyachko-Piter," a local take on NTV's "Segodnyachko," "Amateurs' Club" and other shows.
In addition to being director of NTV-St. Petersburg, Mokrov is also the general director of Channel 11.
Channel 11 has been linked to Russian-Israeli businessman Mikhail Mirilashvili, an associate of Gusinsky. Mirilashvili is vice president of the Russian Jewish Congress, which was headed by Gusinsky until he resigned last month. Gusinsky is currently awaiting extradition proceedings in Spain for fraud charges in Russia, while Mirilashvili is in Kresty Remand Prison on kidnapping charges.
Dmitry Miropolsky, a spokesperson for Mirilashvili, said that his boss used to be president of Channel 11's predecessor, Russkoye Video, until the company was re-registered in 1997.
Miropolsky said that Mirilashvili was involved in the company only until 1999. "Now 75 percent of Channel 11 belongs to Media-MOST and the rest to [two other] shareholders," Miropolsky said on Monday.
According to Mokrov, on Saturday the NTV-St. Petersburg team's further activities were discussed in Moscow between NTV's former general director and editor-in-chief, Yevgeny Kiselyov, and the head of Grass+, Alexander Gerasimov. Both men used to be on the NTV board of directors. Gerasimov resigned from the board on Saturday in protest of the Gazprom takeover, which ousted Kiselyov 10 days earlier.
It was also Gerasimov who ordered NTV-St. Petersburg to switch to Channel 11.
Mokrov said that NTV's contract with the St. Petersburg organization to buy and air city news expired in any case on April 12. He said that there had been no offers from NTV to resume the deal. According to Felix Nevelev, art director of NTV-St. Petersburg and one of the hosts of Wake Up, Piter, the contract on this show expired the same day.
As for the NTV journalists stationed in the city who remain with the company despite the management change, bureau chief Yury Zinchuk said that they would keep working for the moment.
"But if the [new management in Moscow] tells me to cover every move Governor General [Viktor Cherkesov] makes seven days a week, I'll quit," he added.
But Zinchuk said that he was not happy with the way NTV had acted in the crisis days before Saturday, and was torn between staying with NTV or going with Kiselyov. "I don't want to choose between what's worse, and what's worst," he said.
TITLE: IN BRIEF
TEXT: St. Pete Grenade Blast
ST. PETERSBURG (AP) - Six people were wounded in St. Petersburg when a quarrel spiraled out of control and one of the men involved threw three grenades, Itar-Tass reported Sunday.
The argument broke out Saturday night at a restaurant, the news agency said, citing local police. One of the participants vowed revenge, left the building, and returned with several grenades. He threw them when the others were trying to leave the restaurant, and two exploded.
Two of the injured were in serious condition, while the others suffered minor wounds. A 46-year-old man was detained along with one of the injured, a 19-year-old man suspected of being an accomplice, Itar-Tass said. No other details were available, and St. Petersburg police officers could not confirm the report.
Publisher Attacked
MOSCOW (SPT) - An unidentified assailant threw a Molotov cocktail at a car belonging to Dmitry Biryukov, the head of the Sem Dnei publishing house. He was not hurt, but the driver and passenger of another car reportedly suffered burns.
Biryukov was being driven to work Friday and had nearly reached his office when the homemade firebomb was thrown at his Mercedes.
The publisher is embroiled in a dispute with Media-MOST head Vladimir Gusinsky over the fate of the Segodnya daily and Itogi weekly magazine. In an interview to Interfax, Biryukov indirectly blamed Gusinsky for the attack, saying "one of the shareholders was trying to put pressure on me."
Media-MOST spokesperson Dmitry Ostalsky said he was perplexed by Bi ryu kov's statement. "Neither Vladimir Gu sinsky nor his partners have ever used criminal methods in solving conflicts, it is well-known to everybody," Ostalsky said.
U.S. Grants Asylum
KIEV (AP) - The United States granted political asylum to a fugitive Ukrainian security officer who accused President Leonid Kuchma of involvement in the killing of journalist Georgy Gongadze, and to the journalist's wife, the Foreign Ministry said.
A ministry statement said the asylum for Major Mykola Melnichenko amounted to sheltering a man suspected of causing significant damage to national security.
"The U.S. side's decision is viewed by Ukraine as failing to correspond to the spirit of Ukrainian-American partnership and as creating obstacles in the way of a criminal investigation," said the ministry.
The U.S. State Department declined comment on the asylum.
Melnichenko resigned from the president's bodyguard service last year and went into hiding abroad. He then released tapes he said were made by a recorder hidden in Kuchma's office.
Kuchma has strongly denied involvement.
Iraqi PM To Visit
BAGHDAD (Reuters) - Iraq's Vice President TahaYassin Ramadan will visit Russia shortly, the Iraqi News Agency INA reported on Sunday without giving details.
It said Ramadan briefed President Saddam Hussein on "the program of his visit to Russia, which will take place shortly," during a meeting also attended by the vice-chairman of the Revolutionary Command Council, Izzat Ibrahim, and Deputy Prime Minister Tareq Aziz.
The agency said Saddam had asked Ramadan to convey his greetings to Russian President Vladimir Putin. UN Security Council member Russia has called for an end to UN trade sanctions imposed on Iraq after its 1990 invasion of Kuwait.
TITLE: Limonov Arrested in Weapons Investigation
AUTHOR: By Robin Munro
PUBLISHER: Staff Writer
TEXT: MOSCOW - Eduard Limonov, an author and head of the National Bolshevik Party, has been arrested on suspicion of participating in the illegal procurement of weapons, according to media reports.
The Federal Security Service arrested Limonov and an unspecified number of National Bolshevik Party members across Russia last week and has opened an investigation into whether they "were attempting to illegally acquire large consignments of firearms, ammunition and explosives," the Kremlin-connected Strana.ru Web site reported Saturday.
Strana.ru said several of the suspects were caught red-handed.
Limonov was expelled from the Soviet Union in the 1970s after publishing the controversial book "It's Me - Edik" in 1979. He is also editor of the newspaper Limonka, slang for hand grenade, and writes a column for the eXile, an English-language alternative newspaper.
Limonka's founder Sergei Aksyonov was arrested with Limonov and is also in custody, news reports said.
Limonov's lawyer Sergei Belyak said his client is being held in Moscow's Le for tovo prison and is expected to appear in court Wednesday, Interfax reported.
He said no charges have been brought yet against Limonov.
Limonov was picked up April 7 near the Altai region village of Bannoye by special-service agents, Interfax reported.
Segodnya quoted an eyewitness as saying payment for a book from Limonov amounting to several thousand dollars had been confiscated.
Belyak told Interfax that Limonov had been planning to write a book about former Krasnoyarsk Aluminum head Anatoly Bykov.
TITLE: Suggested Duma Merger Already Showing Cracks
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW - The planned merger of the pro-Kremlin Unity party and Fatherland-All Russia movement may prove to be a mixed bag for President Vla dimir Putin - if indeed the alliance is ever tied up, lawmakers and analysts said.
In announcing the alliance Thursday, Emergency Situations Minister Sergei Shoigu, who heads Unity, and Fatherland leader and Moscow Mayor Yury Luzhkov sounded confident that members of their two parties saw eye to eye about the decision and that the factions would be merged by November.
But cracks in the coalition are already appearing.
Former prime minister Yevgeny Primakov, who co-founded Fatherland, expressed strong caution about the deal, saying he and his supporters would take a wait-and-see approach.
A high-ranking Duma source was more direct about Primakov's feelings.
"I spoke to him and he doesn't like the idea," the source told The St. Petersburg Times on Friday. "Primakov was pushed to the side [in drawing up the merger] and he will be fighting to preserve his position."
Furthermore, major ideological differences apparently remain between the two parties. While Unity tends to stand behind any liberal reforms sent down to parliament from the Kremlin, Fatherland usually takes a more leftist stance, said Boris Nemtsov, the head of the Union of Right Forces faction.
Legislation proposed by Putin look more "liberal-authoritative, a combination of liberal economy and authoritative rule," he said.
Simple math suggests that a Unity-Fatherland coalition would give the Kremlin a driving force in the 450-seat State Duma. With a combined 131 deputies, the two parties would control more seats than the Communists and their close allies the Agrarians. Throw in two other factions that are pledging to back the Unity-Fatherland alliance - Russia's Regions and People's Deputy - and the Kremlin would easily have the 226 votes needed to pass most legislation.
But the matter of combining the parties will not be simple. All the members of Fatherland and Unity have to agree to the merger. Political observers said the vote would probably be easily passed by lawmakers in Unity, which was created in 1999 on the sole platform of getting Putin elected president. But a unanimous agreement from Fatherland, which was also formed in 1999, but as a party to put Primakov or Luzhkov in the Kremlin, may not be won without a fight.
Fatherland deputies could be forced to give up their influential seats on Duma committees in order for the merger to go through, a prospect many may balk at, analysts said.
More importantly, Fatherland lawmakers would have to pledge their support for the Kremlin.
Sergei Markov, foreign editor at the Kremlin-linked Strana.ru Web site, said that even if Fatherland deputies agreed to back the Kremlin, many would no doubt remain faithful to the regional authorities who helped them win their Duma seats in December 1999.
But he and other observers pointed out that the Kremlin, as always, will have the upper hand if parliament refuses to pass laws. The Kremlin can punish a disobedient Duma by merely disbanding it and ordering new elections.
TITLE: Ministers Join Putin On Chechnya Visit
PUBLISHER: Combined Reports
TEXT: President Vladimir Putin paid a lightning trip to Chechnya over the weekend, flying by helicopter to the site of one of the federal forces' heaviest losses to dramatize the Kremlin's commitment to fighting the rebels to the end.
During his unannounced trip, which briefly overshadowed the crisis at NTV, Putin promised to sort out "outrageous" wage arrears to troops serving in Chechnya.
The president was accompanied by Defense Minister Sergei Ivanov, Interior Minister Boris Gryzlov and Press Minister Mikhail Lesin, Russian media said.
Putin visited the site where 84 troops were wiped out in an ambush by Che chen rebels in March 2000, state-run RTR television said.
He laid flowers at the scene of the battle, known as Hill 776. He then inspected a special forces unit near the town of Khatuni and moved on to a meeting with officials at the federal base at Khankala, east of Grozny.
Russia will use all necessary force to eliminate the rebels, Putin said, adding that troops being withdrawn from there are superfluous units, Itar-Tass reported.
The federal troops stationed in Chechnya "are doing a good job in accordance with the assignments they receive from the command. I am satisfied," Putin said.
Putin said he came to discuss the financing of federal forces in the region. Some of the soldiers who signed up for Chechnya on a contract basis have complained they haven't been paid.
"When I watch the main television channels, I watch with disgust the scenes when people are demanding wages they earned long ago," Putin said in televised comments.
"They are risking their lives, fulfilling their duty to the fatherland, they are fighting to restore constitutional order to the North Caucasus, and then don't get paid on time. It's outrageous," he said.
The president said the delays would be discussed at a Sunday meeting with Finance and Defense ministry officials in Moscow. Troop withdrawals from Chechnya would also be debated.
Akhmad Kadyrov, the head of the pro-Moscow Chechen administration, said Sunday that Putin's trip was a signal that Chechen rebels would be unable to push out federal troops, as they did five years ago at the end of the first Chechen war.
"Now the times are different, the president is different and the problem is being approached differently, which demonstrates Putin's determination to restore peace and order in Chechnya once and for all," Kadyrov was quoted by Interfax as saying.
Putin has made trips to Chechnya before, one of them in the back seat of a Su-27 jet fighter during last year's presidential election campaign.
State media quickly proclaimed Saturday's visit "the main news of the day," pushing off the top news spot the overnight takeover of NTV.
The surprise trip coincided with the broadcast on state-run ORT television of a Chechnya war film depicting the isolation, tension and tedium of life at a Russian checkpoint. One of the main characters is shot dead by a female sniper who pimps her prostitute sister to Russian troops.
Chechnya has always been an effective tool with which to boost Putin's image as a tough leader close to his people.
- AP, Reuters
TITLE: Borodin Thanks Putin for Securing Release
AUTHOR: By Torrey Clark
PUBLISHER: Staff Writer
TEXT: MOSCOW - Pavel Borodin arrived back in Moscow in time for Easter and at the first opportunity he thanked President Vladimir Putin for helping to bring him home.
The Russian government posted bail of $3 million Thursday to allow Borodin to leave Switzerland, which has accused the former Kremlin property manager of receiving more than $25 million in kickbacks from Swiss construction companies.
After almost three months in jail in the United States and almost a week after his extradition to Switzerland, Borodin flew into Sheremetyevo Airport on Friday night. Holding his adopted daughter's hand, he descended from the VIP lounge to the departure lounge to face a mix of journalists, supporters, OMON special forces troops and curious travelers waiting for their flights.
Borodin paused in front of the press unblinkingly and spoke ponderously. "I am immeasurably grateful to Vla dimir Vla di mi ro vich Putin for his help, for his decency, for being a real man, a citizen, the president." He also thanked Belarussian President Alexander Lukashenko, Patriarch Alexy II of the Russian Orthodox Church and others for their support.
Putin, whom Borodin brought to the Kremlin from St. Petersburg in 1996, has not commented publicly on the case against Borodin or Borodin's arrest in New York on the Swiss warrant. Since becoming president, Putin has distanced himself from Borodin.
The Swiss paper Le Temps, citing a source close to the Federal Security Service, reported last Wednesday that Borodin had one of his Russian lawyers, Genrikh Padva, deliver a message to the Kremlin threatening to disclose compromising materials on the Russian government, and Putin in particular, if he were not granted protection. Padva denied the report the following day.
At the airport, Borodin refused to answer questions put to him by reporters. His short speech ended, "I am a worthy citizen of the Russian Federation and I am willing to work for the greatness of the country."
If Borodin fails to return to Switzerland if he is summoned for questioning in the case, the 5 million francs ($3 million) Russia put up as bail will be forfeited to the state of Geneva.
Geneva state prosecutor Bernard Bertossa said he was not optimistic Borodin would show up, but said it was up to the Russian people to protest.
"If the Russian people accept that their bureaucrats allow persons to run around free who put what comes into their fingers into their own pockets, what can I do? People there must protest," Bertossa said in an interview published Saturday in the newspaper Tages-Anzeiger, Reuters reported from Zurich.
Eleanora Sergeyeva, another of Borodin's lawyers, was shown on ORT saying that he would return, but might not answer questions. Borodin was questioned for the first time by Swiss investigating magistrate Daniel Devaud following the bail hearing Thursday.
Reactions to the government's posting bail were mixed. Nikolai Kha ri to nov, leader of the Agrarians in the State Du ma, said the government did what was right.
TITLE: Smoking Lawsuit Suspended Indefinitely
AUTHOR: By Galina Stolyarova and Molly Graves
PUBLISHER: Staff Writer
TEXT: The judge in a groundbreaking trial in which a pensioner is suing a local tobacco company for damages has said that the court requires additional medical expertise, postponing the trial indefinitely.
Ivan Prokopenko, 64, is suing Petro, a local cigarette factory owned by multinational Japan Tobacco International, for 2 million rubles ($71,500). Prokopenko says that he got cancer by smoking Petro's Belomorkanal unfiltered cigarettes for 40 years.
Although Prokopenko and Petro have called medical experts in the case, Judge Tatyana Ilichyova said on Friday that more research was needed to "resolve contradictions in the opinions of the specialists representing both sides."
She concluded the hearing by reading a list of questions compiled from separate lists submitted by both sides, which will be posed to medical experts at the St. Petersburg Bureau for Forensic Expertise to be considered in the next hearing. The bureau is often consulted by courts for independent advice.
The questions concern to what extent Prokopenko's illness was the result of smoking, and of smoking Petro cigarettes in particular; whether there is a connection between Prokopenko's cancer and his former working conditions - which included 10 years in the smelting department of machinery and metal factory Kirovsky Zavod; and to what extent the local environment and Prokopenko's age could also be factors.
The court ruled that Petro will meet the costs of the consultation.
Andrei Rogov of JTI Corporate Affairs, who was present at the court hearing Friday, said his company considers Prokopenko's claim to be groundless. "We will fight on to prove ourselves right," Rogov said.
Prokopenko's lawyer, Sergei Osutin, said that he was happy about the trial. "With the publicity this case is getting, people will get yet another reminder of the harm smoking causes," he said.
Prokopenko is also suing for changes to be made to the health warnings given on Petro cigarette packs, so that they make specific reference to smoking-related diseases.
Prokopenko himself is refusing to talk to reporters since he claims he was misquoted by a newspaper, according to Osutin.
TITLE: Trams Get Shaft in Transport Overhaul
AUTHOR: Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: The government of the city that holds the 1991 world record for length of tram track is about to start ripping up some of those very lines in the city center and suburbs.
The goal is to reduce traffic snarls and improve the physical condition of St. Petersburg's roads by 2003.
Initially targeted in the plan are five little-used tram lines in the center of the city which - for those who are keeping count with their Guinness manuals - will reduce St. Petersburg's overall track coverage from 717 to 707 kilometers.
According to City Hall, at least four tram lines will be eliminated in the central part of the city, including tracks on Bolshaya Razinochinnaya Ulitsa, Shirokaya Ulitsa and Kronversky Pros pect. One transport committee official, speaking on condition of anonymity, said that trams on these routes handle less than 10 passengers each during rush hour traffic.
In 2002, the city plans to rip up another portion of tram lines that links the northern part of the Petrograd Side to the Central Recreation Park - or TsPkO - as well as lines on Vasilevsky Ost rov's Maly Prospect from the 9th to 16th Line.
One part of the plan that has been abandoned was the removal of tram lines across Troitsky Most, across which 12,0000 people commute daily.
"There are many supporters and many opposed to the idea of removing tram lines from the bridge," said a City Hall transport official who asked not to be named.
Yakovlev abandoned removing tracks from Troitsky Bridge on Monday, his spokesperson Alexander Afa na syev said in a telephone interview Monday.
But when it comes right down to it, the condition of the roads is what is at stake, he said.
"There is a colossal degradation to roads in places where trams run," explained Afanasyev, who also referred to the quality of the soil in St. Petersburg, which is mostly swamp-like and unsuitable for tram lines.
Another part of the problem that Afanasyev mentioned was the deep freezes during the winter. St. Petersburg's tram lines are built directly onto the road surface - unlike many other cities such as Helsinki, Finland, which construct special beds for their tram tracks. Without such purpose- built beds, water seeps into the road from the cracks in the rails, caused by the weight of the trams. The water expands as it freezes, creating ruptures and pot holes in the road surface and causing nightmares for drivers.
City officials, including Afanasyev, would give no figures for how much the tram line removal is likely cost.
Representatives of tram employees were naturally against any slash in their routes and staged a protest last Wednesday in which they claimed City Hall planed to eliminate some 50 percent of extant tram routes, and appealed to authorities to change their position.
"Forty percent of public transport customers use trams every year and there are about 16,000 employees that work for the tram service," said Yury Lvov, curator of the St. Petersburg Tram Museum.
But Afanasyev said the tram employees should not be worried.
"St. Petersburg is a tram city - it will always have trams, so no one should so much as think we are planning on getting rid of them," he said.
TITLE: Kadyrov Deputy Killed in TV Studio Bombing
PUBLISHER: Combined Reports
TEXT: A high-ranking Chechen official in the republic's pro-Moscow administration was killed when an explosion ripped through a television studio where he was filming a broadcast, a Kremlin spokes person said.
Adam Deniyev served as a deputy to Chechen administration chief Akh mad Kadyrov. He had competed in Chechnya's 1996 presidential elections, which were won by Aslan Maskhadov, and came in second in August 2000 elections for Chechnya's seat in parliament.
Chechen rebels claimed responsibility for Deniyev's death Thursday evening.
"This operation was carried out by fighters of the eastern front," Vakha Dzhamalkhanov, who described himself as Maskhadov's chief of staff, said in a statement Saturday. "We think and hope that all remaining Chechens who cooperate with Russia will understand that the same fate awaits them."
On Saturday afternoon, Grozny's deputy city prosecutor Vladimir Moroz was shot to death, Interfax reported, citing the Grozny military command. Moroz was killed on his way back from investigating the killing of three Russian women at a city market earlier in the day, Interfax said.
Chechen separatists have frequently targeted local administration officials, whom they accuse of betrayal.
The separatists accused Deniyev of working for the Federal Security Service, or FSB.
Radio Liberty correspondent Andrei Babitsky, who was held captive in Chechnya in early 2000 under mysterious circumstances, said the masked men to whom he was handed over by federal forces were loyal to Deniyev. The Kremlin said Babitsky was handed over to rebels in exchange for captured Russian soldiers.
Babitsky described Deniyev as having ties to the secret services and said he believed his ordeal was orchestrated by the FSB. Deniyev denied any connection to the FSB.
Deniyev had worked as Kadyrov's special representative in the Middle East and Africa, Itar-Tass reported.
Igor Botnikov, an aide to Kremlin spokesperson Sergei Yastrzhembsky, said that Deniyev was at a private TV studio in the southern town of Avtury - his hometown - when a bomb exploded Thursday night. A TV cameraman was wounded in the blast.
The Kommersant newspaper said the bomb had been placed in the attic, which the report said would have been easy to do unnoticed in the evening because of a lack of street lighting.
Deniyev also went by the first name of Shamalu, which he had adopted as a sign of his Islamic faith, Botnikov said.
- AP, SPT
TITLE: Boeing To Give Russian Aviation a Boost
AUTHOR: By Simon Saradzhyan and Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - The country's struggling space and aviation industry got a big shot in the arm Friday when Boeing and the Russian Aviation and Space Agency announced ambitious plans to jointly develop satellite launches, space modules and a new airliner.
"We have begun our journey together with small steps and achieved some very great things," Boeing chairman and chief executive Philip Condit told reporters. "The agreement we signed today opens the road to achieve even greater things in many areas in space and in aviation."
Condit and Russian Aviation and Space Agency head Yury Koptev refused to say how much money would be invested in the projects.
The deal comes just days after Russian aviation officials met with European aerospace giant EADS at a German-Russian summit in St. Petersburg to negotiate a $2.3 billion contract to make parts for planes built by Boeing's arch rival Airbus. The German business weekly Handelsblatt reported Tuesday that a framework contract has been reached and a detailed agreement was expected to be signed in June.
It was unclear what impact the Boeing deal would have on any contracts with the European Aeronautic, Defense and Space Co.
The framework agreement signed by the Russians and Boeing on Friday calls for the development of a 100-seat airliner with business and economy classes, Deputy Prime Minister Ilya Klebanov said after meeting with Condit.
"When you look just at the Russian market, the need for a good regional jet is very strong. This is also true of the world market," Condit said. "We believe that the Russian aerospace industry, if combined with the market knowledge and some of the skills of Boeing, could produce a very interesting airplane."
Analysts estimated there is a market for about 600 such aircraft throughout the former Soviet Union, with 200 to 300 in Russia alone.
Klebanov said it will take five years to jointly develop a regional airliner, feasibility studies for which are now under way. It has yet to be decided which plant will get the contract to build the planes. Boeing said it would provide leasing finance services, market the planes and help get international safety certification for them.
The Russian aviation industry has for some time toyed with the idea of a regional jet. Most recently, jet-fighter maker Sukhoi and U.S.-based Alliance Aircraft Corp. hammered out a deal to build a family of 50- to 90-seat aircraft under the name StarLiner. But the plan, which would have seen the first planes hit the market in 2003, fell through under unclear circumstances last year.
Sukhoi general director Mikhail Pogosyan, who attended the signing ceremony Friday, did not utter a word about the new passenger jet project.
Alexei Komarov, editor of the Air Transport Observer magazine, said the project was "strange" given that Boeing does not have a regional jet of its own and the competition on a market filled with Brazilian Embraers, Canadian Bombardiers and U.S. Fairchild Dorniers is already high.
Komarov added that with an EADS contract nearly clinched, the Boeing deal was the last chance for Russia to integrate into the world aviation industry.
Viktor Livanov, Ilyushin's general director, said that while the new project reminded him of the ill-fated Sukhoi deal, he felt confident that developing the regional jet under "Boeing's umbrella" would allow it to break into world markets within five to seven years.
"Boeing is giving Russian aviation an opportunity to start facing the world market," agreed aviation analyst Paul Duffy. "This is the first glimmer of really good news that means [Russian] aviation has at least a medium-term future."
Boeing and the Russian Aviation and Space Agency also agreed Friday to work together in marketing a Russian-designed module for the International Space Station (ISS), and they signed an accord paving the way for commercial launches of the Ukrainian-designed Zenit rocket from the Bai konur Cosmodrome. A deal was also signed for the joint development of new liquid-fuel engines.
Kari Allen, spokesperson for Boeing's Houston office, was quoted by Space News as saying Thursday that Boeing may help finance the completion of the ISS module, known as the Functional Cargo Block 2, or FGB-2.
Anatoly Medevdev, chief of the Khrunichev rocket maker, said Friday that a final deal on the commercial use of the FGB-2 could be signed within two months, adding that the module was 70 percent complete and needed 18 months to finish.
The module would be launched, owned and operated by Khrunichev and Rosaviakosmos, Allen said. She also pointed out, however, that Boeing would have the rights to sell space aboard the capsule.
The FGB-2 is a follow up to the FGB Zarya, which the Khrunichev State Research and Production Space Center built under a contract with Boeing and successfully launched to the ISS in December 1998.
Koptev said the two sides are also considering launching loads from the Baikonur Cosmodrome in Kazakhstan with a two-stage version of the Zenit rocket. Sea Launch, a U.S.-Russian-Ukrainian venture led by Boeing, currently uses a three-stage version of the rocket.
Koptev did not elaborate on the commercial details of the deal for the module and the two-stage Zenits.
Condit said only: "We agreed to look into the opportunities and try to take advantage of the capabilities that are in the FGB and the Zenit launch vehicle and find the best commercial answers."
Boeing has worked in Russia for seven years and has invested about $1 billion here.
TITLE: Minister: Privatization Law Illegal
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - The government and the State Duma continue to be at odds over who should approve the list of state enterprises to be privatized, First Deputy Property Minister Alexander Braverman said Friday.
In March, the Duma approved a special article in the 2001 budget that forbids the sale of any stake in a state enterprise - including subsidiaries and affiliated companies - with assets of more than 50 million minimal salaries, or $350 million.
Currently there are two versions of the new privatization law before the Duma, one written by lawmakers, and the other by Braverman, who called the Duma's attempts to have the final say on privatizations unconstitutional. "The Constitution has an Article 114 that vests the government of the Russian Federation with the function of managing federal property," Braverman told a breakfast meeting with the American Chamber of Commerce.
Braverman said his draft law "will significantly reduce the possibilities of lobbyists." All 450 deputies have a lot of possibilities "to lobby either the speeding up of privatization or, on the contrary, of delaying it," he said.
"There are many deputies insisting that the Duma approves the list," Duma Deputy Grigory Tomchin, author of the Braverman alternative, said in a telephone interview Friday. "Among them are Communists, Fatherland-All Russia deputies and the Agrarians," said Tomchin, the deputy head of the Duma property committee and a Union of Right Forces member.
Tomchin said he and Braverman agree that there is a strong temptation to want to participate in the lucrative privatization process.
Braverman said the Duma "can always control the privatization process through the law, the Audit Chamber and special committees."
Prime Minister Mikhail Kasyanov last week signed off on a list of state companies the cabinet wants privatized in the first half of this year and which fall below the threshold needed for Duma approval.
Included in that list is a 50 percent minus one stake in insurer Rosgosstrakh, for which Braverman said the government was counting on foreign strategic investors. "When we prepare Rosgosstrakh for the sale, we certainly mean the participation of foreign investors," Braverman said.
Rosgosstrakh has 78 subsidiaries, 2,354 affiliates and more than 65,000 employees, Braverman told AmCham.
Before the stake is sold, Braverman said Rosgosstrakh's accounts would be released under international accounting standards.
The government may be disappointed, however. Analysts polled Friday said foreign investors just aren't interested.
"[Russia has] a bad investment environment, a very low stock market and the problem is that no foreign companies want to buy Russian companies at the moment," said Roland Nash, chief economist at Renaissance Capital.
TITLE: Ministry Points Finger at PTS
AUTHOR: By Simon Ostrovsky
PUBLISHER: Staff Writer
TEXT: The Northwest Department of the Antimonopoly Ministry has told Petersburg Telephone Network (PTS) that it can no longer require companies to pay to have newly constructed buildings connected to the city's telephone system themselves.
And PTS' response? To stop connecting new buildings altogether.
Prior to the Ministry's decision, companies erecting new buildings were required to undertake the installation of telephone lines from a switch box to the building at their own expense, as a condition of hooking up to the PTS system.
But last week, the ministry of sent an order saying that PTS should undertake and foot the bill for these connection services itself.
A press release from the ministry said that PTS had issued a document entitled "PTS technical requirements for telephonizing a building".
The St. Petersburg Times obtained a copy of the requirements, specifying where to dig and lay down cables and spelling out other technicalities associated with the connection of structures to the telephone network.
According to the press release, after this process is completed, PTS requires companies to sign a contract, handing the property rights to the cables over to PTS, "on a non-compensational basis".
One such contract reads, "The subscriber will hand over telephone connection structures without compensation ... to be used by PTS as it sees fit."
"The price for laying the necessary lines varies widely," said Boris Itskov, head engineer at Svyazelectroproyekt, a company that designs plans for connecting structures to the telephone network, "A typical project will cost 30,000 rubles [$1,500] to plan, and perhaps five to six thousand dollars to execute."
The press release goes on to say that, should PTS continue to require builders to do this work themselves, the utility should provide some kind of financial compensation.
In response PTS has stopped issuing the technical requirements and is refusing to connect new buildings.
"We aren't giving out technical requirements to companies on the order of PTS," said Raisa Trigulova, head of the technical department at the Ne krasovsky switching station, a branch of PTS.
The reaction on the part of the ministry to the PTS response was less than positive.
"PTS' reaction to our order has been to boycott it, and to try to shift the anger of their clients from themselves and onto the ministry" said Yelena Kotyolkina, head of the department of telecommunications monopolies regulation at the ministry.
Kotyolkina said that one such angry client is Sekyurikor, a security company in the city, which sent a request to the ministry to allow PTS to issue the technical requirements.
"The Nekrasovsky switching station confirmed that there were free lines available, but refused to provide services [to Sekyurikor] because of our restriction on issuing technical requirements for the installation of cable," she said.
But Sekyurikor is moving its offices to a new location and is in desperate need of telephone service. "We really need to connect our building with phone lines," said Yury Ivanov, director of Sekyurikor. "We can't afford to wait for a decision from the ministry."
So far, PTS has not changed its position and press secretary Kirill Voloshin said only that the company will "act in compliance with the law.".
Tuesday, the ministry sent another letter to PTS about the Sekyurikor case. The letter reiterated the ministry's position that PTS has no right to issue technical requirements and that a contract must be agreed upon where Sekyurikor will be guaranteed service and compensation for installing its own wires.
The letter also demanded that PTS write a new protocol for connecting new buildings to the city's network, which was to be submitted to the ministry for approval.
But what the economic results of the ministry's order will be remains unclear.
"Now we have the same situation in the whole country and the way things have been done is accepted," said Vyacheslav Nikolayev, a telecommunications analyst at Renaissance Capital in Moscow. "The telephone company knows its math. If the ministry forces PTS to pay for the lines, then PTS will try to raise other prices, and the ministry may have to allow them to do so."
TITLE: Russia To Issue Eurobonds Under Restructuring Deal
AUTHOR: By Brian Killen
PUBLISHER: Reuters
TEXT: MOSCOW - Russia has agreed to restructure about $4 billion in ex-Soviet trade debt under which it will issue about $2 billion of Eurobonds this year, a government official was quoted as saying.
Deputy Finance Minister Sergei Ko lo tukhin told Interfax that the agreement, reached at talks in London on Thursday, allowed for 36.5 percent of the debt to be written off, shaving off only a fraction of Russia's total $144 billion debt burden.
"The restructuring terms make it possible to reduce the foreign debt by $1.5 billion," Kolotukhin said, adding that favorable terms for the swap into Eurobonds would enable Russia to reduce debt servicing and repayment by another $400 million.
Kolotukhin said the total amount of Eurobonds to be issued under the commercial debt restructuring would be $2.5 billion.
He said the swap of the new bonds would take place gradually as the exact amount of the so-called foreign trade obligation debt still had to be verified, but the verified part would be converted this year.
The scheme is similar to a deal agreed last year between Russia and the London Club of commercial creditors, which restructured $32 billion of Soviet-era loans into $21 billion of 10-and 30-year Eurobonds.
Lyudmila Khrapchenko, fixed income analyst at Alfa Bank in Moscow, said the agreement had been expected, especially after the Finance Ministry said earlier this year that FTO holders would be offered almost the same terms as the London Club.
"This is a sort of preliminary arrangement. It was well-known for the market that the FTO restructuring was very likely to take place this year," she said.
Russia proposed in November that the foreign trade debt, estimated at the time to have a nominal value of $2 billion to $8 billion, be exchanged for long-dated dollar Eurobonds, although there was uncertainty about exactly how much debt was outstanding and how much would be included in the restructure.
Khrapchenko said she did not expect much market impact from the deal until closer to finalization when the new bonds appear in circulation. Then there could be some pressure on Russia's 10- and 30-year paper, she added.
"The bonds will stay at the current level for a long time, and we will likely see some selling pressure nearer to the closing date, which is very likely to be at the end of the year," she said.
It took about half a year between signing the London Club restructuring last year and the closure of the deal in August.
The FTO agreement Thursday leaves the Paris Club of creditor nations, to which Russia owes about $40 billion in Soviet-era debt, as the main cloud hanging over Russia's ability to cope with its future foreign debt obligations.
Russia's foreign debt obligations will jump to about $18 billion in 2003 from this year's $14 billion.
TITLE: Failing Industry Has Murmansk in Dire Straits
AUTHOR: By John Varoli
PUBLISHER: Special to The St. Petersburg Times
TEXT: MURMANSK, Far North - For most of the 20th century fishing has been the lifeblood of Murmansk, a port city of about 400,000 situated above the Arctic Circle, and local stores and markets were often full of the sea's bountiful harvest.
Today, however, the city is perhaps the only European port where almost no fresh fish is on sale. A combination of free-market demands, rising fuel prices, depleting sources of fish, and Russian bureaucracy are destroying this city's livelihood.
The port of Murmansk, located in the Murmansk Oblast, is one of Russia's few year-round navigable ports, and one of several with a direct outlet to the open sea. Founded in 1915 during World War I as a gateway for military supplies from Europe and America, Murmansk borders some of Europe's richest fishing grounds.
With over a million inhabitants, Murmansk Oblast borders the northern tip of Norway and measures a little bigger than New York state. Famous for the eerie natural phenomenon known as the Northern Lights during the cold, dark winter, as well as crumbling naval bases and nuclear submarines, one of which, the Kursk, sank in the Barents Sea in mid August, the region's once mighty fishing fleet and industry has also hit hard times.
Total catch in northwest Russia has declined nearly three-fold since the late 1980s, and what is caught is often sold abroad for hard currency, leaving local food processors to stand idle and store shelves with less of an assortment of Russian-made fish products.
"Since Russian law allows for a free market, our fishermen sell their catch abroad where they can fetch a higher price and earn hard currency," said Anatoly Yevenko, head of the Murmansk region government's Fishing Industry Committee.
It is the highest-quality fish, such as cod, which is usually sold to European countries, primarily neighboring Norway. However, the less desirable fish -an indigenous type called moiva - is sold in Russia.
"The goal of the Murmansk governor is to reverse this trend so fishermen sell to domestic fish-processors, many of whom are now idle," added Yevenko. "We also want to attract investment to create more jobs and boost tax income."
While the goal is to create a favorable business climate, bringing fishermen back home, as well as attracting investors, will be no easy task in a country which often slaps taxes on profitable business activity.
The problem is less with the local government, which embraces fishing interests since nearly two-thirds of the city's economy is tied to the fishing industry, but more with the federal government whose punitive tax code often fails to take local circumstances into consideration and suspects the fishing industry of evading taxes.
Russian tax and duty laws give Russian fishermen little incentive to sell in their home port. For example, take foreign-made fishing trawlers. According to Russian law, any equipment made abroad is taxed at 25 percent, said Vladimir Bondarenko, general director of Murmansk Trawler Fleet. This means that the Russian owner of a $10 million Norwegian or Polish trawler must pay $2.5 million just to bring it into port.
In that case, companies like Murmansk Trawler Fleet, the largest fishing company in the European part of Russia, prefer to keep their foreign-made trawlers, which are the most modern and efficient in their fleets, out at sea. Crews are rotated by helicopter, and the trawlers sail into Norwegian ports to sell their catch.
There are other problems, such as fishing quotas, created in the past decade to slow down the depletion of fish stocks. Some, such as quotas on cod, are set by a joint Russian and Norwegian committee.
Bondarenko said his ships have capacity to catch up to 80,000 tons of cod annually, but are only given a quota of 20,000 tons. Left to work at 30 percent of its potential, for every ship he has at sea, two sit idle at port.
"The problem is not that the overall catch is restricted, but in the way the quota is divided by the government between private companies," said Bondarenko.
"We understand the environmental need for quotas but we don't understand why the government allows new fishing companies to enter the market when the quota remains the same," added Bondarenko. "This means that a constant amount of fish is being divided more and more among a growing number of companies."
Last year, Murmansk Trawler Fleet had sales of $100 million, and a profit of about $20 million. But the company's prognosis for 2001 and beyond is to expect declining sales and profits, and bankruptcy may be on the horizon if the government doesn't change its tack soon.
Then there are other problems such as rising fuel costs - something which overall has been a boon to the Russian economy, increasing its trade surplus and government tax revenue, but which has hit certain sectors of the economy hard.
While oil prices rise, prices for fish can't follow suit because there is only so much the Russian consumer can afford to pay for food.
The results of such policy and upheavals in the economy are obvious on the streets. Murmansk has a 20 percent unemployment rate and idle young men are readily seen during the day. Crime, such as theft, is rampant.
The region's population has declined by 10 percent in the past seven years as young people put off having children, and working-age young men and women try to leave for either St. Petersburg or Moscow which offer more opportunity.
After serving six months fighting in an elite regiment in Chechnya, Roma Dzhavarov, 26, came home to Murmansk and discovered few jobs were to be found.
"There is nothing to do here, and if you're lucky to find a job through contacts, it pays no more than $50 a month," said Dzhavarov. "How can you live on that, let alone try to raise a family."
For the past six years, Moscow and the regions have been wrangling over a package of laws to regulate and encouraging the development of the fishing industry. If something is not done soon, people like Dzhavarov will have little hope for the future.
TITLE: Putin Says Inflation Threatening Growth
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - President Vladimir Putin warned Monday that inflation was threatening to ruin the country's economic growth targets, saying that prices grew almost twice as fast as expected in the first three months of the year.
"Inflation in the first quarter was twice as high as forecast in the budget," Putin chided government officials at a meeting reviewing economic data for the first quarter. "It is beginning to erode budget revenues and is posing a threat to economic growth."
The price hikes were triggered by increases in power, railroad and gas tariffs coupled with raises in pension payments and wages to the public sector, the government said.
Household utility bills shot up 12.9 percent from January through March, making inevitable the growth of consumer price indices.
Until Monday, Putin had kept mum about inflation, while government ministers have offered repeated assurances that the matter was under control.
Just Saturday, Prime Minister Mikhail Kasyanov told reporters that inflation would not exceed the annual target set at the year's start of 12 percent to 14 percent.
Prices have jumped 7.8 percent since Jan. 1, but the inflation "was more qualitative," Kasyanov said. "It was due in large to a growth in tariffs" rather than the printing of excess rubles.
At a fourth-annual Russian economic forum last week, Finance Minister Alexei Kudrin also promised foreign investors that inflation would be kept in check.
But Putin said Monday that inflation must be further tamed, calling on the cabinet to tighten fiscal policies in order to avoid inefficient spending.
To keep inflation low, the Central Bank has been moving to tighten its monetary policy by printing fewer rubles.
The country's monetary base - the amount of cash in circulation and the obligatory reserves of commercial banks in the Central Bank - increased 3.5 percent from January to March, or about half the pace of inflation, according to the Central Bank.
Such a move could put the government, which is determined to rake up strong economic-growth figures this year, between a rock and a hard place, economists said.
The problem is that prices are continuing to grow even though the Central Bank is printing less money to keep inflation low. In other words, there is less money available to buy increasingly expensive goods and services. The end result would be stifled economic growth.
United Financial Group estimates that at the current monthly rate of 1.4 percent, the amount of rubles in circulation will increase about 20 percent in 2001, matching its year-end inflation forecast of 20 percent.
So far, however, the economy is showing no signs of fatigue.
Prime Minister Mikhail Kasyanov said Saturday that the gross domestic product grew year-on-year 4 percent in the first quarter and industrial output increased 3.5 percent. Household incomes rose 5 percent in real terms.
The Moscow Narodny PMI index ticked up to 53.2 in March, above the 51.4 measured in February. Any figure above 50 shows continuing industrial growth.
Analysts said Putin's inflation warning appeared to be more of an attempt to call the cabinet into line than a dire warning about a looming economic disaster.
"It is clear that inflation will stay above target, but this alone does not bode ill for the economy," says Georgy Trofimov, senior researcher with the Institute for Financial Studies.
Annual inflation of less than 30 percent does not have a direct negative impact on the economy, Trofimov said.
The most disastrous scenario occurs when the economy tailspins into hyper inflation, or price growth of more than 50 percent a month.
TITLE: Deripaska Widening Its Auto Empire
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - Aluminum tycoon Oleg Deripaska took another step toward building a holding company that will integrate half of the automobile industry of the former Soviet Union.
On Friday, Deripaska signed a cooperation agreement on behalf of Siberian Aluminum with Chelyabinsk Governor Pyotr Sumin, who agreed to hand over the UralAZ carmaker in exchange for Siberian Aluminum's promise to invest 500 million rubles ($14.5 million) and not lay off the plant's workers.
Under the terms of the deal, Siberian Aluminum will buy a controlling stake in ailing UralAZ at a closed investment tender to be held this summer.
With debts of 3.6 billion rubles on its books, UralAZ was put in the state of receivership in September 1998.
Deripaska first floated the idea of taking over UralAZ at a meeting with Su min on March 7.
Sumin said Friday that similar agreements will be penned with other potential participants of the tender, at which a 75 percent minus one share stake in UralAZ is to be auctioned off.
Chelyabinsk officials are mainly concerned with the possibility that Deripaska will order payroll cuts during the restructuring process.
To make sure the Russian Aluminum and Siberian Aluminum boss does not deviate from the designated path, Chelyabinsk officials told Siberian Aluminum that it needs to sign an agreement with the municipal government of Miass, where UralAZ is located.
UralAZ employs some 20,000 workers whose average salary is $100 a month. Plant officials refused to comment.
Earlier, news reports said external manager Valery Panov was trying to prevent a takeover by outsiders and was trying to set up a scheme to save his job.
Deripaska was quoted as saying Friday that, except for strengthening its engineering team, there was no need to make any drastic changes at the plant.
TITLE: Shareholders Meeting Lands Interros in Court
AUTHOR: By Anatoly Tyomkin
PUBLISHER: Vedomosti
TEXT: On Saturday, an extraordinary shareholders meeting chose a new general director and board of directors to run St. Petersburg's Krasny Vyborzhets factory comprised primarily of representatives of Interros and Norilsk Nickel.
A 51 percent package of shares controlled by Interros and its related structures was registered at the meeting, while a 32 percent package of shares controlled by the present management under General Director Valentin Simonov was not.
On the eve of the meeting Simonov filed an action with the Kalinin District Civil Court, arguing that meeting was illegal. This was not the first attempt by the management of Krasny Vyborzhets to get help from the courts, as the St. Petersburg and Leningrad Oblast Arbitration Court had granted an injunction against the meeting, but that decision was appealed at the last moment. According to an Interfax report, the court announced on Monday that it would hear the appeal on May 16.
Saturday's meeting chose Oleg Dyan chnko, the broker who arranged the deal for the Krazny Vyborzhets stocks on behalf of Interros, to be the new general director at the firm. the board of directors selected was made up of representatives from Interros and Norilsk Nickel.
According to Dyanchenko, a preliminary team of economic specialists are presently moving into the plant to supervise a cleaning up of the books.
Dyanchenko also said that Interros plans to arrange an emission of additional shares in the factory, which it plans to purchase itself - thus pumping $30 million into the Krazny Vyborzhets, with the aim of attracting further resources to invest in production.
The management team opposed to Interros refused comment on Saturday's shareholders meeting on the basis that they think it was held illegally.
Industry analysts expressed doubts that the conflict over management of the plant would be resolved easily or quickly, and said that a situation where two general directors and two boards of directors may be trying to exercise control over the factory at the same time may well arise.
"The first act in all of this is likely to be a protracted legal battle," said Ivan Oslolkov, head of the Energokapital research group. "This battle will last for at least two or three months."
A final resolution of the conflict might be expected by the end of May, as an annual shareholders meeting was planned for May 25.
But there is not a single Interros representative on the list of candidates for the board of directors to be chosen at that meeting and, according to Dyan chenko, Interros' officials intend to hold an alternative meeting themselves May 27.
TITLE: WORLD WATCH
TEXT: Yahoo Ditches Porn
LOS ANGELES (Reuters) - Internet media giant Yahoo Inc. reversed course in the face of a barrage of customer criticism on Friday, pledging to remove all pornography from its shopping and auction channels and reject requests for related advertising.
Yahoo, which triggered the criticism by at first defending its expanded sale of pornography, said the changes would be carried out over the next few weeks for its flagship U.S. site, although porn could still be for sale on Yahoo portals in other parts of the world.
"Many of our users voiced concerns this week about some of the products sold by merchants on Yahoo Shopping," Yahoo President and Chief Operating Officer Jeff Mallett said. "We heard them and swiftly responded."
Under pressure to find new sources of revenues amid a slump in online advertising, Yahoo confirmed earlier this week that it was offering a broad selection of adult material, including hard-core porn videos and DVDs through its popular shopping service.
Pegging the Peso
BUENOS AIRES, Argentina (AP) - Argentina's economy minister will introduce legislation pegging the peso both to the euro and the U.S. dollar, breaking with the decade-long practice of tying the peso only to the dollar.
Economy Minister Domingo Cavallo says the introduction of the euro will make it less expensive for European and Argentine companies to trade and do business. He also contends it would shield the peso and local interest rates from any sudden shifts in the value of either currency.
The new currency controls would not be triggered until the next time the dollar and euro reach the same value, or parity, which could take anywhere from a few months to a few years. The peso would then be valued at the average of the dollar and the euro.
English Refinery Blast
LONDON (Reuters) - A large explosion ripped through a Conoco oil refinery in northern England on Monday, injuring two people and all but closing the plant down.
Police said the blast, at the Kil ling holme refinery near Grimsby in Humberside, was "a major incident" and eyewitnesses described an intense fire billowing vast plumes of black smoke.
A spokesperson for Conoco, a major U.S. oil company, told Reuters all but two of the units at the plant had been shut down and would remain closed until further notice.
Fox Pledges Spending
MEXICO CITY (AP) - Seeking support for his tax-reform plan, President Vicente Fox promised Saturday to use the new money to build more hospitals and schools, as well as provide more doctors and free medicine.
Fox's pledge during his weekly radio address was a response to criticism that his $12.8 billion fiscal reform plan would be too hard on the poor because it would impose a 15 percent tax on food and medicines not currently taxed.
While financial analysts have applauded the plan as a way for Mexico to increase revenues, many opposition legislators have criticized it and offered alternative proposals.
Daimler Scraps Plans
DETROIT, Michigan (Reuters) - DaimlerChrysler AG will scrap its joint venture plans with Korean automaker Hyundai Motor Co. following its decision, announced last week, to raise its stake in Japan's Mitsubishi Motors Corp., Automotive News reported on Monday.
The closely watched trade publication quoted DaimlerChrysler's Rolf Eckrodt, who was sent in as Mitsubishi's chief operating officer in January, as saying Mitsubishi would be the German auto giant's partner of choice for a small-car program and other ventures.
"It doesn't make sense to jump around in a triangle and work in a three-company partnership," said Eckrodt, who spoke on the sidelines of DaimlerChrysler's shareholder meeting in Berlin last week. "It is important to fully focus on one partner in Asia. This will be Mitsubishi," he said.
TITLE: Turkey Unveils Plan To Curb Inflation and Interest Rates
AUTHOR: By Ben Holland
PUBLISHER: The Associated Press
TEXT: ISTANBUL, Turkey - Turks reacted cautiously Sunday to an austerity program that will slash spending and pare down the state's economic role.
The program, unveiled by economy minister Kemal Dervis on Saturday, will cut government spending by 9 percent as one way to tame inflation, curb soaring interest rates and promote stable growth.
The International Monetary Fund, whose loans could be crucial to the program's success, welcomed the measures, but trade unions said the plan doesn't ease the suffering of low-income Turks who have taken to the streets since Monday in national protests to demand a new government and an end to the crisis.
"We couldn't oppose this program ... but there is nothing in it to reduce the tension of the people," said Bayram Meral, head of the country's largest union group, Turk-Is.
The program will keep wage increases in line with inflation, but could put some public-sector jobs at risk. The crisis has already thrown some half-million Turks out of work.
Dervis said the economy would likely shrink by 3 percent in 2001 with inflation rising to 57.6 percent. The program targets growth of 5 percent and inflation of 16.6 percent in 2002.
Key areas of the program, including monetary and exchange-rate policy and foreign backing, have not yet been announced. Dervis said Saturday that Turkey needs $10 billion to $12 billion in foreign support, adding that by next week it should be clear how much money Turkey will receive.
The IMF has said it will consider bringing forward $6.25 billion in loans already promised to Turkey, and it may offer fresh loans after talks with Turkish officials next week.
The program "will make an important contribution to re-establishing financial stability," Anatolia news agency quoted the Fund's outgoing Turkey head, Carlo Cottarelli, as saying.
In a late-night telephone conversation on the eve of the program's release, Turkey's Prime Minister Bulent Ecevit reassured the IMF that his three-party coalition was united behind the plan, Turkish newspapers reported Sunday.
The U.S. Embassy in Ankara in a statement Sunday promised "to be supportive of Turkey as it moves forward" with implementing the program.
Gaps in the plan make it hard to see how inflation and growth targets will be met, analysts said.
"With so many unknowns, to assess the targets at this stage requires not an economist but a fortuneteller," Mahfi Egilmez wrote in daily Radikal. He said until ministers filled in the program's details, the targets would remain "nothing more than wish targets."
TITLE: BOJ Gives Weakened Economy Poor Grade
AUTHOR: By Yoko Nishikawa
PUBLISHER: Reuters
TEXT: TOKYO - The Bank of Japan downgraded its view of the economy for the second straight month on Monday, citing flagging exports and slowing domestic output, as March data showed consumers keeping clear of department stores.
The bleak assessment in the BOJ report followed the downgrade in the government's economic assessment last Friday, which used the word "weakening" for the first time since September 1995 to describe Japan's struggling economy.
Like the government, the central bank pointed to faltering Japanese exports due to slowing U.S. and Asian economies, and said this had led to a drop in production.
"While domestic demand remains steady, net exports - real exports minus real imports - are falling rapidly reflecting a sharp slowdown in overseas economies such as in the United States and East Asia," the report said.
Japan's exports grew 1.3 percent in February, down from a rise of 2.9 percent in January and double-digit gains last year, while February's imports rose 11.5 percent from a year earlier. January's growth in industrial output slowed to just 0.4 percent.
The official view by the central bank, which revived an ultra-easy zero interest rate policy in March, is widely shared by economists and financial markets, which showed little response to April's BOJ report.
"They have downgraded their overall view for a second month running, but their view is consistent in that severe economic conditions will persist in the near future," Industrial Bank of Japan senior economist Tomohiro Noda said.
Data on Monday also reinforced a general feeling of gloom in the world's second biggest economy, showing sales at department stores, a key gauge of consumer spending, down from year-ago levels for a third straight month.
The rapidly slowing economy is bad news to Japanese policymakers, including four ruling party contenders vying for the prime minister's job. They had hoped a corporate recovery would boost personal spending and fuel a self-sustaining recovery, thus making it easier for the ruling party in July's Upper House elections.
But personal consumption, the lion's share of the economy, has stayed weak. Unemployment is near record highs, incomes are effectively stagnant and consumer sentiment remains fragile.
Department store sales in the Tokyo area fell 0.6 percent in March from a year earlier to 189.9 billion yen ($1.53 billion), the Japan Department Stores' Association said on Monday.
The BOJ said the pace of improvement in corporate profits has slowed while business sentiment has worsened especially among manufactures.
Kokusai Securities senior economist Michio Ichinohe said the BOJ did not appear to be making a big downgrade of its assessment, but instead may be attempting to emphasize risks in the economy.
Although corporate capital spending was still expanding, the BOJ said excess inventories of electronic parts and some other materials were rising - a worrisome factor.
Last Friday, the BOJ's Policy Board decided to keep monetary policy unchanged after taking radical easing steps at its previous meeting less than a month ago.
TITLE: Cease-Fire Called in Global Banana War
AUTHOR: By Adrian Croft
PUBLISHER: Reuters
TEXT: BRUSSELS, Belgium - A U.S.-European Union agreement to end an eight-year-old banana war and lift $191 million of U.S. sanctions will boost prospects for a new round of global trade negotiations this year, analysts say.
A series of high-profile trade disputes has soured the atmosphere between the giants of world trade in recent years, making it more difficult for them to unite to get a new trade round off the ground.
Bickering between the two powers, which together account for 40 percent of global trade, was partly to blame for the World Trade Organization's failure to launch a new round at its 1999 meeting.
An agreement in principle to end the long-running dispute over banana trade, surprisingly announced on Wednesday, should improve the climate and lift efforts to launch a trade round at the next WTO ministerial meeting in Qatar in November.
"That is clearly the hope, that this will provide positive momentum. The world perceives these big disputes are preventing us from getting together on a round," one U.S. trade official said. "It isn't helping anybody that we are at each other's throats."
"If the EU and the U.S. are not squabbling over particular products, it's easier for them to find a common position to launch a round," said Paul Brenton, a trade economist with the Center for European Policy Studies, a Brussels think tank.
The agreement between two old friends - EU Trade Commissioner Pascal Lamy and new U.S. Trade Representative Robert Zoellick - shows that the EU and President Bush's new administration can do business on trade.
However, analysts say the agreement may have more to do with fatigue on both sides with the marathon banana dispute than a change in administration.
U.S. Senate Finance Committee Chairman Chuck Grassley, an Iowa Republican, said the settlement raised hopes for Qatar.
In Seattle, the EU and the United States clashed over agriculture and over the EU's wish - opposed by Washington - to include investment and competition rules in the agenda.
The 15-nation EU and the United States will also have to persuade some skeptical developing countries that it is in their interests to sign up for talks on further trade liberalization.
Washington, backed by several Latin American nations, has long complained that the EU's banana import rules favor growers in EU territories and former European colonies in the Caribbean over Latin American producers and U.S. marketing firms such as Chiquita Brands International and Dole Food Co .
The EU has now agreed to scrap plans to launch a "first come, first served" system of distributing banana import licenses on July 1.
Instead, licenses will be allotted based on the way they were distributed between 1994 and 1996 in a move that should benefit Chiquita. A quota mainly for Latin American bananas will be increased under the temporary arrangement, which will be replaced by a tariff-only system in 2006.
The United States will suspend July 1 punitive duties it imposed on $191 million worth of EU exports in 1999 after it won a WTO ruling against the EU's banana policies. The sanctions hit European goods from handbags to bed linen and batteries.
Washington had threatened to select new European products for sanctions if the EU went ahead with "first come, first served" - a move which would have angered EU governments.
There are still potential obstacles to trade peace, however.
EU governments, which have differed sharply over banana trade in the past, must endorse the banana agreement. And the world's top banana exporter, Ecuador, which backed "first come, first served," has yet to announce its position.
The EU and the United States remain at loggerheads over a series of other trade issues. The United States imposed $117 million of sanctions on the EU in 1999 after winning a WTO case against the EU's ban on hormone-treated beef.
Attempts to solve that dispute by allowing the United States to increase exports to the EU of hormone-free beef seem doomed for now because the mad-cow and foot-and-mouth disease crises have hit European beef sales.
An explosive row looms over an EU complaint about the U.S. Foreign Sales Corporation scheme, which provides tax breaks for businesses. The EU has threatened to impose a huge $4 billion of sanctions on U.S. goods if the WTO rules that a reformed U.S. scheme breaks global trade rules. A WTO disputes panel is due to deliver an initial opinion in late May.
TITLE: Coffee-House Chief Serves Up Cup of Culture
TEXT: Anna Matveyeva is young, confident and the general director of St. Petersburg's Idealnaya Chashka chain of coffee houses. Staff writer Andrei Musatov spoke with Matveyeva about bringing the coffee-house culture to the city and the future of what has been a fast-growing business.
Q: Where did the idea to open the Idealnaya Chashka chain come from?
A: When I opened the first cafe in 1998 at Baltiisky Dom, near the Gor kov skaya metro station, the idea was really unorthodox. That was the pilot project and I was really a little bit scared that it might not be very popular, so it was just as experiment. We bought a coffee percolator, set up the room, got a license and opened. It really didn't work out initially. People would come in and ask "Are you crazy? You have nothing but coffee here." Back then I didn't know a lot about organizing the business, so we didn't have cakes to offer with coffee.
Q: What kind of competition did you face? Were there any coffee houses like this in the city at the time?
A: No, nothing in the same style. We opened just a month before the crisis hit. At that time the most popular cafes were Bistro Orient and Laima. But there was no place to have a cup of really good coffee.
At the time I had just returned from the United States, where I studied languages. Near the place I studied there was a Starbucks cafe were I spent most of my time and where I came to understand what really good coffee is. I also realized that coffee is perfectly suited to socializing, studying and just passing the time.
To sit down inside for a while and have a sip of coffee - it has a certain style, and that's the attraction. I thought that people in Russia don't really have a lot of places like this to go, so why not open up the same type of cafe here?
But it's risky to set up a coffee house in the same fast-food style as a Starbucks. St. Petersburg is a city of aesthetes and coffee lovers, so we needed a different style.
Q: I get the impression that in opening this cafe chain you are trying to build a coffee culture here.
A: Yes a culture, but not only based on coffee. Coffee is just an incarnation of the consumption culture. For instance, there is a growing desire among people here not just to meet and talk around the kitchen table, but to go some place with a little more aesthetic appeal instead. Or, at least, rather than going straight home after work, to swing by a cafe and relax for 5 or 10 minutes.
Q: But at the same time your cafes don't offer food or entertainment. Is that part of the point?
A: People just sitting, drinking coffee, chatting - that's what appealed to me in all of this. That's a very special style. People like it, want it and that's nice. And above all this coffee is like a kind of light drug. You get used to good coffee, which, by the way, is in our case brought from Italy. You could say "coffee doesn't grow in Italy," but it's roasted so well there.
Q: What market segment were you aiming at?
A: We aimed at people with active lifestyles so, naturally, they're mostly younger people, from about 25 to 45 years old - people who are already out in the world and earning, who like meeting with other people and who like to get away from their family and the society they live in. On some occasions I have set up a meeting in one of our cafes and discovered that there was no place to sit because we were so busy. A lot of the people were just standing.
Q: The decor in each of your five cafes differs a bit, ranging from a Latin-American to a more classical English style. Do the different styles and locations of the cafes draw different groups of customers?
A: Not really. The groups of customers differ a bit depending upon the location, but not really on the style. For instance, we have three cafes on Nevsky Prospect and one on the corner of Ki roch naya Ulitsa and Ulitsa Vosstaniya. In these areas there are a lot of offices and private institutes so, accordingly, the number of clients is little bit greater. But its only a bit higher than the number of visitors to the cafe on Vasilievsky Ostrov, where there aren't so many offices, but the density of institutes and universities is much higher. Students and tourists are also a big part of the clientele at the cafe at the top of Nevsky Prospect because it's right in the center.
Q: Have you always had such a wide selection on offer?
A: Yes, and before it was even larger but, as we grew into a chain we had to simplify our technique in making the coffee in order to serve a higher volume of customers more quickly. We also previously offered coffees with alcohol, but then we moved to listing it on the menu without a price and finally decided not to offer it at all, opting to promote a healthier way of life. It's possible and positive to share time and talk with people not only with a glass of spirits, but with a cup of coffee.
Q: You were very aggressive in the development of your cafe chain. Is that luck or were you sure right from the beginning the steps you had to and would take?
A: Right from the beginning of setting it up as a chain I knew we were fated to succeed. During the first year of working at the first cafe in the Baltiisky Dom we ironed out all technical elements, all the recipes and ultimately identified who our clients were, as we realized that some people were even coming to the cafe from the other side of the city.
Then I sat down and worked out a business plan and calculated all the financial specifics. I came to the realization that it was a very profitable and interesting project. Moreover, looking at the experience in Western countries - in Europe and America - I knew that this kind of coffee house was very popular.
Q: What do you do to attract clients and to make them want to keep coming back?
A: Of course, we have wide range of such "tricks," but that's a secret.
Q: To work out the technical aspects and the recipes you must have had some coffee "guru," someone experienced in coffee preparation.
A: I studied all that myself. My sources were the Internet, books and my trips abroad. The recipes are public knowledge in different countries, but are created by myself and our employees. We don't try to mystify the process - all the information is there on our Web site.
As far as the people making the coffee are concerned, they are "barrista" - the Italian name for a bartender who makes coffee. We train them ourselves and generally don't hire people who already have experience in working in public eateries as I think this serves more as a negative experience - especially in the public eateries that we have in Russia.
There's also nobody with experience in the cafe business among our management. Coffee houses are quite a new business in Russia. Where we would find experienced managers? So we are the first - the leaders - and the business will therefore work in the ways that we devise.
Q: Your company's Web site is interesting. You say that in 1693 in London there were already 5,000 coffee houses. In Europe, lovers of coffee gathered in clubs. Why have coffee houses only appeared in Russia now?
A: I think it's a question of mentality and lifestyle. Any eatery is a public place. But where did we gather before? In the kitchen. And what did we do there? We complained about the authorities. We had no public places to talk about politics or economics for the simple fact that everyone was afraid. Meanwhile in Europe, America and any democratic country, people could easily discuss public events.
By the way, the first coffee houses appeared in Yemen, but were soon prohibited by the Church, as they were places where people gathered and openly aired their complaints - just as we did here in our kitchens.
Q:What about plans for developing the chain further?
A: By the end of the year we are planning to open about 15 more cafes more and then to branch out into the northwest region and Moscow.
We did some research on the volumes in the St. Petersburg market and the demand for eateries. What we discovered was that the demand is still very high and that there is also a high level of non-satisfaction of that demand.
The process of developing the coffee houses further seems natural to me, but it is likely that process will move more actively in the field of cafes where the visitor can have some dinner - more like restaurants, bistros and cafes. The number of coffee houses will also grow, but more slowly as they are not so financially attractive as restaurants and, especially, bistros.
Coffee houses are also unlikely to be opened by everyone - it's a specific culture.
Q: But still you're betting on coffee houses?
A: We're the chain. Fifteen coffee-houses will be enough here and I don't think that, given current market conditions, personal finances and the particular culture here, that other chains will appear in the city. The whole situation, as you know, isn't particularly stable right now. We'll have to watch what happens economically over the next few years and that will determine whether we grow further, stay where we are, or even have to cut back our operations.
Q: Where will your next cafes be located?
A: There are plenty of ideas. I think we've opened almost enough locations in the center, so maybe we'll open another two or three more there, and then it would be interesting to go to new districts. Why not? There are a plenty of people living there, almost no competitors and very low rent costs.
Q: What considerations influence your decision in choosing the location of a new coffee house?
A: There is always the question of location, and I also try always to choose rooms with big windows, so that there is an opportunity to watch what's going on in the street and to have visual contact with the world. When people come to cafes - even when alone - they want some connection with their sight, feelings and impressions.
This is very popular in Europe and, especially in France, where the windows in cafes are often the size of the entire wall and chairs are setup as in a theater. It's very popular there to come alone, get a coffee and watch people passing by. In Russia, most of the visitors are young people who prefer spots in smoking areas, but the places near the windows are very popular as well.
Q: Is that true that you want to open a cigar room in one of your coffee-houses?
A: No, that's not true. Cigars, possibly, are also part of the coffee-culture style, but that is really a different segment of the market.
A cigar means sitting for a long while with a cup of coffee or cognac, while we aim at a broader cross-section of visitors. Currently our marketing department is working on cigarette sales in our cafes, but that's just an extra service. People just won't have to go out to buy a cigarettes.
Q: How does that fit in with promoting a healthy way of living?
A: You see, if we prohibit cigarettes, we will lose a significant portion of our clientele. We just can't change the atmosphere everyone is used to. But we don't offer alcohol as the need to have a drink isn't as strong as the need for many to have a cigarette. There's no point in prohibiting smoking if it's going to make people uncomfortable.
Q: Do you still like coffee yourself?
A: Yes, I still love it. But I drink it much less now than when I was studying. I've also grown accustomed to good coffee, so I drink three to four very strong cups only in our cafes or in the office, where we have a special machine. When I was studying I drank a lot of instant coffee late at night to stay awake while studying.
Q: Can someone order tea in your coffee houses?
A: Yes, but it looks really terrible - with the tail of the teabag sticking out on the side, and it cost as much as a coffee. So we have an anti-tea policy. Well, all right - I'm just kidding.
TITLE: IN BRIEF
TEXT: Illarionov on Debt
MOSCOW (SPT) - A debt-for-equities scheme proposed by Germany at a summit last week would not benefit Russia, Interfax reported economic adviser Andrei Illarionov as saying on Sunday.
"In the proposed scheme, liabilities would be exchanged for assets, while liabilities are usually exchanged for liabilities and assets for assets," Illarionov said. What the German delegation suggested in the St. Petersburg talks is non-conventional and hard to implement, he added.
Still, the exchange of views was useful because it clarified the positions of the two parties, Illarionov said.
U.K. May Help in 2003
MOSCOW (Reuters) - Deputy Prime Minister and Finance Minister Alexei Kudrin said Monday that Britain, along with Germany, would help Russia restructure its huge foreign debt if the country ran into a repayment crunch in 2003.
Russia's foreign-debt payments, about $14 billion this year, are set to rise to $18 billion in 2003 - a burden that could be unbearable for the country's tight budget.
"I have talked with [British Chancellor of the Exchequer Gordon] Brown ... and he said that if necessary he would agree to a rollover of Russia's debt to the Paris Club [of creditor nations]," Kudrin told reporters on the sidelines of a Finance Ministry meeting. "We are speaking about a rollover of the 2003 debt for several years."
Last week, German Chancellor Gerhard Schroder said Moscow was capable of repaying debts at the moment, but Berlin would help Russia if there were a debt crisis in 2003.
Ban To Continue
MOSCOW (Reuters) - Russia's ban on imports of European meat will continue at least until April 26, Agriculture Minister Alexei Gordeyev said Monday.
The ban, imposed March 26 after foot-and-mouth disease struck several European countries, will remain in force until 21 days pass without reports of fresh cases, Gordeyev said.
Russia imports 30 percent of its meat from Europe, but Gordeyev said the ban has had a negligible impact on the market.
Russia last week removed a ban on fish, fish products and fishmeal, poultry, powdered egg, milk and ready-made meat products from several European countries.
Oil Tariff Increase?
MOSCOW (Reuters) - The Finance Ministry has said it plans to hike crude export tariffs if world oil prices rise beyond the $20 per-barrel mark and a law reducing the overall tax burden on oil companies is passed this year.
"The reduction of the overall tax burden on oil companies will allow us to consider hiking export tariffs," Deputy Finance Minister Sergei Shatalov told reporters on Friday.
"If crude prices are under $20 per barrel, the old rate will apply - that is $9 per ton. But at higher prices, new, higher rates will be used," he said, speaking after a Cabinet meeting.
Shatalov, who is in charge of tax reform, had earlier unveiled plans for a single duty on oil producers that would effectively reduce their tax burden by $1 billion a year and reroute the revenues into federal coffers away from the regions.
TITLE: The NTV Takeover: Liberals Reap What They've Sown
AUTHOR: By Boris Kagarlitsky
TEXT: TOGETHER with its blocks of commercials, until it was taken over last weekend, NTV for some time screened a dramatic picture of a masked man forcing the company's familiar symbols out of the way. The purpose of the scene was clear: Freedom of speech may soon be taken from us. Still more significant is that the heads of NTV clearly identify freedom of speech with their own enterprise. So long as there is NTV, there is freedom. When there is no NTV, there is no freedom either.
Indeed, the Russian authorities cannot be described as ardent supporters of free speech or of human rights in general. The problem, however, does not lie here. The tragedy is that the journalists defending themselves against Kremlin attacks are simply not consistent or principled adherents of freedom.
Quite the reverse; throughout the 1990s they showed they did not care at all for anyone else's freedom or rights.
Is it any surprise that despite all the plaints of the liberal intelligentsia, society as a whole is not showing any great interest in the fate of the disgraced television company? For decades, the journalistic elite did not conceal its contempt for the "riff-raff," that is to say, for perhaps 80 per cent of the country's population.
Society has paid the journalists back in the same coin.
Liberal journalism summoned the specter of "enlightened" authoritarianism to haunt our country. Liberal commentators praised Pinochet to the skies, and explained to the public that dictators who shoot communists cannot be placed on the same level with the vile communists, even if these communists have never shot anyone themselves.
The authoritarianism for which the media called was "enlightened" in the sense that it would know how to distinguish its own people from the rest. It would defend market reforms from the "stupid" mass of the population, which had the obstinate habit of constantly voting for the wrong candidates.
Throughout the 1990s, the liberal mass media systematically denied the right of expression to anyone who diverged, even a little, from the norms accepted in this milieu. In 1989, a wall that had seemed unbreachable collapsed before people's eyes.
But with the appearance of a free and independent editor in place of the censor, it was as though the wall of ideological control rose up anew. Worse, the liberal editors, unlike the Soviet censors of the late 1980s, really believed in what they were propagandizing.
During the first Chechnya war, independent television took an anti-militarist position, which enhanced its authority in society. The sincerity of this position came into question, however, when the same journalists took a diametrically opposite stance regarding the second Chechnya war.
In this respect, "independent" television did not differ in the slightest from the official system. What to report and how has been a question of political expediency. This is the principle that triumphed then and that is triumphing today. The tactical calculations from which the media bosses proceed mean more to them than our right to know the truth.
The purpose of the propaganda media structures has never been to inform the population, but to hide from them what is really happening. The truth about ideas and opinions that are inconvenient for the elite has been concealed even more painstakingly than news of unpleasant events.
An event, after all, can be interpreted in different ways.
If you have a monopoly on interpretation, you needn't fear events.
From the beginning, the media have identified freedom with private property, democracy with capitalism and the market, and the market in turn with universal privatization and social irresponsibility. As a result, they have effectively eliminated democratic discussion.
Anyone who understands democracy a little differently has simply been deprived of the right to express their views.
The media have been prepared (on their own terms, of course) to allow nationalists, fascists, Stalinists - in short, everyone who hates freedom on principle - to be heard. But under no circumstances have they allowed even a hint of the fact that a different democratic ideology, a different understanding of freedom, might be possible.
Throughout the 1990s, a large part of society supported the ideals of democratization, but to one degree or another rejected the social and economic program of liberal reform. This program could only be imposed according to the logic of the Soviet "loaded trade-off."
If you want political freedom, then you'll have to take "free capitalism" as well. A large section of the intelligentsia sincerely believed that this connection was indissoluble, but from the point of view of democracy and freedom of speech it is not important what your opinion is. What is important is the degree to which this opinion triumphs in free and equal contention with other opinions.
The criticism coming from the nationalists has been obviously ineffective, and hence admissible. The criticism from socialists, environmentalists and left democrats has potentially been far more subversive, since it places in doubt the main thesis that the media have impressed on the public every day: that the Chubais reforms represent the only road to democracy. For some reason, liberals are now surprised that the nation's disappointment with capitalism is turning into indifference toward democracy.
In Poland in the early 1980s, when the Solidarity trade union led millions into the streets, one of the slogans ran, "The mass media should not shape public opinion, but reflect it!" It is highly significant that Russia's liberals never even set themselves such a goal.
The result has been a comprehensive propaganda whose effectiveness has exceeded Orwell's worst nightmare. The ruling ideology penetrates every pore of the social organism, now in the guise of a commercial advertisement, now hidden beneath the name - incomprehensible to most Russians - of public relations, now appearing as journalism.
Having forged a mighty propaganda weapon, liberal journalists are now surprised that the state wants to appropriate it. For the state to do so, however, is at least logical. A private propaganda channel is just as much a threat as a private army.
If a state monopoly is imposed on propaganda, this will not necessarily represent a triumph for the authorities. The information wars of the past two years have carried on to the point where society's psychological resources are totally exhausted. We have grown tired of propaganda.
By imposing its control on the mass media, the Kremlin is also concentrating on itself society's mistrust, irritation and protest. If a lie is unified, that does not make it more like the truth. Instead, the gap between propaganda and reality becomes more obvious.
Liberal journalism is losing, but the Kremlin is probably not winning anything. The liberals laid the basis for a regime that is now quite seriously inclined to devour them.
Boris Kagarlitsky is a Moscow-based sociologist.
TITLE: Sensitivity Falls Victim To 'Collateral Damage'
AUTHOR: By Hussein Ibish
TEXT: TIMOTHY McVeigh, who is scheduled to be executed May 16, has solidified his position as the poster boy of cold-blooded villainy. The Oklahoma City bomber has once again outraged the American public when he described the 19 dead children among his 168 victims as "collateral damage" in an interview. Although it scarcely seemed possible, this appalling comment has made McVeigh an even more despised figure in American society.
There is no doubt that McVeigh is an exceptionally malevolent and brutal criminal. Yet the rest of us may not be as distant from his propensity to rationalize the killing of innocents as we prefer to believe. All too often, good people allow themselves to believe that the end justifies the means, that "war is hell."
It is worth recalling where McVeigh got this chillingly antiseptic phrase "collateral damage." It was coined by the Pentagon during the Gulf War to describe the deaths of innocent Iraqis during the massive bombing campaign in 1991 and was an attempt to obscure and rationalize these deaths through Orwellian jargon.
"Collateral damage" during the Gulf War included, in only one instance, 313 people incinerated at the Amiriya bomb shelter in western Baghdad, which was deliberately attacked. When asked about the extent of Iraqi casualties toward the end of the Gulf War, then-military Chief of Staff Colin Powell blandly remarked: "That is really not a matter I am terribly interested in." Indeed, it is not a matter that has ever seemed to concern too many Americans.
McVeigh was a gunner on a Bradley fighting vehicle during the Gulf War and told his relatives that "after the first time, it got easy" to kill Iraqis.
The same applies to the effects of sanctions on innocent Iraqi civilians over the past decade. Asked by an interviewer if the deaths of 500,000 Iraqi children because of sanctions could possibly be justified, then-Secretary of State Madeleine Albright did not dispute the figure or the causality, but instead remarked: "We think the price is worth it."
Of course, these psychological defenses are not confined to U.S. society. They approach a depressing universality. Objections from Americans that the Gulf and Kosovo wars were "just," from Palestinians that liberation must be achieved "by any means necessary" or from Israelis that they must ensure their security "at all costs" merely illustrate how the process of rationalization actually works. Once we begin to accept the pernicious notion that the ends justify the means, a callous moral blindness is the inevitable result.
In our tendency to rationalize and accept the killing of innocents, there may be more of McVeigh in most of us than we would care to admit.
Hussein Ibish is communications director of the American-Arab Anti-Discrimination Committee. He contributed this comment to the Los Angeles Times.
TITLE: Who Will Control the Budget?
AUTHOR: By Pavel Felgenhauer
TEXT: LAST week the liberal Yabloko faction and the Union of Right Forces organized a joint conference in Moscow in an effort to hammer out a common strategy on future Duma legislation that would push reform and "promote civil society" in Russia.
Opening the conference, Yabloko leader Grigory Yavlinsky announced that this was the first time in almost 10 years that he was sharing the same stage with SPS leader Boris Nemtsov. For the last decade, Yavlinsky has been a staunch critic of the Kremlin, while Nemtsov was a pro-Kremlin "liberal." Moreover, Nemtsov and Yavlinsky do not like each other personally. But President Vladimir Putin's recent actions seem to have been enough to turn these old adversaries into good comrades.
At the defense-policy forum of the conference, liberal Duma deputies argued for vigorous military reform and pushed plans to abolish conscription entirely or at least to reduce compulsory military service from the present 24 months to just eight.
The liberals insist that the Russian defense budget must be declassified in order for reform to move forward. As long as Russia's military spending is hidden under the pretext of "national security," the path is open to all kinds of misappropriations. The liberals also want to have more say in determining defense budget priorities and in controlling appropriations.
Putin, however, apparently has totally different ideas. In his annual address to parliament on April 3, Putin expressed disgust for the Duma budgetary process. He said that the budget is "pushed through the Duma" and that deputies "bargain." Then, in order to end the unruly lobbying and horse-trading, Putin proposed a radical reform - stripping the legislature of its right to discuss and amend the federal budget.
Putin thinks that the bulk of the federal budget should be put together by government bureaucrats while the Duma would simply approve or reject it without amendment or discussion: Yes or No.
Further, Putin believes that a separate, smaller portion of the budget should be isolated, "built on sources of income linked to a favorable international economic situation [i.e., high world energy prices, when they happen]." The Duma, Putin said, "may be permitted to discuss and amend" this irregular, supplemental budget.
Under current legislation, if the Duma rejects the government's budget, the state simply continues to gather taxes and finance expenditures virtually free of oversight using the previous year's budget as a guideline. So if Putin's budget-reform plans are realized (and the Kremlin surely has the political wherewithal to do it), all vestiges of Russian representative democracy will disappear. The Duma will be turned into a rubber-stamp parliament while all real power - and all the lobbing and the bribery and the horse-trading - will be transferred over to the state bureaucracy.
Surprisingly, the Russian press mostly cheered the "liberal" and "anti-bureaucratic" rhetoric in Putin's address and barely discussed what was practically the only specific reform he laid out: the budget reform plan. The Western media, for its part, did not report anything at all about Putin's monstrous budget-reform proposals. Most likely, the West still considers Putin a "reformer" who will make Russia a business-friendly country, although in reality he is actively rebuilding a bureaucratic police state.
Elected president one year ago, Putin has devoted his energy to building a "vertical of executive power," i.e., undermining or destroying all existing or potential centers of power outside the Kremlin: elected regional government, the private press, the Duma. Putin has installed his cronies in all of the so-called "power ministries" not in order to promote "reform," but primarily to control the true sources of power and legitimacy in a bureaucratic police state where elections are rigged and the press is full of vicious state propaganda.
Today, Yavlinsky is the only national political figure who openly states that the bureaucracy controls everything in Russia, that our liberal Constitution is increasingly a sham, that the Duma only pretends to be a parliament, that the Soviet system has been restored under the cover of different labels. But the protests of the last week have shown that there is a broad opposition. Putin's dream of a centralized bureaucratic empire is at least a century out of date. The opposition in Russia will grow, someday engulfing the military and the police as happens every once in a while to dictatorships.
Pavel Felgenhauer is an independent Moscow-based defense analyst.
TITLE: The Saratov Scandal
AUTHOR: By Alexander Sveshnikov
TEXT: JUST a few months ago, Saratov was the scene of a national scandal in which a group of intruders - some say headed by the head of the regional press committee and others say it was just someone who claimed to be the head of the regional press committee - entered the Slovo printing house and made "corrections" to an Izvestia article that was critical of Saratov Governor Dmit ry Ayatskov.
Now, having barely recovered, the fair town of Saratov is once again at the center of a media scandal, this time one that has focused the attention of the entire world on our little city on the Volga. And all because a little-known judge of the Frunze district court named Vitaly Nikolayev got caught up in the middle of the latest "trial of the century" - the state's assault on the maverick NTV television channel.
Who knows? Maybe Nikolayev's profoundly provincial mentality was so strong that he never even suspected what this case might end up meaning for him. After all, even though the Soviet-era system of direct telephone lines from the upper echelons of power to their minions is alive and well in Saratov, judges are still - technically at least - independent. Nonetheless, it staggers the imagination to think that Nikolayev - being a reasonable man and looking at the situation soberly - didn't recognize his full responsibility in this matter. That is, he must certainly have appreciated not only his responsibility to himself as a judge and a man of honor and to the participants in the case, but also his obligation to those upon whom he is ultimately dependent for his independence.
Of course, the chairman of the district court, Gennady Telegin, tried to convince us journalists that nothing extraordinary at all had happened in this case. But if this is true, then why all the lies? And why the enforced silence of court workers, from Telegin's secretary to the head of the records department? Why were they all forbidden from speaking to the journalists who arrived immediately after NTV's general director and editor in chief, Yevgeny Kiselyov, was shown on television holding the April 2 decision banning the shareholders' meeting? Why did Telegin and Nikolayev both spend the entire day hiding from journalists?
And then there were the formal reasons that Nikolayev gave for reconsidering his decision. He claimed that a filing fee had not been paid and that one of the appeals was not accompanied by an official power-of-attorney. But when reporters managed to ask Telegin (Nikolayev was nowhere to be found) how the judge could possibly have overlooked such simple and self-evident matters in his original decision, Telegin refused to comment and told journalists to go and read the pertinent laws. He also refused to comment on the fact that Nikolayev's second decision did not automatically invalidate his initial one and that NTV lawyer Larisa Blazhnov claimed that all the fees had been paid and all the proper documents had been submitted.
Naturally the journalists who showed up at court on April 4 were intensely interested in speaking to Nikolayev, about whom all sorts of incredible rumors were circulating. When Telegin was asked, he said simply that Nikolayev was working and that his next case was about to begin. This announcement came as quite a surprise to reporters who had been told by security people (of which there were an unusually large number that day) and by Telegin's office that Nikolayev was not there.
Finally, the long-awaited moment of Judge Nikolayev's appearance before the press came. As someone who was standing next to him, I can tell you that he looked terrible. What happened next has, of course, been shown repeatedly on all the television channels.
And there is yet one more little scene from provincial Saratov life that gives plenty of food for thought and imagination. NTV lawyer Blazhnova told journalists how her car had been stopped at the Saratov airport when she was on her way back to Moscow with the original decision. The police told her that they suspected a bomb had been planted in the building and that it had just been evacuated. Cynics might be excused for thinking that the police had been ordered to stop her and prevent her from going to Moscow. After she turned back toward the city, Blazhnov had the presence of mind to use her cell phone to call the airport. "Are there any seats on the next flight to Moscow?" she asked. "Absolutely. No problem," came the reply.
Alexander Sveshnikov is a reporter for the Volga Information Agency in Saratov. He contributed this comment to The St. Petersburg Times.
TITLE: A State TV Monopoly Hurts Us All
TEXT: On Feb. 15, 2000, Gazprom chairman Rem Vyakhirev unexpectedly began spouting forth to reporters his views on NTV. "As the head of Gazprom and as a citizen," Vyakhirev said, "I do not consider the position of the NTV leadership on the Chechnya problem entirely correct."
On a roll, he went on to say that NTV's coverage of Chechnya gave Gazprom "serious reason" to rethink its media policy since - and here is the kicker - Gazprom's interests "obviously cannot contradict the interests of the state."
Fourteen months later, Gazprom has managed to destroye NTV. In what it claims is an effort to preserve the value of the shares that it should never have acquired, Gazprom has managed to chase off any investors who might have helped the company recoup its money. Sadly, it appears, Gazprom - whose interests "obviously cannot contradict the interests of the state" - will be forced to hang on to this money-loser.
We've said it before, but it bears repeating. NTV was a seriously compromised station that repeatedly and shamelessly betrayed its public trust in the past and right up until this weekend's takeover. Its self-serving journalistic sins were all the more pernicious because of its high production values and slick presentation.
But now is not the time to join the chorus of Kremlin spokespeople and surrogates denouncing the crimes of 1996 or 1997 or 1999. Such talk serves only one purpose - to distract attention from the Kremlin's crime against the Russian people, carried out at 4 a.m. on April 14, 2001. That crime is all the more pernicious because it was done on behalf of those who have been entrusted to safeguard the public interest.
Television personality Vladimir Pozner, who earned respect by stating on television two weeks ago that he had been too frightened to speak up for democracy during the August 1991 coup, told journalists before the takeover: "NTV is not without sin. But it is not dependent on the state. In Russia, that is already something special."
In objecting to the cynical destruction of NTV as a private media outlet, we are not defending NTV so much as defending ourselves as citizens and our rights. We have seen what a state television monopoly in this country is like and we don't want it. Such a monopoly is inconsistent with democracy and with the dignity and safety of the Russian people. It is inconsistent with free-market reform and economic development. It is inconsistent with the rule of law. The government must divest itself of this monopoly immediately.
TITLE: Kremlin Has Killed Russian Democracy
TEXT: SO, it has happened. The so-called "tough plan" developed by the Kremlin's top-secret analytical group has been put into action. As opposed to the "mild" one that was in use before, this one envisions the quick silencing of any dissident voices - of course, with the aim of making Russia a paradise of imperial glory.
Early Saturday morning, broad-shouldered guys from Invest-Security (the private security of Boris Jordan's Sputnik fund), with the help of the Ostankino's FSB and police bosses, walked into NTV. Except for the company's own security, there was almost no one there. The cameras that had monitored the entrance the previous week had been removed a couple of days earlier. The state of emergency that had kept shifts of reporters in the offices around the clock had been abandoned as well.
Why? The journalists were certain that no siege would happen that day. For one thing, President Vladimir Putin himself had said that the courts must settle the dispute and that a hearing was set for May 17. For another, Jordan himself - as late as Friday afternoon, just 12 hours before the seizure - had said, "No seizure of NTV by force is going to happen." So the rebellious journalists relaxed.
But their opponents did not. The takeover was carefully prepared. The new guards had lists of journalists who were to be admitted into the NTV newsroom on Saturday and of those who were not. Special guards in unmarked Zhigulis were stationed around the building.
The raid was also perfectly timed. Most of NTV's supporters were busy cooking Easter cakes and dying eggs. Further, no newspapers come out on Sundays. No protests would come from the print media. The two other national television stations were already under state control. They didn't disturb the peace with any significant coverage. The entire burden of covering the weekend's events fell to Media-MOST's radio station, Ekho Moskvy.
Jordan's NTV was able to fill its airtime with documentaries and shows that had been taped earlier by journalists who walked out. Thus, viewers throughout the country were led to believe that nothing dramatic had happened. They continued to see the familiar faces of NTV. Thus, Sunday night viewers saw the satire Kukly, criticizing Putin as uncompromisingly as ever. Only later, if ever, did they learn that the show's main writer, Viktor Shenderovich, had left NTV together with his colleagues.
Finally, the seizure allowed the Kremlin to resolve its "Ted Turner" problem. The authorities by no means wanted any foreign investor to become an owner of NTV, but in view of the June G-7 meeting, the Kremlin wanted to maintain a democratic facade. Now, Turner will most likely cut off the negotiations himself.
We should give the Kremlin team its due: The plan was very well thought through.
But a bad thing - perhaps even a real tragedy - did in fact happen on Saturday morning. From that moment, all three major national television channels came under complete state control. The Kremlin achieved its goal of acquiring an unchallenged monopoly in the information field. Now its hands are untied. Just as people in Leonid Brezhnev's Soviet Union knew nothing about the existence of Perm-35, the special labor camp for political prisoners, now the public will be unaware of the unfolding of the rest of the Kremlin's "tough plan."
The yearlong drama of NTV was first and foremost about the state's plan to monopolize Russia's information field. That is how this story differs from, say, the editorial changes at the once-famous Atlanta Journal-Constitution (the public demonstrated when editor Bill Kovach was fired there as well) or the reporters' strike at the New York Daily News when it was purchased by the Chicago Tribune Company in 1990.
Don't be fooled. The NTV story is essentially, fundamentally different. It is not about business and it is not about the demand of reporters to choose editors they like. It is about politics. It is about democracy in Russia, a democracy that perished early Saturday morning.
Yevgenia Albats is an independent, Moscow-based journalist.
TITLE: Nikita and Catherine Celebrate Together
AUTHOR: By Tom Masters
PUBLISHER: Staff Writer
TEXT: This week sees the birthdays of two of great Russian leaders, one Ukrainian, one German.
Nikita Krushchev was born into an illiterate peasant family in the village of Kalinovka near Kursk on April 17, 1894. He trained as a metal fitter in present-day Donetsk and rose through the ranks of the Ukrainian Communist Party against the brutal background of Stalinism and world war. Indeed, his first wife died of starvation and his eldest son was killed at the battle of Stalingrad. Krushchev traded on his peasant roots and practical approach, which won him the enmity of party intellectuals and theorists. Lavrenty Beria called him "the potato politician," while other party leaders called him "comrade lavatory lover," in a somewhat bizarre reference to his insistence that the Moscow metro (of which he oversaw part of the construction in the 1930s) be equipped with the most immaculate toilets imaginable.
His tenure at the Kremlin was marked by mat becoming the unofficial language of power, and well-documented drunken displays of boorishness - not least when he famously banged his shoe against his desk in protest during a 1960 UN conference. Indeed, naming him "Man of the Year" in 1957, Time Magazine pointed out that mankind had never "seen a despot so willingly, so frequently, and so publicly drunk."
Despite Krushchev's idiosyncrasies and temper, his reign (1953-1964) was significant and encompassed an enormous number of events that were key to twentieth-century history, from the denunciation of Stalin, the Soviet victory in the space race and the Cuban missile crisis, to the thaw, the U2 spy-plane affair, and the building of the Berlin Wall. However, by the early 1960s, Krushchev had ultimately alienated too many powerful Soviet constituencies and was ousted in a conservative coup led by Leonid Brezhnev in 1964.
Another idiosyncratic figure in Russian history, Catherine the Great, was born on April 21, 1729. Born Princess Sophia in the town of Stettin, Germany, Catherine was exported to Russia by order of Empress Elizabeth as a potential match for Peter the Great's grandson, Peter. The emotionally and physically weak heir to the Russian throne was clearly in no position to rule, and soon after he took the throne on his mother's death, Catherine organized a coup. She was proclaimed empress at the Kazan Cathedral in 1762. Catherine's reign was truly great, as she took enormous initiatives in the fields of agriculture, education, foreign trade and technology, as well as creating the Hermitage art collection and embellishing St. Petersburg and its surroundings with her own brand of Italianate architecture.
Her lusty character has made her a favorite subject for speculation - with various tales involving her sexual attraction to horses, including an apocryphal account of her death that maintains she was crushed when a hoist lowering a stallion onto her broke. Unfortunately, Catherine in fact died three days after a stroke, and she was surrounded by half a dozen witnesses. No horses are reported to have been present at the scene.
TITLE: City Health Care: From Lowly to Luxurious
AUTHOR: By Leila Morris
PUBLISHER: Special to The St. Petersburg Times
TEXT: From inoculations to operations, steering your way around the maze of health-care options that exist in St. Petersburg can be quite confusing for those not familiar with the range of choices available. Limited to state-run hospitals and polyclinics, or expensive Western-style clinics - with not a lot in between - people are often faced with challenges when considering where to go to seek medical help and advice.
A large proportion of foreigners in the city would probably admit to not even knowing what to do in an emergency. No matter where you are in Russia, you can always dial 03 for an ambulance (for the fire brigade - 01, the police - 02, and gas leaks - 04). The state-run ambulance service is free and will take you to the nearest suitable hospital, depending on the type and extent of your injuries. The main ambulance station, which serves the majority of the central area of St. Petersburg, is situated at the Mariinsky Hospital, 56 Liteiny Prospect (Tel: 275-73-10, for patient information: 275-74-46). Normally, patients picked up by an ambulance are initially taken to this hospital, and then may be subsequently referred to a more suitable hospital.
To find out if someone's been picked up by an ambulance, and where they've been taken, you can dial the information hotline at 278-00-55.
If you find that you need an ambulance, but your injuries are not serious enough to call the emergency number, the state ambulance service advises that you call your local hospital - which can be found in the yellow pages - and they will arrange for an ambulance to come and pick you up - although quite how quickly is another matter.
The public health sector in Russia, which generally consists of two main types of organizations - polikliniki for smaller problems, and hospitals for larger ones - is desperately short of money, equipment and medication (for example, 40 percent of the hospitals have no hot water). Sadly, many of the buildings are now crumbling and the medical staff earn, on average, abysmally low wages. A doctor at a state hospital would expect to earn somewhere in the region of 1,500 rubles ($50) per month, and a nurse approximately 450 rubles ($15).
Reports of state-run hospitals, from both Russian and foreign ex-patients, can vary enormously; some foreigners will tell you that they were treated very adequately indeed, while others will regale you with horror stories of rusty needles and Dosto yev skian conditions.
With almost a hundred different hospitals in St. Petersburg, each specializing in a different field, finding the one for you can be complicated. Often the choice boils down to the nature of the treatment demanded and your preference of location, and generally the best place to start is at your local hospital.
For smaller medical problems, Russian polikliniki can provide perfectly adequate treatment, and are situated all around the city. One of the most highly recommended is Poliklinika No. 2, at 22 Moskovsky Prospect (Tel: 316-62-72). For those who don't speak much Russian, there is even a section for foreigners, situated on the 4th floor. Here, they charge approximately $26 for in-house visits with doctors and $70 for house calls.
Nationwide, Russia's health is deteriorating at an alarming rate - with the average male life expectancy currently at 59 and the incidence of illnesses such as tuberculosis and AIDS rapidly increasing. (From 1998 to 1999, deaths from tuberculosis rose by 30 percent, and 80,000 people are officially registered with AIDS, though it is thought that nearer to half a million are actually HIV positive.) Indeed, the population as a whole is decreasing - it has fallen from 147.8 million in 1989 to 145 million in 2001.
An expensive new private health-care system, however, appears to be slowly emerging from the old, inadequate state one.
Seemingly cloned private clinics, most opened very recently, have sprung up all around St. Petersburg.
Perhaps one of the most well-known and expensive of the private clinics is The American Medical Center, or AMC, (10 Serpukhovskaya Ulitsa, Tel: 326-17-30, www.amcenters.com). With Russian patients comprising 48 percent of its yearly patient intake, it certainly isn't just for tourists and ex-pats. Nevertheless, all the doctors speak English if the patient does not speak Russian.
The AMC is an out-patient clinic comprising family medicine, dental services, a gynecology unit and a laboratory. They accept all patients who are willing and able to pay for their treatment - which can often be a hefty sum. A basic check-up costs in the region of $100 for members and $150 for non-members, with both individual and corporate membership available (individual membership costs $600 a year).
In the case of referral, the AMC has agreements with five of the main hospitals in St. Petersburg, including Hospital No. 2, the City Hospital and Leningrad Regional Hospital.
From abscess incision to urinalysis, the Euromed Clinic (60 Suvorovsky Prospect, Tel: 327-03-01, www.euromed.ru), opened in 1999, can offer treatment for most all of your health problems. Similarly, it comprises family practice, pediatrics, gynecology, ER and an on-site laboratory. It can also arrange hospitalization and evacuation.
Again, prices here can be steep and can vary - for example $10 for a tetanus injection to $2,300 for tendon-repair surgery (prices are for non-members - member prices are approximately one-third cheaper). Annual membership here for an individual costs $175.
Also opened in 1999, The International Clinic (19/21 Ulitsa Dostoyevskogo, Tel: 320-38-70, www.icspb.com) provides similar services to the two clinics listed above, including specialist consultations in internal medicine, ear-nose-throat, gynecology, pediatrics, cardiology and endocrinology. Annual individual membership costs $180.
All of the private clinics can arrange special health packages, such as maternity packages and vaccination programs at varying costs (for example, a maternity package from the International Clinic will cost $600, and a children's health-care package $1,125 plus 5 percent tax).
If you need a HIV test, free and anonymous testing is available at the City Center for Fighting Aids, 179 Nab. Obvodnogo Kanala (M. Baltiiskaya),Tel: 259-94-05. HIV testing is also available at the private clinics, costing on average $30.
For smaller irritations, pharmacies (apteka) can be found all over the city center, from metro stations to supermarkets, and most are well stocked with both Russian and Western medicines.
Apteka Petrofarm, at 22 Nevsky Prospect, also has an all-night pharmacy (Tel: 311-15-44). The night-time entrance is situated at 14 Bolshaya Konyushennaya Ulitsa.
In addition, right next to Petrofarm, at 4 Bolshaya Konyushennaya Ulitsa, there is a very well-stocked children's pharmacy (Tel: 315-14-31).
However, if a natural cure to your ailments is more to your liking, then there is the homeopathic store situated at 50 Nevsky Prospect (Tel: 310-33-50). Here, they sell a natural concoction for every problem, from hemorrhoids to intestinal problems.
TITLE: Coming Clean At Long Last
AUTHOR: By Genine Babakian
PUBLISHER: Staff Writer
TEXT: It took me nearly a decade of living in Russia before I got up the nerve to visit my local dry cleaner, or khimchistka. My fear of the khimchistka was not completely unfounded. When I first arrived in Russia, I was told that I had to remove all of the pugovitsy i molnii, or buttons and zippers, from each article of clothing before I submitted it to such a rigorous cleansing process. I opted, instead, for Woolite.
Even as supposedly kinder, gentler khimchistki started popping up all over town, I was still reluctant to trust them. But my resistance melted when I picked up a dress at a "Western" dry cleaners, only to find the bill was as much as I originally paid for the dress.
Gathering up my dry-clean-only washables, I headed to the khimchistka in my courtyard. Forty-five minutes later I realized that it was too soon to completely abandon my 10-year aversion to Russian dry cleaners: Not all soiled items are so readily accepted at the khimchistka. In fact, I walked away with two rejected items, a silk blouse and a pair of velvet pants that I was not permitted to leave behind - even bez pretenzy, or without any right to complain if my clothing is returned in tatters.
The first 20 minutes of my visit were spent negotiating over the down comforter. A visiting pet had left an indelible mark - and smell - in the middle of the blanket that I wanted removed. Koshka napisala, I explained. A cat pissed on it.
My announcement raised a few eyebrows. The manager went running for the phone to see if they could get permission from a higher authority to accept a blanket with cat piss. A compromise was found: They would accept the blanket for a stirka, or wash, but not a khimchistka.
Then we moved onto the other items, each scrupulously examined by the attendant. "What's that?" she asked, pointing accusingly at a dirty patch lying low on a pants leg. I didn't know. She decided to write it up as dorozhnaya gryaz, or road dirt.
A vy ranshe otdavali na khimchistku? she asked, wondering if they'd already cleaned the pants before. I said no, and was sent away with the pants. But when I returned the following week, I brought the pants along. The woman was still skeptical. She asked, once again, if I had cleaned them before.
"Yes," I said this time. And they took them, only to send them back with a note asking me not to submit them again because povtornaya chist ka ne uluchshit vneshny vid iz de liya (a repeat cleaning will not improve the item's appearance).
TITLE: Mauresmo Takes 3rd-Straight Title After 2-Month Hiatus
AUTHOR: By Eddie Pells
PUBLISHER: The Associated Press
TEXT: AMELIA ISLAND, Florida - By putting faith in the theory that less is more, Amelie Mauresmo won yet another championship.
Coming off a two-month break she used to get ready for the clay-court season, Mauresmo won her third-straight tournament Sunday, defeating Amanda Coetzer 6-4, 7-5 in the final of the Bausch & Lomb Championship.
Mauresmo's winning streak dates to February, when the Frenchwoman won on indoor surfaces in Paris and Nice, then took a break, practicing on clay in Europe while her opponents were grinding it out on hard courts in America.
The sixth-seeded Mauresmo earned $90,000 and moved from 15th to seventh in the world rankings. Just as important, she positioned herself as a serious threat for the French Open in May, where she'll be under a lot of pressure as she plays in front of her native fans.
She was up to the challenge against the fourth-seeded Coetzer, one of the most patient players on the tour, who makes a living playing a waiting game in hopes of her opponent making a mistake. The South African advanced to the final in that fashion, with a come-from-behind, three-set victory over Nadia Petrova on Saturday. She also played doubles Saturday night.
She said fatigue wasn't a factor. Rather, it was going against an opponent with a strong, consistent serve who was better suited to handle her persistence.
Mauresmo's strong groundstrokes helped too, allowing her to take effective angles against her opponent, pushing Coetzer into corners and keeping her on the defensive.
Mauresmo landed two-thirds of her first serves - many flying in at 160 kilometers per hour - and had 32 winners, compared to just seven by Coetzer.
Early in the second set, Coetzer let her frustration show, screaming and batting her racket into the screen behind the baseline after a missed shot.
Mauresmo led 5-3 in the second set and had a chance to serve out the match at 5-4. But she double-faulted twice to lose that game, and Coetzer seemed primed for another comeback, but she fell short, losing the second set 7-5.
TITLE: RUBLE AROUND TOWN
TEXT: Monday's ruble/dollar rates in St. Petersburg:
Address Buy Sell
Avto Bank 119 Moskovsky Prospect 28.30 28.95
Alfa Bank 6 Kanal Griboyedova 28.20 28.90
BaltUneximbank Grand Hotel Europe 28.35 29.15
Baltiisky Bank 34 Sadovaya Ulitsa 28.40 29.29
Bank Sankt Peterburg 108 Ligovsky Prospect 28.30 28.95
Impexbank 58 Nevsky Prospect 28.25 28.95
Inkas Bank 44 Nevsky Prospect 28.30 28.90
Promstroi Bank 4 Mikhailovskaya Ulitsa 28.35 28.95
Petrovsky Narody Bank 7 Naberezhnaya Reki Moiki 28.35 28.95
RusRegion Bank 54 Nevsky Prospect 28.70 28.95
Sberbank 4 Dumskaya Ulitsa 27.80 28.95
Viking Bank 17 Vladimirsky Prospect 28.10 28.95
Average 28.28 28.99
Change from last week +0.10 -0.01
TITLE: Israel Strikes Syrian Radar Site
AUTHOR: By Sam F. Ghattas
PUBLISHER: The Associated Press
TEXT: DAHR AL-BAIDAR, Lebanon - Striking deep into Lebanon to retaliate for guerrilla attacks, Israel launched an air strike against a strategic Syrian radar station in the mountains Monday - the first time Israel had targeted such a significant Syrian outpost in almost 20 years. Three Syrian soldiers died and six were wounded, a Lebanese security officer said.
The air strike was in response to Hezbollah guerrilla attacks in recent months, an Israeli army spokesman said. The most recent was a cross-border attack on Saturday that killed an Israeli soldier near the Chebaa Farms area, where the borders of Lebanon, Syria and Israel meet.
Israel has repeatedly accused Le ba non and Syria, the main power broker in Beirut, of responsibility for attacks by the anti-Israel guerrillas and threatened to retaliate. But Monday's strike was a major new departure in the Israeli military response to the guerrilla attacks and increased the risk of escalation along Israel's tense northern border.
Raanan Gissin, an adviser to Israeli Prime Minister Ariel Sharon, suggested that more air raids could follow if Syria failed to restrain Lebanese guerrillas, including the Shiite Muslim Hezbollah group.
"We sent a message to the Syrians that we see them as the only ones responsible, but at the same time ... I am trying to prevent an escalation," said Israeli Defense Minister Binyamin Ben-Eliezer.
In a statement, Lebanese President Emile Lahoud condemned the attack on Syrian positions as a "grave development expressing anew the bloody course adopted by Sharon since his coming to power in the Palestinian arena and outside."
U.S. Ambassador David Satterfield met Lahoud and Prime Minister Rafik Hariri, and later called on all parties to exercise restraint, saying Hezbollah's attacks "can only have the effect of creating an escalation."
Syria's state news agency late Monday quoted an unidentified official condemning the Israeli air strikes as "a dangerous escalation" that would destabilize regional security. The official said only one soldier was killed and four others wounded in the Israeli air strike.
At least three impacts were heard shortly after midnight Sunday in the region of Dahr el-Baidar, a mountain pass on the highway, according to the witnesses and Lebanese police. Israeli jets roared on several runs as tracers from ground anti-aircraft installations were fired at the warplanes, the witnesses said.
Syria, which has 30,000 troops in Lebanon, has radar stations in the Dahr el-Baidar area and maintains bases and checkpoints for its forces along the crucial highway in mountains with an altitude of over 2,000 meters. The area is strategic because it overlooks much of Lebanon's Mediterranean coastline and the eastern Bekaa Valley, all the way to the mountain range that forms the border between Lebanon and Syria.
A Lebanese security officer at a checkpoint about a kilometer from the radar station told reporters three Syrian soldiers were killed and six wounded. The officer, speaking on condition of anonymity, said the wounded were taken to a military hospital in Chtaura, 10 kilometers east. Reporters were barred from the hospital.
Later Monday, two Israeli warplanes flew over Lebanon's central mountains and Beirut around noon, breaking the sound barrier. Residents in Beirut's southern suburbs, a Hezbollah stronghold, scurried for cover, fearing the Israeli jets would unleash bombs.
It was the first time Israel had targeted such a significant Syrian outpost since the 1982 Israeli invasion of Lebanon, when the Israelis destroyed all the Syrian antiaircraft missile batteries in Lebanon and pushed the Syrian army back from the Beirut to Damascus highway. Israeli helicopters attacked Syrian army positions around Beirut airport during the 1996 Israeli bombing campaign against Lebanese guerrillas, but Israeli military sources said the Syrians were not the target of the operation.
TITLE: Edmonton Stages Comeback, Loses in Overtime
PUBLISHER: Reuters
TEXT: EDMONTON, Alberta - Replacement Benoit Hogue got the Dallas Stars out of a hole when he scored 19:28 into overtime to beat the Edmonton Oilers 3-2 in the third game of their first round Western Conference playoff series on Sunday.
Hogue's goal gave the Stars a 2-1 lead in their best-of-seven playoff series.
The New Jersey Devils, playing at home, beat the Carolina Hurricanes 2-0 to take a 2-0 lead in their Eastern Conference playoff series.
And in the Western Conference, the Los Angeles Kings defeated the Detroit Red Wings 2-1 to bring that best-of-seven series to 2-1 in favor of Detroit.
Dallas' Hogue was called into the game as a replacement for the injured Joe Nieuwendyk and made his mark when he got to a rebound.
"I only had three shifts in overtime and I really didn't play much at all tonight. So I was kind of surprised to be out there with two minutes left in the overtime," Hogue said.
Oilers coach Craig MacTavish summed up the night saying: "Happiness and heartache. That pretty much spells NHL playoff hockey. And we got the latter tonight.''
Dallas goalie Ed Belfour was 63 seconds away from his 12th career playoff shutout when Edmonton took out goaltender Tommy Salo for an extra attacker in what was the beginning of a frenetic minute.
Belfour was away from the net chasing down a dump-in in the right corner, but Edmonton's Georges Laraque beat him to the puck and centered for Ryan Smyth, who knocked it in.
Salo again came out for an extra attacker with just 6.4 seconds left in regulation time. Rem Murray forced the contest into overtime when he tipped defenseman Eric Brewer's wrister from the blueline inside the left goalpost. But the Oilers could not hold the momentum.
Sergei Zubov scored first for Dallas at 3:06 in the opening period when he took a pass from Modano at the top of the right circle and rifled one low that to beat Salo. Jamie Langenbrunner slid a pass to Modano, who was unchecked at the bottom of the right circle and flip ped the puck into a half-empty net for his second goal of the series.
New Jersey 2, Carolina 0. In East Ruther ford, the New Jersey Devils moved a step closer to defending their championship with their victory over the Carolina Hurricanes.
Goaltender Martin Brodeur had his ninth career playoff shutout to give the Devils a commanding 2-0 lead in the best-of-seven first-round series.
Brodeur saved only 10 shots in the first two periods, but had to block eight in a busy final term when Carolina had three power plays.
"For the most part, [the defense] did a great job. But Marty was counted on tonight to make a lot more big saves than he should have," said Devils coach Larry Robinson. "I think when you've got a two-goal lead, you've got to play a lot smarter than we did in the third. That's the only thing that probably disappointed me tonight."
Alexander Mogilny scored first with his 20th-career playoff goal after 4:16 in the first. Then early in the second Sean O'Donnell got by Carolina goalie Arturs Irbe, who made 27 saves.
Los Angeles 2, Detroit 1. In Los Angeles, the Kings' margin of victory came on a third-period redirected shot by Jozef Stumpel, as the Kings won their first playoff game in nearly eight years.
Felix Potvin made 22 saves for the Kings.
Luc Robitaille scored the first goal for the Kings when he hit the net with his 51st career playoff tally 8:21 into the second period before a crowd of 18,478, the largest to watch a hockey game in California.
Nicklas Lidstrom tied the game with his first goal of the playoffs before Stumpel scored the eventual game winner.
The Red Wings, who had their NHL record of 13 consecutive first-round victories broken, lead the first-round of the Western Conference best-of-seven series two games to one.
TITLE: WORLD WATCH
TEXT: Estrada Free on Bail
MANILA, Philippines (Reuters) - A Philippine court ordered the arrest of disgraced former president Joseph Estrada on Monday, took his fingerprints after he surrendered himself to custody and released him on bail ahead of his trial on corruption charges. Toppled from the presidency in a "people power" revolt in January, Estrada looked crestfallen as court officers took his fingerprints five times in a graphic demonstration of his long fall from grace.
The court issued two warrants for his arrest in connection with twin charges of graft and perjury which were among a total of eight criminal complaints filed against him by state prosecutors.
He has six other charges pending against him, one of which - economic plunder - is a non-bailable offense and punishable by the death penalty.
Taleban Leader Dies
KABUL, Afghanistan (AP) - The second most powerful man in Afghani stan's ruling Taleban militia, Mullah Mohammed Rabbani, died of cancer Monday, officials said. He was 44.
Rabbani was head of the Taleban governing ministers' council, a position equivalent to prime minister. He died early Monday in neighboring Pakistan, where he had been receiving treatment, the officials said on condition of anonymity.
"The Taleban has lost a great leader, a brave and important mujahedeen [holy warrior]," Taleban Foreign Minister Wakil Ahmed Muttawakil told reporters in the Afghan capital.
Rabbani had been ill for several months and had not been seen in public for much of this year. But he was considered a powerful man in the Taleban movement, second only to the reclusive leader, Mullah Mohammed Omar.
Slave Ship Sought
COTONOU, Benin (AP) - Benin appealed Monday for help from the United Nations and Western powers in the search for a missing cargo vessel suspected of carrying child slaves off the coast of West Africa.
The aging and decrepit Nigerian-registered vessel, MV Etireno, was refused entry at two African ports over the past week after apparently leaving Benin's capital of Cotonou 10 days ago or more. It is believed to be carrying 100-250 impoverished children intended for sale as unpaid domestic and plantation workers.
The ship was originally turned away from Gabon, a relatively prosperous country to the southeast, where authorities believe those behind the operation were planning to sell the children. On Thursday, it was also refused port in Douala, Cameroon, according to UN and Benin officials.
Chinese Pilot Mourned
BEIJING (AP) - China's official news agency has set up a memorial Web site for a pilot killed in the collision with a U.S. spy plane, letting visitors offer online versions of wine, flowers or other gifts appropriate for a Chinese funeral.
The Web site is part of a campaign to put Wang Wei's death to patriotic use. Wang's hometown held a weekend rally to celebrate the heroism of the pilot who has been declared a "revolutionary martyr," and the army and paramilitary police vowed to make him their role model.
In the latest posthumous honor bestowed on Wang, Chinese President Jiang Zemin gave him the title of "Guardian of the Air and Sea," Chinese Central Television reported in its evening news broadcasts.
CCTV quoted Jiang, who is on a tour of Latin America, as calling Wang an "outstanding representative of the new generation of revolutionary soldiers." All Chinese should emulate Wang's devotion to safeguarding national sovereignty, as Jiang was quoted saying.
Death Toll Rises
BANGKOK, Thailand (AP) - The death toll from traffic and other accidents during the Thai New Year holiday has risen to 636, by far the highest on record, the Public Health Ministry said Monday.
"At least five people were killed and 300 injured every hour," national police spokesman Major General Phongsapat Phongchareon said.
Traffic accidents accounted for 442 of the fatalities and 25,637 of the 49,453 injuries recorded since Thursday, a Health Ministry statement said. It said other people were killed or injured in drunken quarrels, from electrocution, drowning and other festival-related accidents.
Last year, 164 people died during the holiday period, The Nation newspaper reported. Officials say the much higher toll this year is partly due to improved recording of accidents.
An Heir in the Making?
TOKYO (AP) - Japan reacted with joy Monday as the palace announced that Crown Prin cess Masako appears to be pregnant. If she gives birth to a boy, he would be the first potential heir to the ancient Chry san themum Throne born in more than 30 years. Palace officials made the announcement in a brief news conference.
Masako, 37, wed Crown Prince Naruhito in 1993. She suffered a miscarriage in December 1999, weeks after newspaper reports that she was pregnant touched off a media frenzy about the possibility of Japan finally having a new heir to the throne.
Palace officials were criticized then for announcing the pregnancy too early. Reflecting their extreme caution this time, officials said Monday that a more formal announcement would not be made until there was absolutely no doubt.
But according to reports, Masako could give birth in November or early December. If she has a boy, he would be second in line to the throne after Naruhito, 41, the eldest son of Emperor Akihito and Empress Michiko.
Prison Riot Ends
RIO DE JANEIRO, Brazil (Reuters) - Inmates ended a four-day prison rebellion in western Brazil on Sunday morning when they killed six leaders of the uprising who had wanted to extend the standoff in order to appear on television, police said.
Inmates stabbed the fellow prisoners to death with handmade weapons, decapitating the declared leader of the uprising, and freeing nearly 150 family members still inside the prison who had been taken hostage, Lt. Col. Antonio Moraes, who was in charge of negotiations, told Reuters.
"The inmates took justice into their own hands and brought an end to the rebellion," Moraes said.
During visiting hours last Thursday, 368 prisoners seized the prison in the remote city of Cuiaba, 1,100 kilometers west of Brasilia, to demand the dismissal of the prison warden, whom they accused of torture. They took 168 people hostage, most of them women and children.
TITLE: The 'Other' Schumacher Wins Grand Prix
AUTHOR: By Alan Baldwin
PUBLISHER: Reuters
TEXT: IMOLA, Italy - Ralf Schumacher seized the first win of his Formula One career at the San Marino Grand Prix Sunday with a commanding drive from start to finish that handed Williams its first victory since 1997.
It was a day of contrasting fortunes for the Schumacher family, with older brother Michael retiring his Ferrari to the dismay of the silenced local fans after just 25 laps and losing his outright lead in the championship.
The world champion's failure to score in Ferrari's heartland, at a track named after team founder Enzo and son Dino, allowed Briton David Coulthard to draw level with 26 points after four of the 17 races this season.
Coulthard, starting on pole, brought his McLaren home in second place after Ralf made a storming start from the second row and snatched the lead going into the first corner.
The 25-year-old German gradually pulled away and never surrendered his lead, finishing 4.3 seconds clear of the Scot after two pitstops on a brilliantly sunny day in Imola.
Team chief Frank Williams said: "Ralf triumphed magnificently today. He had it well under control all the time. He has reached the ranks of winners and I think he will make his own mark throughout the year."
Gerhard Berger, motorsport director of Williams' partners BMW, echoed the sentiments.
"[Ralf] is doing a brilliant job this year. He seems to have the same potential as his brother Michael and we are very happy to have him on the team," Berger said.
Brazilian Rubens Barrichello, who had a nightmare in the last race in his native Sao Paulo, made amends by taking third and giving Ferrari at least a podium place for their efforts.
McLaren's Mika Hakkinen was fourth, followed by the Jordans of Italian Jarno Trulli and German Heinz Harald Frentzen.
Ralf's victory was the first in 23 races by a driver from a team other than Ferrari or McLaren and made the two Schumachers the first brothers to win Formula One races.
Michael Schumacher was delighted for his brother but frustrated by his own problems. The German triple world champion, who had started fourth on the grid, was lying seventh when his Ferrari suffered a puncture on the front left tire. He drove into the pits to have all four tires changed and to refuel but re-entered the 62-lap race in last place after a 12.8-second stop. On the following lap Schumacher drove back to the pits and out of the race. "There was a puncture and there was something else wrong, which damaged the rim," he said. "As a precaution they told me to stop and I was quite happy. "The start wasn't perfect and we had a problem with gear selection at one time. It wasn't a great weekend all in all."
Other retirements included Canadian Jacques Villeneuve, in a BAR, and Williams' other driver, Juan Pablo Montoya.
Villeneuve was deeply upset after leaving the track in a cloud of smoke.
"It was looking like we were finally going to get some points this year. We worked hard to get up to sixth and to have a mechanical failure was very frustrating."
Montoya had hoped to earn points as well before a troubled pit stop that cost him one minute eight seconds when the fuel line got stuck and then the engine died.
"Up to then the race was going quite well. It was not the best race in the world but you know we were going to score some points," the Colombian said.
"Five laps before the pit stop I got an alarm about the clutch."
Coulthard said he had made a bad start and also had problems with inconsistent tires.
"I moved a little bit just before the start and had to stop the car and that is when the lights went on," he said.
"This is probably the most difficult grand prix I have had this season in terms of balance."
TITLE: Team Russia Favored To Win Hockey's 'Bolshoi Priz'
AUTHOR: By Christopher Hamilton and Curtis Budden
PUBLISHER: Staff Writer
TEXT: The 27th annual "Bolshoi Priz Sankt-Peterburga" got underway at the Yubileiny Sports Palace on the weekend. From Sunday through Thursday, the city will play host to the national youth "B" teams from Russia, the Czech Republic, Finland, Sweden, and St. Petersburg.
The Bolshoi Priz began in Riga, Latvia in 1975 as the "Tournament of Four Nations." A year later St. Petersburg became the host city, an honor it has not since relinquished, making Russian's Northern Capital the only city in the world to be the permanent host of a major international hockey tournament.
The tournament was first conceived as a venue for the best "B" teams among the European hockey powers. Since those countries' "A" teams were at the time preparing for the senior World Championship, this tournament naturally grew into an event featuring youth players, aged 16 to 19.
Over the past quarter of a century the Bolshoi Priz, or the "Prize of Leningrad Truth" as it was known until 1991, has experimented with several formats, even inviting North American teams from Canada and the United States in 1983 and 1987, respectively, but it has remained true to its goal of showcasing the most talented young European hockey players.
This, of course, is no secret, which is why more than 50 NHL scouts have been accredited to attend the tournament hoping to find future stars like some of the Bolshoi Priz's more famous former participants, such as Sergei Federov, Dominik Hasek and Vladimir Konstantinov.
Unfortunately for the Czechs they won't have the services of Hasek, but with their recent success in international hockey, some may favor the Czechs to win this event simply on momentum alone. It is intersting to note, however, that having won the 1998 Olympic gold medal, the 1999 and 2000 World Ice Hockey championships, as well as the 2001 World Junior Ice Hockey Championship, this remains the one major international tournament that they have never one.
Many hockey experts, however, are favoring team Russia to take the 27th Bolshoi Priz. So far, the Russians have not disappointed.
After opening with a 4-2 win over Finland on Sunday, Russian goaltender Sergei Mylnikov backstopped his team to an impressive 4-0 victory over Sweden Monday evening.
Russia has a strong team comprised of many players who spent this year in Superliga, Russia's top hockey league. Currently leading the team, however, is left wing Alexander Frolov from Krylya Sovietov of Moscow - which was promoted back into the Superliga at the end of the season - who already has two goals and two assists after the first two games.
In other action Monday Finland bounced back from its earlier loss to defeat team Petersburg 4-1. Sweden beat the Czechs 3-2 in their opening match on Sunday.
TITLE: SPORTS WATCH
TEXT: Henderson Recalled
SAN DIEGO (AP) - Rickey Henderson is headed back to the major leagues. The career steals leader was called up by the San Diego Padres after going 2-for-4 with a double Sunday for Triple-A Portland. He hit .275 with five runs, three RBIs and one walk in nine games for the Beavers.
The 42-year-old Henderson needs three walks to break Babe Ruth's major league record of 2,062, and 68 runs to break Ty Cobb's record of 2,245.
He needs 86 hits to become the 25th player in baseball history to reach 3,000.
Hewitt Undergoes Tests
SYDNEY (Reuters) - Australian tennis star Lleyton Hewitt is to undergo further medical tests this week to diagnose the cause of his continuing breathing difficulties.
Hewitt pulled out of this week's lucrative Monte Carlo Masters after a recurrence of the problems that plagued him last year.
His father Glynn told reporters on Monday that Hewitt had withdrawn from the Mediterranean clay event to undergo tests in Belgium before returning to the circuit next month.
"He's still having some breathing problems and he's decided to have a bit of a break," Glynn Hewitt said.
Hewitt, 20, has been hampered by breathing problems in the past year. The ailment has remained a mystery although CAT scans taken late last year revealed he had a blocked sinus.
Stick Work
NEW YORK (Reuters) - The National Hockey League fined Detroit Red Wings defenseman Chris Chelios $1,000 on Sunday for careless use of his stick in the second game of the Western Conference quarterfinals against the Los Angeles Kings.
In the third period of Saturday afternoon's game, Kings left wing Luc Robitaille had fallen to the ice and Chelios tried to clear a puck from the front of the Red Wings' net.
His stick hit Robitaille's head, though no penalty was called.
"Although it was determined that there was no intent to injure on the play, all players must be held responsible for the careless use of their sticks," said Colin Campbell, NHL executive vice president and director of hockey operations.
Zenit Moves Into First
St. Petersburg (STP) - Zenit kept its winning streak alive and moved into a three-way tie for first place in Russian Premier Division after defeating Fakel 2-1 in Voronezh Saturday.
Gennady Popovich and Andrei Arshavin scored for the Petersburg side in the 11th and 45th minutes, respectively. In the 33rd minute Gurban Gurbanov converted a penalty kick against Zenit goalkeeper Vyacheslav Malafeyev.
Playing Rough
NEW YORK (Reuters) - Bernard Hopkins used every trick in the book Saturday night, wrestling his way to a unanimous decision over Keith Holmes and unifying the WBC and IBF middleweight titles at the Theater at Madison Square Garden.
Hopkins used smothering, roughhouse tactics over 12 rounds to earn the nod from all three judges by scores of 119-108, 118-109 and 117-110.
With the victory, Hopkins (39-2-1) moves on to a September matchup with the winner of the May 12 middleweight title fight between WBA middleweight champion William Joppy and undefeated superstar Felix Trinidad.
TITLE: Sorenstam Making Waves on LPGA Tour
AUTHOR: By Beth Harris
PUBLISHER: The Associated Press
TEXT: LOS ANGELES - Not even a 10-shot deficit could keep Annika Sorenstam from picking up another trophy - and four more lines in the record book.
The Swedish sensation birdied four of the last nine holes and got help from Pat Hurst's back-nine collapse to win a record-tying fourth consecutive LPGA Tour title in a playoff Saturday.
Not since Hall of Famer Kathy Whitworth in 1969 has anyone captured that many consecutively scheduled events. Mickey Wright, another Hall of Famer, accomplished the feat in 1962 and '63.
"I think about those things, but it's tough being out here just trying to win tournaments," said Sorenstam, who has four wins and two seconds in six events this year. "I tried not to build it up too much for myself. But if you had asked me if it would end this way, it would have been tough to believe."
Especially since Sorenstam trailed Hurst by 10 shots entering the final round of the Office Depot at Wilshire Country Club.
As Sorenstam headed for the back nine at 3-under, she was reminded by her caddy that victory was still possible. She nodded at him.
"I felt it inside," she said. "I was so calm and confident in my own game."
In addition to her record-tying win, Sorenstam added her name to three more marks in the LPGA record book.
She set a record for biggest comeback in tour history; she broke Karrie Webb's record for fastest player to reach $700,000 in season earnings - she leads with $756,448 in six events - and she became the tour's career money leader with $6,957,044.
Sorenstam couldn't decide which was more amazing: her comeback or becoming the first woman to shoot 59 in a tournament last month.
At 30, Sorenstam already has qualified for the LPGA's Hall of Fame. However, she can't be inducted until she's played 10 years on the tour, which won't happen until the end of the 2003 season.
Sorenstam shot a 6-under 66, including a bogey on the 17th that cost her a shot. But she recovered at 18, hitting a 7-iron within 12 feet for her seventh birdie. She finished at 6-under 210 and earned $120,000.
"Last year, I would not have made that putt on 18 in regulation, and this year I made it," she said. "It's just being confident with my putter. I've practiced a lot."
In the playoff, South Korea's Mi Hyun Kim hit a tee shot over a back bunker and had played three shots when Sorenstam tapped in for her winning par.
Hurst blew a huge lead with five bogeys on the back nine, including a three-putt from 5 feet at 16. Her collapse kept the tour without an American-born winner in nine events this year.
"You can keep blaming me," Sorenstam said.
Beginning Thursday, Sorenstam will try to tie one of the LPGA's most famous records.
Before anyone had heard of Tiger Woods, Nancy Lopez stunned the sports world by winning five tournaments in a row as a rookie in 1978. She won three straight, skipped a week, then won two more.
Sorenstam's 18 victories were more than any LPGA player in the 1990s. Already she's off to an impressive start this decade, with five wins last year and four this year.
TITLE: Royals Upend Blue Jays To Halt 5-Game Skid
PUBLISHER: Reuters
TEXT: TORONTO - This time, Roberto Hernandez held on - barely.
Hernandez loaded the bases in the bottom of the ninth inning Sunday but got Alex Gonzalez on a grounder to shortstop for the final out as the Kansas City Royals snapped a five-game losing streak with a 4-2 American League victory over the Toronto Blue Jays. Hernandez, who had blown his last two save opportunities - allowing nine runs over 1 1/3 innings - was able to protect Kansas City's two-run advantage on Sunday after allowing four ninth-inning runs in Saturday's loss.
After Tony Batista fouled out to begin the final frame, Darrin Fletcher singled to left and Jose Cruz singled to right.
Brian Simmons flied out, but Shannon Stewart walked and represented the winning run.
Gonzalez, however, bounced out on a 1-1 pitch from Hernandez, who recorded his second save for a Royals team that led the major leagues in blown saves last year.
Tampa Bay 7, Baltimore 4. John Flaherty hit the last of four Tampa Bay Devil Rays home runs to break a seventh-inning tie as they continued to flex their muscles in a 7-4 victory over the host Baltimore Orioles.
Greg Vaughn, who entered the game in a three-for-27 slump, hit a pair of homers and Fred McGriff also went deep for the Devil Rays.
Tampa Bay has hit eight homers in the first three games of the series and has scored all but one of its 14 runs via the long ball.
Russ Johnson walked with one out in the seventh and Flaherty homered to left-center off starter Sidney Ponson to make it 5-3.
Greg Myers and Jerry Hairston homered for the Orioles off starter Bryan Rekar, who allowed three runs and six hits in five innings. Doug Creek (1-0) got the win, despite being charged with a run in two-plus innings. Tanyon Sturtze pitched the eighth and Esteban Yan worked a scoreless ninth for his first save. Ponson (0-3), who moved near the top of the Baltimore rotation with the departure of free agent Mike Mussina, has lost all three of his starts.
Chicago Cubs 5, Pittsburgh 1. Sammy Sosa hit a three-run homer in the seventh inning to propel the Cubs to a 5-1 victory over the Pittsburgh Pirates on Sunday. Sosa had not hit a home run in his last 11 games at home. The game was tied 1-1 when a single and a walk put two men on for Sosa, who slammed his fifth homer of the season and his 199th at Wrigley Field. Eric Young also homered and Julio Zuleta had an RBI double for the Cubs, who have won five straight games.
Atlanta 3, Philadelphia 0. In Atlanta, the Braves got seven good innings from Odalis Perez - his longest stretch in almost two years - and a home run each from Brian Jordan and Andruw Jones to beat the Philadelphia Phillies 3-0.
Perez, who gave up just four singles, missed last season because of surgery on his pitching elbow.
Mike Remlinger gave up one hit in one inning before John Rocker worked the ninth for his fourth save.
Colorado 10, Arizona 7. In Denver, Todd Hollandsworth hit three home runs - one a three-run shot in the bottom of the 10th inning to rally the Colorado Rockies to a 10-7 victory over the Arizona Diamondbacks.
Hollandsworth also had a pair of two-run shots and drove in seven runs. His second homer gave Colorado a 7-5 lead in the bottom of the eighth.
Greg Swindell was rocked for two homers and three runs in the bottom of eighth. Todd Walker tied it with a solo blast before Hollandsworth put the Rockies ahead.
Milwaukee 7, San Francisco 4. In Milwaukee, Barry Bonds hit the 499th home run of his career to bring the San Francisco Giants within one run of the Milwaukee Brewers in the eighth inning, but he dropped an easy fly ball in the bottom of the inning to put the Giants four runs down and the Brewers won 7-4.
"I straight [messed] up," said Bonds. "That's the best way I can put it. I lost this game for this team. You pray for a shot to redeem yourself but it shouldn't have happened."
Florida 6, Montreal 3. In Montreal, Montreal Expos backup catcher Randy Knorr hit two home runs but the Florida Marlins stole five bases, including Preston Wilson's steal of home as Knorr soft-tossed the ball back to the pitcher. The Marlins won 6-3.
Cincinnati 3, New York Mets 1. In New York, Jim Brower, recently recalled from the minor leagues, allowed just one unearned run over 5 2/3 innings in his Cincinnati debut and former Met Alex Ochoa had an RBI triple as the Reds completed a three-game sweep with a 3-1 victory over New York.
The Mets have scored only four runs in their last five games, but they have also left just 10 men on base.
The Mets got their only run in the third inning on a throwing error.
St. Louis 6, Houston 5. In St. Louis, J.D. Drew homered to break a sixth-inning tie and the Cardinals threw runners out at the plate in the eighth and ninth to end a three-game losing streak with a 6-5 victory over the Houston Astros.
Jose Vizcaino delivered a two-run single in the top of the sixth to tie it at 5-5, but Drew answered in the bottom of the inning with a leadoff homer on the first pitch of the day by Jay Powell.
St. Louis hit a three-run triple but gave up five runs in 5-2/3 innings.
Los Angeles 5, San Diego 4. In San Diego, three relievers combined to pitch four hitless innings after Kevin Brown was forced out of the game as the Los Angeles Dodgers rallied for a 5-4 comeback victory over the San Die go Padres.
Brown was part of the Dodgers' three-run rally in the top of the sixth. But he was removed for a pinch runner after getting hit on the left arm by a pitch thrown by Padres' reliever Rodney Myers (0-1) that loaded the bases.
Brown (1-1) suffered a contusion and is listed as day-to-day.
TITLE: Serb Arrested on War-Crimes Charges
AUTHOR: By Arthur Max
PUBLISHER: The Associated Press
TEXT: AMSTERDAM, The Netherlands - NATO-led peacekeeping forces arrested a top war-crimes suspect in Bosnia and hustled him to The Hague on Monday to stand trial on genocide charges linked to Europe's biggest massacre since World War II.
Dragan Obrenovic, former chief of staff of a Bosnian Serb unit, was arrested Sunday in Bosnia by UN investigators working with U.S. troops. Dutch radio and television said Obrenovic was brought to the Netherlands during the night and put into a detention cell at the UN war-crimes tribunal.
He was expected to make an initial appearance before UN judges within a few days to enter a plea.
Obrenovic was under a secret indictment for allegedly participating in the July 1995 attack against Muslims in the eastern enclave of Srebrenica during Bosnia's 1992-1995 war. Srebrenica was a so-called safe zone protected by the United Nations until Serb forces overran the town, killing up to 7,500 Muslims and Croats and expelling the rest of the Muslim population.
Details of Obrenovic's arrest were unclear, but Bosnian Serb television said he was detained by three men and one woman in the Bosnian town of Zvornik and was rushed away in a car. Police stopped the car, then let it go after they realized who the officials were, the television station said.
In a statement issued Sunday night, NATO Secretary General Lord Robertson said the arrest was conducted by the NATO-led Stabilization Force, or SFOR, in Bosnia. The White House said U.S. troops took part in the operation.
Robertson said Obrenovic is accused of "the extermination of thousands of Bosnian Muslim males, complicity in genocide, violation of the laws and customs of war, crimes against humanity, and grave breaches of the Geneva Conventions, including murder, torture, and racial and religious persecutions."
NATO is committed to arresting those indicted for war crimes, Robertson said, adding: "Each one sent to The Hague makes it easier to build a lasting peace in the Balkans.
A tribunal spokeswoman, Florence Hartmann, welcomed the arrest.
"We hope that this will lead to other arrests in the next weeks. There are still some 10 fugitives in the Bosnian Serb entity," Hartmann told the British Broadcasting Corporation.
The White House said in a statement that such arrests are an "essential step in consolidating the peace and promoting the rule of law in Bosnia."
Obrenovic's lawyer, Krstan Simic, told Bosnian Serb television that the indictment was kept secret and said the move "appalled" him. Obrenovic previously had cooperated with investigators and told them he was ready to surrender if the court issued an indictment against him, Simic said.
Another Bosnian commander, General Radislav Krstic, is already on trial for his alleged role at Srebrenica. He was apprehended in December 1998.
The White House statement said blame also should be borne by Radovan Karadzic, the Bosnian Serb political leader during the war, and military leader General Ratko Mladic.
"Srebrenica represents one of the darkest episodes in the recent tragedy that befell Bosnia," it said. "This barbaric operation was conducted under the overall command of Radovan Karadzic and General Ratko Mladic, who are also indicted by the U.S. and who also deserve to face justice in The Hague."
TITLE: Larsson Leads Celtic Step Closer to Title
AUTHOR: By Phil Gordon
PUBLISHER: Reuters
TEXT: GLASGOW, Scotland - Henrik Larsson's remarkable season continued on Sunday when he scored twice in Celtic's 3-1 Scottish Cup semifinal win over Dundee United.
The Swedish striker took his goals tally on the season to 49 as the Scottish champions and League Cup winners moved one match away from completing their first domestic treble in 32 years.
Larsson overtook the Celtic post-World War II record of 48 set by Charlie Nicholas in 1982-83.
Celtic will play Hibernian in the final at Hampden Park on May 26. Hibs beat Livingston 3-0 on Saturday.
"We don't want to think about the treble just yet," said Larsson. "We must concentrate on Hibernian who are a tough side.
"It feels tremendous to get the record but I never think of figures during the season, or set them [targets] before the season.
Larsson continued his love affair with Hampden Park, taking his total to seven on three appearances at the stadium this season.
Dundee United, which eliminated holders Rangers in the quarterfinals, gave Celtic few chances until Larsson broke the deadlock in the 32nd minute. Chris Sutton whipped in a cross that was met by Larsson, whose diving header flew past goalkeeper Paul Gallacher from a tight angle.
Celtic then had to soak up a torrent of second-half pressure before Larsson sealed the tie by earning a penalty. The Swede was brought down after 79 minutes by defender Danny Griffin and slotted home the penalty himself.
A minute later Larsson set up substitute Jackie McNamara to make it 3-0.
England. Manchester United wrapped up the English title with five matches to spare when it beat Coventry City 4-2 and second-placed Arsenal slumped to a 3-0 home defeat by lowly Middlesbrough.
Two goals from Dwight Yorke and one each from Ryan Giggs and Paul Scholes gave United the points before Middlesbrough won at Highbury for the first time since 1939.
Ipswich Town, which beat Newcastle United 1-0 with a Marcus Stewart penalty, moved into third place with 56 points, ahead of Leeds United, which beat Liverpool 2-1 on Friday.
Chelsea jumped to fifth with 51 points after Gus Poyet gave them a 1-0 home win over Southampton, one ahead of Liverpool and two clear of Sunderland, which lost 3-2 at home to Tottenham Hotspur after leading 2-0.
Italy. AS Roma's lead in Serie A was cut to four points when it was held 2-2 at home by Perugia while second-placed Juventus beat Inter Milan 3-1.
Roma needed an injury-time own goal by Giovanni Tedesco in an ugly goalmouth scramble to salvage a point.
Juventus took full advantage of Roma's disappointment as it swept aside Inter with second-half goals from Alessio Tacchinardi, Filippo Inzaghi and Alessandro Del Piero.
Argentine striker Hernan Crespo scored both goals to give Lazio a 2-0 victory at Reggina while Andriy Shev chen ko hit a classy 71st-minute goal to cap AC Milan's 3-0 defeat of Udinese.
Parma won 1-0 at Atalanta Bergamo in its tussle for a Champions League berth to extend its unbeaten run to eight matches.
Spain. A superbly taken hat trick by Guti and a marvellous swerving free kick from Roberto Carlos gave Real Madrid a comfortable 4-0 win over Villarreal.
Real maintained its eight-point lead as Deportivo Coruna squeezed out a 2-1 win over relegation strugglers Osasuna.
Third-placed Valencia lost ground after falling victim to in-form Alaves, which grabbed a rare 2-1 victory at the Mestalla stadium.
A last-minute Rivaldo free kick enabled Barcelona to salvage a 4-4 draw in a pulsating home clash with Real Zaragoza.
It was the second week running that Barcelona had been involved in an eight-goal thriller, but they slipped to fifth as Real Mallorca moved above them with a 2-1 win over Las Palmas.
Real leads with 65 points, Deportivo follows with 57 and Valencia stayed in third with 52, ahead of Mallorca on goal difference. Barcelona was a point back.
Germany. Danish striker Ebbe Sand hit a hat trick for Schalke 04 in its 3-1 win over Bayern Munich to go to the top of the Bundesliga.
The Gelsenkirchen club, chasing its first German title since 1958, moved two points clear of deposed leaders Bayern, which is now second with five games remaining.
Bayern has now lost nine league matches - four more than in its entire title-winning campaign last season.
But Bayern could take some consolation from the performance of rivals Bayer Leverkusen, who stayed in third place after slumping to a 3-1 defeat at home to modest SC Freiburg.
Leverkusen was one of four teams on 49 points with Borussia Dortmund, Hertha Berlin and Kaiserslautern, all still in contention for the title in a race that remains wide open.
France. Goalkeeper Mickael Landreau produced a heroic performance as Nantes moved closer to its first French championship in six years with a hard-fought 1-0 win at home to Bastia.
Olivier Monterrubio scored the only goal but it was Landreau who kept Nantes in the game with a series of sensational saves, including a penalty kick.
With three matches left, the Canaries lead by four points as Lille, second before the weekend, was held 1-1 at AJ Auxerre and slipped to third.
Olympique Lyon moved up to second after a 2-0 home win over Paris St. Germain while Girondins Bordeaux is fourth, six points off the top, after a 2-1 win over Strasbourg that relegated the Alsace side.
TITLE: South African Police Run Daily Gauntlet of Death
AUTHOR: By Ravi Nessman
PUBLISHER: The Associated Press
TEXT: SOWETO, South Africa - The fervent melodies of the pre-Easter prayer service fill the hall behind a police station in Soweto with a desperate appeal to God: Stop the slaughter of our police.
South Africa's police are being killed at a startling rate. Since 1994, 1,597 officers have been killed out of a national force of 130,000, and although the rate went down last year, it still averaged a death every two days. New York City, by contrast, lost three officers out of a force of 41,000 last year, all in car accidents.
"We need prayers," the Soweto-area commissioner, Martin Maphanga, told the more than 100 officers and churchgoers gathered for a service that went on for hours with marches, speeches, songs and prayer in a mixture of South Africa's languages.
Criminals' increasing boldness, police corruption and the lingering hatred South Africans have for the security forces that enforced apartheid have contributed to the attacks, experts say.
Visiting the families of two slain police officers last month, Safety and Security Minister Steve Tshwete said it appeared police were "just being shot for no apparent reason." The mere sight of police officers seemed to incite criminals to kill them, he said.
The killings are so pervasive that every morning Inspector Maurice Pikwa straps on his bulletproof vest, picks up his gun and then pauses to offer a silent prayer.
"You never know when you are going to be killed," he said.
Pikwa, 38, has already been shot once: During the dying days of apartheid, in 1993, he was caught in the cross fire in riots in Soweto. At that time, many officers of the mainly black force were targeted as lackeys of the oppressive white-led government. Though blacks now occupy many of the senior management positions previously held by whites, police are still viewed by many blacks as the enemy.
Many of the officers killed on duty would have survived had they been wearing their bulletproof vests, said Riaan van Staden, head of the police service's directorate of police safety, which was established in 1999 to reduce the killings.
But two-thirds of the victims were killed off-duty. In some instances, off-duty officers still in uniform and carrying guns have been killed when they stumbled upon crimes, van Staden said. In other cases, corrupt officers are killed committing crimes themselves, he said.
Police union officials say a more serious problem is low pay. Rookies earn less than 37,000 rand - about $4,500 - a year. They must commute in crowded taxi vans, where they are under constant threat of being ambushed for their guns or simply for being police officers.
As startling as the numbers are, they have improved dramatically. In 1994, 265 police were killed. Last year, only 185 were slain. In Gauteng, the province that includes the cities of Johannesburg, Pretoria and Soweto, 62 officers were killed out of a force of 22,000, down from 96 in 1998.
Nonetheless, the killings have badly damaged the confidence of a public still wary of their security force, said Sibusiso Masuku, a researcher at the Institute for Security Studies.
"If they are unable to defend themselves, how can they defend us?" he said.
TITLE: A Soviet Icon Reflects On Time and Space
TEXT: Cosmonauts' Day, which was celebrated in Russia on April 12, marked forty years since Yury Gagarin's first flight into space. A great deal is known about the world's first man in space, but much less is known about the first female cosmonaut, Valentina Tereshkova, who followed Gagarin into space two years later. In June 1963, Tereshkova went down in history as she became the world's first woman to blast off into space. For her three-day solo flight aboard the Vostok-6, she was presented with the prestigious Hero of the Soviet Union award.
Indeed, her achievement has not been repeated to this day. She remains the only woman in the world to have made a solo space flight, serving as her own commander, flight engineer and crew. In recognition of her efforts, the International Women of the Year Association awarded the 63-year-old cosmonaut their highest award last fall: Woman of the Century.
A poor factory worker from provincial Yaroslavl, Tereshkova had dreamed since childhood about the sky. Beginning as an amateur parachute enthusiast, Tereshkova was headhunted by the cosmonaut program as one of four women to be trained for space flight. On June 16, 1963, Tereshkova made history, by completing a 70-hour space flight and orbiting the earth 48 times. Later the same year, Te resh kova married cosmonaut Andrian Nikolayev. Their daughter Yelena was the first child whose parents had both been in space, allaying fears that space travel could encourage birth defects.
The former cosmonaut currently heads the government center for international scientific and cultural cooperation. And while she usually avoids speaking to the press, Tereshkova recently granted this rare interview to Marina Uvarova.
Q: After your space flight, there were rumors that you were taken out of the ship literally half-dead and were very ill for the next three years. Is there any truth to this?
A: That is absolute nonsense - one of the stupid and ridiculous rumors that has been spread about me. After all, my condition, every move I made during the flight, was recorded. I had a very large research program and instead of the planned two days, I was in space for three days. But nevertheless, I carried out all of my tasks. And if I was "half-dead," is it really possible that I could have done that? After all, I was alone on the ship.
Of course, the flight was very difficult, a terrible strain on my body - particularly during the landing. We, the first group of cosmonauts, were selected according to very strict criteria; we were the strongest of the strongest and healthiest. Moreover, we trained for our flights so intensively - with such excessive caution and exertion - that the flight itself was much easier to endure than we expected. Later on, the training was more merciful, because it became clear that the flight itself did not involve the unbelievable test of strength we had experienced during training.
Q: What about a return flight? Why was it that you never returned?
A: I wanted to be in space just one time very badly. Of course, I was eager to go again. In 1965 they discussed a possible second flight, but it did not happen.
Q: You could easily become a deputy of the State Duma representing any party. Have you ever considered going into politics?
A: Never. For what purpose? I became a member of the Communist Party of the Soviet Union in 1962, in a factory in Yaroslavl. For me that was a great honor. The ideals of the party were close to me, and I have tried to adhere to those principles all of my life. In essence, they are the same as the Ten Commandments in the Bible, and I will never change my convictions. These days it is very fashionable to condemn everything that came before Perestroika. As a result, the breakthroughs achieved in science, technology and industry during those years are forgotten.
Q: Do you mean to say the authorities are hypocritical about the past?
A: I am saying that everyone should do what he or she is good at. They should do what they love. I always did what I loved - in the space program and in my present work. I enjoy introducing foreign governments to our achievements in the areas of culture, science and technology. And even now, despite everything, there are many such achievements. Our people are unusually gifted and talented.
Q: Did you know Yury Gagarin very well?
A: Yes. We [all] lived together in Star City. We studied together at the Zhu kovskyAir Force Academy. After graduation, we were both selected as candidates for graduate studies in the sciences. He was unusually colorful, sincere and unselfish. He attracted everyone to him like a magnet. I believe we never fully appreciated the significance of his flight.
Q: What do you think about what is happening in Russia today?
A: Like every person who loves and is devoted to his homeland, I find it difficult to reconcile myself with our country's current condition. But in our history we have suffered far worse days and still came out victorious. I am confident that sooner or later, Russia will become a successful country.
Q: How did you react to the decision of the [London-based] International Wo men of the Year Association to name you "Woman of the Century?"
A: It was quite unexpected for me because that organization had already named me "Woman of the Year" in 1984. It is a great honor. I see it first of all as a reward for our country. After all, it was granted to me in recognition of my achievements in space. Could I have achieved all that on my own? Of course not.
Q: Do you continue to follow research on space issues?
A: Of course. Anyone who has spent any time in space will love it for the rest of his live. That is not just my personal opinion, but that of all the cosmonauts I know. We pay close attention to and feel anxious about every flight, every event. Now, for example, we are all very sad that the Mir was de-orbited. To be honest, that was a tragic event for all of us.
Q: How about your current work? What is the focus of your center now?
A: First and foremost, we have been planning the celebrations marking the fortieth anniversary of Yury Gagarin's first flight. This was, after all, a tremendous event. We have prepared a great number of events, exhibitions and meetings. These explorers who gave our country glory should remind us of our own power and potential.
Aside from that, we are also preparing to send the children of the doomed submariners aboard the Kursk submarine to Berlin and Vienna on vacation.
Q: Was your space flight the most important event of your life?
A: Of course. It was a tremendous event that determined the course of my entire life. My childhood dream about the sky came true. But I cannot belittle the best twenty years of my life - those I spent with my second husband, Yury Shaposhnikov. He was [until his death] a surgeon and the former director of the Central Institute of Orthopedics and Traumatology. He was an unbelievably gifted, strong and decent person. With him I did the impossible: I achieved happiness.
Q: And what makes you happy today?
A: My grandson Alyosha! I have a miraculous grandson. He is five years old. He makes me so happy and gives me so much strength and energy. I am always happy to be with him. And of course, my daughter Yelena is the closest and dearest person to me.