SOURCE: The St. Petersburg Times
DATE: Issue #756 (22), Tuesday, March 26, 2002
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TITLE: City Faces Chronic Insulin Shortage
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: Despite official assertions that the situation regarding the provision of insulin in the city is "stable and does not provoke concern," documents obtained by The St. Petersburg Times show that there have been serious and ongoing shortages of many types of insulin since 1996.
On Oct. 11, 2001, Sergei Shustov, the city doctor who oversees treatment of diabetics, wrote to the City Hall Health Committee to complain about the insulin situation.
"The absence of a 10-percent insulin reserve and a deficit of the most modern types of insulin are leading to serious interruptions in the provision of care to those who are ill ... which has negative consequences for their quality of life and in some cases leads to instability in their condition," Shustov wrote.
In the same letter, Shustov wrote that the city has not been adequately provided with all necessary insulin supplies since 1996.
The documents would seem to contradict a statement earlier this month by Vice Governor Anatoly Kagan, who heads the Health Committee. In an interview with Interfax on March 1, Kagan said the insulin situation "is stable and does not provoke concern."
Kagan made the statement after prosecutors filed criminal charges against him based. The charges were based on the results of a St. Petersburg Audit Chamber inspection that alleged Kagan had signed an agreement in March 2000 to purchase $300,000 worth of insulin from a private firm called Kovi-Farm at a price that was 2.6 times the prevailing market rate.
Kagan has denied any wrongdoing, but has been suspended from office pending the outcome of his trial.
However, just two weeks before his statement on the insulin supply, Kagan had a completely different view of the situation. On. Feb. 14, in a letter to the Legislative Assembly, Kagan stated that the city budget did not allocate enough funding to provide subsidized medication to all who are eligible for it.
"The Health Committee has prepared an estimate of the medicines necessary for privileged categories for 2002, which totals 777.5 million rubles [about $25 million]. Budget item No. 430028, "Spending for Free Medicine for Privileged Catagories," allocated 450.4 million rubles [about $14.5 million] .... It is impossible to forecast what percent of eligible individuals will actually be provided with medicine ... because of this budget shortfall, rises in prices and the introduction of the value-added tax on insulin," Kagan wrote.
The shortage of financing has led to a significant reduction in the amount and types of anti-diabetic medicines available and the widespread practice of substituting cheaper medications for more effective and more expensive modern treatments, according to Marina Shipulina, the head of the St. Petersburg Diabetics' Society.
The society estimates that the amount of insulin purchased by the city has decreased by 30 percent from 1998 to 2001 and that the decrease for other forms of anti-diabetic medicine has been even more dramatic.
There are an estimated 80,000 registered diabetics in St. Petersburg, 12,000 of whom need four to five insulin injections daily.
Shipulina said that the shortages compel diabetics to switch frequently from one type of insulin to another.
"This practice contradicts every rule, including [federal] Health Ministry regulations that explicitly prohibit changing types of insulin," Shipulina said.
Shipulina's organization is aware of cases in which local diabetics were hospitalized after taking a new kind of insulin.
"There have been such cases, and sometimes the relatives of patients must leave their places of work to stand in lines at drug stores," Shipulina said.
An official at the Health Committee, however, denied that there had been any such cases in recent years.
"We have researched the situation and medical statistics show that we have reached European standards in this respect," said Nikolai Kirichenko, a spokesperson for the Health Committee.
Although the St. Petersburg Diabetic Society could not provide any statistics on the numbers of people who were hospitalized because of insulin problems, a knowledgeable source who asked not to be identified said that the number has definitely grown in recent years.
"People often ask to be hospitalized if they foresee that they are going to have problems getting their insulin. Doctors are just afraid to talk about it, because they are intimidated," the source said.
"There have been some shortages," Kirichenko said, "but the long-term situation looks stable. We have analyzed the situation and found that in some cases patients buy medicine up to nine months ahead, especially during the summer season because there are no drug stores in the country."
Kirichenko said that one measure to combat the shortages was a city order requiring patients to purchase insulin only in the districts where they live.
"Diabetes, especially the type where patients are dependent on insulin injections, is a very serious illness. I know several people who suffered from this form of the disease and who died before they reached the age of 50," said Yelena Morozova, who suffers from the illness.
"I developed insulin-dependent diabetes at the age of 12, and now I am 51. I can't afford taking risks and changing my insulin. The price may be too high, and I know that the state is having financial problems, but I don't want to hasten my death. If they tell me they have no money and give me a different insulin, I will have to find a way to buy the insulin I am using now," Morozova said.
"It is cynical to make people compete to get a medicine upon which their lives depend. Are our officials hoping that some of us will die of heart attacks in the process of proving that we really need [the medicine] and therefore there will be fewer diabetics in the city?" Morozova said.
TITLE: Slava the Soviet Survivor Still Strong at 75
AUTHOR: By Warren Hoge
PUBLISHER: New York Times Service
TEXT: LONDON - Waves of laughter rolled out from the Barbican Hall, but it wasn't a stand-up comic working the room. It was Mstislav Rostropovich taking the London Symphony Orchestra through a rehearsal of Prokofiev's "Romeo and Juliet."
He was blowing kisses at the brass for hitting an entrance precisely, rising from his chair at heady string lines as if levitated and bringing his whirling baton sharply back to rest with a scowl and a full-bodied shrug at the slightest sound of imperfection.
He pranced about the podium, miming the ballet steps reflected in the score-swan's wings, tutu, tiara, toe shoes and all-and told the players a funny story about the time he dressed in drag and crashed a tribute concert for Isaac Stern.
Rostropovich has brought his blend of Old World virtuosity and antic wit to London for a series of concerts and a Buckingham Palace gala, all commemorating his 75th birthday on Wednesday.
It is the celebration of a man known as an ebullient survivor of Soviet repression, and a steadfast friend to artists ostracized by the system, as much as for his spirited conducting and his cello mastery.
Known universally by his nickname, Slava, he is stunningly fit and active, crisscrossing the globe with little sleep but remembering with a watchmaker's precision the dates, addresses, details of where things happened and who said what to whom more than half a century ago.
As a youngster, he had to beg with his family for shelter on Moscow streets. Today he owns six houses. He has lived astride the great political schism of his time, practicing his art in the former Soviet Bloc - where he was born, in Baku, on March 27, 1927 - until his forced departure from Russia in 1974, and then triumphing in the West as a cellist and conductor with a base in Washington, where for 17 years he was the director of the National Symphony Orchestra.
He never thought he would see Russia again after being stripped of his citizenship in 1978, only to stand tearfully in front of a television set in Paris in 1989 watching Berliners tear down the wall. The next morning he borrowed a friend's private plane and was flown to Berlin, where that night he played Bach in the concrete rubble.
Many memories have been flooding back this week as he lovingly tends to the music of Prokofiev and Shostakovich, two Soviet-period friends who inspired him and whom he championed at the cost of his own security.
"You know, I see their faces, Prokofiev and Shostakovich, that I had so much contact with, there in front of me when I'm conducting," he said. "Sometimes they are looking at me and I am worrying, 'Oh my God, maybe I'm making the tempo too slow.'"
Prokofiev had been lured back to Russia from the West by the Soviet authorities in the 1930s with the promise of prestige and power, only to find his music banned as subversively "formalist," and himself reviled as an enemy of the Soviet people, a decade later.
"How he suffered," Rostropovich recalled. "One morning he said to me, 'Slava, I have no money, not even for bread.' So I was coming to the union of musicians and asking for money, but they said they could help only if Prokofiev wrote something that had some link to Stalin. 'Well,' I am thinking, 'Stalin always wants to bring big changes to nature, like making all the rivers in Siberia run the other way and building a canal to bring the Volga and Don together.'
"I am coming back to Prokofiev and I say, 'Why don't you compose a piece about the meeting of the Volga and the Don?' He said, 'What kind of nonsense is that?'
"I was so sad I was near to cry. He kept walking around for 30 minutes and then he asked, 'What ideas do you have for this piece?' and I said, 'Think of all the bulldozers and tractors moving all that earth.'"
Prokofiev wrote the piece and got the money he needed to live on from the state radio.
"He never knew why I suggested it," Rostropovich said. "Prokofiev was a genius, but he was very naïve."
A similar act of solidarity in the early 1970's got Rostropovich expelled from Russia. He invited Alexander Solzhenitsyn, the officially shunned writer then living in a potting shed on the outskirts of Moscow, to move into his dacha in town.
"There was Solzhenitsyn, the man who was 'the second Tolstoy and Dostoyevsky' and then in two hours becomes a guy with no talent and an enemy of the Soviet people," Rostropovich said, contempt still fresh in his voice.
Rostropovich was called in by the KGB, and he responded by composing an open letter pleading for artistic freedom, which he planned to send to four Moscow newspapers. His wife, Galina Vishnevskaya, a noted Bolshoi soprano whom he married in 1955, pleaded with him to reconsider.
"Galina was very upset with me for writing the letter. We stayed up for 40 hours talking about it until finally I said, 'I'm going to publish the letter, but first we will get an official divorce and then we'll still be together, but you'll be protected.' She grabbed the letter from my hands and read it again. 'I think that last paragraph must be even stronger,' she said."
He held his fingers together and summoned the memory of standing at the airport mailbox before leaving on tour. "I was holding the letters at the opening just like this, and I remember thinking, 'Here is one life for me. If I let this go, that's a whole other life.'"
He dropped the letters into the chute, and he remembers the first episode in his new life.
"I drink a lot of vodka in the airport," he said.
The past two weeks he has been in Baku, Paris, Cannes, Nice and kept up a punishing schedule of rehearsals and performances in London. Next month he and the London Symphony Orchestra will be at Avery Fisher Hall in New York playing an all-Shostakovich program of three concerts.
Will he ever take a break?
"The only vacation I plan is the last vacation," he answered.
To what did he attribute his robust vitality?
"You know a bad conscience can eat away your body, eat away your health. And I am happy to say I have a very clear conscience."
His upcoming birthday also marks the anniversary of his first struggle for survival.
"My mother told me that she really didn't want a baby at that time and that she tried to get rid of me with some medicine her gynecologist gave her," he said.
"I ended up coming out one month late, and one day I say to her, 'Mother, if you had to keep me for 10 months, you might have at least given me a more acceptable face.'"
He turned and displayed his thrusting jaw profile, and the thin gash of a mouth creasing his broad face fell into its customary smile.
"She said, 'My, son, I was busy with your hands.'"
TITLE: Kursk Commander Given Final Honors
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: The commander of the Kursk nuclear submarine, Captain Gennady Lyachin, and six other crew members were buried Saturday at the Serafimov Cemetery.
Twenty-five other Kursk victims had already been interred there.
During a solemn ceremony attended by hundreds of naval officers, cadets and ordinary citizens, the seven coffins stood in the hall of the Peter the Great Naval College, draped in the blue-and-white flag of the Russian Navy.
"The crew and the captain sacrificed their lives to save hundreds of lives in northwestern Russia and Scandinavia while staving off the danger of a nuclear-reactor explosion," said Admiral Vladimir Kuroyedov, the head of the Russian Navy, who came to St. Petersburg for the funeral.
"I think that we still cannot imagine how bad the consequences of such an explosion could have been," he said.
Lyachin's widow, Irina Lyachina, stood silently with her head covered by a black scarf beside her husband's coffin, together with their son Gleb - who serves as a lieutenant in the navy - and their daughter Darya, who is still in school.
Sasha Baigarin, the 11-year-old son of Captain Third Class Murat Baigarin, leaned his head against his father's coffin and wrapped his arms around it.
The Baigarin family had almost lost hope that Baigarin's remains had been recovered when the news came last week, on the eve of Sasha's March 13 birthday.
The Kursk nuclear submarine sank during a naval exercise on Aug. 12, 1999, killing all 118 men on board. The main body of the vessel was raised from the bottom of the Barents Sea last summer. One hundred and fifteen bodies have been recovered and identified.
"These sailors have also saved the lives of many future submariners by helping us to understand the complications of these powerful torpedoes," Kuroyedov said.
As an orchestra played the Russian national anthem and an honor guard fired a salute, the seven coffins were slowly lowered into the ground.
TITLE: Deputies Pushing for Seleznyov Dismissal
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Three top lawmakers called on the State Duma's procedures committee Friday to get the ball rolling for a vote on dismissing the chamber's speaker, Gennady Seleznyov.
The move was one of several attacks against Seleznyov by fellow deputies over the past week, but politicians and analysts said the campaign to unseat the Communist speaker could prove successful only with the blessing of the Kremlin, which has thus far remained neutral on the issue.
The request submitted Friday was signed by the head of the pro-Kremlin Unity faction, Vladimir Pekhtin, the deputy leader of the Fatherland-All Russia faction, Farida Gainullina, and the first deputy chief of the liberal Union of Right Forces (SPS) faction, Boris Nadezhdin, Interfax reported.
The idea of electing a new speaker was first floated Wednesday when the Duma voted 245-159 to strip Seleznyov of his deciding vote on the State Duma Council, the body that determines the chamber's agenda. That vote had been initiated by the pro-Kremlin centrist coalition that holds sway over the Duma's decision-making.
Speaking Saturday at the end of a four-day visit to Spain, Seleznyov called the campaign against him the result of a "political order" and said he intended to "uncover those who ordered it" upon his return to Moscow, Interfax reported. Seleznyov returned to the capital Sunday, but left the following day for St. Petersburg, where he will remain until Friday.
Many liberal Duma deputies were critical of the anti-Seleznyov effort and speculated that the Unity-led centrist coalition, which played a key role in winning Seleznyov the speaker's seat, was now attempting to force a redistribution of top posts in the Duma. Most of the current committee chairmanships were doled out after the December 1999 parliamentary elections as part of a deal between the centrists and the Communists, which drew heated protest from the smaller liberal factions, SPS and Yabloko.
Sergei Ivanenko, first deputy head of the Yabloko faction, called the move to oust Seleznyov part of "the centrist deputies' offensive aimed at destroying the package deal on the chamber's top posts," Interfax reported.
Alexander Barannikov, deputy leader of the SPS faction, agreed that the centrists would demand some personnel changes, Interfax said. He speculated that Unity and its allies could be angling for two committees now controlled by the Communists - on economic policy and on labor and social policy.
Under this scenario, it was not clear whether the centrists would be hoping to get the committee posts in exchange for agreeing in the end to keep Seleznyov in the speaker's post, or whether they would need to oust Seleznyov to claim the committee posts.
One of the deputies publicly spearheading the attack against Seleznyov is Gennady Raikov, leader of the People's Deputy group. Raikov has initiated an investigation by the Duma's procedures committee into an advisory council that operates under Seleznyov.
Committee chief Oleg Kovalyov, a Unity member, said Friday that the advisory council uses "official Duma stationary to offer paid legal services to businesspeople and other individuals" and the charge is 50 to 90 rubles a day, Interfax reported. Kovalyov could not be reached Friday for further comment.
Seleznyov told reporters in Spain that he was not aware of the accusations.
Both Yabloko's Ivanenko and Barannikov of SPS predicted that the moves to oust Seleznyov - which will likely resume at the Duma's next plenary session on April 3 - can work only with the Kremlin's backing.
"I think it won't be an easy task because Seleznyov is loyal to the Kremlin and it seems no one there is harboring plans to replace him," Barannikov said.
So far, the Kremlin has stayed on the sidelines of the conflict. President Vladimir Putin's envoy to the Duma, Alexander Kotenkov, said Friday that replacing the speaker would destabilize the chamber's work but the decision "to elect and re-elect its speaker is exclusively the Duma's internal problem."
TITLE: Serial Killer Terrorizes Moscow Suburb
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW - Alexei Novikov no longer lets his wife go outside alone to walk the dog at night, even though it has been her evening ritual for years.
"I go out with her and smoke in the yard, always keeping my eyes on her," said Novikov, 29. He, like many in Moscow's Khovrino district, fears that a serial killer is stalking their streets.
At least four women have been killed in eerily similar night-time attacks over the past three months. Each was struck on the head with a blunt object and robbed. Two more victims escaped alive. All of the attacks took place near the intersection of Festivalnaya Ulitsa and Petrozavodskaya Ulitsa.
Although police are quick to assert that they see no links between the assaults, bloodcurdling media reports along with neighborhood gossip have struck terror in the hearts of residents.
"Who told you about a serial killer?" Viktor Maximov, spokesperson for the Northern District police, roared into the telephone Monday. "Those well-dressed women were attacked by a robber or robbers who were probably drug addicts."
"The attacker was not a pervert. Nothing sexual took place," said an investigator at a police unit set up to probe the murders. "Such robbery-inspired attacks take place often in Moscow."
Police said the first victim was Lyudmila Prokopova, 45, whose body was found on the evening of Dec. 26, her left temple smashed and her purse with 500 rubles missing.
A month later, in the early hours of Jan. 25, Austrian citizen Yelena Feidler, 51, was found beaten into unconsciousness in the same area. She died in a city hospital without regaining consciousness.
Late on the evening of Feb. 20, Nadezhda Bolotova, 65, was found dead on the street with her skull split open. Her purse with 600 rubles had been taken.
Six days later, Natalya Putilova, 38, was repeatedly struck on the head by a man with a metal rod and robbed of her purse with 150 rubles. She miraculously survived the night attack.
But Svetlana Kurina, 33, was not so fortunate. She was found dead at midnight on Feb. 28, her skull and nose shattered and her purse with 2,000 rubles missing.
The last registered assault in the area, which press reports have linked to the previous attacks, took place March 4. Gennady Lipnyagov, 50, a lawyer, was attacked with an iron rod.
He survived and helped police draw up a composite sketch of the assailant, which is now posted on almost every bus stop in Khovrino.
The sketch depicts a gray-eyed man in a woolen hat. He is 25 to 30 years old, 165 to 170 centimeters tall and wears a blue coat and black pants.
Police said Lipnyagov's attack is clearly unrelated to the previous ones.
"Lipnyagov is a lawyer, and the attack on him is related to his professional activities," Maksimov said. "And his assailant's pattern was different. He didn't try to rob the lawyer, and when he beat him up the attacker aimed at his body, not his head."
The other survivor, Putilova, said the police sketch looked nothing like her attacker.
"He was much younger than 25 and short," she said in an interview published in the Komsomolskaya Pravda newspaper Monday. "He even had to jump up to hit me. Maybe that was why I survived."
The media has linked three more victims - this time in northeastern Moscow - to the feared serial killer, but police were unable to confirm the reports.
"Robberies and murders happen in our district like anywhere in Moscow, but none of them resemble the Khovrino attacks," said Yelena Zosimova, a spokesperson for the Northeastern District police. "Journalists played an evil trick on their readers, writing that the killer is moving to our district."
TITLE: IN BRIEF
TEXT: Briton Charged
LONDON (AP) - A British defense-company worker charged with spying appeared in court Monday on charges of stealing secrets about stealth technology designed to cloak combat aircraft from radar.
The Independent newspaper reported Monday that Ian Parr, a worker at BAE Systems, was working for Russia.
Parr, 45, was ordered held without bail at a hearing at Bow Street Magistrates Court. Parr was charged over the weekend with nine counts of spying under the Official Secrets Act.
A further court hearing was set for April 3. Parr was not required to enter a plea to the charges Monday and spoke only to confirm his name.
British officials declined to say for whom Parr was charged with working.
Parr was working on stealth technology for combat jets, the Press Association reported.
Police said Parr, who worked at BAE Systems' avionics division in Basildon, east of London, was charged with nine offenses under the Official Secrets Act and one under the Theft Act of 1968, for allegedly stealing documents.
Chris Tear, a BAE spokesperson, declined to comment, other than to say the company was aware of the arrest and would review security procedures, as it always does.
Chechen Kill Figures
MOSCOW (Reuters) - The Defense Ministry said Monday that its forces have killed more than 12,000 rebels in Chechnya since returning to the region in 1999, but rights groups called the figures grossly exaggerated.
Diederick Lohman, head of the Moscow chapter of Human Rights Watch said: "Even if the figure includes civilians, it is very high. ... I would be very skeptical."
A Defense Ministry spokesperson said 12,760 "confirmed rebels" had been killed since the 3 1/2 year conflict began.
"This excludes wounded and civilian casualties," the spokesperson said.
Oleg Orlov at human rights group Memorial said: "These figures have no link to reality, they are pulled out of a hat.
"They said there were only 1,500 rebel fighters left last September. Since then, official announcements of Chechen deaths total 1,224. That would leave only around 300 rebels in all of Chechnya."
Church Visits Iraq
MOSCOW (SPT) - As Washington is considering military action against Iraq, the Russian Orthodox Church's head of external relations, Metropolitan Kirill of Smolensk and Kaliningrad, embarked on his first visit to the Arab country Monday.
He will meet with several Iraqi ministers and religious leaders of the predominantly Muslim country, which also has an ancient Eastern Christian minority. Metropolitan Kirill will discuss the humanitarian situation in the country and hand over medical supplies to a Baghdad hospital, the Moscow Patriarchate said.
"With a full understanding of the importance of international monitoring of nonproliferation of weapons of mass destruction, the Russian Orthodox Church is at the same time concerned with the situation of Iraq's civilian population, which lives in extreme poverty and is deprived of adequate health care as a result of extremely harsh economic sanctions," the statement said.
During the past several years, the Russian Orthodox Church has played a visible role in Russia's contacts with Iraq and Iran, both of which are seen as rogue countries by the United States.
TITLE: TB Infection Rate Fell in 2001
AUTHOR: By Robin Munro
PUBLISHER: Staff Writer
TEXT: MOSCOW - The rate of new cases of tuberculosis fell in 2001 for the first time in a decade, giving hope that efforts to curb the epidemic are starting to take effect, health officials said Friday.
Wieslaw Jakubowiak, coordinator of the World Health Organization TB control program in Russia, said Health Ministry statistics showed the rate has dropped some 3 percent from about 90 new cases per 100,000 people in 2000.
"This is the first sign that there is cause for some optimism," he said.
About 342,000 TB cases were reported last year, including 133,000 new ones, while about 30,000 people a year, or 80 people a day, die of the disease, according to the Health Ministry statistics. The number of cases has more than doubled in the last decade.
"The number of new TB cases is no longer increasing, but the figures are still high," said Mikko Vienonen, special representative of the WHO director-general in Russia.
Other health experts said the statistics are difficult to interpret; for example, an increase in the number of cases could reflect greater detection activity rather than an underlying increase.
The experts were speaking at a news conference in the run-up to World Tuberculosis Day on Sunday. It was the 120th anniversary of the discovery of the TB bacillus by Robert Koch in Berlin and the 20th anniversary of the first World TB Day.
The disease has killed about 200 million people since 1882 and today kills 2 million people a year.
Mikhail Perelman, the chief TB specialist at the Health Ministry, praised President Vladimir Putin for taking up the cause of tuberculosis and pushing for greater efforts to combat the disease. Extra money flowing into treatment and prevention programs has meant that drugs are widely available and much more detection equipment has been installed in hospitals, he said.
Russia has hiked spending on TB by about 15 times in four years - from 58 million rubles in 1998 to 900 million rubles in 2001, Vienonen said. This year's budget of 1.3 billion rubles ($42 million) includes another hefty increase, he said
The Health Ministry is preparing a five-year strategy in conjunction with the Justice Ministry and leading institutes, he said.
Samantha Perkins, coordinator of British NGO Merlin's programs in Russia, which has in a TB program in the Tomsk region, said drugs to treat TB can be inexpensive. It costs about $15 to $20 to complete a six-to eight-month course of treatment, but if it is a multi-drug resistant, or MDR, case it costs about $4,000 for a 24-month course, she said.
Penal reform - meant to jail fewer people in already crowded prisons where there are dual epidemics of TB and HIV - could also improve the nation's health, Perkins said.
TITLE: Officers Acquitted in Friendly Fire Case
PUBLISHER: Combined Reports
TEXT: MOSCOW - The first attempt by Russian authorities to address the problem of "friendly fire" in Chechnya fizzled Friday when a court acquitted two senior Interior Ministry officers and instead laid blame posthumously on the commander of the targeted unit.
Twenty-two men from a 98-member OMON unit from Sergiyev Posad died and 31 were wounded in the March 2000 firefight in Grozny.
The military initially blamed Chechen fighters, who they said ambushed the arriving column of military trucks carrying the OMON forces as it neared a federal checkpoint in the northwestern section of Grozny. Officials also accused officers from the newly formed Chechen police force of assisting the rebels.
Investigators later determined that the Sergiyev Posad service personnel had come under fire from a fellow OMON unit from Podolsk that they had been sent to replace.
Three senior officers were charged with negligent homicide for failing to provide adequate security for the convoy. One, Major Igor Tikhonov, was ruled too ill to stand trial so the court proceedings in his case were put off.
The two other defendents, Major General Boris Fadeyev and Colonel Mikhail Levchenko, maintained their innocence throughout the closed-door trial, which opened in January.
The Staropromyslovsky district court of Grozny, which convened in a Moscow courtroom because of high public interest, acquitted both officers.
In an unusual addition, however, Judge Bakar Magumadov said that the commander of the Sergiyev Posad unit, Dmitry Markelov, was at fault for improperly ordering the convoy to depart without receiving the proper paperwork. Markelov died in the firefight.
"Blaming someone who is gone is incomparably easier than finding the real perpetrators of the crime," said Major Andrei Koryavin, acting commander of the same OMON unit, who said he had never heard of the paperwork involved.
"In fact, today's court hearing did not have anything to do with finding out who actually killed our guys."
The verdict appeared to satisfy few, including the acquitted defendants. "The reasons for the deaths ... have not been established," said Lilia Ababkova, Fadeyev's lawyer. "Fifteen months of investigation went in fact down the drain."
The Prosecutor General's Office planned to challenge the court's decision. Deputy Prosecutor General Sergei Fridinsky told Itar-Tass on Saturday that he will file an appeal to the Supreme Court of Chechnya. Many officials, including Levchenko, continue to insist the incident was an elaborate rebel ambush.
"It was an action painstakingly planned by the rebels," Levchenko said as he left the court. "I intend to issue a statement on this."
The question of who fired first remains unclear, complicated by the presence at the scene not only of the two OMON units but also of groups of ordinary police officers from Chechnya and other regions of Russia.
In addition, according to documents from the Prosecutor General's Office, OMON and the Grozny-based police had received apparently incorrect intelligence that a group of rebels posing as police would be arriving in the capital that day.
(LAT, AP, SPT)
TITLE: IN BRIEF
TEXT: Film Broadcast
MOSCOW (SPT) - Boris Berezovsky's politically charged documentary film about the 1999 apartment bombings was broadcast on television for the second time over the weekend - and once again in a Baltic state.
The 42-minute film, which has been rejected by Russian television channels and was first played on television in Lithuania two weeks ago, aired on Latvia's second-largest network, state-owned LTV-2, on Saturday afternoon.
"We just decided to show the film to our citizens after Berezovsky's foundation in Latvia offered it to us," LTV news producer Ilse Yaunalksne said by telephone from Riga on Sunday.
Yaunalksne could not say how many people watched the 1:35 p.m. local time broadcast. LTV-2, which broadcasts in Russian, has a market share of about 4 percent, according to the Baltic Media Center ratings agency.
Yaunalksne said LTV had notified the Latvian Interior Ministry about the plan to show the film and received a go-ahead. She also said the film was shown as is, without any added commentary before or after the broadcast.
The film, in which Berezovsky accuses the Federal Security Service of complicity in the deadly apartment bombings, was first presented at a news conference in London last month and then screened at the Sakharov Museum in Moscow and, since then, in several Russian cities.
Pension Reform?
MINSK, Belarus (AP) - At an opposition rally in Minsk on Sunday, one protester had more reason to complain than most: former Belarussian leader Stanislav Shushkevich, singled out by the president to be denied real pension benefits.
Shushkevich is fighting in court to make President Alexander Lukashenko provide him with a proper pension but has little doubt about the outcome of the court's case.
As the value of the Belarussian ruble has dwindled, Shushkevich has seen his pension shrink from $200 to $2, he said before attending the anti-government rally.
This, he said, is a direct result of his being one of three leaders of Soviet republics - Shushkevich, then chairperson of the Belarus Supreme Soviet, President Boris Yeltsin and Ukrainian leader Leonid Kravchuk - who met at a hunting lodge in Belarus in December 1991 and signed the documents that led to the dissolution of the Soviet Union.
In 1997, Lukashenko issued a decree linking pensions for state officials to inflation and the cost of living. Former chairpeople of the Supreme Soviet of Belarus were exempted from the decree.
There were only two former chairpeople, Shushkevich and Seymon Sharetsky, a former opposition leader who now lives in the United States.
$1-Million Seizure
MOSCOW (MT) - Sochi customs officials seized a haul of rare icons and gold Friday worth an estimated $1 million from a woman heading to Turkey, Interfax reported.
Stavropol region native Olga Kurdova was detained when customs officers found 76 rare icons believed to have been stolen from the State Hermitage Museum and $3,500 worth of gold and jewelry in her luggage.
Viktor Ivashchenko, head of the Sochi seaport criminal police, told Interfax that police had been tipped off about Kurdova's planned trip to Turkey, where she planned to sell the icons and gold.
Prosecutors have opened a criminal probe on smuggling charges.
Japan Spy Case
TOKYO (AP) - Japanese police suspect a former Russian envoy of trying to buy U.S. military secrets from a former Japanese air force officer in the late 1990s, a spokesperson said.
The Tokyo Metropolitan Police presented the evidence Friday to prosecutors, who are expected to decide in coming days if there is enough evidence to indict the Russian on espionage charges, the spokesperson said.
Police believe Alexei Shchelkonogov, 43, a former Russian trade official based in Tokyo, asked the former Japanese military officer for secret information on U.S. guided-missile systems for fighter jets and paid him an unspecified amount of money for it, a police spokesman said.
Shchelkonogov returned to Russia in March 2000, Japanese media reported.
The police spokesperson declined to say whether Shchelkonogov had obtained any weapons data, what type of information he sought or whether he was still in Japan.
Borodin Covered
MOSCOW (SPT) - The $177,000 fine levied by a Swiss prosecutor on former Kremlin property chief Pavel Borodin will ultimately be covered by private individuals, Borodin's lawyer Genrikh Padva told Interfax on Saturday.
Earlier this month Geneva prosecutor Bernard Bertossa found Borodin guilty of laundering about $30 million in kickbacks from Swiss construction companies Mercata and Mabetex, which got lucrative contracts to renovate the Kremlin and several other government buildings in the mid-1990s. Bertossa then fined Borodin $177,000.
Borodin, who has denied any wrongdoing, decided not to appeal the verdict last week. He also refused to pay the fine.
Bertossa said he would take the fine out of Borodin's $3 million bail. That bail was posted by the Russia-Belarus Union, which is financed by the two countries' governments and headed by Borodin.
Padva said the Russia-Belarus Union would be reimbursed the amount of the fine by Viktor Stolpovskih, the head of Mercata, and other individuals named in the Swiss case.
"Those who are ready to compensate the sum are the people who are interested in the case being closed because they are mentioned in it," he was quoted by Interfax as saying.
Differences Narrowed
GENEVA (Reuters) - Russia and the United States said Friday they had narrowed differences in two days of talks on a pact to cut nuclear arms that they hope to sign in May.
"We have reduced the field of our disagreements," Deputy Foreign Minister Georgy Mamedov said at the end of talks with U.S. Undersecretary of State John Bolton. "But there are still two or three important questions that will decide whether the negotiations will be completed in time for the [May] summit."
U.S. President George W. Bush and President Vladimir Putin have said they want to slash their countries' strategic arsenals of between 6,000 and 7,000 nuclear warheads by some two-thirds by 2012. They want to seal the deal at their summit in Moscow and St. Petersburg.
Mamedov said one of the sticking points was how the warhead count should be made, with Russia holding out for the same system used in the earlier START strategic-weapons treaties.
TITLE: Local Big Five Firms Merging
AUTHOR: By Andrey Musatov
PUBLISHER: Staff Writer
TEXT: As part of the merger of Arthur Andersen Russia/CIS into former financial-services competitor Ernst & Young CIS, the unification of the offices and clients of the two companies in St. Petersburg will make the new entitiy the largest of the international consultants working in the market in the Northwest Region.
The merger is part of a global rash of deals that has seen the independent affiliates of Andersen Worldwide, such as Andersen Russia/CIS, merge with local branches of the world's other "big five" accounting firms.
Andersen Worldwide itself is in merger talks with KPMG in an effort to sever its ties with the U.S. arm of Arthur Andersen.
U.S. Andersen is under indictment by the U.S. Justice Department on obstruction of justice charges related to its involvement in the Enron affair. Enron, one of its main clients and the United States' eighth-largest company, collapsed late last year, leading to losses of billions of dollars to shareholders as well as to employees' savings and pensions. Andersen has been hemorrhaging major corporate clients since the indictment was announced.
Officials at Arthur Andersen say that the precise structure of the new entity has yet to be determined, but it will do business under the Ernst & Young name.
In Russia, Ernst & Young CIS's major Russian clients include Vimpelcom, Golden Telecom and Rosneft, as well as international firms Coca-Cola, McDonald's and Tetrapack.
It is likely that Andersen's major clients, which include oil majors LUKoil, Surgutneftegaz and Sibneft, as well as Aeroflot, Mobile TeleSystems and the Railways Ministry, will follow Andersen in the merger.
According to Scott Antel, the Andersen partner in charge of legal and tax services in Russia, both companies are presently expoloring the options in determining the most effective and expedient way to unite.
"We have yet to decide on deadlines, structure or who will head the new company, but it will be figured out as soon as possible so that we can get back to business," Antel said Monday. "But no staff reductions are planned as a result of the merger."
The St. Petersburg office of Arthur Andersen employs about 90 people.
According to Antel, Arthur Andersen's clients have been very receptive to the move and most of them have said that they are not concerned with the name of the firm, but that they continue working with the same people and receiving the same service.
"Andersen has a very large, well established and well known presence in St. Petersburg, but we don't have many international audit clients," Antel said in telephone interview on Monday. "Ernst & Young has a smaller office here, but it has a number of a very high-quality international clients."
"Combining the two practices gives the new Ernst & Young entity a very large and well established presence in the northwest, with the larger portfolio including a substantial number of new Russian clients. It's a very nice step for our both operations," he added. "If the new organization is properly integrated, and I don't see any reasons why it shouldn't be, we have significant opportunities for growth in this practice," he added.
At the national level, Ernst & Young CIS Managing Partner Stephen Moosbrugger will become the chief executive partner of the new entity, while Andersen General Director Hans Jochum Horn, will become managing partner.
The firms hope to complete the merger by the end of April, Moosbrugger said, citing the time needed to deal with paperwork.
Otherwise the firms are "ready to join tomorrow," he added.
According to Horn, the synergies between Ernst & Young's practice in Russia and Arthur Andersen's are strong.
"Ernst & Young has a high quality practice in Russia with a prestigious international clientele," he said in statement. "Ernst & Young's corporate culture is much like our own."
According to Moosbrugger, the newly constituted Ernst & Young CIS and will have projected yearly revenues of $100 million.
Staff writer Valeria Korchagina contributed to this report.
TITLE: Gazprom Tightens Grip With Sibur Board
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Gazprom took control of Sibur's board at an extraordinary shareholders meeting Monday, sealing a victory for Gazprom management in their drive to crack down on asset-stripping.
New Sibur board Chairperson Alexander Ryazanov, a deputy Gazprom CEO, immediately announced that his priority would be reviving the petrochemical holding's lagging production - not forcing through bankruptcy proceedings initiated by Gazprom last month.
Sibur shareholders also voted to annul a controversial share emission and ratify a new company charter.
"It's possible that there might be some kind of peace agreement," Ryazanov told reporters after the shareholders meeting. "The shareholders have agreed to look for a solution to the company's problems that are acceptable to all sides."
Ryazanov, who joined Gazprom along with a wave of new managers appointed by CEO Alexei Miller, was named chairperson at a board meeting held directly after the shareholders meeting. Vyacheslav Skortsov, formerly deputy head of oil major Bashneft's Moscow office, was appointed president.
The board's size was cut from 17 to nine members, five of whom are Gazprom managers. In addition to Ryazanov, they include deputy CEO Vitaly Savelyev, asset department head Alexander Krasnenkov, deputy legal-department head Mikhail Sirotkin and Walter Bernhard, the former CEO of Dresdner Bank.
The four members from the Sibur side are Yelena Zaritskaya, Dmitry Tkach, Yelena Struk and Valery Pisaryov.
Getting a majority on Sibur's board of directors is a key victory for Gazprom, said William Browder, CEO of Gazprom shareholder Hermitage Capital Management.
"It was crucial," Browder said. "It's a very important part of Gazprom's asset-recovery process - a rigorous and concerted effort to get the assets back and a plugging of the holes through which they escaped."
Miller, appointed by the Kremlin last summer to get Gazprom's house in order, has been scrambling to reclaim hundreds of millions of dollars in assets that went missing during CEO Rem Vyakhirev's reign.
Since the beginning of the year, Gazprom has waged war with Sibur managers to regain control of the petrochemical holding, of which it owns 51 percent. Under the former 17-member board, Gazprom had a minority of votes.
Gazprom had federal prosecutors detain top Sibur officials in January and then initiated bankruptcy procedures a month later.
Two Sibur officials, former President Yakov Goldovsky and former Vice President Yevgeny Koshchits, remain in custody, the General Prosecutor's Office said Monday.
Aside from Gazprom, Sibur shareholders include Gazoneftekhimicheskaya Kompaniya with 14.23 percent, Triodekor with 13.79 percent, Bonus-Invest with 8.18 percent and Omskshina with 4.8 percent.
While Gazprom holds the controlling stake, the other shareholders - who are closely linked to Vyakhirev - exert considerable influence over Sibur. Last May, the Sibur board approved a share emission to consolidate 17 companies that the holding had recently acquired. Had the stock issue gone ahead, Gazprom's share would have shrunk to 4 percent.
Last fall, those Sibur shareholders began buying additional allotted shares, causing Gazprom's share in the company to temporarily fall. This angered Gazprom officials and is believed to be the reason behind Goldovsky's and Koshchits' arrest.
In annulling the emission at Monday's meeting, shareholders made an earlier decision by the Moscow Arbitration Court, which had found the emission illegal, moot.
Meanwhile, in another battle for assets, Gazprom has come one step closer to regaining control of Zapsibgazprom. A Tyumen court relieved the general director of his position and appointed Viktor Korchemkin as external manager last month. Korchemkin is believed to be working in Gazprom's interests.
TITLE: Petersburg Bad Girl Belle of Internet Ball
AUTHOR: By Larisa Naumenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - Already the darling of white-collar nine-to-fivers, the pot-smoking local cyber-chick dubbed Russia's answer to Beavis and Butthead is now officially all the rage in elite circles, too.
Masyanya, a foul-mouthed, short-skirted slacker, may not respect authority, but she has certainly made her creator famous - while crashing his Web site.
Mult.ru, the site of the cartoon's creator, 35-year-old Petersburger Oleg Kuvayev, won five of the 22 prizes awarded at Russia's prestigious National Internet Awards on Friday, including the Grand Prix. "It's strange to hang around people offline," Kuvayev admitted in thanking all his non-virtual admirers while accepting top honors.
The antics of Masyanya first hit the ether just six months ago, but she already has a cult following, with some 30,000 visitors checking her out each day - mostly between 5 p.m. and 6 p.m., "when the bosses leave the office," Kuvayev said in an interview last week. In addition to the Grand Prix, Kuvayev's Mult.ru won in the categories of "Breakthrough of the Year," "The Web Chooses You," "The Prize of the Press" and "Online Arts."
One award Masyanya did not win was the one for the best home page by a federal government body, which went to the Tax Ministry's Nalog.ru. A ministry official who accepted the prize said he hoped that some day "everyone will have to deal with the Tax Ministry only through our Web site."
The awards are sponsored by the Russian Academy of the Internet, a public organization founded in 1999 that now claims more than 100 members, including prominent scientists, journalists, businesspeople, artists and academics. Celebrities who presented awards at this year's ceremony, held at the nightclub Tochka, included film director Andrei Konchalovsky, music critic Artemy Troitsky, writer Maria Arbatova and academician Sergei Kapitsa.
While Yandex.ru lost its Grand Prix title to Kuvayev, the pioneering site did hold on to its trophy in the "Directories and Search Engines" category.
NTVRU.com, run by the former team from NTV before the national television broadcaster was taken over by Gazprom, was named the country's best online information site, while the daily newspaper Izvestia - www.izvestia.ru - was given top honors in the "Traditional Media on the Internet" category.
Rubricon.ru was awarded best educational site for its catalogues of encyclopedias and dictionaries, while Ozon.ru was chosen as the best e-commerce project.
Individual winners were the academic Semyon Musher, a member of the Russian Academy of the Internet, who was named "Person of the Year," Lev Simkin, also an academy member and a lawyer for Microsoft Russia, was honored for his work on protecting intellectual-property rights, and Seva Novgorodtsev was awarded for having the best personal Web site, www.seva.ru.
Kommersant-Vlast magazine was named the traditional mass media outlet with the best coverage of the Internet. St. Petersburg's State Hermitage Museum (www.hermitage.ru) won in the "Arts and Museums" category. In the "Health" category, www.7ya.ru claimed the prize, while Solnyshko.ru was named best children's site, Jazz.ru best music site, www.sports.ru best sports site and magazines.russ.ru best site for literature.
TITLE: IN BRIEF
TEXT: Severstal, Arcelor JV
MOSCOW (SPT) - Steel major Severstal is close to finalizing a $140-million joint venture with Arcelor, the world's largest steel producer, the Financial Times reported Monday.
Severstal head Alexei Mordashov said the venture, to be based in Cherepovets where Severstal is located, is to be 75-percent controlled by his group and will operate a new galvanizing line to provide steel for foreign carmakers in Russia and abroad. The venture is expected to be set up in the next few weeks.
Severstal last week unveiled a restructuring under which the group will be divided into three separately quoted companies, each with a 17-percent free float.
Mordashov said the move, which should be implemented by the end of the year, was partly designed to make each business more focused to gear them up for potential partnerships and mergers and acquisitions as soon as 2003. He said Arcelor was a prime candidate for such cooperation.
The restructuring comes as several of Russia's metals and commodities groups have capitalized on their cash-rich position at a time of relatively high world prices and low ruble costs to buy up a wide variety of low-priced domestic businesses.
Chinese Steel Inquiry
MOSCOW (SPT) - The Chinese Trade Ministry has started an anti-dumping investigation into imports of Russian cold-rolled steel, Interfax reported the Economic Development and Trade Ministry as saying Monday.
The probe concerns steel shipped by Severstal, the Magnitogorsk Metals Plant and the Novolipetsk Metals Plant, among others.
China has launched similar anti-dumping investigations into cold-rolled steel from South Korea, Taiwan, Ukraine and Kazakhstan.
The Economic Development and Trade Ministry said so far it has only received a verbal notification of the investigation.
Serafim Afonin, head of the Union of Russian Metal Exporters, denied Russia was dumping cold-rolled steel in China.
"Our steel mills are fairly confident in themselves," he said, adding that the issue was discussed at a meeting between representatives of his union and the Chinese Steel Industry Association in Moscow at the end of last week.
Severstal has said that last year Russia exported 593,520 tons of cold-rolled steel to China, not including 50,000 tons of electrical sheet steel. Severstal itself exported 100,000 tons of cold-rolled steel.
Magnitogorsk accounts for the lion's share of Russian cold-rolled exports to China.
Lord of the Box Office
MOSCOW (SPT) - Lord of the Rings: The Fellowship of the Ring has made over $6 million at the box office in Russia in the month since its premier, Interfax reported Karo-Premiere, the company that holds the rights to the Russian version of the film, as saying Friday.
About 2 million people in 130 Russian cities saw the film in its first month, a Karo-Premiere spokesperson said.
The success of the movie in Russia was predicted long before the premiere, but "box offices of the Russian version of The Lord of the Rings have surpassed our boldest expectations," he said.
TITLE: Investors' Return Downgrades Fear to Caution
AUTHOR: By Victoria Lavrentieva
PUBLISHER: Staff Writer
TEXT: MOSCOW - There are two emotions driving the markets: greed and fear.
So says Peter Westin, chief economist with Aton brokerage - and in recent years he has seen much change in investors' feelings toward Russia.
"Greed prevailed in 1996 and 1997, while fear dominated after the 1998 crisis," Westin said. "What we see now is cautiousness rather than fear."
The RTS index climbed by 98.5 percent in dollar terms last year, making the Russian stock market one of the best performing markets in the world. Now many investors abroad are faced with the question of whether they have the guts to give Russian stocks another try.
"After the crisis of 1998, 100 percent of investors hated Russia," said William Browder, the managing director of Hermitage Capital Management, the largest Russia-invested portfolio equity fund, with a total of $432 million under management. "In the last five years, about 5 percent of those people converted from 'hating' to 'liking' the country ... . The continued rise of the market over the next few years will be driven by the flow of funds of the other 95 percent changing their opinion about Russia."
For private investors, the options to participate in Russia's growth are still quite limited, and funds - both portfolio and direct equity - are probably the easiest of all.
Currently, according to the Micropal fund database, there are at least six open Russia-invested funds that are listed on the New York Stock Exchange, each of them offering daily redemptions to their clients. The most popular among the six is the Templeton Russia Fund, which has $105 million under management, and the Pilgrim Russia Fund, which is managing $48 million. Pilgrim was previously managed by Troika Dialog and Lexington, which sold it to ING Barings in 2001.
The Pilgrim Russia Fund topped the financial lists as the best-performing U.S.-based fund in the world last year, providing a return of 80.32 percent. About 40 percent of the fund's assets are held in oil companies, the biggest tow being Yukos and Surgutneftegaz, which explains the fund's 2001 performance. Yukos was one of the best-performing Russian blue-chip stocks last year, with its price jumping by 192 percent in dollar terms. The fund's other significant holdings include metals giant Norilsk Nickel and cellular-communications company Vimpelcom.
For Hermitage, according to Browder, the best stocks in the portfolio were Sberbank and Gazprom, as well as oil companies.
"We had a nice position in Sberbank that went up almost 300 percent last year, and we saw a good gain on Gazprom as a result of [former Gazprom chief Rem] Vyakhirev's firing," Browder said. "We were also overweight in oil, which helped us with our 80-percent return."
There were other funds that performed even better, but they had to sacrifice liquidity as they are not traded daily and invest primarily in less-liquid, second-tier stocks. Prosperity Capital Management, which has $200 million under management, saw its three funds grab the top spots on the list of the best-performing fully Russian-invested funds, with two posting annual returns above 100 percent in dollar terms.
"The most successful investments we made last year were preferred shares of big Russian companies," said Prosperity Capital Management head Alexander Branis. "LUKoil, for example, even converted its preferred shares into ordinary in 2001. Also, Yukos performed very well last year, as well as second-tier stocks, which we actively invest in."
Some second-tier stocks' performance last year was astonishing. While regional energos like Tulaenergo and Lenenergo were up 330 percent and 325 percent in dollar terms, respectively, leading Russian car producer AvtoVAZ posted sky-rocketing growth of 1,086 percent. But while these figures would surely impress any fund manager, some still prefer liquidity, remembering the lessons of 1998.
"It is very risky to be in illiquid second-tier stocks, as you often can't sell them if you want to," said Browder. "The lesson I learned in 1998 is that you always want to be able to sell a stock if you learn something new that changes your view," he said, adding that "you have to be pretty certain you like a company to buy shares that you cannot sell."
According to Russian Trading System statistics, the market's most liquid stock was Unified Energy Systems. UES accounted for nearly a third of all transactions on the RTS last year, with $1.4 billion worth of shares traded. LUKoil was the second most-actively traded stock, with some $725 million worth of shares changing hands, followed by rival Yukos with $579 million, Surgutneftegaz (ordinary), Norilsk Nickel, Tatneft, Mosenergo, Surgutneftegaz (preferred), Rostelecom and Sibneft.
Still, the Russian market's total capitalization of about $70 billion is very small, and fund managers' choice is limited. Out of 235 companies listed on the RTS, only 10 stocks are actively traded. The average daily trading volumes on the RTS range from $15 million to $50 million, so any substantial deal could lead the market up or down.
LONG-TERM CHOICE
By contrast, the choice is almost unlimited in the case of direct investments, but one has to search hard to find the right company in which to invest. There have been conflicts in the past when foreign investors' rights have been violated, with old management not welcoming them into a company. Also, due to the pace of change and the overall instability in Russia, it has always been hard to think long-term. As a result, foreign direct investment remains low, and direct-equity funds are not very active in Russia.
Yet, for those investors who would like to participate in the long-term development of Russia's economy without committing substantial resources, a direct equity fund is the right choice.
"We believe that the key distinction between direct and portfolio investment is not 'unlisted versus listed,' but rather 'control versus lack of control,'" said Michael Calvey, managing partner with Baring Vostok Capital, which currently manages three direct-equity funds with more than $400 million focused on Russia and other CIS countries.
Calvey said that by taking controlling stakes in companies, the more experienced direct-equity groups are able to manage risks and increase the value of the companies themselves, whether the stock market is going up or down.
"In our experience, it is always possible to find a buyer for a controlling stake in a profitable business, regardless of whether it is listed or unlisted," he said.
The Baring First NIS Regional Fund, formed in 1994, has made direct investments in 22 Russian companies. Twelve of these investments have had an average annualized return, or IRR, of approximately 70 percent, Calvey said. "Of course, this very high IRR is unlikely to be sustainable over the next 10 years, so we expect the long-term net IRR for investors in our funds will be 30 percent to 40 percent per annum," he said.
Calvey said the most attractive sectors in Russia at present are communications, energy, oil, media and branded consumer products.
Bruce Gardner, a partner with the Renaissance Capital investment house, agreed. "We see a lot of Russian entrepreneurs starting up their own businesses, mainly in technology and retail," he said. "I think in the next two years we will see the development of real Russian brands," he added. "There are already a couple now, and Wimm-Bill-Dann is a good example, but there should be at least 20 or 30 of them in the future."
These sectors have also been popular with the U.S.-Russia Investment Fund, which is managed by Delta Capital Management. The $440 million Delta Capital manages was originally provided by the U.S. Congress in 1995. In addition to these sectors, the fund focuses on financial services, including mortgages, leasing and other consumer loans.
Most of the existing direct-equity funds invest in the consumer and retail sectors, as well as food and financial services. Due to their relatively small size, they do not often participate in large-scale projects in core industries. Their average investment ranges from $5 million to $50 million and involves buying a blocking stake in a company.
MARKET OUTLOOK
Most fund managers agree that, with respect to global funds, there remains a large number that reduce their ability to make investments in Russia. In most cases, they are not allowed to commit more than a small percentage of their portfolio to Russian securities because of their investment and risk strategy.
Another thing that keeps fund managers at a distance after 1998 is fear of being fired if anything goes wrong again.
"If you do an investment in Russia and it goes wrong, you have more chance of being fired than if you made the same investment decision, for example, in Poland," Aton's Westin said. "Everyone still remembers well the 1998 crisis, so now they prefer to think twice."
Browder agreed. "Although some portfolio managers like Russia, they are still limited by constraints that their bosses, who aren't so positive, put in place," he said. "We will see those constraints lifted over time as the good Russian news softens their bosses' positions."
Analysts say that, as the Russian economy continues to grow, the investment climate improves and the market becomes more mature, foreign investors will be forced to reevaluate their opinion of Russia.
According to Calvey, "the Russian market is strategically important for most multinational companies, and they cannot afford to ignore it forever."
"Five years ago, a manager in a multinational company could get fired for recommending an investment in Russia," Calvey said. "By contrast, five years from now, multinationals will fire managers for failing to capture a share of the Russian market.
"I do not think foreign direct investment in Russia will 'explode' any time soon, but it should steadily increase over the next five to 10 years to levels which are similar to central Europe."
For the Russian equity market, happy days look much closer.
Christopher Weafer, the head of research with Troika Dialog, said that global funds, which have been mostly absent from Russia in recent years, are expected to come back this year.
"We already have strong evidence that they are doing their research and are very closely looking at Russia now," Weafer said, adding that "the only things that are holding them back now are the concern over the U.S. and oil market."
The main internal benchmarks for foreign investors this year will be banking-sector reform, with Sberbank at the center, and further restructuring of Gazprom.
"There is one thing that will have a major impact on Russia and that is the lifting of the ring fence between domestic and international shares of Gazprom," Browder said.
There is broad agreement that Gazprom should be valued much higher than it is, along with the rest of the Russian stock market, which is still undervalued if compared with Russia's economic performance.
Though Russia has yet to taste all the fruits of its reforms, almost everyone agrees that the investment climate has improved considerably since 1998, as has Russia's image in the eyes of private investors.
In general, all Russian brokerages have a very positive outlook for the market over the course of this year.
"We think that Russian corporate and bond markets will be again the best performing in the world in 2002," Weafer said.
TITLE: Old Turnover Taxes Had Staying Power
TEXT: IF there ever were a group of taxes that businesses in Russia just loved to hate, they were surely the infamous turnover taxes. Consisting of the Federal Road User's Tax (2 1/2 percent) and the local Housing Tax (1 1/2 percent), they scalped companies out of 4 percent of their turnover, even if were losing money. Most firms would have pointed to these taxes as the banes of their existence and as good evidence of the archaic nature of Russia's system.
That's why there was truly joy in Mudville when, in late 2000, it was announced that the Road User's Tax would be reduced to 1 percent and the Housing Tax eliminated altogether on Jan. 1, 2001. Better yet, it was announced that the Road User's Tax would be phased out entirely by Jan. 1, 2003, leaving the country completely free of turnover taxes.
The debate leading up to the changes was characterized as a clash between federal and regional authorities, with the governors strenuously defending the levies. The elimination of the tax was touted as a victory by the feds in their drive to centralize control and provide industry with some breathing space, especially those businesses with low profit margins.
It now appears that some people were a little premature in expressing their relief. There occurred, in the last couple of months of 2001, what can only be described as a mad dash on the part of many municipalities in the Leningrad Oblast to introduce a variety of exceedingly creative taxes and fees that would go into effect on Jan. 1 of this year.
Although the municipalities introduced their legislation independently, they show a strong degree of uniformity. One example of this is that a "Cleaning Tax" - ostensibly for tidying the area around the taxpayer's location - has popped up in most of the municipalities, and in many of these cases the taxable base is ... you guessed it, turnover!
You can be pretty sure that, as far as a revenue-generating source, the Cleaning Tax is a cash cow for the local municipalities, especially compared to other locally-determined levies, such as taxes charged dog owners. It likely contributes to their coffers more than any other tax.
The moral of the story seems to be that the devil you know is better than the devil you don't.
Many in the Oblast now look back at the Housing Tax with longing. At least federal legislation capped that tax at 1 1/2 percent. The Cleaning Tax, on the other hand, has crept up to 2 percent in some municipalities, and the local authorities appear to believe that there is no legally prescribed upper limit for such rates.
What's worse is the fact that for years Leningrad Oblast has advertised itself as having one of the most progressive investment regimes in the country. Even when changes in federal legislation would have restricted the ability of the Oblast to honor its promises, the regional administration acted quickly to pass legislation to attempt to satisfy both the letter of the federal law and its commitments to investors.
Although it is rumored that there has been a willingness to negotiate lower rates in some instances, the introduction of a turnover-based tax by many of the municipalities, does not do the Oblast any favors. On the contrary, it goes a long way to undermine the trust and confidence among investors that the Oblast has worked so hard to cultivate.
Tom Stansmore is head of the St. Petersburg branch of Deloitte & Touche CIS.
TITLE: Andersen's Demise Seems in the Cards
AUTHOR: By Allan Sloan and Mark Hosenball
TEXT: IT'S March, time to entertain questions about the Final Four. No, we're not talking about college basketball. We're talking about accounting firms. After all, the stunning criminal indictment of Big Five firm Arthur Andersen for its role in the Enron scandal may well be the death blow for the proud old partnership. The first criminal charge ever filed against a major accounting firm comes at the height of annual-meeting season, when U.S. companies with publicly traded stock ask shareholders to approve their choice of auditors. Already, more than 70 clients have said they're deserting Andersen, and the U.S. government has banned Andersen from bidding on new federal contracts.
While many companies in far worse trouble than Andersen often manage to survive, Andersen is in serious danger of disappearing altogether because of the way accounting firms work. Unlike most businesses, an accounting firm has relatively little in the way of cash and tangible assets. Its value consists almost entirely of its clients, its partners and its prospective profits. If it loses lots of partners and clients, there's not much left.
"In its current form, the firm is done," says Arthur Bowman of Bowman's Accounting Report. "The indictment sealed their fate."
There doesn't seem to have been much last-minute bargaining. The one-count indictment, charging Andersen with obstruction of justice for allegedly destroying records related to Enron, was handed up by a grand jury in Enron's hometown of Houston on March 7 and unsealed a week later. The U.S. Justice Department used the sealed indictment as leverage to try to get Andersen to plead guilty. But Andersen wouldn't: It feared that a guilty plea would cause state regulators across the country to instantly yank its licenses. The Justice Department remained unmoved.
The week the indictment was unsealed the relationship between Andersen and the Justice Department had soured to the point that Michael Chertoff, head of the Justice Department's criminal division, was refusing to take calls from Paul Volcker, the former Federal Reserve chairperson whom Andersen named in February to run its the relationship-oversight board and recommend changes in its practices.
Andersen is stuck with a tough case to make if it is to get yet another chance to mend its ways. It used to be regarded as the primo accounting firm. "They're like the Marine Corps of accounting," says Bowman. "They have an incredible culture. Their motto is 'There's the Andersen way and the wrong way.'" But lately the Andersen way has seemed to be the wrong way. It recently signed a consent decree stemming from fraud at Waste Management, failed to catch major fraud at Sunbeam and paid $217 million to settle a case involving the Baptist Foundation of Arizona. It also faces huge liability for the collapse of Global Crossing. And, of course, there's Enron.
That record is obviously a major reason behind the Justice Department's decision to indict Andersen for obstruction, thereby risking the collapse of a firm that still handles 20 percent of the United State's publicly traded companies. Fearing the worst, the U.S. Securities and Exchange Commission issued guidelines last week designed to forestall panic if Andersen collapses, and to keep publicly traded companies from being forced to dump the firm. But the SEC guidelines don't apply to non-SEC transactions, such as banks requiring firms to get certified audits to complete purchases or sales, or to conclude loan agreements.
Since January, Andersen has trotted out a variety of public-relations strategies in an attempt to save itself. Chief executive Joseph Berardino bought full-page confessional ads, blamed everything on rogue employees and rotten apples at Enron and hired the 75-year-old Volcker as a symbol of good intentions. But last week it moved into attack mode, accusing the Justice Department of "abuse of prosecutorial discretion." An Andersen spokesperson didn't return calls, but sources said that, having failed to head off or soften the indictment, Andersen now intends to push for a quick knockout in court. Andersen pressed to get the case before a jury quickly and, upon pleading innocent to the charges last Wednesday, was granted a May 6 trial date.
It's not clear when Andersen found out the indictment had been issued. But it is considering whether to argue that keeping the indictment secret while the firm continued to turn over information to the federal government in good faith violated Andersen's right against self-incrimination. Normally, indictments are kept secret so defendants won't flee the country - not a problem in this case.
If Andersen is going to salvage itself, it will have to act quickly, or risk having its partners desert en masse, taking their clients with them. The 1,600 partners face the virtual certainty that their stake in the firm is down the drain, because the firm's huge legal liabilities greatly exceed its liquid assets and insurance. So, the sooner a partner leaves and starts over, the sooner he or she can begin the game of amassing wealth at a new firm.
Andersen has been trying to sell itself to one of its Final Four competitors. But prospective purchasers fear inheriting Andersen's legal liabilities. The conventional method of dealing with this type of problem is for the company to file for bankruptcy protection from creditors, then sell its assets. But having Andersen go Chapter 11 would create a whole new set of problems. For example, how many managers of publicly traded companies want to ask shareholders for permission to have their companies audited by a bankrupt firm? Very few.
With any luck, Andersen will either miraculously hang together or at least manage to go out of business in an orderly manner. Let's hope that March Madness stays confined to the basketball courts, and doesn't spread to the financial system.
Allan Sloan is the Wall Street editor and Mark Hosenball a staff writer for Newsweek, to which they submitted this comment.
TITLE: Let's Discuss the Real Issues Regarding Tariffs
TEXT: In response to "U.S. Steel Tariffs Take Gold Medal for Stupid," a comment on March 15.
Editor,
In an effort to get to the real issues here, the first thing we should not do is resort to name calling and finger pointing. The U.S. steel-import tariff and the Russian poultry ban are attempts by the United States and Russia to accommodate domestic producers of the respective commodities, and nothing more.
The U.S. economy is built on the concept of free trade, and the Russian economy discovered free trade in 1991. While both countries now operate their economies on this premise, what would a free market be without government intervention?
Now to the real story. All countries around the world regard self-sufficiency in certain areas of production as strategic. Certainly food and steel production fall into this category. This philosophy, coupled with the politics generally involved, always results in protectionism. When protectionist programs are put in place, who are the winners? Nobody.
Why? One might say in this case that U.S. steel producers and the Russian chicken producers are the winners. In the long run, whenever economies (supply and demand) are artificially influenced, sometime in the future - usually sooner rather than later - the economy will falter. Russia probably knows this better than the United States. Remember communism? Now, who are the losers? Everybody.
The U.S. steel industry will not gain in the long term, because ultimately supply and demand will prevail. The cost of steel for U.S. steel consumers will go up. U.S. products produced with U.S. steel will have to compete with foreign imports (cars, etc.) and fewer U.S.-produced goods will be sold.
The same thing will basically happen with Russian-produced poultry. The consumer will have to pay higher prices and presumably higher prices will result in lower demand. Not only will the domestic producers not benefit from protectionist measures, the real losers are the consumers in our respective markets with higher prices and lower availability.
Now that we understand what the real issue is here, let's get away from the smoke screen of the health issue of U.S. poultry. There is no health issue. Obviously, the Russian government must convey to the consumers that they are trying to protect their health in order to justify why they must pay more for poultry, as any other reason would not go over very well. The chicken legs that are shipped from the United States to Russia are from exactly the same chickens from which we take breast meat for our own consumption. The entire chicken is inspected and approved by the U.S. Department of Agriculture under the guidelines dictated and approved by the Russian veterinary service several years ago.
Regardless of whether the steel issue and the poultry issue are worked out or not, let's at least get the facts straight. There is no need to fabricate concepts and take one-sided positions, such as referring to U.S. poultry as a "chemically altered steroid-pumped super bird." This serves no purpose. Let's stick to the real issues.
Don Ford
President & CEO
American Poultry
International, Ltd.
Jackson, Mississippi
Tasty Chicken
Editor,
I applaud the Russian government on its move to ban American poultry from entering the country.
I was visiting Yoshkar-Ola in the Republic of Mari El over the Christmas and New Year's holidays and had the opportunity to cook for the family that I was staying with. There I discovered that the difference between Russian chicken and American chicken is considerable. The chicken I cooked for this family had little to no fat; it was lean and tasted like the chicken
I remember eating as a child in the United States in the 1960s. I have commented for years that poultry in the United States was getting fatter and fatter and that the taste has changed. My visit to Russia proved that I was right, and I feel that Americans should re-evaluate our willingness to eat the chemical-laced food that we are forced to purchase. Maybe this move by the Russian government will improve food quality in the United States.
Richard Spencer
Indianapolis, Indiana
Russia and the EU
Editor,
Having visited Russia on a number of occasions over recent years and read your newspaper, one thing occurs to me. While most Eastern European countries are on the track to joining the European Union, Russia appears to have no interest in the prospect. Russians appear to consider that their geographic size makes them a natural unit of equal importance to the EU. It is obviously not the case that Russia is a match for the EU because, while Russia has huge potential, it remains underdeveloped economically. It appears that Russia is being done out of its European birthright. Russia is essentially a European country and membership in the EU would strengthen democracy, open up the country to fellow Europeans and others and increase investment, while yielding obvious benefits to the rest of Europe as a vast source of under-exploited natural resources. In the short term, Russia must surely open up to Europe and the rest of the world and ease its visa travel restrictions. Russia's huge cultural resources could benefit the country so much through increased tourism etc.
John O'Brien
Dublin, Ireland
WTO Debate
In response to "Dispelling the Myths of Accession to the WTO," a comment by Mikhail Delyagin on March 12.
Editor,
I support Mikhail Delyagin's opinion about Russia and the WTO. Contrary to what is usually assumed both in Russia and Western countries, WTO-accession negotiations are not necessarily a logical priority for Russia.
Russia currently exports mostly raw materials. Fifty-two percent of all exports are oil, gas and weapons - commodities for which the WTO is not relevant. Moreover, the WTO is currently under strong attack, and some very significant changes could take place in the next two to four years. To make a bid now to enter the WTO could only mean one thing: Russia wants to enter one of the last international clubs to which it still has not been admitted yet.
One can understand such a motivation, but rapid accession to the WTO without provisional protection for at least 10 years would be completely destructive for Russia. The actual issue, then, is not just accession, but how Russia can obtain temporary relief from certain WTO obligations that its economy cannot currently meet.
First and foremost, Russia should be free to raise dramatically its import tariffs, if only to gain room for maneuver in further negotiations.
Second, Russia should make no concession regarding being allowed to devise and implement industrial policies during the next five to seven years.
And last but not least, Russia must defend its ability to restrict capital flows and to enforce capital regulations for the next five years.
If the Russian government really believes it can win on these three issues, joining the WTO would be worthy of consideration. There is another point, however, that certainly reduces the urgency of WTO-accession negotiations: the geographical structure of Russia's foreign trade.
Europe, in the broadest sense, and the CIS make for at least two-thirds of Russia's foreign trade. Increasing coordination and cooperation with the European Union and developing a system for easing and promoting intra-CIS trade, such as the establishment of a payments union modeled on the European Payments Union as it was between 1949 and 1958, would make much more sense. Developing trade with CIS countries could generate from 10-percent to 15-percent growth over a three-year period (up to 5 percent per year).
As the EU is already committed to the process of Eastern European enlargement, and as most countries involved still have non-negligible trade with Russia, the EU is set to become Russia's most important trade partner. This is why reaching an agreement with the EU on trade is - after a CIS payments union - the next highest priority for Russia.
Four projects could be commonly devised with the EU, each of them having a much greater impact on the Russian economy than joining the WTO:
. Supporting major investments to economize on energy and local services (local public utilities) and thereby facilitating a rapid improvement of living standards. This would also cut down on energy and fuel waste, and thus reduce not only energy consumption, but also pollution. Under the Kyoto protocol, this would increase the pollution credits Russia could sell; European countries could buy these credits and help to fund the investment effort. This could be part of an EU-Russia integrated energy policy.
. Supporting trade integration between CIS countries through technical assistance and political support for the setting-up of the local equivalent of a payments union.
. Supporting a kind of post-privatization cleanup that is badly needed to harden property rights. This is particularly important in the raw-materials sector. It could involve technical assistance in setting rules and regulations, as well as in making clear that some "deprivatization" is politically tolerable if it is the only credible way to move away from a situation in which vested interests and collusion prevent any improvement in governance. Such a cleanup could also pave the way for a debt-equity swap enabling Russia to lower its debt burden.
. Fostering industrial integration at the branch level by targeting some specific industries (automobile, aerospace, food-processing etc.) in order to help the flow of foreign direct investment.
All this does not mean that accession to the WTO should not be a medium- to long-term goal. However, the WTO will be really significant for Russia when, and only when, Russia's industry has been restructured and modernized.
Jacques Sapir
School of Advanced Studies in Social Sciences
Paris, France
Editor,
I am a former banker and an interested observer of Russia's emergence as a free economy, and so I was particularly interested Mikhail Delyagin's article on the World Trade Organization. The single most important thing Delyagin noted is that the "fine print" of all WTO members' agreements allows any member country to address excessive price competition through the implementation of a price-restraining tariff. Delyagin also mentions bilateral agreements, whereby unilateral tariffs can be imposed, even under most-favored-nation agreements.
In the former case, Russian steel could be, and has been, sold more cheaply than U.S. steel to U.S. customers, who always want a good buy to improve bottom-line profit figures. As long as the quality of Russian steel is as good as U.S. steel, who is to say that Russian steel would not continue to be imported by U.S. buyers, even with the prices equalized by a tariff?
Two variables would need to be explored. One is the age of Russian steel plants versus those of the United States, as this defines the overall quality and tensile strength of steel products and also defines the overall production and operating costs. Newer plants generally are cheaper to operate and require less maintenance.
The second is steel-shipping and handling costs from Russia to the United States. A new door has just opened for Russian steel in the short term, but perhaps in the longer term as well. The countries of central Asia need additional international bridges, more railroad lines and pipelines to carry oil and gas from the Caspian Sea area both to the west and east. Billions of dollars are being spent now by the United States and its allies in central Asia as we fight the war on terrorism. The infrastructure of these republics will, for years to come, benefit from these Western infrastructural expenditures. This is a golden opportunity for the Russian metals industries to provide materials for construction and development.
George Singleton
Birmingham, Alabama
In response to "U.S. Planning Expanded Use of Nuclear Weapons" on March 12.
Rogue Russia?
Editor,
The Pentagon's plans to target Russia along with other "rogue states" were an unpleasant surprise for me. Are we to understand that all the post-perestroika detente between our two countries has been flushed down the drain by die-hard hawks in Washington? Are they trying to dismantle the very edifice of a new strategic relationship just for kicks?
Eugene Leonenko
Plekhanov Economic Academy
Moscow
Editor,
As an American, I am incredibly upset about the Los Angeles Times report on the Pentagon's plans to target Russia along with the other countries mentioned in the Nuclear Posture Review. To me, this is just utter stupidity at a time like this. It may be realpolitik to do this kind of contingency planning, but the relationship between our two nations has often been difficult, and this does not make it easier for us to get along.
I had hoped we had turned a corner toward a more reasonable rapprochement with each other. This kind of report will only make it easier for hard-liners in each country to re-escalate tensions and pad defense budgets. I honestly don't know what, if anything, can be done about this, but I can assure you I will voice my displeasure about this development to the White House and the U.S. Congress.
John Moor
San Antonio, Texas
Is Floyd a Martian?
In response to "Global Eye," a column by Chris Floyd on March 5.
Editor,
I must say that I truly enjoyed the comment by Chris Floyd. With a name like that he must be American, and he writes like an American.
However, American or Martian, he has nailed the situation with the Pentagon lying machine and the related Bush family dirty tricks - notwithstanding the usual mess that is being and has been made of our foreign policy.
Don't get me wrong, I love America and I'm no pacifist. But somehow I don't think the Pentagon's plans to lie to the world (last time I looked, the United States was still part of the world) are in my best interests or in the United States' best interests. I don't even think lying is in the Pentagon's best interests, but those jackasses have very, very seldom ever had a clue what was in their own best interests, much less in the interests of the American people, including their own soldiers and sailors.
Once again the Pentagon reveals it's strategy: They will save the village by destroying the village.
Mark Swaney
Fayetteville, Arkansas
TITLE: Russia and EU: Two Actors in Search of a Policy
AUTHOR: By Peter Pomeranzev
TEXT: THE Luigi Pirandello play from which the title of this piece is paraphrased deals with several characters who arrive at a theater in search of an author. The original author who created them disappeared without finishing their story and they find themselves now as unrealized characters who have not been fully brought to life. Something very similar holds true for relations between the European Union and Russia.
Though Russian membership in the EU has never been part of the script, the original rhetoric defining the relationship was drafted with the clear aim of developing an ever closer relationship. The 1999 EU Common Strategy for Russia speaks of its "integration into a common European economic and social space," while Russia's "Strategy for the Development of Relations with the EU," from later in the same year, looks forward to the "construction of a Europe without dividing lines."
Geographically, at least, the two are set to reach a new level of closeness when the first wave of EU enlargement, expected around 2005, should bring the two borders into direct contact with one another. The theory runs that EU enlargement can only further integration with Russia, as best practices, standards and investments are transferred eastward through some kind of osmosis. From this perspective, the narrative of EU enlargement is seen as being synonymous with that of greater European integration. But is this the case?
The end of the Cold War not only saw an increase in contacts between Western and Eastern Europe but also between countries within the former communist bloc. However, the introduction of the Schengen visa regime along the EU's future eastern border only threatens to restrict those contacts - social, economic etc. - which have developed over the past decade.
Moreover, the process of EU enlargement has so far served more to exacerbate the divisions between future EU "ins" and "outs" rather than serving as a channel for the transfer of know how and best practices.
The accession process provides a yardstick for measuring the development of future members, leading to growing social and economic asymmetries between them and Russia - asymmetries which are being further aggravated by the disequilibrium in funds available to future members under the EU's Phare program, and those, such as Russia, under the Tacis program.
Poland, for example, receives some 450 million euros annually through Phare, while Russia receives around 100 million euros per year.
The issue is particularly poignant with regard to Kaliningrad, the exclave on the Baltic Sea between Lithuania and Poland set to become a small piece of Russia marooned within the EU after enlargement.
In the near future, Kaliningrad residents will effectively be unable to travel over land to mainland Russia without first obtaining a Schengen visa - an famously problematic process. Moreover, restrictions to the free movement of people and goods across the exclave's border may well cripple the region's already fragile economy, which is underpinned by small-scale shadow cross-border trading.
Formerly the east Prussian city of Koenigsberg, captured by Russia in World War II and transformed into a closed military naval base during the Cold War, Kaliningrad is a living reminder of the divisions drawn across the European continent during the last century. Both the historic symbolism and the practical reality of enlargement provide a unique opportunity for achieving a new level of integration between the EU and Russia
When the EU Russia Strategy called for the development of Kaliningrad into a "pilot region" for EU-Russia relations and encouraged cooperation between regions in the EU and Russia, it appeared as if the stage was set.
Not all the actors, however, seem to know their lines. When President Vladimir Putin, during a visit to the region at the end of July 2000, was asked what he thought the prospects for the pilot region concept were, he answered that the idea of a any sort of pilot region in Russia was a sheer impossibility, as all regions of the Russian Federation had the same status. Though the statement was later retracted by the Kremlin, which complained that the question had not been officially submitted prior to the visit, it reflects a central split within Russian foreign policy between the desire for integration with Europe and the rest of the international community on the one hand, and the centuries-old paranoia concerning territorial integrity and the threat of regional secession on the other.
Lack of policy coherency is not alien to the EU either. European Commissioner for External Affairs Chris Patten chants the chorus of ever closer EU-Russia relations moving toward a common European space. But requests by Russia to found a special committee for Kaliningrad are seen as a subversive move to influence and undermine EU enlargement to the Baltic states.
In any case, the message from Brussels is that the Kaliningrad question can be easily categorised under the 12 sectoral sub-committees of the Partnership and Cooperation Agreement. A point of view which could only have been formulated by the sort of policy-making which concentrates on ticking boxes next to bullet points, while blithely ignoring what anyone who had glanced at a map of Europe would realize.
While the policy stand-off continues, criminality and disease continue to develop in Kaliningrad. As the socio-economic condition of the region continues to deteriorate, the chances of the EU imposing the harshest of borders after enlargement increase.
It remains highly questionable, however, whether even the highest ramparts of fortress Europe will be able to prevent the spread of HIV and narcotics from the geographical heart of Europe or from anywhere else for that matter.
Soft security issues cannot be stopped at the border, they need to be tackled at source. This would require a new level of cooperation in the field of Justice and Home Affairs. Unfortunately, the EU is presently dawdling over whether JHA falls within its competency or is the responsibility of member states. The Russian Interior Ministry, for its part, is yet to initiate a tradition of openness and cooperation with its counterparts in Europe and elsewhere.
So, returning to our original image, what future for the play? However positive the opening speeches, fear and mistrust form the underlying content. The play may have a new title, but it looks as if the only roles the protagonists know how to play are from an old one.
Peter Pomeranzev, a Moscow-based researcher for the EastWest Institute, contributed this comment to The St. Petersburg Times.
TITLE: Lessons in Comparative Democracy
AUTHOR: By Vladimir Kovalyev
TEXT: A COUPLE of weeks ago, March 8 to be exact, I found myself at the Finnish parliament in Helsinki. Although back in Russia this was, of course, International Women's Day and I probably should have been presenting flowers to all the people in my life whom I fail to appreciate properly the other 364 days of the year, instead I was being ushered around the Suonen Eduskunta (the Parliament of Finland) by a female deputy of the chamber.
Naturally, I was curious about the differences between Russian and Finnish legislative practices. For instance, faithful readers may remember that I wrote a column last fall about how the deputies of the St. Petersburg Legislative Assembly frantically run around the chamber during the big votes to cast ballots for their absent colleagues.
"This question may sound stupid," I said, fearing that any question based on Russian practice may, indeed, sound stupid, "but can you vote in place of another deputy if he or she is absent? You may have heard that this is a common practice in the St. Petersburg Legislative Assembly and even in the State Duma."
I could see an expression of complete surprise wash over her face.
"No, you can't do that," she said politely after she got over her shock. "Even if a deputy is pregnant and absent for a long time, she is simply absent, and nobody is allowed to vote for her."
Last week, I was back in the Legislative Assembly, watching in amazement as deputy Igor Mikhailov ran from table to table, doing the voting honors for a surprisingly large number of deputies, who may or may not have been pregnant but certainly weren't present at the session.
Fellow deputy Viktor Yevtukhov, a Unity member who had sponsored the bill being slowly voted down, watched Mikhailov vote and vote and vote.
"A lot of issues that have not been resolved could have been settled if we had a strict ban on voting in someone else's place," Yevtukhov told me with a sigh. "The Finns are absolutely right. This shows the level of their legal culture, which is one of the highest in the world."
I suppose that there is a reason why the Finnish system looks so mature compared to our wild parliament. The Finnish system has been in place more or less as it is now since 1906, and the constitutional provisions controlling the activity of legislators hasn't changed significantly since the mid-1980s. The same number of deputies - 200 - have worked in the same building for more than 70 years, spending at least 150 days a year in session.
As my guide pointed out to me old black-and-white photographs of the parliament building and the legislature in session, I was overwhelmed by an enviable feeling of stability. As I stood in the chamber itself, I noticed that the only things that seemed to have changed since those pictures were taken was some of the furniture and the microphones on the deputies' desks.
But some other things have changed in Finland and these changes too show an advanced society moving forward. The most noticeable change that struck me - since it was March 8 - was the increase in the number of female deputies. In 1907, Finland had 19 women in parliament and now there are 72.
There is one woman, by the way, currently serving in the St. Petersburg Legislative Assembly, and I can't report that she is always treated with the respect that she deserves. On more than one occasion, I've seen Yabloko deputy Natalya Yevdokimova nearly reduced to tears after one or another "colleague" insulted her on the floor of the chamber. And who can forget the indelible image of Duma deputy Vladimir Zhirinovsky pulling the hair of a female deputy during a legislative session? These colorful images project the state of Russian legal culture.
Of course, some may argue that St. Petersburg has an even more venerable parliamentary system than Finland, pointing out that there were local and national legislatures in Russia before the 1917 revolution.
But I think that it is the gap of more than 70 years that seems more important whenever I see a deputy walking past me with a fat key ring of his colleagues' voting keys.
TITLE: Chris Floyd's Global Eye
TEXT: MECCA, March 22, 2005 - President Osama B. Laden today called for a "regime change" in the United States, saying the military dictatorship led by unelected strongman George Walker Bush "is an ever-present threat to world peace."
Speaking in Mecca at a rally marking his first year in power, the Saudi president said that "issues of national sovereignty are beside the point when the civilized world is faced with the possibility of untold carnage. Bush has long been developing weapons of mass destruction. He has announced his willingness to use them. He refuses to abide by international treaties to curtail these tools of evil. I will not wait on events while dangers gather. We must act."
Laden said the "last straw" was the Bush regime's refusal to allow UN inspectors into the United States. Saudi Arabia and its allies have demanded that the United States give international inspectors a free hand throughout the country, with access to all military installations, government offices, businesses and private homes, including the White House.
In response, Commander Bush - as he has been known since declaring martial law shortly before the 2004 U.S. elections - said he "will never surrender the sovereignty of the great American people" and called on the nation to "gird yourself for war."
Bush once again denounced the sanctions imposed on the United States by the Saudi-led coalition, which cut off all oil shipments to America and blockaded its ports to prevent other nations from trading with the Bush regime. The resulting economic collapse has led to thousands of deaths from disease, starvation and neglect, say some analysts. "This is blackmail, pure and simple, and our children are dying from it," said Bush.
Saudi officials dismissed the casualty claims as "rank propaganda," but added that any such deaths are the responsibility of the Bush regime itself. "It's up to Bush to meet our just demands, eliminate his weapons of mass destruction, and open his country to international supervision," said Khalil Pow-El, the Saudi foreign minister. "It's his call."
Pow-El said Saudi Arabia will continue to enforce the sanctions with regular bombing raids in the "no-fly zones" it has established over Florida, New York, Texas and California. He brushed aside American claims that hundreds of civilians have been killed in these air strikes. "There may have been a few inadvertent casualties," Pow-El said. "But that's because Bush continues to put military installations near civilian population centers. The blood's on his hands, not ours."
In his speech yesterday, President Laden called for even tougher action. "We're moving on to the next phase in the war on terror," he told the cheering crowds. "I do not say when we will strike. I do not say how we will strike. But make no mistake: this evil will not stand. We will deal with Mr. Bush."
Laden's aggressive stance has drawn some muted criticism at home. A few dissidents say he is using the "permanent war" against "worldwide American terrorism" to legitimize his own hold on power after taking office in a disputed election last year.
After the royal family abdicated during the turmoil unleashed by the Second Gulf War, Laden ran for the presidency of the newly established Union of Saudi Arabia (USA). Although he finished second in the national balloting, Laden was awarded the office in a controversial split decision by the Saudi High Court. Several of the judges had political and financial connections to Laden and his influential family.
Early in his term, Laden saw his poll ratings decline as he failed to grapple with the country's deep-seated economic problems, focusing instead on pushing an agenda of religious conservatism and tax breaks for his wealthy backers in the oil industry. His presidency was transformed last autumn, however, when an alleged CIA covert operation against oil fields outside Riyadh resulted in more than 3,000 civilian deaths.
Laden's popularity soared as the nation rallied around the government following the attack. In a ringing speech at the Dome of the Rock, Laden denounced the "evildoers" who "hate our way of life" and vowed to "bring them to justice, dead or alive." The Saudi Congress immediately passed the USA PATRIOT Act, giving Laden sweeping emergency powers to launch military action anywhere in the world and to crack down on suspected terrorists and "terrorist sympathizers" at home.
Some Saudi allies, including New Kurdistan (formerly northern Iraq), Greater Kuwait (which annexed southern Iraq) and the Iranian Empire (which incorporated Baghdad and central Iraq after the Second Gulf War), urged caution in pursing an enforced "regime change" in the United States.
"We all want to ease the danger posed by Bush's weapons of mass destruction," said a top Iranian diplomat, who asked not be identified. "But we are uneasy with the notion that a powerful nation can simply attack any country it dislikes or fears or finds inconvenient and replace its leadership. Especially in the absence of any direct threat or aggressive action by the targeted country."
"What's more, it seems that President Laden's moral outrage is a bit selective," the official continued. "For example, China has a vast arsenal of weapons of mass destruction, and a very harsh, aggressive regime to boot - but you don't see Laden and the USA getting ready to bomb Beijing. No, I'm afraid this 'regime change' rhetoric is just the same old trick we've seen throughout history: using fancy words to get ordinary people to kill and die for the twisted ambitions of their leaders."
TITLE: An Actor for Whom Feeling Comes First
TEXT: He's played film versions of Chekhov, Hitler and Lenin, but Leonid Mozgovoi's most challenging role has yet to hit the cinema. In his most recent film by famed director Alexander Sokurov, Mozgovoi, 60, plays a spy who silently follows Marquise de Custine throughout the Hermitage. The film, "The Russian Ark," will premiere this May at the Cannes Film Festival.
In the meantime, the man who has been described as Sokurov's favorite actor, continues to entertain audiences with his intimate one-man shows. Mozgovoi recently spoke to The St. Petersburg Times' Galina Stolyarova about his collaboration with Sokurov and his work as an independent artist.
Q: Your new role in "The Russian Ark" is quite a departure from your previous film roles. If in "Stone" (1992), "Molokh" (1999), and "Taurus" (2000) you play people making history as Chekhov, Hitler, and Lenin, respectively, this time your character says almost nothing while spying on a figure from history - Marquis de Custine, the French aristocrat famous for his scandalous memoirs of life in Russia.
A: It doesn't matter to me that the role has almost no lines. I remember Stanislavsky's famous words - there are no small roles, only small actors - and I agree with that.
The film was shot in the Hermitage in one straight 90-minute take. It won't be edited; the idea is for audiences to watch the film as if in one breath. With the "The Russian Ark," Sokurov turned a cold static museum into a warm Winter Palace full of life.
Q: You have been described as Sokurov's favorite actor. Why are you so close?
A: We met by sheer accident. A friend of mine who happened to know that Sokurov was looking for an actor to play Chekhov in "Stone" arranged a meeting. We talked for about two hours about theater, cinema, life. Shortly after the first five minutes of our conversation I understood that he would cast me. I read the decision in his eyes, even though he only told me that at the very end of the conversation.
I admire Sokurov's intelligence, his gentle manners and understanding of the human soul. He is a true philosopher. Over the 10 years I have worked with him, I have never heard - not even once - him raise his voice to anybody.
It is important for me to be able to trust my director. A violinist has his violin, but I am my own violin and the director is my tuning fork. I simply can't work with people whom I don't trust.
Q: Which of your characters was the most difficult to play?
A: Perhaps Lenin. When I was young, my generation didn't have God. We had Lenin. And to be quite honest, I don't entirely believe people of my generation who go to church. In Soviet times there were very few genuinely religious families in Russia. And while I never took part in destroying churches, I was an active member of the Komsomol. It wasn't until the 1960s - when we learned who really was responsible for throwing Russia into the abyss - that my perception of Lenin changed.
Q: You played Lenin as he was dying. What was it like for you to play the dictator at his weakest moment?
A: When I was working on the character of Hitler and later of Lenin, the first thing I told myself was that I am portraying the human sides of these people. In "Taurus" I played the tragedy of a dying man. Lenin couldn't even spell his name out of children's alphabet blocks in his final days.
All of us - consciously or unconsciously - have done harm to other people. We were being unfair. Almost everyone knows what guilt and shame feel like, and so do I. And I called upon these very feelings when I was working on the role of Lenin to help myself to plunge into the character.
Personally, I sympathize with Lenin during his last days. When I watched "Taurus" for the first time, I felt so much pain.
Q: There is a popular belief in the world of theater that actors do their best when they play themselves. Do you share this view?
A: No, I disagree! But it is perhaps the very plight of Russian cinema these days ....
What I particularly like about my film roles is that I am unrecognizable. Of course, what actor needs first is to fully understand himself, but the very next necessary step is to fully understand your character and to see how different you are from your character. One of the major exercises for actors is to watch other people and absorb their manners and movements and expressions. My professor, Boris Zon, used to say about that: start from yourself but go as far as you can! This is what I am always trying to do.
Q: What does it take to be an actor?
A: Perhaps it sounds brutal, but I can't think of a more vivid illustration: If you let a person walk along a bridge over a precipice full of burning lava far down, and as he is walking tell him to jump down, a true actor would follow your words, a bad actor wouldn't.
If I had to give a complete definition of the actor's job, I'd probably say that it means to produce the right emotion at the right moment in the right place.
Q: Do you believe that art - and cinema in particular - can bring out human qualities, help making people better or worse?
A: Yes, most certainly. Many people tend to follow examples they see. They take the patterns from other people, from books they read and from films they watch. Film-directors who deny it, just want to escape responsibility.
As regards television, its influence on human brain has an enormous potential that still needs to be studied. When I talked to Sokurov about it, he said that only about 2 percent or 3 percent of the principles of cinema have been understood, and therefore it is dangerous to trust filmmaking to immoral people. I share his concern.
And, talking about patterns, shortly after the Sept. 11 disaster, it turned out that there was a computer game with pilots hitting skyscrapers. ...
Q: Your repertoire includes 15 one-person shows. What is it about being alone on stage you find so appealing?
A: I am not a member of a particular theatrical troupe, and I've never regretted that. Theater is inside me, and I have been free to choose my repertoire. I have been giving literary evening, reading poetry and prose from stage. Even during the Soviet era, I enjoyed more freedom that many of my colleagues who worked in theaters. I wasn't forced to compile the programs based on works by Leonid Brezhnev. The most patriotic thing I ever read on stage was Yevgeny Yevtushenko's "Ball on Red Square."
I received a very good training from Professor Boris Zon at the St. Petersburg Theatrical Academy. The school is as important for the actor as it is for a musician. It can't be underestimated. School gives liberty.
It is quite a painful question. I have never had a chance to become part of a truly good theatrical company. God only knows would it have worked or not. On the other hand, I dread thinking of the intrigues behind the scenes that eat the art up.
Artistically, I am independent, and this is crucial for me. I never considered myself a dissident, but liberty has always been essential.
Q: Your "The Dream of a Ridiculous Man" - a one-person show based on Dostoyevsky's short story of the same name - is performed in the attic of an old St. Petersburg apartment. This is, perhaps, your most atmospheric staging. How did you choose it?
A: I believe that everything in life happens by chance. Originally we started rehearsing this monologue in the House of Scientists, but it just didn't work in that environment. At the time I had no place to live, so I was looking for an apartment. As luck would have it, I came across that attic apartment. When I first saw it I joked that it would be quite the place to perform the Dream. We started to rehearse, and since then I have performed it more than 400 times there.
What I value about this show is to be in such close contact with the audiences. Eighteen viewers in one room with a low ceiling; the audience is an arm's length away - we can feel each other's breath. Sometimes I address them, look them in the eye - but not everyone can bear that!
Q: I understand there are plans to film "The Dream of a Ridiculous Man" for television. Do you believe that such an intimate show would work on television?
A: Of course, the television version will be different, but I hope it will have its own impact. I very much welcome the idea and just hope that the enthusiasm for the project won't vanish halfway through the process.
The fact that this production has managed to survive is a miracle. There are no posters or ads for it, but every time I perform it the attic is full and there are always people on the waiting list for future shows.
Q: What is the greatest compliment you ever received?
A: Once I got a phone call from a woman who came to see "The Dream of a Ridiculous Man." "My husband committed suicide a year ago," she said. "If he saw this production he wouldn't have."
Her words meant more to me than any film or theatrical award ever could.
TITLE: Israel Mulls Arafat's Travel Ban
AUTHOR: By Mark Lavie
PUBLISHER: The Associated Press
TEXT: JERUSALEM - Despite U.S. pressure to let Palestinian President Yasser Arafat attend this week's crucial Arab summit, Israel will not lift the travel ban on the leader unless he takes decisive steps against militants, an adviser to Israeli Prime Minister Ariel Sharon said on Monday.
Israel will make its decision by Tuesday, the day before the summit, said adviser Raanan Gissin.
At the summit, which begins Wednesday in Beirut, Lebanon, Arab leaders are to discuss a Saudi plan that offers an end to the Israeli-Arab conflict, in exchange for Israel's withdrawal from the territories it occupied in the 1967 Mideast war.
The United States wants Arafat to be able to attend the summit. A U.S. official said Monday that the government of U.S. President George W. Bush has asked the Israeli government to lift the four-month travel ban. However, Sharon has said he would only do so if a truce was reached first.
Gissin, the Sharon adviser, said Arafat would have to make a real effort in the coming days to rein in militants. "The cabinet has made a decision that Arafat will be able ... to go any place he wants only when he takes action to fight terrorism," Gissin said. "That is something that one cannot give up."
A senior Palestinian official said Arafat is seeking U.S. guarantees that he will be able to return to the Palestinian areas after the summit.
Some Israeli cabinet ministers have demanded that Sharon not allow Arafat to return. Sharon was to meet with key cabinet ministers Monday evening to decide on Arafat's travel plans. Defense Minister Binyamin Ben-Eliezer and Foreign Minister Shimon Peres of the moderate Labor party favor lifting the travel ban, while members of Sharon's hawkish Likud party oppose the idea.
Shaath, the Palestinian planning minister, said from Beirut that Saudi officials would leave it up to Arafat to decide whether the initiative should be presented if the Palestinian leader is unable to attend.
U.S.-sponsored cease-fire talks, meanwhile, ended without agreement late Sunday. U.S. envoy Anthony Zinni presented bridging proposals to which Israelis and Palestinians were to respond in another session Monday.
It was the first time that Zinni had made his own proposals. In 11 days of talks, Zinni has been urging the two sides to agree on implementation of a truce plan negotiated by CIA director George Tenet last June.
Israel and Palestinians have accepted the plan, but in the current talks, they have been trying to improve their positions, making conflicting demands.
The Israelis insist that the Palestinians must crack down on militants, stop terror attacks and arrest militants as the first steps. The Palestinians say the first moves must be made by Israel - pulling troops back to positions they held before the violence erupted in September 2000 and lifting roadblocks that have crippled Palestinian travel and trade.
In new violence on Monday, a 19-year-old Palestinian was killed by Israeli fire during an Israeli incursion into the Rafah refugee camp in Gaza, Palestinian security officials said. The Israeli military said soldiers were looking for tunnels used for smuggling weapons across the border and returned fire when Palestinians attacked with a bomb, grenades and gunfire.
In the West Bank, the body of a Palestinian man was found by a roadside. The army said it was checking whether the dead man was connected with a bomb explosion on Sunday, which was thought to have been aimed at a passing Israeli bus.
On Sunday, two Israeli motorists were killed in Palestinian shooting ambushes in the West Bank, and five Palestinians were killed by Israeli fire, including three men who the military says were planting a bomb next to a Jewish settlement.
Also Sunday, four gunmen who had infiltrated Israel from Jordan were killed by Israeli troops after an extended search. Two other members of the squad were killed by Jordanian security forces before crossing the border.
TITLE: North and South Korea Start Reconciliation Process Again
AUTHOR: By Paul Shin
PUBLISHER: The Associated Press
TEXT: SEOUL - South Korea will send a presidential envoy to North Korea next week for talks that the communist North said will address "the grave situation" between the countries, which share the world's most heavily armed border.
The joint statement issued on Monday marked a resumption of the reconciliation process on the divided peninsula, which stalled last year after U.S. President George W. Bush criticized the North's communist regime.
Lim Dong-won, a special adviser to South Korean President Kim Dae-jung will visit North Korea in the first week of April, said presidential spokesperson Park Sun-sook.
Park said Lim's dispatch was proposed by Kim Dae-jung and North Korea accepted. She said the visit is aimed at defusing tension on the world's last Cold War frontier and that her government expects the trip to produce a turning point in inter-Korean relations.
The countrier were divided in 1945. About 37,000 U.S. troops are still stationed in South Korea as a deterrent against North Korea, a legacy of the Korean War.
Inter-Korean relations warmed after a historic summit between Kim Dae-jung and North Korean leader Kim Jong Il in 2000. Kim Dae-jung won that year's Nobel Peace Prize for his effort to reconcile with the North.
However, ties cooled after Bush took office and expressed skepticism about the North Korean leader. In January, relations dipped again when Bush labeled North Korea as part of "an axis of evil" along with Iran and Iraq.
During a visit to South Korea in February, Bush said his view of North Korea had not changed, but he offered to start talks with North Korea. Pyongyang rejected the offer.
The South Korean president expressed disappointment at the rejection, but said that his country should do its best to help mediate between the two sides. He said that inter-Korean ties were closely related to progress in U.S.-North Korea relations.
Lim told reporters that his discussion with North Korean officials will include Washington's concern about the communist country's nuclear-weapons and missile-development programs.
Lim served as the government intelligence chief and unification minister before taking the presidential advisory job. He was instrumental in arranging the first-ever inter-Korean summit.
The summit agreement calls for the North Korean leader to make a return visit to South Korea, at a date yet to be set.
South Korean analysts said Lim's trip will have a positive impact on U.S.-North Korea relations.
"It can be a signal that North Korea wants to use South Korea to break a deadlock in relations with the United States," said Koh Yu-hwan, a North Korean affairs professor at Seoul's Dongguk University.
YTN, a news cable network, said North Korea is likely to reciprocate Lim's visit by sending its own envoy. The presidential spokesperson refused to confirm the report, saying that "what has been agreed on now is Mr. Lim's visit.
TITLE: Oscars Recognize Black Actors
PUBLISHER: Combined Reports
TEXT: LOS ANGELES - "A Beautiful Mind" may have won the best-picture award at the 74th Annual Academy Award, but the whole town is talking about two other victories. For the first time in the Oscar's 74 years, two black performers walked off with awards on Sunday for best actress and best actor: Halle Berry for "Monster's Ball" and Denzel Washington for "Training Day."
The victories - accompanied by a powerful, emotion-filled speech by Berry - brought the Oscar audience to its feet.
The night was easily and winningly stolen by Berry, who won a acclaim for her role as a down-and-out waitress who falls in love with a white racist in "Monster's Ball."
Washington was only the second black man in the Oscar's history to claim a best actor. Sidney Poitier was the first with 1963's "Lilies of the Field."
Poitier was on hand to accept an honorary Oscar for his more than 50 years in the movies. He said, "To speak of Hollywood as if there has not been change is unfair. You can question the pace of it. You can question how long it will last. But you ought to ... take note of the fact there has been change."
The other big winner was "A Beautiful Mind," a drama about the schizophrenic mathematical genius and Nobel laureate John Forbes Nash Junior. The film earned four Oscars for best adapted screenplay for Akiva Goldsman, best supporting actress for Jennifer Connelly, best director for Ron Howard and the night's top honor, best motion picture.
The evening began on a serious tone with actor Tom Cruise taking center stage to remark on the effect movies had on his life, from Stanley Kubrick's "2001: A Space Odyssey" through "Jaws." Then alluding to the role of entertainment after Sept. 11, Cruise asked: "Should we celebrate the joy and magic the movies bring? Dare I say it? More than ever."
Cooing "Come and get me boys," Oscar-winning actress and host Whoopi Goldberg made a grand entrance from the rafters on a swing a la Nicole Kidman in "Moulin Rouge" She wore a gaudy feather-and-sequin get-up with an extravagantly designed top hat and tights as she took the stage and, in a breathy voice, said, "Good evening, darlings, I'm the original 'Sexy Beast,'" referring to the Ben Kingsley gangster thriller.
Goldberg's monologue set the tone for an often-ribald, acerbic evening when the dreadlocked comedian addressed Will Smith, his wife, Jada Pinkett-Smith, and British actress Dame Maggie Smith, sitting together in the front row, as "the Smith family."
The evening's writing awards went to Akiva Goldsman for adapted screenplay for "A Beautiful Mind" and Julian Fellowes for original screenplay for "Gosford Park." "No Man's Land," a war satire from Bosnia-Herzegovina was named best foreign-language film.
In a historical footnote, the first Oscar for animated feature film went to "Shrek," the DreamWorks anti-fable about an ugly green ogre who, accompanied by a wisecracking donkey, goes in search of a princess.
(AP, LAT)
TITLE: U.S. Stance on Terrorism Raises European Hackles
AUTHOR: By Thomas Wagner
PUBLISHER: The Associated Press
TEXT: LONDON - An emergency debate in the House of Commons was supposed to be about the government's decision to send more British combat troops to Afghanistan, but repeatedly the subject shifted to Iraq.
Why, legislators asked, is the United States considering extending the war against terrorism to Iraq and its weapons of mass destruction before achieving all its goals in Afghanistan?
Opposition has been even stronger elsewhere in Europe, especially in Russia and France. European governments express worries that an assault on Iraq could further destabilize the Persian Gulf and other parts of the Middle East.
While leaders continue to pledge full support for the U.S.-led war on terrorism, many Europeans are urging Washington to work with the UN to find a peaceful way to resolve the defiance of Saddam Hussein's regime.
Britain has been a staunch U.S. ally in confronting Iraq since the Gulf War, but while U.S. Vice President Dick Cheney was hearing strong opposition from Arab governments last week, anxiety and anger emerged during a three-hour debate in Britain's House of Commons.
"What is the point of moving the battle from Kabul to Baghdad now?" asked Alan Simpson, a member of the Labour Party. "That would not bring peace to the region or country, but would add massively to the sense of instability, threat and risk felt by us all," he said.
"Wouldn't a war in Iraq overstretch the allies' forces as they are fighting remnants of Taliban and al-Qaida forces?" asked Labour's Malcolm Savidge.
John Chipman, director of the International Institute for Strategic Studies in London, said Europeans are not prepared now to join an effort to overturn Saddam's government. "They want to hear more about why UN Security Council diplomacy can't be extended further and how the U.S. can be certain that this will not create even more instability in the Middle East," he said.
European countries will closely watch when Blair and his family visit U.S. President George W. Bush at his Texas ranch from April 5 to April 7, reportedly to discuss what actions should be taken against Saddam.
European leaders are also awaiting the outcome of Bush's visit to Russia in May and a review by the United Nations later that month of economic sanctions against Iraq.
During a European Union summit earlier this month, leaders said they recognized the threat posed by Iraq's development of chemical and biological weapons, but no effort was made to develop a plan for dealing with Saddam.
The lack of support for action now is especially evident in Russia and France, Iraq's major trading partners in Europe. Both are owed billions of dollars by Iraq.
Russian Foreign Minister Igor Ivanov said last week that there was no evidence Saddam was stockpiling weapons of mass destruction and stressed that Russia remained opposed to any military action against Iraq. Ivanov also insisted that any planned military campaign against Iraq would have to be approved by the UN Security Council, where Russia and France hold veto power along with the United States, Britain and China.
French President Jacques Chirac, who is in a tight race for re-election, also has said an attack on Iraq needed Security Council backing. He says countries should first work to persuade Iraq to accept the "unconditional return" of weapons inspectors before any consideration is given to military action.
In Germany, Chancellor Gerhard Schroeder said that there was no U.S. attack plan yet and that Washington would consult with its European allies first. But government spokesperson Charima Reinhardt said Germany would not join attacks on countries except Afghanistan in the campaign without a new Security Council mandate.
TITLE: Kashmir Leader Malik Detained by Police
AUTHOR: By Mutjaba Ali Ahmad
PUBLISHER: The Associated Press
TEXT: SRINAGAR, India - Police arrested Kashmiri separatist leader Yasin Malik on Monday, a day after they detained a woman with $100,000 in cash allegedly intended for him, police said.
More than 100 officers ringed the office of an umbrella group of Kashmiri political and religious leaders where Malik, leader of the Jammu-Kashmir Liberation Front, was holding a news conference. The JKLF is a former militant group that laid down its arms and became a political party.
Police lobbed tear gas at some 60 of Malik's supporters when they tried to prevent them from taking him away in a van in Srinagar, the summer capital of India's Jammu-Kashmir state.
More than a dozen militant groups have been fighting since 1989 for Kashmir's independence or its merger with Islamic Pakistan. Hindu India and Pakistan have fought two wars over the mainly Muslim Himalayan province.
On Sunday, police Inspector General Ashok Suri said a woman, identified only as Shazia, told investigators she had been given the cash in Nepal's capital, Katmandu, by Altaf Qadri, a Kashmiri leader based in Pakistan-held Kashmir. She said Qadri asked her to deliver the cash to Malik.
Shazia was arrested in a random check on the highway leading to Kashmir at Kud, about 96 kilometers north of Jammu, Kashmir's winter capital.
Malik denied that the money was intended for him as he was being led into the police van on Monday.
Malik was arrested under anti-terrorism laws and the Foreign Exchange Movement Act, said K. Rajendra Kumar, another inspector general of police. Police say the money was allegedly brought in the country illegally. Under the laws, a suspect can be held by police for three months without being charged.
"They consider me an impediment in coming state legislature elections," Malik said, adding that his party had announced a boycott of the elections in September.
The Indian government is trying to persuade the All Parties Hurriyat Conference, a conglomerate of more than two dozen political and religious groups in Kashmir, to participate in the elections.
TITLE: WORLD WATCH
TEXT: Aussies Protest
MELBOURNE, Australia - Up to 30,000 people around Australia rallied on Sunday to protest against the government's policy of detaining asylum seekers, police and government officials said.
Leading religious, political and academic figures joined the protests which were also held in Brisbane, Adelaide, Perth and the national capital Canberra.
The government uses navy ships to patrol waters between Indonesia and northern Australia to prevent people smugglers dumping boatloads of asylum seekers along the remote coastline.
Those caught are sent to detention centers set up by Australia in Papua New Guinea and Nauru until their asylum applications have been processed.
In addition to the government's so-called "Pacific solution," thousands of asylum seekers are also being held in camps around Australia.
Melbourne rally organizer Leigh Hubbard said protesters Sunday were calling for the government's policy to change. "What we want out of this is the end of mandatory detention, the end of temporary protection visas and the end of the Pacific solution," which is estimated to cost Australia $250 million a year, he said.
China Clamps Down
BEIJING (AP) - Police said on Monday they are rounding up North Koreans hiding along China's border and sending them home - a crackdown that follows the daring and successful asylum bid in which 25 North Koreans barged into the Spanish embassy in Beijing on March 14.
The searches and other measures come despite renewed appeals in South Korea for Beijing to recognize fleeing North Koreans as refugees who should be protected from and not returned to their hardline communist state.
Police and residents in five different towns along China's border with the North all spoke of stepped up measures to capture North Koreans, who have streamed over by the thousands in recent years, escaping hunger and repression.
China insists that fleeing North Koreans are illegal immigrants, not refugees, and is bound by treaty with its communist neighbor and ally to return them.
Rebel Leader Flies In
COLOMBO, Sri Lanka (AP) - The chief negotiator for separatist Tamil rebels returned to Sri Lanka on Monday for the first time in seven years, to prepare for peace talks with the government, officials from both sides said.
Anton Balasingham flew into northern Sri Lanka from London via the Maldives, government officials said. Balasingham, top negotiator for the Liberation Tigers of Tamil Eelam, landed on a lake in the rebel-held northern part of this island country off the southern tip of India, a rebel source said.
Balasingham is expected to meet with Tamil rebel leader Vellupillai Prab hakaran later this week to prepare for peace talks backed by Norway, which recently brokered a landmark cease-fire.
The rebels and the government signed the cease-fire agreement Feb. 22, raising hopes of a dialogue between the two sides and an end to an ethnic conflict that has claimed more than 64,500 lives since 1983.
TITLE: Zenit Torpedoed by Lebedenko Double
AUTHOR: By Christopher Hamilton
PUBLISHER: Special to The St. Petersburg Times
TEXT: Torpedo Moscow's Igor Lebedenko had a memorable Russian Premier League debut on Saturday. The 18-year-old striker grabbed two goals in 12 second-half minutes to ensure that the teams were knotted at 2-2 in his side's clash with Zenit at Petrovsky Stadium.
The 20,000 fans that braved a cold, windy afternoon were silenced when, at 75 minutes, Zenit goalie Vyacheslav Malafeyev blocked a shot from the edge of the area, only for Lebedenko to tuck away the rebound and tie the game.
Torpedo, 1-0 down at halftime, came out fired up the second half, but found itself two down 17 minutes into the half after a stunning show of individual skill by Alexander Kerzhakov. From a Boris Gorovoi cross, the young striker headed the ball back over himself, before swivelling to despatch it into the near corner past a helpless Valery Vorobyov in the Torpedo goal.
Enter Lebedenko. Just two minutes after Zenit's second, Milan Vyeshnitsa was caught out of position, Lebedenko found himself one-on-one with Malafeyev, and easily found the near corner.
Twelve minutes later it was 2-2 and, although Zenit pushed hard in the closing minutes, it failed to capitalize on a number of scoring chances. Like the fans, whose excitement faded into cold shivering, the team's energy was gone.
Zenit, coming out playing last season's successful 3-4-3 formation, had much the better of the first half. The Petersburgers created numerous chances, and beat Vorobyov at 17 minutes. Gorovoi worked the ball up the right flank, Denis Ugarov supplied the cross, and Maxim Astafyev had a simple header to open the scoring.
Things turned nasty for Zenit when, at 68 minutes, a brutal chest-high challenge by Torpedo's Albert Sarkisyan left defender Valery Tsvetkov with a two-by-five-centimeter gash on his chest. Tsvetkov was substituted, for Alexei Katulsky, and afterwards Zenit head coach Yury Morozov was bitter about the referee's decision not to send off Sarkisyan, who had already been booked for unsportsmanlike behavior.
"It had an effect [on the game]. How the referee missed it I don't understand. Either he can't see, or he doesn't want to see. One of the two," Morozov said.
"But why are we talking about the refereeing? If we can't win when the score is 2-0 [with 28 minutes until fulltime] then we need to stop and look at what happened," he added.
"Yes, mistakes were made, but it was the team that lost. There is no reason to go after and take down one player for the mistakes. If it is anyone's fault it is the coach's for making the decision to use that player," Morozov said, defending Vyeshnitsa, whose performance was criticized.
Morozov remains convinced that his three Yugoslav signings will be able to take the place of Andrei Kobelov, Alexander Gorshkov, and Maxim Demenko, who have all departed since last season. The new imports - in particular striker Predrag Randjelovic, who has failed to make his presence felt up front - have all had their performances criticized by fans and the media. Vladimir Mudrinic, who has so far been the most succesful of the trio, was warming the bench alongside Randjelovic on Saturday. Clearly it is going to take time for the foreign legion to integrate itself at Zenit.
In the meantime, Morozov probably has to choose between giving youth a chance, as on Saturday - it was the first time that all four goals in a Russian Premier Division game have been scored by players under 20 - or try to integrate the more experienced players more quickly, with an eye on the upcoming UEFA Cup campaign.
It will be interesting to see which Zenit takes the pitch next Saturday in Rostov-na-Donu when it plays Rostselmash. Its next home game is April 7 against Shinnik Yaroslavl.
(For other results, see Scorecard)
TITLE: Late Smicer Strike Paces Liverpool Into First Spot
PUBLISHER: Combined Reports
TEXT: LONDON - Liverpool is back on top in England, and Internazionale has first place all to itself in Italy.
Liverpool beat Chelsea 1-0 Sunday on a goal by Vladimir Smicer and moved into first place in the Premier League. In Italy, Inter beat AS Roma 3-1 Sunday night behind two goals and an assist by Alvaro Recoba.
England. Substitute Smicer volleyed a superb injury-time winner as Liverpool beat Chelsea 1-0 on Sunday to move into first place in Premiership. Smicer, who came on after Liverpool lost England midfielder Steven Gerrard to a recurrence of a groin injury, smashed in a cross from Emile Heskey as the hosts secured a barely-deserved victory.
A lacklustre Liverpool got the points after a late rally in the second half, while Chelsea was left to rue several wasted chances as it dominated the first half.
On Saturday, Middlesbrough pulled off a stunning 1-0 victory at Old Trafford to blow a gaping hole in Manchester United's title ambitions.
Croatian Alen Boksic exploited the hosts' leaky defense to score the winner after nine minutes as United, seeking an unprecedented fourth straight championship, suffered its eighth league defeat of the season.
United created plenty of scoring chances but was denied by a rare off-day for Dutch striker Ruud van Nistelrooy and some dogged defending from Boro, inspired by former United midfielder Paul Ince, who was roundly booed as usual on his return to Old Trafford.
Italy. Inter moved three points ahead of AS Roma in Serie A after winning the top-of-the-standings clash with the defending champion 3-1 at the San Siro stadium on Sunday.
Uruguayan Alvaro Recoba scored twice for Inter, whose performance, as much as the result, indicates it has a great chance to claim its first title since 1989.
Recoba put Inter ahead in just the second minute of an outstanding game, completing a swift counter-attack with a stylish finish. The Inter striker then helped double the advantage two minutes before the break, crossing to Christian Vieri, who found the target with a perfectly angled header.
Roma fought its way back into the game with a 57th minute goal from Francesco Totti, but then Recoba secured the points for Inter with a spectacular, curling free-kick from 30 meters.
Roma defender Jonathan Zebina was sent off 12 minutes from the end after an off-the-ball incident in which he hit Recoba in the face.
Inter's Turkish substitute Emre Belozoglu was also dismissed in injury time, after kicking out at Roma's Brazilian midfielder Emerson.
The defeat completes a miserable week for Roma, which was knocked out of the Champions League by Liverpool on Tuesday and then fined and banned from its stadium for one game by UEFA following disturbances at the end of its match with Turkey's Galatasaray earlier this month.
Spain. Fernando Hierro struck a hat-trick to lead Real Madrid to a 3-1 win at home to Real Zaragoza on Sunday and preserve his side's slim lead at the top of the Spanish first division.
Valencia stayed level on points with Real at the summit, as it clinched a 2-1 home win over 10-player Osasuna thanks to an injury-time winner from Ruben Baraja, who had earlier missed a penalty.
Real was grateful for the goal-scoring heroics of its centre-back and captain Hierro as it struggled for fluency against a poor Zaragoza side.
Hierro bundled in his first goal from a Zinedine Zidane corner at 15 minutes, and added the second from the penalty spot just before the hour mark.
Real appeared set for an uncomfortable end to the game when Savo Milosevic raced clear of the home defense to reduce the deficit with a smart finish on 78 minutes. Hierro ensured there would be no upset, though, as he swept in Real's third from the edge of the area two minutes later.
Valencia was enduring a frustrating afternoon against Osasuna, which had Josetxo sent off after 30 minutes for giving away a penalty. Baraja failed with the spot kick, but Valencia eventually went ahead with a close range strike from Juan Sanchez with 12 minutes to go.
Osasuna responded seven minutes later to equalize through John Aloisi and the game was heading for a draw until Baraja made amends for his earlier miss with a late winner.
(AP, Reuters)
(For other results, see Scorecard.)
TITLE: Penguins Keep on Trying To Defy the Odds
PUBLISHER: The Associated Press
TEXT: PITTSBURGH - Logic and the schedule say the Pittsburgh Penguins have no chance to make the Stanley Cup playoffs. That's why the Penguins aren't listening.
They beat the Washington Capitals 6-2 Sunday night with their "Survivor" approach to the stretch drive: Just win and see where it takes them.
"It's our Game 7 every night," defenseman Andrew Ference said. "If we lose a game or drop a couple of points, we're gone."
It was an especially bad night for Jaromir Jagr, who was minus-4 against his old team. Jagr had one point, the second assist on Peter Bondra's goal that came during a two-man power play late in the third period.
Jagr's frustration was evident in the second period when he elbowed Ference in the head, then used his stick to flip Ference's stick out of his grip. Ference was assigned to defend Jagr.
"I had no speed, no moves to beat him," Jagr said. "I was just very tired and I couldn't do anything. What can you do?"
Jan Hrdina and Aleksey Morozov scored in the first period for Pittsburgh. Olaf Kolzig was pulled after the second period saw him allow goals by Michal Rozsival, Randy Robitaille and Dan LaCouture.
LaCouture scored his first in 33 games. Toby Petersen ended a 17-game goal drought with a short-handed breakaway against Craig Billington in the third.
The loss cost the Capitals a chance to move into the eighth spot in the Eastern Conference. The Penguins gained two points but they still have four teams to overtake and not many games left
Coyotes 4, Kings 0. To prolong their winning streak , the Los Angeles Kings had to do something they haven't done all season - beat Phoenix. They didn't even come close. Sean Burke had 25 saves in his fifth shutout of the season Sunday night as the Coyotes snapped the Kings' six-game winning streak.
Michael Handzus and Brian Savage scored first-period goals for Phoenix, which won the season series with Los Angeles 2-0-3.
Savage also had an assist on Shane Doan's goal that slipped between the legs of goalie Jamie Storr at 5:20 of the third. Daniel Briere and Teppo Numminen each had a pair of assists for Phoenix. Daymond Langkow completed the rout with an empty-net goal at 18:01 of the third.
(For other results, see Scorecard.)
TITLE: Slutskaya Takes World Title As Kwan Misses Out Again
PUBLISHER: Combined Reports
TEXT: NAGANO, Japan - One month after failing to win the Olympic gold medal, Michelle Kwan is no longer even the world champion.
Kwan lost the world title she held for the last two years, finishing second to Rus sia's Irina Slutskaya on Saturday at the World Figure Skating Championships.
"After the Olympics a lot of people decided not to come," Kwan said. "For me it is like, if you don't show up, you don't gain anything, but also don't lose anything. I gained a lot by coming here."
Not as much as Slutskaya, who beat Kwan for the fifth time this season to win her first world championship. Slutskaya had finished second to Kwan three times, including the last two years.
"A couple of times I was so close and now I am just so happy as I feel the medal," Slutskaya said. "It's sport and competing. Sometimes someone else wins. We are just competing. Maybe I am just lucky tonight."
Kwan led at the Olympics after the short program, but settled for the bronze medal when Slutskaya beat her out for second in the long program, giving the gold to American Sarah Hughes.
Hughes skipped the world championships, citing lack of training following the Olympic triumph.
Fumie Suguri of Japan finished third and Sasha Cohen of the United States was fourth. American Jennifer Kirk withdrew with a hip injury before the free skating.
Slutskaya won the free skate ahead of Kwan although both did six triple jumps and didn't make a mistake. Slutskaya had six of nine firsts in the free skate to her routine from "Tosca." Her marks were all 5.8 and 5.9 except for a lone 5.7.
Kwan's routine to "Scheherazade" also had six triples, including two triple-double combinations like Slutskaya. But her landings were less secure than Slutskaya and the technical marks reflected it. Five of the technical marks were 5.7, the rest 5.8. Slutskaya had one 5.9 with seven marks of 5.8 and the 5.7.
On Friday, Irina Lobacheva and Ilia Averbukh won their first major international title when they clinched the ice-dancing gold.
Russian champions Lobacheva and Averbukh scored mostly marks of 5.8 and 5.9 for presentation in a moving free program dedicated to the victims of the Sept. 11 attacks on the U.S. to improve on their Olympic silver medal.
Canadians Shae-Lynn Bourne and Victor Kraatz finished runners-up, with Galit Chait and Sergei Sakhnovski taking the bronze to win Israel's first-ever world-championship medal.
The ice-dancing competition was marked by the absence of French pair Marina Anissina and Gwendal Peizerat, who retired after winning gold at the Olympics last month.
In addition, defending world champions Barbara Fusar Poli and Maurizio Margaglio declined to travel to Japan.
"Our first world championships was in Makuhari, Japan eight years ago. It has been a long road," said Averbukh. "Before this competition, we thought it could be our last but now we are not sure."
(AP, Reuters)