SOURCE: The St. Petersburg Times
DATE: Issue #764 (30), Tuesday, April 23, 2002
**************************************************************************


TITLE: How Will All the Tourists Get Here?
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: International air carriers and tourism-industry representatives are concerned that there may not be enough flight capacity available to satisfy demand for travel to the city during the jubilee celebration next summer.
 
"The current situation with the airlines will influence [the flow of international tourists for the 300th anniversary]. International tourism to St. Petersburg has been hampered in recent years by the poor transportation infrastructure," said Sergei Korneyev, head of the St. Petersburg department of the Russian Association of Tourism Operators.
 "Some operators have had to turn away [clients] seeking to travel to St. Petersburg," he added.
 International air carriers flying to St. Petersburg have long been limited by a 15-year-old agreement between the European Union and the Soviet Union that mandates a parity in the number of flights by international carriers and domestic ones. 
 This situation has been further aggravated by the recent spat with the EU over airliner noise regulation. In a tit-for-tat response when the new EU noise restrictions took effect on April 1, the Russian government cancelled 11 international flights per week between St. Petersburg and Europe, including three by SAS, four by KLM and two by Finnair.
 "It is noticeable that the summer season starts earlier this year and ends later, so there is demand to increase the number of flights to the city, which we wanted to follow," said Albert Henschel, head of SAS's St. Petersburg office. "[But] we have constantly been denied."
 Henschel said that the airline had scrapped plans to launch two new daily flights to Copenhagen and one to Stockholm this summer, plans that would have increased the number of SAS flights to St. Petersburg to 21 per week.
 Instead, the airline was forced to cut back after the April 1 decision.
 "This is complete madness and stupidity," Henschel said.
 "We constantly read about the necessity of increasing the number of tourists and [the amount of] investment in Russia, and then they make decisions like that. If the city wants to be a loser, it should continue this way," he explained.
 The federal government maintains that the international carriers are not interested in helping St. Petersburg, but are instead trying to grab as large a portion of the tourism market as possible, at the expense of Russian carriers.
 "Thanks very much to SAS, of course, that they care about the development of tourism and investment in our country," said Alexander Sorokin, head of the Tourism Committee of the federal Economic Development and Trade Ministry. "But what they are really doing here is using the situation to their advantage since we can't provide enough Boeing planes because our economy is so screwed up. They are just trying to take over the market."
 Sorokin noted that although France, Germany and Greece have made concessions to allow Russian airliners that do not meet the EU noise regulations to land at selected airports away from major cities, the Scandinavian countries have insisted on applying the regulations scrupulously. 
 "Finnair and SAS have said that they would rather die than allow our dirty ... airplanes to fly to their countries. It is understandable that the market is being divided up, but nobody will allow them to [take it over]," Sorokin said.
 He also defended the 15-year-old agreement on international flights, saying that it enables Russian air carriers to maintain their share of the market.
 "They cancelled two of our flights too," said Maria Rissonen, the office manager of Finnair's St. Petersburg office. "I'm sorry that we do not have enough flights. We all have big plans and this question remains open since our negotiations [with the Russian government] are still in progress."
 Although tourism to St. Petersburg fell off by about 10 percent in the wake of the Sept. 11 terrorist attacks in the United States, the city is predicting a considerable increase during 2003. Officials have estimated that as many as 6 million people will visit the city that year, as compared to 2.9 million in 2000.
 Nonetheless, local authorities are not worried by the noise-regulation controversy or the cancelled flights.
 "This is not a problem," said Alexander Afanasiev, Governor Vladimir Yakovlev's spokesperson. "It is up to the airlines to make their planes correspond with EU requirements, and there is still one year before the anniversary to do that. If this happened a month before the anniversary, it would have been a different thing."
 Local air carrier Pulkovo Airlines says that the new EU regulations have not been a problem and that it is expanding its service to Europe this summer.
 "We don't have any problems with flights to western Europe," said airline spokesperson Yelena Yelagina. She added that the carrier is launching new scheduled flights to Athens, Nice and Saloniki this summer and is increasing the number of flights to Berlin, Hamburg, Hannover, Dusseldorf and other German cities. Pulkovo also intends to increase its service to Paris and is negotiating to open new routes to Italy.
 In addition, Yelagina said that Pulkovo was expanding its charter service by 20 percent this year.
 "We have enough [EU-compliant] Tu-154M planes to operate with and can even send some of those planes to cover [Aeroflot] flights that were cancelled because of the new regulations," Yelagina said. "We have not banned anyone from anything."
 Pulkovo International Airport, or Pulkovo-2, is currently undergoing a $45.8-million renovation that is scheduled to be completed by spring 2003. The project includes the reconstruction of the arrival and departure zones to increase the facility's capacity to as many as 1,800 passengers per hour. A 258-car indoor parking facility is also being constructed.
 In the wake of the April 1 decision, Pulkovo-2 serves 90 international flights per week.
 "The airport is not working at full capacity. There is significant potential [for growth], which will be even bigger after the reconstruction is finished," Yelagina said. "[The domestic airport] Pulkovo-1 has also become international. It is used for flights arriving from Germany and for charter flights while the work is going on at Pulkovo-2."
 International tourism to St. Petersburg is also severely restricted because Moscow is not able to serve as an effective hub, since international tourists arriving there must change airports or switch to trains in order to continue on to their final destination.
 German air carrier Lufthansa is also considering expanding its local service for 2003, including the possibility of assigning larger planes to existing routes. 
 "We have very good occupancy at the moment and it is already hard to find tickets [for the summer season]," said Dmitry Zelenin, a Lufthansa representative at the airline's local office.
 "As for replacing planes, it is too early to talk about it. It would be better to think about this in the autumn when the picture [about the anniversary] will be clearer," he said.
 Local business representatives fear that by the time that picture becomes clearer, it will be too late.
 "I think that the apprehension is justified. If the flights are already full ... the fact that some SAS flights have been cancelled will clearly have caused damage to tourism," said Natalya Kudryavtseva, a spokesperson for the St. Petersburg International Business Association.
 However, Korneyev of the Russian Association of Tourism Operators, dismissed predictions that the anniversary would lead to a major increase in tourism.
 "I think that it is more like a start to develop tourism in the city. Just 15 percent of the world's population knows that a city called St. Petersburg even exists and even fewer people know that it will celebrate its 300th anniversary," he said.
 "How many people in our country know that Stockholm is celebrating its 850th anniversary this year?" he added.
 "After people see the Placido Domingo concert on television or watch the torchlight parade, then they will understand that the city is safe and start to come here," Korneyev said.
 "Now it is too late. Promoting the event should have started four years ago," he said.
 Earlier this month, the Russian government approved a three-year conceptual program for developing tourism that is aimed at increasing the number of international tourists visiting Russia. 
 The program includes a number of provisions such as simplifying the visa process and easing currency restrictions. However, Rzhena Mentasova, an author of the plan who works at the Tourism Committee, said that most of the ideas would not be put into practice until 2005.
 About 8 million foreigners visited Russia in 2001, according to government statistics, while 18 million Russians traveled abroad. This accounts for just 1 percent of the global tourism industry.

TITLE: Audit Report Puts Shipyard Deal in Danger
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - The State Audit Chamber said Friday that the Severnaya Verf shipyard had failed to pay $6 million to the federal budget after completing two destroyers for China. The finding may cast doubt on a new $1.4-billion contract that the local ship builder was awarded to build another two ships for China. 
 
The Audit Chamber, which is the agency of the State Duma that oversees the federal budget, performed the audit at the request of Vladimir Pekhtin, leader of the pro-Kremlin Unity faction in the Duma. 
 Pekhtin has said that Severnaya Verf owed the state budget at least $300 million for the two destroyers that it received from the Defense Ministry and which the shipyard delivered to China in 1999 and 2000. 
 Severnaya Verf sold the ships to China for $610 million but received them from the Defense Ministry when they were already 70 percent and 44 percent complete, Pekhtin said. 
 Severnaya Verf has said that the Defense and Finance ministries agreed to accept the sum of 186 million rubles ($6 million) as compensation for the work completed on the two vessels before they were delivered to the shipyard.
 The Audit Chamber said Friday that the $6 million was never paid. 
 "The federal budget did not receive any compensation, even to the amount coordinated between Severnaya Verf and the Defense Ministry," the chamber said in a statement on the results of the audit, which was conducted in February and March. 
 The chamber also charged that the budget did not receive the $6 million "because of Defense Ministry inaction." 
 The audit is crucial in the current tug-of-war between the two local shipyards, Severnaya Verf and Baltiisky Zavod, for a new $1.4-billion contract to build two 956EM destroyers for the Chinese Navy. The government's Shipbuilding Agency declared Severnaya Verf as the contractor in early 2001. 
 But shortly after Rosoboronexport, the state's arms-exporting agency, signed the contract with China in January, then-Deputy Prime Minister Ilya Klebanov called a tender for the contract, and rival Baltiisky Zavod was declared the winner. 
 On Feb. 18 - the day that Rosoboronexport signed an agreement with Baltiisky Zavod and auditors began investigating Severnaya Verf - Klebanov was demoted from the post of deputy prime minister following a recommendation from Prime Minister Mikhail Kasyanov. The prime minister also called for a review of the recent tender. 
 In March, Shipbuilding Agency chief Vladimir Pospelov said the agency would stick to its decision from 2001 and support Severnaya Verf, and Rosoboronexport signed an agreement with that shipyard. Now both shipyards are awaiting a government resolution to determine the winner of the deal. 
 "It looks like a new round may start [in the battle for the contract], with the deal being given back to Baltiisky Zavod," said Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies. 
 Valery Pogrebenkov, spokesperson for New Programs and Concepts, the holding that controls Severnaya Verf, said the Audit Chamber has no serious claims against Severnaya Verf. He said the chamber holds the Defense and Finance ministries responsible. 
 "As soon as the means of compensation are worked out, Severnaya Verf is ready to pay," Pogre-benkov said Sunday by telephone. 
 He insisted that the sum should be no more than 186 million rubles. 
 Commenting on how the Audit Chamber reports could influence the decision to award the Chinese contract, Unity's Pekhtin said: "We think that contracts should be given to companies that work in the interests of the state."

TITLE: Government Takes Aim at Racist Violence
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW --The Justice Ministry has only one thing to say about President Vladimir Putin's announcement that legislation aimed at cracking down on racial violence will be sent to parliament: It's about time. 
 
In early 1999, when Putin was head of the Federal Security Service, the ministry noticed an alarming growth in racism among teenagers and drew up an anti-extremism bill for the State Duma. 
 Communists and their supporters, who at the time dominated the Duma, quickly dumped the bill, fearing it would somehow be used against them once they passed it. 
 The new Duma with a pro-Kremlin majority fished the bill out of the scrap heap last year but, faced with the need to update it to comply with new related legislation, sent it back to the government for reworking and soon forgot about it. 
 "The bill was not an issue, and the Communists were strongly against it," said Sergei Nikolin, Justice Ministry's top official for state security and law enforcement legislation. 
 "Now the situation has changed. The president has shown his interest," he said in an interview. 
 Putin may have had little choice but to pull the Justice Ministry's bill out of legislative limbo and declare in his state of the nation address Thursday that it would soon be submitted by the cabinet to the Duma. 
 At least 13 countries had sounded the alarm bell in the week before his speech, responding to a rash of skinhead threats and attacks over the previous two months. 
 But some Duma deputies and analysts said there is little need for such a bill. Existing laws already allow tough charges to be brought against skinheads and others responsible for racial violence. The problem in enforcing the laws lies in an ineffective police force and a lax court system, they said. 
 Despite Putin's comments last week, he had not completely forgotten about the Justice Ministry's anti-extremism bill. Earlier this year, he asked the ministry to rework the bill and submit it to the presidential administration for approval before being sent to the Duma again. 
 But the legislation got stuck once again, this time in the presidential administration. 
 Justice Ministry Yury Chaika said shortly after Putin's address that the bill would allow charges to be brought against both attackers and the parties deemed as having inspired them. 
 Nikolin said the bill bans groups, parties and movements whose activities or remarks entice national or religious hatred. The bill also allows the prosecution of ultra-nationalist organizations and their members who remain active after being banned. 
 He refused to give further details, saying it may be undergoing a drastic revision at the hands of the presidential administration. 
 Experts said that violence committed by skinheads and anti-extremism legislation are two separate issues. They said racially motivated attacks can only be averted by jailing offenders on a charge of a hate crime rather than hooliganism, as is usually the case now. 
 "Racially motivated crimes are usually combined with other crimes, which judges usually pick as the main charge when they announce a verdict," Pavel Krasheninnikov, a former justice minister and the head of the Duma's Legislative Committee, said in an interview. 
 "It is important to have an anti-extremism legislation, but it is wrong to say that its absence gives us no instruments to fight against extremists," Krasheninnikov said. 
 Andrei Ryabov of the Moscow Carnegie Center said law enforcement agencies also must be held more accountable. 
 "[Further violence] can be avoided only by putting constant pressure on law enforcement," he said. "The system just will not work without a firm hand." 
 A number of Western countries, including Germany, Sweden and the United States, have met success in preventing and fighting hate crimes by holding various counseling programs for offenders. One such program has offenders sitting face to face with members of the groups they dislike. 
 But such practices are unrealistic for Russia, which needs to spent its limited funds on more pressing issues than counseling, Krasheninnikov said. 
 Moreover, gathering a group to listen to a counselor would be met with strong suspicion, he said. 
 "After 70 years of the Communist rule the Russian people are genetically opposed to any kind of propaganda," he said. 
 Unlike most European countries, which passed anti-Nazi and anti-racism laws after World War II to protect ethnic minorities, the Soviet Union did not see any need to adopt such legislation - especially since the country lost some 27 million lives in fighting Nazi Germany. 
 "We thought that we would remain immune to the problem forever," Krasheninnikov said. 
 But nationalist sentiments have been on the rise since the breakup of the Soviet Union. Some experts say that Russian authorities boosted skinhead activity during the two Chechen campaigns with their impassioned calls for nationalism. 
 Ryabov said that despite the racially motivated attacks, the majority of the population remains tolerant to hate-related violence and prefers to blame Azeris, Chechens and other people from the Caucasus for high crime rates. 
 Lawmakers as recently as Wednesday refused to put the anti-extremism bill on the Duma agenda, apparently still fearing that one day it would become a tool their opponents could use against them. 
 "There is a common apprehension that the law may be used by one political force against another," Ryabov said.

TITLE: Memorial Leader Iofe Dead at 63
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: Venyamin Iofe - a well-known local dissident, historian and head of the St. Petersburg branch of the human-rights organization Memorial - died of an apparent heart attack on Saturday.
 
Iofe, 63, died at about 1:30 p.m. on the escalator at the Prospect Bolshivikov metro station, Interfax reported. The apparent cause of death was a heart attack. According to Interfax, Iofe had had one previous heart attack.
 "This is very big loss. He has done such a great thing to complete the history of Soviet dissident movement. And, to be honest, I don't know how the center that he headed will continue without him," said Yury Vdovin, a member of the human-rights monitoring organization Citizen's Watch.
 Iofe was born June 29, 1938 in the central Russian city of Ufa. He graduated from the Leningrad Chemistry Institute in 1963 and, in 1964 began working for Kolokol, a dissident publication that had been banned by the Soviet authorities.
 In 1965, he was sentenced to three years in prison as a result of his work for Kolokol.
 After his release, Iofe continued his dissident activity, documenting the history of political opposition in the Soviet Union. In 1989, he began working for Memorial, which had been founded in 1988 and was dedicated to researching communist-era repression and preserving the memories of its victims.
 Yakov Gordin, a former local dissident and colleague of Iofe, credits Iofe with uncovering the truth about the village of Levashovo, located about eight kilometers north of St. Petersburg. It is estimated that 46,000 local victims of the Great Terror in 1937 and 1938 were murdered by the Soviet secret police and buried in unmarked mass graves in Levashovo.
 "He returned many ruined fates to history, thousands of them," Gordin said.
 Representatives of Memorial were unwilling to comment on Monday.

TITLE: Police Break Up Minsk Protest
PUBLISHER: Combined Reports
TEXT: MINSK, Belarus - Riot police beat opposition protesters marching through Minsk on Friday, using batons to break apart their clasped hands. At least one person was injured and more than 100 detained, many of whom remained in prison over the weekend. 
 
The clash came the same day a fire burned down a tent inhabited by anti-government protesters in Kuropaty outside Minsk and injured one of the demonstrators, opposition members said. 
 At the unauthorized protest march, more than 300 people gathered to demand higher wages and other improvements to Belarus' struggling economy and the resignation of President Alexander Lukashenko. 
 The protesters marched under a banner that declared, "We can't live like this anymore." Some also carried signs accusing the government of providing illegal military assistance to Iraq, an allegation raised by U.S. officials who visited Minsk in February. 
 As the march spilled into traffic on a Minsk thoroughfare, about 500 riot police appeared and blocked the road. Several protesters sat on the ground with clasped hands to resist. The police pounded them with batons before dragging them off to buses parked nearby. 
 Valery Shchukin, 60, a journalist who helped organize the march, was hospitalized with injuries, said Oleg Bebenin, a spokesperson for the Charter-97 opposition group. The police said Shchukin suffered injuries to his lower back and pelvis. Interfax said two other protesters were taken away in ambulances. 
 A total of 102 people were detained, Bebenin said. About 40 demonstrators remained in a Minsk jail over the weekend. At least 15 other protesters, most of them underage, were released Friday night, said Andrei Sannikov, the leader of Charter-97. 
 On Saturday the Belarussian police said they had arrested about 85 protesters and released nearly 50. 
 Sannikov said the police action against what had been a peaceful march was meant to intimidate potential participants in Friday's annual march marking the anniversary of the Chernobyl nuclear disaster, usually Belarus' largest anti-government demonstration. 
 He said the protest had been peaceful until several buses carrying black-helmeted riot police officers pulled alongside the marchers, and the police exited the buses and formed a line in front of them. 
 "When the marchers met the first line of the special police force, they turned around and went back,'' Sannikov said, "and then they were beaten.''
 Meanwhile, protesters have been camped out since October in Kuropaty, a wooded area where up to 250,000 victims of Stalin-era repression were shot and buried, to try to prevent construction of a highway that would cut through the mass grave site. 
 Early Friday, a fire broke out while three protesters were asleep in their tent. Protester Vasily Parfenkov said he and tentmate Irina Vyatkina woke up to flames racing up the tent walls and across the ceiling. They heard screams from another protester, Ales Poklad, whose feet, hands, face and neck were burned, Parfenkova said. The two pulled Poklad out of the tent and called an ambulance, which delivered him to a nearby hospital. 
 "The police officers accused us of arson, but we were asleep and our candles and stove were extinguished," Parfenkov said. 
 In 1989, Kuropaty became the site of Belarus' first mass protest against Soviet rule and since then has been a popular rallying point. 
 "This site and our vigil here have provoked the hatred of the authorities," said Sergei Vysotsky, the leader of the Belarussian Freedom Party, which organized the protest together with the youth wing of the Belarussian National Front. He accused the government of starting the fire. 
 
 <i>(AP, NYT) </i>

TITLE: Leaders Back Off in Gorge Dispute
PUBLISHER: The Associated Press
TEXT: MOSCOW - Leaders of Georgia and Abkhazia toned down their confrontation over the disputed Kodori Gorge over the weekend and said they had no plans to launch military action against each other. 
 
&quot;It's time to leave behind this language of ultimatums,&quot; said Abkhaz Prime Minister Anri Dzhergenia, who met with officials at the Russian Foreign Ministry in Moscow on Friday. &quot;We are not planning any military action in the Kodori Gorge or anywhere else in the near future.&quot; 
 Georgian President Eduard Shevardnadze also downplayed the confrontation after a meeting of the Georgian Security Council in Tbilisi. 
 &quot;Georgia is not developing any plans to attack or begin military action,&quot; he said. &quot;Georgia does not want war in Abkhazia and is doing everything to settle the conflict peacefully.&quot; 
 Officials in both governments have ratcheted up their war of words in recent weeks, with each side accusing the other of planning an invasion of the Kodori Gorge, which separates Abkhazia from the rest of Georgian territory. Abkhazia has accused Georgia of keeping military forces in the gorge, in violation of a UN-brokered protocol that required Georgia to withdraw its troops by April 10. 
 Georgia has denied breaking the protocol and says it has deployed only border guards and reservists, who are not technically part of the armed forces and are legally allowed to be there. 
 Meanwhile, Defense Minister Sergei Ivanov denied an accusation by his Georgian counterpart David Tevzadze that Russia was beefing up its presence in the Kodori Gorge under the guise of rotating peacekeeping troops in the conflict zone. 
 &quot;No increase in the military presence is under way. There are not, and cannot be, such plans,&quot; he said Friday.

TITLE: IN BRIEF
TEXT: IRA Arms
 

MOSCOW (SPT) - The Federal Security Service has alerted British intelligence that Russian army officers are selling arms to the Irish Republican Army, the British Sunday Telegraph reported. 
 A team of senior IRA commanders flew into Moscow last fall and purchased at least 20 AN-94 assault rifles from "renegade Russian special forces officers," the newspaper said, citing British intelligence sources. It was not clear Sunday whether the officers who allegedly supplied the weapons had been arrested. 
 The Federal Security Service declined to comment on the report. The British Defense Ministry and Prime Minister Tony Blair's office also declined to comment, Reuters said. 
 The Sunday Telegraph said the disclosure of the shipments by British intelligence, combined with the recent discovery of an IRA hit list with the addresses of Tory members of parliament, would fuel fears that the IRA was preparing to resume its armed struggle for control of Northern Ireland.
 
 
NATO Ties
 

MOSCOW (AP) - A new deal on closer ties between Russia and NATO could be a crucial step toward a new European security structure, Foreign Minister Igor Ivanov said in an interview on state-run RTR television Sunday. 
 "It's a qualitatively new level of cooperation," Ivanov said. "The new mechanism is a principally new stage in our relations, but not only in Russia-NATO relations.
 "If this works - and we want it to work - it could become an important element in building a new European security architecture," he said. 
 He said there would be collective debates and decisions by consensus on a selection of "perhaps five or seven" issues of concern to all member countries. 
 Alliance officials have stressed, however, that the mechanism will not give Moscow a veto over NATO actions.
 
 
Diplomat Beaten
 

MOSCOW (SPT) - A British diplomat was dragged out of his car and beaten early Sunday morning on the Arbat by three men angered that he failed to give way to their silver Mercedes, the police said. 
 David Arkley, 36, a third secretary at the British Embassy, was struck several times on the head by the assailants, who are thought to be from the Caucasus Mountains region, said police spokesperson Yevgeny Gildeyev. 
 "We don't have any information about Arkley receiving very severe injures," Gildeyev said. "According to witnesses, he was only dealt a few blows to his head."
 Calls to Arkley's office and the British Embassy went unanswered Sunday. However, the British Foreign Office in London confirmed the attack and said the British Embassy was working with the Moscow police, according to The Associated Press.
 
 
American Robbed
 

MOSCOW (SPT) - A burglar broke into the Moscow apartment of a U.S. citizen and made off with a safe containing about $220,000 in cash, jewelry and antique coins, his employer said Friday. 
 The burglary took place Thursday evening after the American, an employee of engineering firm Lockwood Green International Inc., left for the company office. 
 "He left the apartment at 5:30 p.m. and went to the office," said Yekaterina Borisova, the finance director of Lockwood Green International, who would only identify the American as Andrew. When he returned at 8:30 p.m., he found the inner apartment door was open even though the front door was locked. 
 After sending his driver to check the apartment for an intruder, he went inside and discovered that the safe had been ripped out of his wardrobe and stolen. Nothing else in the apartment was touched. The safe contained $67,000 in cash and a number of valuable family heirlooms, including 15th-century coins from the Ottoman Empire and a U.S. $20 gold coin, Borisova said. 
 Police suspect the robbery was committed by someone who knew the victim and had access to the apartment, said police spokesperson Yevgeny Tildeyev.
 
 
Royal College?
 

MOSCOW (SPT) - A few days after the death of the Queen Mother last month, students and teachers at a small-town college in the Urals wrote to the British consulate in nearby Yekaterinburg to express their sympathy for her passing. They also included in their letter an unusual request to be forwarded to the Queen: permission to rename their college in the Queen Mother's honor. 
 The letter, which was signed by dozens of students and teachers at the technical college in Verkhnyaya Salda in the Sverdlovskaya Oblast, noted that educational establishments in Russia have a tradition of naming themselves after "great people." 
 From the consulate, the letter was sent on to the British Foreign Office in London, which was due to pass it on to Buckingham Palace when official mourning for the Queen Mother finished Friday. 
 Currently the college is named for Alexei Yevstigneyev, a local hero killed during the Battle of Stalingrad. 
 A spokesperson at the British Embassy in Moscow said that it had not received any other requests to honor the Queen Mother. No one at the college could be reached for comment.
 
 
New Citizens
 

MOSCOW (AP) - The State Duma passed a bill on third reading Friday that would make it more difficult to acquire Russian citizenship. 
 The Duma voted 252 to 152, with two abstentions, to approve the government-proposed bill. It must also be passed by the Federation Council and signed by President Vladimir Putin to become law. 
 The bill requires applicants to spend at least five years in Russia, pass a Russian-language exam and have a job to receive citizenship. It also requires applicants to reject the citizenship of other countries to become Russian citizens. 
 
 
Latvian Visas
 

BRUSSELS, Belgium (Reuters) - Lithuania said Monday it would impose EU-style visas for residents of the Russian enclave of Kaliningrad in 2003 as part of its preparation to join the Western bloc the year after. 
 "As of July 2003 visas will be introduced for residents of this enclave [Kaliningrad]," Lithuania's chief EU negotiator Petras Austrevicius said after a round of accession talks in Brussels. 
 The commitment is likely to rise objections from Moscow, which is afraid that Kaliningrad, sandwiched between EU candidates Poland and Lithuania, will be cut off from Russia proper when the EU expands eastward in 2004. 
 The issue will be discussed by EU justice and home affairs ministers and their Russian counterparts later this week, with Moscow expected to seek special privileges for the movement of Kaliningrad's 1.3 million people and for the transport of goods and energy. 



TITLE: Reform Plan Draws Lukewarm Reaction
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - With just months to go before the much-anticipated sale of a government stake, LUKoil presented a drastic restructuring plan on Monday that could add $500 million a year to its bottom line.
 
Analysts, however, were skeptical of LUKoil's ability to stick to the ambitious plan, saying real change would probably only become evident in about a decade.
 As part of the restructuring operation, the oil company, Russia's largest, plans to cut costs from $3.50 a barrel to $2.60 to $2.80 a barrel by shutting down 5,000 wells, or 24 percent of those in operation.
 While the LUKoil's cost structure should shrink, production should not because 30 percent of all wells account for 85 percent of the oil company's production.
 In fact, LUKoil hopes to increase its oil production by one percent to two percent a year until 2005. After that, the company envisages annual increases of 10 percent to 15 percent until production hits 140 million to 160 million tons a year. Last year, the oil company pumped about 80 million tons.
 If all goes according to plan, the overhaul should boost LUKoil's annual profits by $500 million.
 &quot;We are creating an optimal structure so that the government can make money off the sale of our shares,&quot; LUKoil Vice President Leonid Fedun said at a news conference.
 Earlier this month, First Deputy Property Minister Alexander Braverman said the government hopes to reap $700 million from the sale. The starting price has yet to be determined.
 Fedun said that LUKoil also plans to shift sales of crude and refined oil products from the domestic to the export market, with 70 percent of the total output being shipped abroad in the form of crude or oil products. 
 He said the company has subsidized the financial performance of rivals No. 2 Yukos and No. 3 Surgutneftegaz - and hurt its own - by keeping a low profile on the export market.
 By the end of this year, LUKoil will spin off its main service division, LUKoil-Bureniye, through a listing on the Russian Trading System and a separate agreement with a strategic investor, officials said. Hiving off LUKoil-Bureniye and other noncore assets will cut the company's ranks by 20,000 people. LUKoil currently employs 140,000.
 Industry analysts said that, while LUKoil's plans look good on paper, its thrust and presentation left a bad taste.
 &quot;We were expecting something a bit more serious,&quot; said Vladislav Metnyov, an oil analyst with Renaissance Capital.
 Despite being the most liquid oil stock on the RTS, LUKoil has earned a not-so-shining reputation among investors. In February, several brokerages downgraded LUKoil's stock after the company announced a weak 2001 financial performance and then held an awkwardly executed conference call that failed to explain why. Even before that, LUKoil had let investors down time and again by failing to publish financial results audited to generally accepted accounting principles, and in a timely manner. The payment of last year's dividend was also delayed, with no immediate explanation from the company.
 The restructuring presentation Monday was LUKoil's chance to once again win investors' hearts, but Metnyov said the company failed to make a convincing argument.
 While another $500 million in profits would add 23 percent to LUKoil's bottom line, this still would not be enough to catch up with Yukos.
 &quot;We are competing with Yukos, and right now they are more successful than we are,&quot; Fedun said.
 Yukos CEO Mikhail Khodorkovsky greeted the news of LUKoil's restructuring, saying the company - which many industry observers perceive as a Soviet-era throwback - would now have more in common with sector leaders Yukos and Sibneft.
 &quot;They're now with us,&quot; Khodorkovsky told Interfax.
 LUKoil would do best to emulate its rivals in its drive for efficiency, said Steve Allen, an oil analyst with Troika Dialog.
 &quot;They don't need to do something clever here,&quot; Allen said. &quot;They just need to do what Sibneft and Yukos have done.&quot;
 LUKoil is late in moving to source out out its service companies and to copy the Western model, where production and retail activities are dealt with in separate divisions, Metnyov said. Monday's presentation also emphasizes results that will become evident only in 2010, instead of results investors can see this quarter, or even this year, he said.
 &quot;The longest investment horizon, from the investors' point of view, is three to four years,&quot; Metnyov said. &quot;No one wants to put money into LUKoil now and see the return a decade from now.&quot;
 LUKoil and the government are targeting foreign investors by selling the 5.9-percent state-owned stake on the London Stock Exchange through a Level 3 American Depositary Receipt listing. The listing of the ADRs has been repeatedly delayed and is now planned for the second half of this year.
 Allen said LUKoil has good incentive to follow through on the revamp plans. If LUKoil management fail to implement them, the government's chances of getting a decent price for its remaining 8 percent stake would be low, he said.
 &quot;The problem is that you're not going to know next month or the month after that whether or not their plan is working,&quot; Allen said.

TITLE: Croatia Puts Hitch in Druzhba
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia's plans to export oil to the United States may have run into a hitch.
 
The state-owned Croatian pipeline operator, Jadranski Naftovod, put forward on Wednesday new conditions for its participation in integrating two east European pipeline systems, said Igor Solyarsky, vice president of Transneft, Russia's state-owned pipeline company.
 &quot;Croatia hasn't refused to sign the agreement, but they did take a timeout for further study,&quot; Solyarsky said. He declined to give a reason for the holdup.
 Russia and Croatia both signed a protocol in November to go forward with the project, which would create an oil-transport corridor running from Russia to the Adriatic Sea.
 For the <i>Druzhba</i>, or friendship, pipeline to be completed, however, the flow of oil through Croatia's Adria pipeline will have to be reversed. Adria now carries crude eastward from the deep water port of Omis on the Adriatic to the city of Sisak and further inland.
 A $20-million modernization of the pipeline would reverse the flow, and Russian oil would be able to bypass Turkey's overcrowded Bosporus Straits. Russia's export capacity is expected to increase by 5 million tons per year after completion of the first phase of the project.
 Russian oil companies hope to avoid the Bosporus because Turkey restricts the passage of large tankers through the narrow straits. Analysts say that producers could save money on transportation costs by using large tankers, which can carry 350,000 to 400,000 tons of crude.
 Although Russia will have difficulty competing for market share on the U.S. East Coast, the United States may buy Russian oil to diversify.
 Russia, Belarus, Slovakia and Ukraine have already signed a framework agreement. But the Druzhba-Adria project cannot go ahead without Croatia and Hungary. 
 Interfax reported that the Croatians are upset because of a scandal surrounding a west Siberian oil producer that is wholly owned by Croatian state oil company INA.
 Last month, Transneft refused to give the producer, White Nights, access to Russia's trunk pipeline system. Transneft says the oil producer's metering system needs an upgrade, while sources quoted by Interfax say Transneft is acting on behalf of oil company Slavneft.

TITLE: Railways Ministry Looking To Erase Tax Bill
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Railways Ministry will become Russia's second-largest taxpayer by the end of the year, contributing $3 billion to the federal budget, Railways Minister Gennady Fadeyev said Monday.
 
Taxes became a major problem for the railways sector last year, when 293 criminal cases were opened against companies within the ministry for nonpayment, Fadeyev said at a news conference.
 &quot;Today all railways and all companies within the ministry are fully paying taxes,&quot; he said.
 Fadeyev had said earlier this year that the ministry would take measures to strengthen companies' discipline in paying taxes, and he threatened to fire the heads of railway companies that do not pay up.
 The ministry owed a total of 141 billion rubles ($4.5 billion) at the beginning of 2002, but payed off 13.5 billion rubles ($450 million) in the first quarter, Fadeyev said. 
 The ministry's total debt to the federal budget and regional budgets currently stands at about 40 billion rubles ($1.3 billion).
 By the end of the year, the ministry is planning to pay off 96 billion rubles to the budget, making it &quot;the second-largest taxpayer after Gazprom,&quot; Fadeyev said.
 Paying off debt is central to restructuring the railways sector, Fadeyev said. 
 Under the restructuring, a 100 percent state-owned joint stock company called Russian Railways Co. is to be set up by the end of the year to run the commercial part of the ministry.
 &quot;The joint stock company must not be created until all debts are paid off, otherwise all Russian railways will be sold off at once,&quot; Fadeyev said. 
 President Vladimir Putin said in his annual state of the nation address last week that the budgets of the natural monopolies - the Railways Ministry, UES and Gazprom - must be approved by the government. &quot;Until now, we did not even know what was happening inside [the monopolies],&quot; Putin said.
 Fadeyev said that the government &quot;must be fully informed about ... financial activities, of such a giant like the Railways Ministry, which has between 350 billion and 400 billion rubles [$11 billion and $13 billion] in revenues per year.&quot;
 He said the ministry is preparing a document in which it will &quot;fully disclose all its expenses down to the ruble.&quot;

TITLE: Wary Eye Cast on EU Influence on Trade
AUTHOR: By Todd Prince
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW - As the European Union brings countries from eastern and central Europe into its fold over the next few years, its political clout in the region is expected to strengthen and its influence on Russian economic life is set to grow.
 
But although the political ramifications of EU extension are considered damaging for Russia, the economic consequences are far from being a black-and-white, win-or-lose situation.
 The EU accounts for about 40 percent of total Russian exports, but this is expected to rise to 60 percent in coming years as the bloc expands to include former Soviet satellite states in central and eastern Europe.
 EU membership will require eastern and central European countries to bring their economic and trade legislation into accordance with EU standards, which could mean new hurdles for Russian producers.
 &quot;The most important concern on the Russian side is highly justified, that of EU trade policy being applied to yet another eight or 10 countries, many of them important Russian trading partners,&quot; said Erik Berglof, director of the Stockholm Institute for Transition Economies. &quot;The EU's choice of protectionist tools, in particular the use of anti-dumping measures, is also particularly damaging to Russia and has hit the country where it hurts the most.&quot;
 While this will hurt some major Russian companies, like steel and machine manufacturers, some say its biggest effect will be on smaller-scale producers.
 &quot;EU ecological and accounting standards are stricter than those currently in effect in Eastern European countries,&quot; said Vladimir Tikhomirov, a senior economist at NIKoil investment bank. &quot;Small manufacturers and businesses will find it more difficult to get into these countries after EU accession.&quot;
 EU candidate countries in eastern and central Europe account for about 20 percent of Russian exports. According to ING Bank Eurasia, raw materials account for 75 percent of that total. Oil and gas alone make up 50 percent of Russian exports to these countries, according to the bank.
 &quot;We do not expect a substantial impact in the short run resulting from trade with the new EU members,&quot; said ING Bank Eurasia General Director Hendrik Ten Bosch.
 The EU's interest in little more than Russian energy resources, which would only intensify with the additional states, adversely affects the development of the Russian economy, some say.
 &quot;By imposing restrictions on Russian manufacturers and agricultural products, and no restrictions on energy exports, EU trade policy has contributed to the 'Dutch Disease' problem,&quot; said Berglof of SITE, referring to the tendency of large influxes of income from the export of energy resources to raise the exchange rate of a country's currency and damage competitiveness in the non-export sector of the economy.
 But many observers see positive benefits for Russia from EU expansion. Some say EU extension could theoretically even help Russian exporters of European-standard goods.
 &quot;EU tariff barriers are lower on average than existing barriers in eastern Europe,&quot; said Christopher Granville, chief strategist at United Financial Group. &quot;Thus, technically, Russian companies could have a larger export capability, but in real life things are a lot more complicated and regulations could change. The overall effect of EU expansion will be minimal.&quot;
 But although EU tariffs are lower than current eastern European tariffs, Russian goods may still lose their competitiveness in both these regions after EU expansion. Current tariffs between the EU and eastern Europe will disappear with EU expansion, making each region's goods more competitive relative to Russian goods within the expanded EU market.
 EU regulations may single out goods entering eastern Europe, but they can't single out investors. And in eastern Europe, where Russia-phobia has shown itself at tenders for major state properties, Russian investors should see a more level playing field.
 Hugo Erikksen, head of public relations at oil major Yukos, said some of these countries have been reluctant to welcome Russian investment. &quot;Under EU regulations, these countries can't discriminate,&quot; he said. &quot;They have to treat all investors as equals, and that gives Russian companies new opportunities.&quot;
 Expansion gives Russian companies with assets in eastern Europe, like No. 1 oil company LUKoil, access to the entire European market, analysts say. LUKoil, with refining capacity in Bulgaria and Romania, could sell products from these refineries in any EU state once these countries are EU members. Some say this could pull Russian investors into eastern Europe.
 &quot;There is a big difference between investing in tiny Estonia and investing in the EU,&quot; said Alexei Sushkevich, economic analyst for Yabloko and senior research fellow at the USA-Canada Institute. &quot;Once Estonia joins the EU, any Russian investment there will be investment in the EU.&quot;
 But analysts are quick to point out that the chances LUKoil and other companies will be able to take advantage of such opportunities right away are minimal. Competition in the EU market is already fierce, they say.
 However, expansion could have positive consequences for Russia and Russian companies beyond dollar figures and market share.
 Eastern European politicians and economists will be able to bring their knowledge of Russia to the decision-makers at the EU headquarters in Brussels, some analysts say. Russia will also slowly become integrated into the EU culturally, as it plows more investment into the EU member states in eastern Europe. Russian companies operating there will have to adopt EU business standards and ethics.
 But that is a double-edged sword for Russia. EU regulations demand greater transparency in financial transactions than currently exist in eastern European countries, and that may scare off some Russian companies.
 &quot;There may be problems in acquiring assets. Companies will have to show more information about their operations,&quot; said Renaissance Capital economist Alexei Moiseyev. &quot;Right now they have to show fewer documents in eastern Europe. But the EU will be more diligent about money laundering and other issues.&quot;
 Tikhomirov agreed that this would create obstacles for certain Russian companies. &quot;The general trend in the EU is to get more control over borders, including economic ones,&quot; he said. &quot;The EU will closely watch these countries.&quot;
 Moscow has expressed fears that EU expansion would erode trade between Russia and eastern Europe, but observers say that breakdown has for the most part already taken place. EU expansion could only enhance those former Soviet trade contacts by strengthening the economies of eastern Europe, they say.

TITLE: WTO Boss: Russia Must Maintain Momentum
AUTHOR: By Victoria Lavrentieva
PUBLISHER: Staff Writer
TEXT: LONDON - As Russia approaches the final stage of negotiations with the World Trade Organization, the head of the WTO said it was crucial not to lose momentum.
 
&quot;Now all parties involved should redouble their efforts to make sure that it happens as soon as possible,&quot; Mike Moore said in addressing the fifth annual Russian Economic Forum in London on Friday. &quot;Leaving the job half-done will mean watching the results of hard work go by the wayside.&quot;
 Moore has said that Russia should be able to join the WTO by summer 2003.
 Finance Minister Alexei Kudrin, speaking at the forum the day before, said that the working group on Russia's accession to WTO is pushing ahead.
 &quot;By the end of this year, Russia expects to see the full picture of the terms and conditions for its membership in this organization,&quot; said Kudrin, who also is a deputy prime minister.
 There are still outstanding problems in the agriculture, banking, insurance and telecommunications sectors. But no matter how difficult it is to resolve them, Moore said the price for not resolving them would be much higher.
 Andrei Kazmin, chairperson of Sberbank, Russia's largest bank, who took the floor after Moore, agreed that problems in the banking sector are among the major remaining obstacles to WTO accession.
 Kazmin said the question is whether Russian banks are ready to compete with foreign rivals if local corporations are allowed to obtain loans directly from abroad.
 &quot;Due to the large difference in interest rates offered by banks in Russia and the EU or United States, it would be hard for Russian banks to compete in terms of the costs of money,&quot; Kazmin said.
 &quot;Also, this would de facto give a green light to legal export of capital from Russia,&quot; he said.
 According to Kazmin, of the current 144 members of WTO, there are only 31 countries that have no capital controls. &quot;I think for Russia, with its still undeveloped financial sector, it would be useful to keep current restrictions during the process of joining WTO,&quot; he said.
 Yet most people agree that joining the World Trade Organization is necessary for Russia to stay on the path of reform.
 &quot;The political cost of changes has already been paid and accession to WTO will be payback for the reforms,&quot; Moore said.
 His views were shared by Jean Lemierre, president of European Bank for Reconstruction and Development.
 &quot;Membership in WTO will be a major driving force for further reforms in Russia,&quot; Lemierre said, addressing the London forum.
 In his state of the nation address last week, President Vladimir Putin endorsed Russia's accession to the WTO, saying it would help Russia better defend its interests on the global market.
 After the terrorist attacks of Sept. 11, there has been greater willingness on behalf of Western industrial countries to support Russia's efforts to join the world trade body.
 &quot;We will not be a true WTO without Russia as a member of our table,&quot; Moore said.

TITLE: Gazprom Wants Price Scheme
PUBLISHER: Combined Reports
TEXT: MOSCOW - Gazprom said Friday it will ask the government to approve a long-term domestic gas-pricing program that envisages an annual 25 percent hike in prices from 2003 to 2006.
 
Gazprom CEO Alexei Miller said last week that he wants the gas giant's stock, which has doubled since the beginning of the year, to go up further - and higher gas tariffs are crucial to his efforts.
 Domestic prices for natural gas are a fraction of international levels, and Gazprom officials say that companies and individual consumers pay less for the gas than the costs of extraction and delivery. 
 The gap between domestic and foreign prices widened as a result of the August 1998 crisis, while cash payments have plunged sharply, aggravating Gazprom's investment problems.
 During the program's first stage, scheduled to run from 2002 to 2003, Gazprom hopes to recoup production, transportation, storage and marketing expenses while being compensated for costs it incurred while financing long-term investments.
 &quot;We propose that the unregulated gas market be expanded beginning in 2003,&quot; Gazprom said in a press release. &quot;This will be done by introducing gas trading on the free market.&quot;
 During the second stage, to begin in 2004, gas prices for households will be diversified. Cross-subsidization is to be halted by 2005, and liberalization of gas prices is to be completed by 2010.
 Gazprom's board of directors is to discuss measures to increase gas production at a board meeting scheduled for Monday.
 Miller said last week that harmonizing prices will take a long time because the industry and consumers are used to huge subsidies. &quot;The increase in gas prices must be very gradual - there will be no sharp, drastic increases,&quot; he said. 
 The government earlier this year scaled back plans to hike tariffs. Although Gazprom and the Federal Energy Commission lobbied hard for a 35-percent hike in domestic tariffs, they got a meager 20-percent increase as of March 15. The government said it may review tariffs again in midsummer.
 Miller sees higher domestic tariffs as an instrumental part of his strategy to increase the company's value.
 
 <i>(SPT, Reuters) </i>

TITLE: Economic Slowdown Calls for New Path for Russian Business
TEXT: Is Russia's spectacular growth spurt already over? As 2001 drew to a close, nearly all economic indicators dipped for the first time in nearly three years and, as staff writer <strong>Ben Aris </strong>reports, the period of effortless improvement has clearly come to an end. 

The economy has grown by an average of 6 percent annually over the past three years, but in October growth slowed dramatically. Conventional wisdom has it that high oil prices have been driving growth for the past few years, and, indeed, oil prices took a sharp dip in November as Russia went head-to-head with OPEC over production cuts to bolster prices.
 
However, economists say money earned from oil ceased to be the main driver of economic growth, as consumer spending took over. Private consumption was up by 8.7 percent last year and investment by 11.5 percent.
 &quot;In 1999, growth was driven by exports and the high international prices as well as the beneficial effects of devaluation,&quot; said Christof Ruhl, the World Bank's chief economist in Moscow. &quot;In 2000, investment was the driver of growth. And in 2001, it had become consumption. It looks like a trickle-down effect triggered by high oil prices.&quot;
 Devaluation may have slashed the value of workers' money, but, following the crisis, the big difference was that devalued cash was in workers' pockets rather than overpriced rubles in managers' desks as IOUs. Since the crash, wages and pension arrears have fallen off to next to nothing. And people have been spending their cash.
 Wholesale retail sales have almost doubled since 1998, while real income has recovered to pre-crisis levels and continues to grow strongly, according to the State Statistics Committee. At the same time, real wages are rising twice as fast, increasing by a quarter last year alone.
 
 
Economy Off the Boil
 
The growth seems to have peaked last summer. Between October and January, nearly all the economic indicators began to fall: Growth fell by half - to 0.3 percent per month - profits dipped, margins were squeezed and most of the increase in retail sales were taken up by imports.
 
Falling oil prices have been a factor, but are affecting the budget more than business. The government has been running a budget surplus of more than 2.5 percent since March 2000, but in January, receipts fell below the budget's target for the first time.
 Of all the results, the rise of imports is the most worrying. Demand continues to climb, and doubled between 2000 and 2001, according to the World Bank, but imports are rising even more quickly.
 The trade surplus fell by $10 billion from 2000 to 2001, to about $50 billion.
 Part of this is due to falling oil and gas prices, which make up half of all Russian exports, but consumer-orientated companies are also feeling the pinch.
 Textile sales continued to grow, but domestic textiles producers saw demand stagnate in the last quarter of 2001 as foreign competitors took nearly all new spending: Average imports by value rose by about 3.4 percent per month over most of last year, but textile imports jumped a 28.8 percent in October.
 Importers are largely insulated from the current global slowdown, but exporters are feeling the pinch from a combination of rising prices at home and falling prices abroad.
 The steel industry is suffering, and the recent trade spat with the United States over duties will make matters worse. The conflict with OPEC over production cuts, which has recently abated, could also squeeze the oil companies.
 
 
Short-Term Problems
 
There is much confusion over just how fast Russia will progress. The consensus is that Russia will grow about 3.5 percent in 2002, but instead of offering a prediction of where Russia will be in January 2003, international financial institutions are offering various scenarios that depend on how factors such as oil price, inflation and the ruble exchange rate combine.
 
According to Ruhl, Russia faces three threats to continued growth. In the short term, the first is that companies' rising productivity may fail to keep up with production costs, which will depend on companies' ability to attract investment and the strength of foreign competition, which in turn is related to the exchange rate.
 Part of the debate over the new Central Bank chairperson, Sergei Ignatyev, is what monetary policy the bank is going to follow - in other words, how fast it will allow the value of the currency to rise.
 The Economist Intelligence Unit estimates that the ruble appreciated by 8.6 percent in real effective terms in the course of 2001, roughly half the rate seen in 2000, although it accelerated again at the end of the year.
 The second threat is that costs will be driven up too fast. Tariff reforms, wages and money supply-inspired inflation are the most important factors here, and companies were already feeling the pinch by the end of last year.
 The government has set a target inflation rate of 12 percent to 14 percent for this year, but economists believe that inflation will end the year at around 15 percent to 16 percent, which is at least better than last year's 18.6 percent. Russia got off to a bad start in January, when the monthly inflation rate spiked to more than 3 percent - its highest level in three years - before falling back to a more reasonable 1.1 percent in March.
 President Vladimir Putin's economic adviser, Andrei Illarionov, said in January that tariffs were too high and warned that planned hikes, averaging 35 percent, will act as a brake on growth.
 The Economic Development and Trade Ministry is acutely aware of the dangers of high inflation. Although it is trying to bring inflation down to help small and medium-sized businesses (SMEs), it is equally concerned about the need to boost tariffs in order to allow the natural monopolies to raise badly needed investment capital. The government has already cut back on the natural monopolies' investment plans for this year and compromised on tariff hikes after the January numbers came out.
 &quot;There is a need to hike tariffs so that the natural monopolies can be reformed, but tariff hikes feed through into both inflation and the value of the ruble,&quot; said Peter Westin, an economist with Aton. &quot;Other countries of Eastern Europe have managed dramatic growth with high inflation, but they also had vibrant small and medium-sized enterprise sectors, which just don't exist in Russia.&quot;
 Illarionov is more concerned about the health of private business and believes the interests of the monopolies ought to be sacrificed to support SMEs.
 As Russia's natural monopolies are so inefficient, Illarionov argued, it would be better to squeeze more money out of them by boosting efficiency rather than raising tariffs. This would have the advantage of creating the needed investment capital, without punishing other businesses with the associated inflation. However, as the problems already present in the economy from labor constraints show, efficiency-driven productivity gains are extremely difficult to win and are a long-term solution.
 Price, inflation and ruble exchange rates are all short term factors, but underlying the fluctuations on the international commodity markets, business is faced with a much more serious problem that indicates the economy will be unable to repeat last year's spectacular result for several years.
 The third danger - making itself felt for the first time - is that the Kremlin may fail to make its reforms work.
 
 
Capacity Utilization
 
Economists and pundits have been surprised by the strength of Russia's growth since 1998. At the start of 1999, Russian Economic Trends took an average of the predictions for GDP growth that year from 11 leading institutions, which included the International Monetary Fund, the World Bank and JP Morgan. Together, they predicted the economy would shrink by 8 percent, when it actually grew by about 5 percent - a huge discrepancy by economic standards.
 
The nay-sayers pointed to the lack of a banking sector and an unreformed legislative base as the drag on growth.
 The devaluation of the ruble led to the collapse of imports and created a $30-billion hole in the market into which domestic producers gleefully stepped. Ironically, industry has been able to boost production to meet this demand without either a banking system or investment. Most of the growth in recent years has come from tempting idle employees back to work by doing little more than using the mushrooming cash flow to pay their salaries on time.
 &quot;It is one of the more remarkable facets of the Dr. Seuss economy that evolved in the '90s that, despite a 60-percent decrease in industrial production between 1991 and 1999, unemployment rose by less than 5 percent,&quot; said Roland Nash, head of research at Renaissance Capital. &quot;The fact that workers received no wages and factories produced no output appeared to do little to damage the relationship between employers and employees. Workers went to work, hung out, puttered around a little and went home. Employers seemed to enjoy having them around.&quot;
 After three years, it seems that companies have now taken up most of the labor slack and this, not oil, was causing the slowdown at the end of last year.
 According to the Russian Economic Barometer, a monthly business survey, the utilization of available labor has already risen from just over 70 percent in 1998 to just under 90 percent by the start of 2001, while machinery utilization has climbed half as quickly. On average, a third of all factory machines remain idle.
 As the economy slowed in November, unemployment fell by 1 percent instead of rising as would be expected. At the same time, wage increases continue unabated.
 &quot;If all the slack in labor productivity gains has been taken up, then the window of opportunity is now closed,&quot; said the World Bank's Ruhl. &quot;Life will get more difficult if further production gains become dependent purely on the investment flows.&quot;
 Clearly, there are still more gains to be won from making staff work better, rather than just harder, but study of Russia's labor productivity is still needed and it is difficult to say just how important this is. These types of productivity gains usually require extensive training and time.
 
 
Reform and Banks
 
It doesn't take much money to make employees work but, as companies bump up against labor-capacity ceilings, it is going to get much more difficult to further increase production without buying new equipment.
 
Banks have contributed almost nothing to growth. Despite rising fixed investment, last year bank credits made up a pathetic three percent of total capital invested into industry.
 Companies are already on the hunt for investment capital. Companies in the oil and gas sectors are awash with cash following three years of high international commodity prices, but many of them are planning to rationalize their financing needs by issuing Eurobonds.
 In addition to the $4 billion worth of Eurobonds the state is expected to issue this year, 12 blue-chip corporations are expected to issue about $3 billion worth of Eurobonds.
 One tier down, big companies such as domestic health-and-beauty-product maker Kalina and diamond monopoly Alrosa are tapping into the growing pool of rubles that banks have been depositing in correspondent accounts with the Central Bank.
 More than 100 companies issued a total of $2.6 billion worth of ruble-denominated corporate bonds last year. Both numbers are expected to double this year.
 And there has been a small trickle of Russian companies using their stock to raise money. Wimm-Bill-Dann's initial public offering on the New York Stock Exchange in February was one of the most recent, and this month will see Russia's first ever Initial Public Offering as RosBusinessConsulting sells its shares directly on the RTS and MICEX.
 All these sources of capital are closed to the huge swathe of SMEs forced to pay for investment out of retained earnings or by finding private investors.
 The lack of SMEs is a serious problem. Their number has fallen in recent years to about 800,000, or about 4 percent of gross domestic product, according to official statistics, although there is much debate over how the number should be measured. Other estimates put the number at 15 percent to 18 percent of GDP and growing.
 Whatever the real number, there are clearly not enough SMEs. A few years ago, a World Bank study concluded that a vibrant SME sector was an important contributor to rapid growth.
 &quot;If a thriving segment of new, small-and medium-sized firms is already in place, it becomes easier to import the conditions leading to the restructuring of old enterprises, because it is relatively easy for people to find new jobs elsewhere,&quot; the study said. &quot;If, on the other hand, alternative employment opportunities and government support are absent, the recommendation to close down non-viable plants may appear very cynical.&quot;
 But the fast growth of SMEs depends on successfully reforming the bureaucracy. Apart from feeling more optimistic about the future, small businesses say they see little or no change on the ground. The lack of access to capital is another problem.
 Bank credit portfolios have been rising strongly over the past year, but the maturity length of loans has been dropping equally quickly, suggesting that most of the credits are going to fund working capital. More worrying, wage arrears also began to creep up in February, suggesting that even retained earnings are no longer enough to fund the pace of growth.
 &quot;Firms for the first time are running into capital constraints, just as they are being hit by the combined force of ruble appreciation and rising tariffs,&quot; says Renaissance Capital's Nash. &quot;If the new chairman of the Central Bank is unable to facilitate the redistribution of capital from that sector of the economy which generates it, to that which requires it, then Russia's brief flirtation with fast growth will soon end.&quot;
 
 
'Now the Hard Part'
 
The slowdown at the end of last year marks the end of the first and successful phase of Putin's attempt to transform Russia Inc. into a profitable concern. As it is being caused as much by capacity constraints and demand as the fall of international oil prices, some economists are even talking about &quot;Russia's first business cycle.&quot;
 
Business cycles are driven more by fluctuations in demand than what happens on the London metals market, and after the Christmas downturn, demand picked up again at the start of this year.
 The Moscow Narodny Bank production-managers index (PMI), a survey of business activity, found that, by February, confidence, output and orders had all picked up again, although problems with labor persist.
 The PMI index also grew in March. Nash said: &quot;The March Moscow Narodny Bank PMI index shows the pick-up in industrial production levels continued in March, which supports our views that manufacturing growth has recovered, and that it is likely to continue until October as it has every year since 1999. It means the lower rate of manufacturing growth this winter was nothing more than a seasonal phenomenon and is no cause for concern.&quot;
 Last month, Deputy Economic Development and Trade Minister Arkady Dvorkovich said preliminary State Statistics Committee figures show the economy was up 2 percent year on year - the lowest figure since May 1999 - although this was being driven by large enterprises and is not sustainable in his view.
 He pointed again to the need to develop the SME sector in the long term.
 The lack of a banking sector is already dragging on growth. The Russian Economic Barometer survey found managers are worried about the rising cost of equipment. However, 90 percent of managers said their biggest problem is simply the lack of access to capital, up from two-thirds a year ago.
 Russia's economy remains top-heavy, with two thirds of investment going into fuel and energy and budget-funded enterprises. The only companies doing really well tend to be catering directly to consumers. Huge chunks of the economy are simply being bypassed.
 &quot;At the moment, the government is part of the economy in a way it should not be,&quot; Prime Minister Mikhail Kasyanov said in January. &quot;This includes not only banking, but the economy as a whole.&quot;
 The government plans to conduct a thorough, across-the-board analysis and inventory of state-controlled enterprises at all levels, and intends to spin off its stakes, says Kasyanov, but this process has yet to begin.
 A World Bank report in 1992 noted that the only foreign investors in Russia were those that &quot;had&quot; to be there - companies in the extraction industries and multinationals with famous brands.
 Ruhl points out that foreigners would like to invest in oil. But as the oil companies are awash with money, there are few opportunities.
 The government would like foreigners to invest into areas such as the utilities sector, but the amount of money required - Unified Energy Systems estimates that it needs $5 billion per year for the next decade - are so huge, no one is prepared to take the risk.
 The country's natural wealth means expert-orientated industries should be attractive, but the venal state of the customs service means that few have taken the plunge (IKEA's recent pledges to make Russia a production center for furniture are a notable exception). This leaves only those industries connected to the consumer, such as beer and food processing, which is exactly where foreign investment is going.
 Putin has been hitting bullseyes with his reform program. All the major problems outlined in this article are being addressed. And, in what is increasingly typical of Putin's pragmatic style, the problems have been addressed more or less in order of importance.
 Starting with tax reform, the Kremlin moved on to tackle the natural monopolies which affect both budget revenues and inflation. Of the instructional changes, customs reforms topped the list, followed by Putin's call to focus on promoting SMEs at the end of last year.
 Last month, Viktor Gerashchenko resigned six months before his term as Central Bank chairperson was due to expire, a sign the Kremlin is already concerned about doing something about the banking sector.
 &quot;The easy stuff has been done,&quot; said United Financial Group chairperson Charles Ryan. &quot;Now the hard part starts.&quot;

TITLE: What Does Russia Need for Rapid Growth?
AUTHOR: By Vladimir Mau
TEXT: THE central aim of Russia's current and medium-term economic policy is to create the conditions for rapid economic growth while restructuring the country's economy along post-industrial lines. This means tackling the problems of catching up with advanced economies - similar to the problems Russia faced a century ago, only then in the context of the industrial epoch.
 
There has been a new turn in the debate regarding the mechanisms needed to achieve sustainable economic growth. In 2000, when the government's strategic program was being prepared, three main growth strategies were put forward: (1) dirigiste (increasing the regulatory and redistributive role of the government through direct involvement in investment); (2) liberal (the drastic reduction of the budget as a share of GDP); and (3) institutional (development and enforcement of &quot;rules of the game&quot; that will encourage business and investors to work in Russia). In its program, the government opted for the third of these approaches. However, actual developments in economic policy and the behavior of business have raised further questions.
 The government was faced with three alternative models for its relations with business. First, an active state industrial policy; second, enhancement of the role of conglomerates of the countrys' largest enterprises (financial-industrial groups or vertically integrated companies); and third, the development and strengthening of the institutions of a modern market-based democracy. These three alternatives are related to at least two of the three above-mentioned growth strategies. However, whereas the discussion in 2000 was abstract, based on economists' theoretical understandings of preferred developmental paths, now conclusions are drawn on the basis of an analysis of actual economic trends in Russia.
 Two trends are discernible. First, the government is more-or-less consistently implementing institutional reform plans and focusing its efforts on improving the business climate. Simultaneously, the pace of formation of vertically integrated groups of companies has increased; these financial-industrial groups consist of various enterprises and banks, and many increased their investment activities.
 An active state industrial policy needs the identification of priority economic sectors and promotion of investment in these sectors, as well as significant expansion of state demand and its use as a key factor in increasing business activity. Further, it needs real appreciation of the ruble to facilitate the import of machinery and components, as well as the possible support of &quot;import-substituting&quot; industries through the imposition of tariffs. The development of integrated business groups is seen as a central part of this model, as these groups can be instruments for such an industrial policy.
 The drawbacks of this are that, in a post-industrial economy, it is fundamentally impossible to pick &quot;winning&quot; industries as priority targets for support, and the cost of mistakes is high. Also, the low level of effectiveness of state investment has been shown repeatedly in practice. Furthermore, financial-industrial conglomerates have a tendency to put their interests before those of the wider public; they will need fiscal incentives to develop chosen sectors and may lobby the authorities to substantially restrict competition from foreign companies.
 Under the other model, the government redoubles its efforts to attract private investment to both export-oriented and import-substitution sectors. This is pursued through the government's macroeconomic, institutional and foreign policies. Macroeconomic policy, unlike the model described above, is targeted at curtailing real appreciation of the ruble and decreasing the burden of the budget on the economy (although increasing the size of the budget in absolute terms). At the same time, efforts are stepped up to provide incentives for investors, both general (reducing the tax burden, removing bureaucratic barriers to doing business, improving the effectiveness of the judicial system, etc.) and specific (such as creating free economic zones, concluding production sharing agreements, etc.). And lastly, measures are taken to expand Russia's involvement in relevant international organizations and to harmonize the country's business legislation with that of other market economies.
 In reality, these two policy models are not totally incompatible. When actually put into practice, they can, to some extent, be combined, neutralizing certain drawbacks and making the most of their respective merits. For example, under certain circumstances, it could be expedient to use government demand as an instrument for stimulating economic growth - as long as it is not founded on &quot;fiscal populism&quot; and is not linked to the monetary authorities providing loans to the budget. It is also obvious that the course of events is not determined solely by government decisions and that these decisions are circumscribed by the state of the Russian economy.
 It is highly probable that the expansion of vertically integrated groups will be one of the features of the country's development in the immediate future, and that they will play an important role both in investment and in the political arena. This means the government should develop macroeconomic and institutional policies to support and encourage investment by financial-industrial groups, while at the same time curbing their monopolistic powers. The authorities have sufficient levers to deal with this.
 If developments do indeed follow this scenario - as seems highly likely - three policy areas will be of particular significance.
 The first is consistent implementation of a liberal foreign-trade policy, and WTO accession is a key element in this. The openness of the market to competition from abroad is one of the main ways to counteract the monopolistic tendencies of major Russian companies. It is no accident that certain of these companies have stepped up their efforts to oppose Russian WTO entry. However, progress toward this goal does not mean the complete rejection of all forms of protection for domestic manufacturers - for example, protection that can be achieved through exchange-rate policy measures.
 Second is the implementation of fundamental reforms in areas that are not directly related to the economy, but which have a huge (sometimes decisive) impact on economic activity. The most important of these are: the judicial system, reform of governmental machinery (including law enforcement agencies) and military reform. Positive changes here affect the overall business climate (above all by reducing transaction costs), as well as forestalling attempts by companies to state institutions under their control.
 Third is to conduct specific policies to stimulate entrepreneurship. Central to this is anti-monopoly policy and the promotion of competition. Deregulation issues (lowering administrative barriers to doing business), as well as stimulating innovation and the small and medium-sized business sector are particularly important for this.
 All these factors contribute to the creation of a favorable postindustrial institutional environment. These three target areas taken together are the main priorities in the government's social and economic policy for the next few years.
 
 <i>
Vladimir Mau is head of the Working Center for Economic Reform under the Russian government. This comment is excerpted from his &quot;Economic and Political Results for 2001 and the Prospects for Strengthening Economic Growth.&quot; The full article is available at www.iet.ru. </i>

TITLE: Putin Should Consider Circumstances
TEXT: PRESIDENT Vladimir Putin last week took the government to task for its pessimistic economic forecasts and highlighted the need for greater growth in his state of the nation address. Now, I don't want to suggest that we have an ideal government, but there are a few mitigating circumstances that need to be considered.
 
The first of these is that 80 percent of a Russian company's expenditures go to cover its bills for natural gas, electricity, rail shipments and taxes. In other words, only 20 percent of a company's turnover finds its way into the market. Companies have devised a fairly obvious strategy to deal with this situation. After all, why increase the profitability of your company when a well-placed bribe can cut your bills by millions? The result of this strategy is that Russia's GDP doesn't grow. It is redistributed. In order to break out of this vicious circle, the government must rationalize the tax system and reform the natural monopolies. Who's responsible for holding up these reforms, the government or the president?
 The second mitigating circumstance is that the carving up of property in Russia continues to this day. War remains practically the main instrument of economic exchange. And it's well known that GDP doesn't grow much during a war. In fact, it doesn't grow at all. It shrinks in proportion to the volume of capital sent overseas by former factory owners.
 To claim the moral right to threaten warring oligarchs, the government must, for a start, stop extorting money from them. Where do the oligarchs deliver their donations to the &quot;future election fund,&quot; the government or the Kremlin?
 The third circumstance is that the more bureaucrats Russia has, the less its economy grows. Under Putin a new class of bureaucrat has emerged - the plenipotentiary presidential representatives, or <i>polpredy</i>. And the result? Leonid Drachevsky is drawing up a development plan for Siberia that calls for the creation of an extra-budgetary fund under his control. Konstantin Pulikovsky is divvying up the gas stations in Primorye in favor of the Alyans group, and Sergei Kiriyenko is bankrupting chemical plants in Dzerzhinsk with the help of friendly energy suppliers.
 Who brought this new breed of locust down on our heads? The president or the government? Law enforcement agents are a particularly harmful subspecies of bureaucrat. Unlike the oligarchs, they can't divide up property. Some sort of natural trait predisposes them to play the role of tools, not masters. At the same time they actively encourage and even prolong industrial conflicts. They clean out the losers and blackmail the victors.
 Here's an example torn from the headlines. A certain oligarch acquired a factory. Two months later, some guys with badges approached him and demanded $200,000. &quot;What for?&quot; the incredulous oligarch asked. &quot;Look, your rival came to us and asked us to 'arrange a call' against you.&quot; (Arranging a call means having a highly placed officer make a few calls to the Tax Police and other law enforcement agencies on the unsuspecting target.) &quot;We arranged it. The whole thing cost us $200,000 but he never paid up. So now we're coming to you. How about you give us the money.&quot; &quot;You must be crazy,&quot; the oligarch said. &quot;You arranged a call that made my life very unpleasant, and now you're asking me to pay you for it?!&quot;
 The point is that the increased role of law enforcement in Russia to this point translates into nothing more than the increased price for &quot;arranging a call.&quot; And it's pretty clear that the more this nonproductive category of citizens consumes our GDP, the less GDP is left over. It makes you wonder who's responsible for the increased role of law enforcement - the government or the Kremlin?
 What's the upshot of all this? That the president was entirely right to give the government a tongue-lashing. Machiavelli advised that the sovereign who can't help but perform bad deeds should lay the responsibility for those deeds on his subordinates. Of course, Machiavelli also recommended that heads should roll in such a situation.
 
 <i>
Yulia Latynina is a journalist with ORT. </i>

TITLE: War Is Over, But Debt Survives
AUTHOR: By Mark Medish
TEXT: ONE of the last unsettled financial questions of the Cold War is Russia's $42 billion of Soviet-era debt to official creditors. Since the Soviet collapse there have been calls to forgive all or part of it.
 
A plausible option for Russia's creditors is to do nothing. But in the aftermath of Sept. 11, President Vladimir Putin's closer political alignment with the West has boosted the chances of a debt deal, as this month's agreement between Russia and Germany over Soviet debts with the former East Germany illustrate.
 Russia's ability to repay its Soviet-era loans has increased substantially since the 1998 financial crisis. But while Prime Minister Mikhail Kasyanov reassures markets that Russia can meet its external obligations - helping the country's credit ratings - Russian experts continue to call for debt forgiveness. Group of Seven governments are reviewing the options.
 There are three arguments for debt forgiveness. The first is symbolic but important. It relates to U.S. President George W. Bush's mantra that the Cold War is over, as he reminded the world in defence of scrapping the Anti-Ballistic Missile Treaty. The magnitude of this historic transition supports relief from the Soviet Union's financial legacy. There are precedents for large-scale moral or political debt forgiveness. For example, Poland and Egypt received such relief in the early 1990s, as did Yugoslavia last year.
 The second, related argument is strategic. Russia has emerged as a partner in the war on terror. There are few things the West can do in economic terms to respond to Putin's apparent &quot;paradigm shift&quot; towards the transatlantic community. One is to support early accession to the World Trade Organisation. Another is to provide debt relief.
 The third argument is economic. Although Russia may not qualify for relief based on orthodox financial criteria, its fiscal outlook and investment climate would certainly be enhanced by well-structured debt relief. The same is true of a number of other so-called &quot;middle income&quot; countries such as Nigeria, Indonesia and Jordan, all of which have been candidates for new thinking on debt relief.
 These reasons make a strong case for considering comprehensive treatment of Russia's Soviet-era debt. But several counterpoints must also be weighed.
 The most obvious is that creditor-club orthodoxy does not support forgiveness. If a country can pay, it should. But the G7 is looking for more creative financial tools to advance policy objectives. Financial orthodoxy is important, but it is a bad reason to miss big foreign-policy opportunities. One option is to provide relief outside the Paris Club.
 A more subtle objection is that, after the Soviet break-up, Russia got the benefit of the so-called &quot;zero option.&quot; Under it, Moscow assumed both the external liabilities and the assets of the Soviet Union. Would debt forgiveness now amount to promising one thing and doing another? Not really. First, after joining the Paris Club as creditor in 1997, Russia wrote down much of the debt owed by Soviet client states. Second, the West used the zero option to give the non-Russian successor states a full Soviet-era debt write-off.
 Russia's Western creditors are not all united. Germany, the largest creditor, with 48 percent of the Soviet debt, is torn. German Chancellor Gerhardt Schroeder faces tough elections in September, and there is little appetite for more spending. But Soviet-era debt is heavily discounted on most G7 budget books, so a write-off would cost a fraction of par value.
 The United States, with only a 6-percent stake, must lead the way politically. The other G7 countries are likely to support a united U.S.-German approach, which may include a menu of debt-relief options spread over years, with reasonable burden-sharing among creditors.
 As Bush prepares for the St. Petersburg summit in May, debt is likely to be high on the agenda. Peter the Great's &quot;window on the West&quot; would be an appropriate setting for the two presidents to close another chapter of the Cold War.
 
 <i>
Mark Medish is a principal of AG Global Solutions in Washington. He was a U.S. Treasury and National Security Council official under President Bill Clinton. He submitted this comment to the Financial Times. </i>

TITLE: Tax-Authority Decision Not a Letter of the Law
AUTHOR: By Ruslan Vasutin and Edward Zadubrovsky
TEXT: REGIONAL tax concessions and their issuance, as is often the case, are hot topics right now in the local business community.
 
On March 14, the St. Petersburg branch of the Tax Ministry issued a short, three-line letter advising that, pursuant to the St. Petersburg Law No. 422-52, On Amendments to the Law On Tax Concessions, of June 1 of 2001, the capital-investment concession for the portion of profits tax payable to the St. Petersburg budget was being suspended. This regional concession was provided for in the law &quot;On Tax Concessions&quot; in July 1995, which is still in effect.
 The letter raises questions. First, while brevity is a virtue, it is unclear whether the letter is intended to apply to the 2001 or 2002 tax years. It appears to have been intended to limit the concession just for 2001, but it may also effect those concessions that may be legally claimed for 2002 if a taxpayer is able to apply federal &quot;grandfathering&quot; provisions. Since 2001 tax filings were due April 1, this also poses a problem, as many companies have already filed their tax declarations claiming this tax concession, while those who claim the concession in a corrected tax return will also face uncertainty.
 Second, the letter has no legal basis, as it contradicts legislation and is not - and cannot be - registered with the Justice Ministry. Issuing this conflicting document doesn't help promote an image of St. Petersburg as a favorable place for investment, especially when compared to the Leningrad Oblast. Despite lacking some of St. Petersburg's advantages in this field, the Oblast has consistently endeavored to develop legislation that will attract investment. The signing into law on April 8 of the oblast law &quot;On Measures of State Support of Trade Activity in the Leningrad Oblast&quot;, which provides additional concessions to companies involved in wholesale trade, is only the most recent example.
 The tax authorities' attempt to suspend the capital-investment concession has raised concerns that the city plans to try &quot;stealth&quot; tactics to raise revenues ahead of next year's 300th anniversary celebrations. Despite the fact that the portion of the profit-tax rate that goes to the St. Petersburg budget fell from 18 percent to 16.5 percent - 14.5 percent to the city and 2 percent that would in most cases go to municipal budgets - when Chapter 25 of the Tax Code took effect Jan. 1, corporate taxpayers' lives may not have become any easier.
 Whatever the case, should the St. Petersburg tax authorities attempt to enforce this letter, there are very strong grounds on which taxpayers may, and should, contest this in the courts.
 
 <i>
Ruslan Vasutin is the senior manager and Edward Zadubrovsky an associate at the Andersen Legal office in St. Petersburg. </i>

TITLE: Glad To Hear They're Serious About Tourism
TEXT: In response to &quot;Cabinet Says Yes to Long-Term Tourist Plan,&quot; April 12.
 </i>
 <i>Editor,
 </i>I found your article on the Russian government's new-found interest in promoting tourism ironic, having just been mugged by police officers in Ulitsa Arbat in Moscow the evening before I read it. 
 
These men - the only people we encountered in three weeks in Russia with a decent command of English - are working the tourist precinct, shaking down unsuspecting foreigners with fictitious visa irregularities. 
 Three officers ask to see your passport, claim there is a problem with your visa - which we knew was all in order - and call in reinforcements. Soon there are five officers present, and as soon as you agree to go to the police station to complete a report, you are hustled into a back alley. 
 The scam begins. While the senior officer pushes up the pressure, a junior one pretends to be writing a report - in fact, scrawling badly the victims names from their passports onto a scrap of paper. Requests to contact your embassy are laughed off.
 The price to get out of this situation starts at $100 a head. However, since we were not carrying that much cash, having just stepped out to grab food for a train journey, they settled for all the rubles I was carrying and some small U.S. notes from my friend. The whole process was carried out in a particularly malicious and threatening manner.
 If the Russian government is even vaguely interested in increasing tourism revenues, eliminating the confiscation of undeclared currency at the borders is barely a start. Poor signage, incomprehensible taxi fares, multi-level pricing, excessively complex visa arrangements, the undeveloped service culture and police corruption are among other things need to be addressed. 
 Even prime tourist sites like the State Hermitage Museum and the Kremlin have virtually no signage in English, French or German. Had I not learned the cyrillic alphabet before my trip, we would have been in serious trouble quite a few times. By comparison, major sites in China, Vietnam, Cambodia and even Mongolia, cater well to tourists.
 Would we come back to Russia? Hell no! Would we discourage others from traveling to Russia? At every opportunity!
 <i>Ian Douglas
 Stawberry Hills, Australia
 </i>
 <i>
In response to &quot;U.S. Visa Scam Leaves Behind Trail of Tears&quot; by Todd Prince on April 19.
 
 Editor,
 </i>As someone whose family emigrated from Russia, it greatly saddens me to hear that the embassies of the United States and Canada are doing nothing to stop these kinds of visa scams being orchestrated upon people seeking better lives abroad.
 
When I was in Moscow last year I spent close to two hours informing a Canadian Embassy official about what many of these immigration firms were doing and how my embassy was, by its inaction and silence, just as guilty as the firms perpetuating such scams.
 I told the official how rude attitudes displayed on the telephone by consular staff at the embassy was cruel, mean and costing poor people literally thousands of dollars that they could not afford.
 Answers that could be given quite simply over the telephone in a courteous manner weren't being given and because of it people were forced into borrowing everything they had to give money to immigration firms that can't do anything for them.
 The Canadian Embassy has a free form that it will send to anyone in Russia who requests it. You can fill it out for free and the embassy will return it to you with an opinion of what it thinks your chances of getting a visa are. The embassy did this so people would not pay a $500 fee to be told within a short time they maybe shouldn't have bothered trying. 
 The unfortunate thing is that the embassy doesn't tell ordinary Russians on the telephone that the form exists.
 Advertisements in newspapers promising visas are not responded to by the embassy and so visa scams just seem to keep cropping up, and poor people continue to be ripped off. Can't the Canadian and U.S. embassies see that the Russian people who telephone them for information are most likely not criminals and they are just honest people hoping to emigrate to what they feel and have heard is a better life? 
 It is very easy for anyone who has a command of English to fill out the embassy forms by himself - or with the help of a translator. You don't have to pay thousands of dollars for this.
 The Canadian Embassy should be telling Russians who telephone the Canadian Embassy these things, but they just seem to be caught up in their own pettiness at times.
 Not everyone telephoning the Canadian Embassy is a scam artist or criminal. Most are just honest, hard-working people seeking honest answers and hoping for a better life. Unfortunately the North American embassies just see them as dishonest. 
 <i>Gerry Thomas 
 Moose Jaw, Canada
 </i>
 <strong>
Good Neighbors
 </strong><i>
In response to a letter by Markus Lehtipuu published on Feb. 12.
 
 Editor,
 </i>I'd like to emphasize that I have always blamed the Soviet regime for initiating the Winter War against Finland and I highly esteem the bravery of the thousands of Finnish soldiers and officers who took part in the war.
 
As regards territorial claims, after the two world wars, the defeated countries lost some territories. For example, Germany lost Alsace and Lorraine and all its overseas territories in Africa, Asia and the Pacific, while Japan lost the Kuril Islands and the southern part of Sakhalin to the Soviet Union. At the Yalta and Potsdam conferences, new borders were defined, and the postwar borders' inviolability was confirmed at the Helsinki conference in the 1970s. 
 To a large extent, the postwar prosperity of Finland is based upon favorable relations between the former Soviet Union and Finland.
 I live at Komarovo (formerly Kellomaki,near Terioki) on the Karelian isthmus, and I love this land. As I know, there have been close, friendly ties with Finland for many years. But I have never heard of any territorial claims from the Finnish side. 
 I remember a series of articles that appeared in a Leningrad daily in 1990 or 1991 about the problem of the Karelian isthmus. I was under the impression that Finnish officials did not express any territorial claims at that time.
 Personally, I wouldn't mind in the least if Finland was returned its former territories, including those in Karelia and Petsamo, provided the Russian population could remain unless they wish to leave. Why repeat the brutality of the Stalin regime and its mass deportations?
 Despite two wars, Russians have never felt any hostility toward the Finnish people, although officials did their best to eradicate any marks of Finland in these territories. I have had many dear friends in Finland for more than 40 years and even speak some Finnish. And I believe in good and friendly relations between Finns and Russians. 
 <i>Vadim Yurchenkov 
 Komarovo
 </i>
 <strong>
In the Dark
 </strong><i>
In response to &quot;Lack of Funds Pulls Plug on Observatory&quot; on April 16.
 
 Editor,
 </i>I am a frequent reader of The St. Petersburg Times online and an amateur astronomer. Having completed my undergraduate studies at St. Petersburg State University in physics and astronomy, I tend to have a soft spot for Russian astronomy and space sciences. Even though I never had any direct participation with the Pulkovskaya Observatory, I did work with some leading scientists affiliated partly with Pulkovskaya. 
 
There are only a few observatories throughout Russia that carry out leading-edge optical and radio astronomy, and Pulkovskaya used to be one of them. I strongly feel that Russia's federal government should definitely reconsider its interest in continuing such research, and thus help in restoring Pulskovskaya. 
 Also, scientists working there should voice their concerns just a little louder and send in petitions to the International Space Consortium, in the form of agencies like European Space Agency asking for support or funding for future proposals and for money that could partially help in pay the observatory's bills.
 <i>Wellesley Pereira
 Houghton, Michigan
 </i>
 <strong>
Bad Neighbors
 </strong><i>
In response to &quot;The Roots of Anti-Americanism,&quot; a column by Boris Kagarlitsky on April 12.
 
 Editor,
 </i>I thoroughly enjoyed reading this article. As a Canadian who was born in Niagara Falls, Canada - where virtually everything from news broadcasts to tourists were from egocentric middle America. I have been steeped in a rather uniquely &quot;Canadian&quot; anti-Americanism. I fully understand why Russians are fed up with the inferiority complex shoved down your throats from decades of admiring American stuff too much. 
 
What were Russians thinking, by the way, when they admired America so senselessly? I really love Russian culture, history and the country's &quot;in-your-face&quot; attitude now. 
 I traveled to Russia and Ukraine, learned the Ukrainian and Russian languages and struggled my way through everything from Pushkin to Krug. Well, it's not just Russian stuff I like - I read Marguerite Duras in French. And I watch reruns of Jean Renoir, Fassbinder and Fellini films as often as possible. 
 Such internationalism is part of being Canadian. There is much more to us than our propensity for &quot;not hurting anyone&quot; - we have managed to actually be educated in internationalism, sophistication and free-thinking tolerance, all of which are quite a few notches above the cigar-smoking, naval-gazing, McDonald's-eating slob who owns us just to the south. 
 In all of my Russian friends who have immigrated to Canada, I see an enormously high level of thinking, education, and intelligence. But my question is: Why do none of them bother to read our great Canadian poets such as Gwendolyn MacEwan? Or listen to &quot;the Canadian Vysotsky&quot; - Leonard Cohen? Or bother to be entertained by our acclaimed Cirque du Soleil? 
 Is it because none of it is Russian? Why am I able to find so much beauty and meaning in Rakhmaninov or Rilke, but every single Russian I know in Canada won't even look at any work of art that isn't Russian? And, how different is that, really, from American egocentricity? 
 <i>Margaret Pohran-Khomenko
 Winnipeg, Canada
 </i>
 <strong>
Friends Like These
 </strong><i>
Editor,
 </i>The Kremlin is happy to sell any advanced weapon system to any of the United States' most avowed enemies, such as Iraq, Iran, Libya and North Korea. All of these countries have murdered U.S. citizens and destroyed airliners with U.S. citizens aboard. 
 
When the Kremlin sells advanced weapons to these dictatorships, which country is harmed by them? When you have Russia for an &quot;ally,&quot; you have no need to look far for an enemy. Many in the United States think the Kremlin can't forget that the Cold War is over.
 <i>John King
 Eugene, Oregon
 </i>
 <strong>
Don't Hate Us
 </strong><i>
Editor,
 </i>Your article about anti-Americanism in Russia is interesting and disturbing. Yet another country's masses are getting in line to forge their anvil of hate directed against America. 
 
There is so much that Russians don't understand about Americans. We benefit from so much freedom and prosperity. Yet here, too, hate finds a foothold. 
 My observation is that there are many similarities between hate groups from our country and Russia. Ignorance, resentment built on frustration and blame is directed beyond one's self in order to explain the inadequacies that failure brings. 
 Failure comes infrequently to the average American. Most everything we want is ours if we work at it. Are we to be blamed for this? We are guilty only of living in a country with a government that has allowed us to be free and to succeed in our ambitions. We seek to protect those freedoms. We seek to share the concepts that has brought those freedoms to us. Don't blame us for Russia's inadequacies.
 Communist Socialism is one of the biggest failures of the last 100 years. Russia will fight for many years the legacy of a government responsible for the deaths of so many, and the eventual bankruptcy of an economic system that failed to deliver. Don't blame us for that. It is not our fault.
 Instead, treat Americans as individuals. Some are good, others are not, but we don't hate Russia. We have much to learn from Russia and vice versa. Don't hate us because we found freedom and prosperity. Join us in sharing our prosperity with the world and your country.
 <i>Steve Jordan
 Lodi, California
 </i>
 <strong>
Not So Simple</strong>
 <i>
In response to &quot;Try Trade for Peace, Instead of Land for Peace,&quot; a comment by Robert Skidelsky on April 19.
 
 Editor,
 </i>Skidelsky is correct in asserting that for the peace process to go forward, the Palestinian people will have to live in an atmosphere in which they could conduct free elections, rather than push the agenda of the Iraqi-style dictator and his clique. He is also correct in saying that for the Palestinian state to go forward, there would have to be a viable economy and free trade.
 
However, there is also a number of key issues over which Skedelsky glides. I'd like to expand on these. 
 First, the unwillingness of Israel to accept an international peacekeeping force is based on the bitter experience it has had with the supposedly impartial forces. The latest case in point is the recent situation on the border with Lebanon, when UN troops ended up as accomplices of the Hezbollah terrorists, and then used their supposed impartiality to withhold videotapes with evidence from Israel. Had they turned over these tapes to the Israelis when they filmed them, the kidnapped Israeli soldiers could have been saved. 
 Second, the agreements between Israel and the Palestinian Authority have called for many of the measures that are advocated by the author. Israeli leaders are on the record for soliciting the Western governments for economic aid to the Palestinians. 
 Regrettably, the Palestinian leadership has chosen to use this aid money to buy weapons, which are illegal under the agreements they'd signed, and to use educational funds to print the anti-Jewish hate propaganda for their grade-school children.
 Third, the author implies that Israeli Prime Minister Ariel Sharon represents the obstacle to normalizing the relations between the Israelis and the Palestinians, equating him to Palestinian President Yasser Arafat. Skidelsky must be forgetting that before Sharon, Israel was led by Ehud Barak, who offered so many concessions to the Palestinians' demands that, in the words of the widow of Ytzhak Rabin, her husband would be turning in his grave had he known what Barak was doing. 
 Yet even he was unable to make peace with the Arabs. This indicates to me (and every other logical person) that Sharon is not the problem, but rather Arafat is. 
 As long as the Palestinian leadership and their oil-rich handlers continue to advocate sacrificing the Palestinian people to achieve their political goals, there will be no peace, no matter what the economic situation is.
 <i>Alex Khazanovich
 Phoenix, Arizona </i>

TITLE: A Second Chance for Chavez and for Bush
AUTHOR: By Michael Shifter
TEXT: WASHINGTON - For Venezuelan President Hugo Chavez, Sept. 11, 2001, turned out to be a decisive day in ways few could have imagined. Just moments after the terrorist attacks on the United States, U.S. Secretary of State Colin Powell, speaking at a special session of the Organization of American States in Lima, Peru, eloquently defended a new democratic charter - which called for hemispheric responses to interruptions of constitutional rule. That instrument was used for the first time to help bring Chavez back to power after a botched attempt to oust him on April 12. 
 
Of all of Latin America's leaders, Chavez had long expressed the most profound reservations about such a charter. A decade ago, Chavez himself, a former paratrooper, failed in a coup attempt against a democratically elected government in Venezuela. In January 2000, when Ecuadoran president Jamil Mahuad was ousted by a popular revolt with some military backing, Chavez sympathized with those who engineered the coup. And a year ago, at a hemispheric summit meeting in Quebec, Chavez led a move to block the adoption of the democratic charter. 
 Though he went along with its adoption on Sept. 11, Chavez has hardly concealed his disdain for liberal, representative democracy. Rather, he has passionately extolled the virtues of quite a different notion, which he calls &quot;participatory democracy.&quot; As envisioned by Chavez, this brand of democracy eschews principles such as checks and balances and the separation of powers. Chavez has also criticized regional gatherings that issue pronouncements on the status of democratic rule in particular countries and thereby encroach on national sovereignty. 
 Therefore, for many Latin Americans, the image last week of OAS Secretary General Cesar Gaviria together with Chavez - recognizing his return to power as Venezuela's legitimate, duly elected president - was drenched in irony. While the democratic charter might have won, at least temporarily, a convert, it also seems to have temporarily lost one of its devotees. 
 U.S. President George W. Bush pushed hard for the democratic charter a year ago at the hemispheric summit meeting in Quebec, seeking to demonstrate to his Latin American counterparts that the region was vital to his administration. Powell's statement in Lima appeared to underline the commitment. But in the hours immediately after the coup directed against Chavez - with Powell and other senior foreign-policy officials consumed with the Middle East - the U.S. government failed to express any concern about the evident interruption of the constitutional process in Venezuela. On the contrary, the Bush administration seemed pleased with the outcome that day and claimed Chavez's own actions had provoked his ouster. 
 In the minds of some Bush administration officials, getting rid of Chavez - whose anti-American rhetoric and friendship with Fidel Castro and Saddam Hussein have long been irksome - was no doubt tantamount to installing democracy. 
 Latin American leaders, however, responded differently. Worried about a potential contagion effect of the Venezuelan scenario in their own fragile democracies, they took the initiative and immediately condemned the coup, invoking the democratic charter adopted seven months before. Although the United States went along with the Latin American move at the first formal meeting of the OAS on April 13, one day into the increasingly shaky coup, the initial U.S. reaction had already resulted in a loss of credibility on the democracy question. Latin Americans were, moreover, upset that the United States did not consult with them before issuing a statement. 
 The image of Venezuelan generals standing behind Pedro Carmona - a business leader they had tried to install as president - had particularly chilling echoes of previous periods of military rule in Latin America. The message of condemnation by Latin American leaders proved to be one factor in the extraordinary chain of events a week ago that ultimately led - as the headline in the Argentine daily Pagina 12 put it - to the &quot;resurrection of Chavez on the third day.&quot; 
 The democratic charter has been strengthened through its use - especially in defense of one of its leading critics. Chavez himself, though Venezuela's elected leader, has undermined his country's democracy through his own policies, his reliance on &quot;Bolivarian circles&quot; to bully opponents and his constitutional maneuvers to prolong his time in office. The Latin governments, through the OAS, should now take advantage of their unprecedented authority on the democracy question and engage the Chavez government to advance reconciliation in Venezuela. This role, after all, is also essential to the spirit of the democratic charter. 
 With Venezuela still so polarized, the OAS can foster what is known throughout the region as &quot;concertacion,&quot; or consensus, among disparate political forces. The best way for the Bush administration to regain its credibility is to work with hemispheric partners and support such an effort. Bush himself should consult with his colleagues in the region and urge joint action to help Venezuela heal itself.
 The United States may be tempted to pursue quite different courses. One option might be to distance itself from other Latin American governments. Another temptation may be to adopt an even more adversarial posture toward Chavez, justified by his ties with Cuba and his presumed sympathy for the Colombian guerrillas, who in turn are at war with Colombia's democratic government. Neither of these approaches, however, would help move the United States off the sidelines in hemispheric affairs. And neither is an effective way to deal with the complex challenges posed by Venezuela and democracy throughout the region. 
 The premature triumphalism exhibited by the United States in reacting to the Venezuela coup revealed a misreading of the situation in that country. Chavez may not have expected the sort of &quot;participatory democracy&quot; he eventually got - with genuine opposition forces, a coalition of &quot;civil society&quot; out on the street, protesting the president's confrontational style and failed policies. But Chavez's critics, including the United States, underestimated the intensity and passion of his hard-core base, made up overwhelmingly of the poorest Venezuelans. 
 And they also failed to anticipate the fissures that quickly developed within the agglomeration of opposition groups - and the political ineptitude of those who eventually assumed control. Indeed, if these astonishing events show anything, they underscore the critical role that needs to be played by political parties and leaders in fragmented societies like Venezuela. 
 Although Chavez's success can be traced to his relentless indictment of the country's traditional parties, it is clear that the void left by those now-passive parties cannot be filled by &quot;civil society,&quot; no matter how inspired its members may be. The issue is less one of ideology - the labels of &quot;left&quot; and &quot;right&quot; have little meaning in this context - than of practicing clean and competent politics. Especially in this oil-rich country, corruption underlies everything. Chavez has leveled corruption charges against his critics, who, in turn, have leveled the same charges against his administration. 
 Venezuela's vast social inequities have made governing enormously difficult. As Venezuelans look ahead, their task will be to renovate political parties or establish new ones that will learn from the mistakes of recent decades and build political structures that are more modern and responsive to citizen demands. Indeed, throughout Latin America - whether in Argentina, Peru or Ecuador - this is perhaps the most formidable challenge. 
 And what about Chavez? How is he likely to behave after nearly being toppled? Will he be chastened? So far, his comments have been remarkably conciliatory. But Chavez is mercurial and predictions are hazardous. More than three years ago, Gabriel Garcia Marquez - the Nobel Prize-winning Colombian writer whose most fantastic flights of &quot;magical realism&quot; pale in comparison to Venezuela's recent reality - wrote a telling profile of Chavez. After talking for hours with Chavez on a flight from Havana to Caracas, Garcia Marquez wrote, &quot;I was overwhelmed by the feeling that I had just been traveling and chatting pleasantly with two opposing men. One to whom the caprices of fate had given an opportunity to save his country. The other, an illusionist, who could pass into the history books as just another despot.&quot; Now fate has given Chavez yet another chance to amend his chapter.
 
 <i>Michael Shifter is vice president for policy at the Inter-American Dialogue and teaches Latin American politics at Georgetown University's School of Foreign Service. He contributed this comment to The Washington Post. </i>

TITLE: New Border Offices, Same Old Customs
AUTHOR: By Vladimir Kovalyev
TEXT: ON the surface, the changes that have swept Russia over the past decade have also reached customs checkpoints - at least those located on the northwest border. 
 
Checkpoints such as Ivangorod on the Russian-Estonian border, or Torfyanovka, Brusnichnoye and Vyartsila on the Finnish border, have new customs offices built in Lego-like blocks of green and gray that look more or less modern, stylish even. Another border post will soon start operating in Svetogorsk on the road to the Finnish town of Imatra.
 The European Bank for Reconstruction and Development has given millions of dollars to Russia to improve its border infrastructure. The consensus is that the money has not been wasted and that Russia has been gradually opening itself up to the world. 
 But at the same time, it is also fair to say that things would have proceeded even more smoothly if the authorities had just a slightly more enlightened attitude to change.
 We already know that the three-day visa plan launched in February has got stuck in a bog of Russian bureaucracy. Nobody knows how it works, including the very officials who are meant to be implementing it.
 It seems to me that most Russian officials are a special breed of people who have been brought into the world with the single aim of preventing good ideas from being realized. When they see something new, the authorities don't react with any interest, only suspicion. If the wheel had been invented in Russia it would never have spread to the rest of the world.
 That is exactly what happened to a British-Russian project to test an amphibious vehicle in the Bering Strait this month. Because the vehicle did not look &quot;traditional&quot; enough, Russian bureaucrats would not give permission for it to cross the Russian border. Before reading about this latest incident, I thought I had become immune to the stupidity of the Russian authorities, but now I must admit I was mistaken. 
 A week ago, I was stopped by a customs official at the Russian-Finnish border for not declaring my Nokia mobile phone. This, you see, is &quot;a high-frequency piece of equipment that should be declared for a temporary removal.&quot; 
 The official was interested in what type of telephone it was and how much it cost. These are both things that I don't remember. 
 Happily, the official was brave enough to determine the type herself and agreed with my price, which I gave as $50. 
 But that was not all.
 Next came the passport office. Here I was told that Russian customs stamps that I had received in the past were not arranged in the correct order in my passport. I was asked why (like it's me who stamps my passport every time I go somewhere). Because of this, a Finnish driver who had kindly agreed to take me to the next town for free was made to wait outside for 20 minutes.
 On my way back, I saw something even more ridiculous. 
 Under Vyartsila customs regulations, every driver crossing the border in a private car receives a piece of paper the size of a tram ticket saying how many people are in the car. A hundred meters further on, the driver must hand the piece of paper on to another border official, presumably to make sure that nobody gets lost on the way. It looks like a bit like a children's game, which could be called &quot;Prove you didn't lose a person on the way.&quot; 
 Anyway, I happened to witness one driver who lost this game. 
 It was not his fault, of course, that a border official forgot to give him that all-important piece of paper. Nevertheless, he was made to go back and get it by a second official, even though his passport was already stamped.
 The Vyartsila checkpoint looks Western and modern, with clean floors and well-washed windows. Although there is no music playing as it does at the Finnish checkpoint, the place generally looks good and helps to create a reasonable first impression of Russia. 
 But that is only the surface. You can wear an expensive suit and have shiny shoes on, but if you can't stop swearing, people will still turn away from you.

TITLE: Chris Floyd's Global Eye
TEXT: <b>The Valley</b>
 Gaius Aelius Messala, </i>legatus, <i>XVII Legion, to his brother, Quintus.
 </i>
Germania Magnia. <br> 19 October [8 A.D].
 
 
Brother! Warmest greetings from the River Elbe. Tonight you recline on soft couches with your friends, feasting and drinking - and talking rot - while we poor soldiers shiver in our tents, eating hard bread and sharpening our blades for tomorrow's battle. 
 
Even now your arm is encircling some tender waist - is it still Livilla, or has Agrippina mounted the throne once again? Such lusty campaigners! - while my only company is cold bronze, a flickering lamp, and the ugly mug of Brutus, the slave Father sent with his last dispatch. He smiles as he writes this for me - quite right, Brutus! We must take our misfortunes in good part, eh?
 But in truth, Brother, I would not change places with you tonight. Our fight tomorrow is a noble one, an act of justice that will bring fresh glory to Rome. We strike at the barbarians who devastated Noviomagus this summer, a murderous raid across the Rhine, on our own territory, leaving thousands dead - an affront to Roman power that cannot go unanswered. We have pursued these beasts deep into their own lair, and now they are cornered. Tomorrow they will pay the price for their evil.
 So much for them. Now, Quintus, Father sends disturbing news: Your continuing acquaintance with those so-called &quot;republicans&quot; who snipe and peep and whisper calumnies against the great Augustus. I know the type well; indeed, in my own youth I was given to much the same tomfoolery, duped by tales of &quot;ancient liberties&quot; lost and fearsome rants against &quot;tyranny.&quot; 
 But you are now reaching an age when you must put aside this kind of sentimentality, and recognise that the measures taken by our <i>Imperator </i>have in fact saved the Republic from its own worst excesses.
 Where is this &quot;tyranny&quot;? You are in Rome - look around, what do you see? The old forms and formalities of government are still observed, as strictly as ever. The Senate still meets and debates, the assemblies still hold their elections, the praetors still exercise their constitutional powers. Political factions still jostle for primacy, poets and playwrights still revel in decadence, law-courts are still filled with wrangling advocates chewing over every jot and tittle - tyranny should present a more placid face, don't you think? The bumptious course of our public life should be smoothed and flattened by the iron hand of the autocrat. But as you see, it is not so.
 Yes, I know the whispers. I know that Augustus has taken on many of the burdens of state that once were dispersed among several hands. But note well: At each stage, these powers have been granted by the Senate, ratified by law, in the best Roman tradition. And note too, dear brother: this accumulation of authority is <i>temporary. </i>They were given to Augustus in a time of crisis, to preserve our way of life from those who would destroy it. Once we are past these dangerous shoals, the concentration of powers will end, never fear.
 So yes, to save our &quot;ancient liberties,&quot; we must relinquish them, in part, for a time. Perhaps this paradox is hard to fathom there in the comfort of Rome - but for us on the frontier, its truth stands out in stark relief. We are here to carry on that work of preservation, to pass down our way of life to our posterity. I want my son to grow strong and wise, secure in the bounty of our family estate. He should never know want or fear or hunger: Those ravening wolves which spring from the chaos that Augustus has mastered - and which these barbarians, in their envy and ignorance, would unleash upon us again.
 How many generations have shed their blood to bring us to this pinnacle of civilization! Yet your whispering friends speak of &quot;violent conquest,&quot; and &quot;oppression&quot; of other peoples. They would have us still in mud huts, trembling by the Tiber. Yes, we project our dominance - because we <i>must. </i>First and foremost, to preserve our patrimony, as is right and just - but also to bring enlightenment to the dark places of the earth. Why else has Fortune favored us, above all nations in the history of the world, except to carry out this divine mission? I am proud to play my small part in such noble endeavors - and I hope that you too, dear Quintus, will come to know this pride as well.
 The night grows thin. Dawn is near. I must finish this tomorrow - if Jupiter and Minerva, deities of our house, see fit to bring me through.
 <i>20 October. Evening. </i>The battle was short, our losses light. The barbarians have been destroyed. The best of our men went about it quickly - the only mercy in this kind of thing - but some fell short, alas. I had to execute three of my soldiers - dispatched them with my own hand - for the bestial way they handled the women and children, making slow sport of the business.
 By afternoon, the killing was done, and the village put to the torch. We marched up to the surrounding hills and made camp on the western slope, the far side, away from the smoking valley.
 I am weary now and will write no more. Commend me to our father, and attend well what I have told you. Put away childish things and gird yourself: We have much hard work ahead.

TITLE: IN BRIEF
TEXT: Extinction Certain
 

SINGAPORE (Reuters) - Singapore's only unique wild animals - one of the world's largest squirrels and a monkey that lives high in the forest canopy - are perilously close to extinction, a researcher said last week. 
 Peter Ng, the director of a museum on biodiversity at the National University of Singapore, said the Cream-colored Giant Squirrel and the Banded Leaf Monkey have fallen victim to urbanization and shrinking forests. 
 "In the old days both animals were listed as common. They numbered in the comfortable thousands," he said. 
 Less than 20 Banded Leaf Monkeys and no more than four squirrels still live in what is left of the tiny island nation's forests, Ng said. Their likely extinction will mean the end of the last animal sub-species found only in Singapore. 
 "We're pretty sure they're kaput," he says. 
 With only three percent of the island set aside for parks, efforts to breed the animals in captivity and reintroduce them to the forests will fail, Ng said.
 
 
Frogs in Peril
 

WELLINGTON, New Zealand (Reuters) - A toxic fungus blamed for decimating amphibian populations around the world has been found in New Zealand, prompting fears that the country's four unique frog species could be wiped out. 
 Six months ago, the native Archey's frog population was found to be infected with the chytrid fungus, believed to be responsible for a rapid decline in a number of species, Canterbury University ecologist Bruce Waldman said last week. 
 New Zealand's four matchbox-sized native frog species all lack ears, don't croak and hatch directly into froglets without going through a tadpole stage. "These are living fossil frogs. ...They were alive before there were dinosaurs roaming. These frogs - not necessarily the same species but frogs that morphologically are very, very similar - lived 200 million years ago." 
 Three of the species live entirely on land and all have little or no webbing between their toes.
 
 
Resistance on the Rise
 

BOSTON (Reuters) - Antibiotic-resistant strep infections among children have risen dramatically in the last year, doctors in Pittsburgh have found, the latest evidence that widespread use of drugs is making them less effective in fighting infection. 
 The study, led by Dr. Judith Martin of Children's Hospital in Pittsburgh and coming out in Thursday's New England Journal of Medicine, is the latest evidence of a growing danger the medical community has been warning about for years, with little response from governments. 
 Scientists believe the practice of routinely feeding powerful antibiotics to livestock, along with the overuse of the drugs in humans, is allowing bacteria to develop a resistance to the medicines. As a result, some infections that were once easily controlled by antibiotics are becoming increasingly difficult to contain. 
 Martin's team found 48 percent of the 318 throat cultures with group A streptococci taken in a single school from October 2000 to May 2001 were resistant to the drug erythromycin, which is usually given to children who are allergic to penicillin. When the researchers randomly selected 100 strep cultures from outside the school between April and June of last year, 38 turned out to be resistant to erythromycin. 
 Such rates are unheard of in the United States, although they have been reported in Europe and Japan. 



TITLE: France Rocked by Le Pen Tally
AUTHOR: By Elaine Ganley
PUBLISHER: The Associated Press
TEXT: PARIS - The leader of France's resurgent extreme right today called on mainstream voters to join him as he faces incumbent Jacques Chirac for the presidency, following a stunning finish in a first round of voting that shook the political establishment and sent protesters into the streets.
 
Socialist Prime Minister Lionel Jospin, disqualified after placing third in Sunday's first-round vote, called the performance of Jean-Marie le Pen a &quot;thunderbolt,&quot; and announced his retirement from politics.
 Le Pen's second-place showing is a &quot;very disturbing sign for France and for our democracy,&quot; Jospin said, choking back emotion.
 Le Pen, 73, leader of the anti-immigration National Front, called his score a step in &quot;the French renaissance,&quot; to be completed with a second-round victory on May 5.
 Eyeing the runoff, the National Front leader made a broad appeal to the French, &quot;whatever their race, their religion or their social condition, to rally to this historic chance for national recovery.&quot;
 The silver-haired le Pen, a former paratrooper now in his fourth presidential race, has been a fixture in French politics for decades. But few could imagine that he would reach the final round in the contest for the country's top office. 
 Scores of polls leading up to the vote consistently showed the conservative Chirac, 69, and the Socialist Jospin, 64, taking the top two slots. Only recently did le Pen even solidly emerge as the so-called third man, the kingmaker.
 With more than 99 percent of the vote counted, Chirac had 19.7 percent, le Pen 17.06 percent and Jospin 16.05 percent, according to the Interior Ministry.
 The three men were among a record field of 16 candidates. The abstention rate of some 28 percent also was a record, Interior Minister Daniel Vaillant said. Both were likely contributing factors to le Pen's success.
 Shock was also reflected in French newspapers, with the leftist Liberation newspaper's front page showing a photo of le Pen with an enormous one-word headline: &quot;No.&quot; Conservative le Figaro's headline read, &quot;The earthquake.&quot;
 Voter apathy and the fragmented field punished Jospin and rewarded le Pen, boosting him beyond the 15 percent that he and his party traditionally score in national elections.
 Rising crime and the central role it took in the campaign appeared to be another factor in le Pen's success.
 Chirac put public insecurity at the top of his campaign platform. At a campaign meeting, he referred to the massacre in late March of eight suburban city council members by a deranged gunman as an example of the left's failure to address rising crime.
 Vaillant, commenting on the election result, denounced what he called fear tactics - without mentioning Chirac - that played into the hands of le Pen, whose party blames urban violence on immigrants.
 le Pen has long been accused of racism and anti-Semitism. He is notorious for having called Nazi gas chambers &quot;a detail&quot; of history in 1987 - a remark for which he was fined in court, one of several convictions.
 Le Pen denies he is anti-Semitic. An estimated 10,000 people gathered in Paris early Monday morning to protest le Pen's showing to cries of &quot;We are all the children of immigrants&quot; or &quot;Down with the National Front.&quot;
 Violence tinged the peaceful protest as a few thousand broke away, apparently marching toward the presidential Elysee Palace, and confronted riot police lobbing tear gas at the Place de la Concorde. The huge window of the famed restaurant Maxim's was smashed. Several hundred protesters then rampaged on a Left Bank boulevard, smashing some bus stops and shop windows. Police arrested several dozen people.
 Demonstrators gathered in other cities too, from Marseille in the south, to Lille in the north, to Strasbourg in the east.
 The Union of Jewish students in France called for a rally on Monday outside the historic Pantheon in Paris to denounce &quot;intolerance, anti-Semitism, and xenophobia.&quot;
 Le Pen, who founded the National Front in 1972 and uses &quot;French first&quot; as his slogan, has struck a chord among voters who fear that the French identity is being sacrificed to immigration, particularly Muslims from Africa. 
 He blames immigrants for urban violence and unemployment, and refers to himself as a simple patriot.
 Champagne bottles stayed corked at Chirac's campaign headquarters as a somber president called for national unity.
 &quot;I call on all French men and women to gather to defend human rights,&quot; Chirac said in a brief speech. &quot;At risk is our national cohesion, the values of the Republic.
 &quot;France needs you, and I need you.&quot;
 Defeated candidates, one after another, put out calls for followers to vote for Chirac in the second round to stop le Pen. &quot;France must not be abandoned to the National Front,&quot; said candidate Jean-Pierre Chevenement, who once served as interior and defense minister.
 Le Pen had only narrowly qualified for the presidential race, scrambling for the 500 endorsements from elected officials needed to run. His party all but imploded in 1998 when top lieutenant Bruno Megret left in a nasty public quarrel and formed his own movement.
 Megret, too, was a presidential candidate on Sunday, getting nearly 2.4 percent of the vote. Taken together with le Pen, that meant that the extreme right garnered almost as many votes as Chirac.
 Calling the results a &quot;veritable cataclysm,&quot; Finance Minister Laurent Fabius, a Socialist, said Le Pen's path must be blocked in the second round.
 &quot;I think that tonight there are lots of people crying,&quot; he said. &quot;This is not the France that we love.&quot;

TITLE: Renewed Violence Leaves Eighteen Dead in Gujurat
AUTHOR: By Rupak Sanyal
PUBLISHER: The Associated Press
TEXT: AHMADABAD, India - Police fired into a crowd of Muslims during religious clashes in western India, killing nine people by shooting them in the head, according to a police report Monday.
 
At least 18 people were killed Sunday in a new wave of sectarian fighting in Gujarat state, police said.
 Several neighborhoods were under siege again on Monday by Hindu and Muslim groups who were setting homes and businesses on fire. There were several reports of stabbings, but police did not yet have any casualty figures.
 Sunday's religious violence took the death toll from India's worst religious rioting in a decade to 851.
 At least 91 people were seriously injured, with burns and bullet wounds, said officers at the police control room in Ahmadabad.
 The communal violence began Feb. 27, when Mus lims set fire to a train carrying Hindu activists returning from a pilgrimage.
 Those killed on Sunday include nine Muslims in Gomtipur, a neigh borhood of Ahmadabad, where police fired into a swelling mob on the Hindu festival of Ramnavami.
 Eight men and two women were shot by police. Nine were shot in the head. The dead include a father and daughter who were killed inside their house.
 Some police officers, speaking on condition of anonymity, said the firing at Muslims was a reaction to the murder of a police Constable Amar Rao Patil, who was stabbed by Muslims in the crowd.
 &quot;Residents came out in large groups and pelted stones on the policemen, forcing them to open fire,&quot; Assistant Commissioner of Police R.B. Puwar said. He could not explain why the Muslims were shot in the head.
 &quot;There is no reason to think that police fired on these people just to kill them. Our intention was to disperse the mob, but unfortunately they were hit on the head,&quot; said Deputy Commissioner of Police R.J. Savani. 
 According to police, groups were assembling for the Hindu festival in Gomtipur when clashes erupted among Hindu and Muslim neighbors. Stones were thrown and petrol bombs were hurled from both sides, forcing police to open fire. Two Hindus were killed in the clashes and another died when hit by a petrol bomb, police said.
 When a police officer was stabbed, more police moved in to push back the crowd, a police officer said on condition of anonymity.
 Two other people were killed in the city, but their religion was not immediately known. The remaining two deaths occurred in the Kheda district, about 32 kilometers north of Ahmadabad.
 The renewed violence came on the same day that Prime Minister Atal Bihari Vajpayee vowed to avenge earlier Gujarat killings. Most of those murdered have been Muslims, many of whom were burned alive.
 &quot;The country belongs to people of all religious, ethnic and linguistic groups,&quot; Vajpayee was quoted as saying by the Hindustan Times newspaper. &quot;My government will ensure their protection.&quot;
 After the Feb. 27 train fire, retaliatory rampages have consumed the state. Tens of thousands of Muslims have been left homeless as a result of Hindu mob violence. 
 The inability of the state government to stop the rioting, and allegations that police have targeted Muslims and supported the Hindu rioters, have provoked widespread demands for the dismissal of Gujarat Chief Minister Narendra Modi, the top elected official.
 Work in parliament was stalled last week due to the opposition demand for action against Modi. Both houses of parliament were adjourned again Monday when the opposition began shouting out for Modi's sacking, a debate on Gujarat and a vote on whether to censure the state's government.
 The opposition blames the Hindu-nationalist party Vajpayee and its ideological affiliates for the carnage. Vajpayee's Bharatiya Janata Party has declined Modi's offer of resignation and insists he is doing everything he can to end the attacks.

TITLE: Zenit Turns on the Style To Hold Loko 1-1
PUBLISHER: The St. Petersburg Times
TEXT: Maybe life without Yury Morozov is possible.
 
From his hostpital bed, Zenit's head coach saw his side, under senior trainer Mikhail Biryukov, produce a thrilling display to hold league leader Lokomotiv Moscow to a 1-1 draw at the Petrovsky Stadium on Saturday.
 Zenit's goal was only the second that Loko had conceded all season, and came right at the beginning of the second half when Sarkis Ovsepyan, up from right-back, sent a low cross to the near post.
 A frantic scramble ensued in the six-yard box, the ball eventually breaking to Andrei Arshavin, who swivelled and slotted home left-footed.
 Arshavin's goal, his second of the season, sparked frenzied celebrations around the stadium, and Arshavin pulling off his jersey and throwing the T-shirt underneath into the crowd.
 Prompted by captain Alexei Igonin, who was rampant in midfield alongside Konstantin Konoplyov, Zenit took the game to Loko from the start. Konstantin Lepyokhin missed a free header from an Arshavin freekick after eight minutes, and Konoplyov and Arshavin both missed good chances early on.
 Loko relied on quick counterattacking, and took the lead against the run of play at 38 minutes. South African fullback Jacob Lekheto found Dmitry Loskov on the edge of the area, Loskov's low drive was only parried by Vyacheslav Malefeyev, and Marat Izmailov tucked away the rebound.
 A physical game eventually boiled over just before halftime. After a Zenit freekick from the right was blocked, fullback Valery Tsvetkov sent in a low cross, which resulted in Zenit forward Alexander Kerzhakov tangling with Loko goalie Sergei Ovchinnikov. Several players got involved, and some were lucky to escape bookings. In the second half, Loko's Gennady Nizhegorodov was sent off for a second bookable offense after holding back Kerzhakov.
 Zenit was unable to capitalize on its man advantage, however, and was frustrated when Ovsepyan hit the post in the final minute.
 The weekend's biggest game saw a 3-0 win for CSKA Moscow away at its hated city rival, Spartak.
 Andrei Solomatin, Rolan Gusev and Juris Laizans were on target for the army club in a game marred by violence among supporters.
 Police made over 150 arrests after the game.

TITLE: Mariners Continue Hot Streak
PUBLISHER: The Associated Press
TEXT: SEATTLE - Ichiro Suzuki tripled twice and scored two runs Sunday as the Seattle Mariners overcame two home runs by Alex Rodriguez in his former ballpark to defeat the Rangers 5-3.
 
Rodriguez homered twice in a game for the second time this season against Seattle. It was his 22nd career multihomer game.
 Texas has lost 12 of its last 14 against Seattle, and is 6-21 since Rodriguez left the Mariners after the 2000 season to sign a $252 million, 10-year contract.
 Rodriguez has hit five of his eight homers this year against his former team. His former fans booed him and tossed paper money in all three games of the series, his first in Seattle this season.
 He also added a double in the eighth off Joel Pineiro. Rafael Palmeiro had a sacrifice fly in the inning, dropped by left fielder Mark McLemore for an error, as Pineiro allowed his first run of the season.
 Rodriguez hit a solo homer in the first into the upper deck in left field as the Rangers tagged Seattle starter Freddy Garcia for three straight hits with two outs. Rodriguez also homered in the sixth.
 Garcia (2-2) gave up two runs on seven hits in six-plus innings. He struck out three and walked none, settling down after the first inning and retiring 14 of 15 batters at one point before Rodriguez's second homer.
 The Mariners tied it at 1-all in the bottom half of the first after Suzuki led off with a triple that got past Carl Everett and rolled to the wall in center field, then scored on Cirillo's single down the third-base line.
 Suzuki tripled again in the third and scored on a groundout by Cirillo.
 Dan Wilson hit his first homer in the second, a solo shot to left on a 2-2 pitch from lefty Doug Davis (2-1) to put Seattle up 2-1.
 
 <i>
(For other results, see Scorecard.) </i>

TITLE: Laker's Title Quest Begins With Victory
PUBLISHER: The Associated Press
TEXT: LOS ANGELES - Although Kobe Bryant's new close-cropped look might have made him quicker, as he professed with a smile, it didn't do much for his shooting.
 
But it didn't prevent Bryant and his Los Angeles Lakers teammates from coming up with a winning performance Sunday as they began their quest for a three-peat.
 Bryant scored 34 points despite making only 10 of 28 shots, and Shaquille O'Neal had 25 points and nine rebounds to lead the Lakers past the Portland Trail Blazers 95-87.
 &quot;I've been wanting to change it for two months,&quot; Bryant said about his haircut. &quot;I've had an Afro for 5 1/2 years and last night, I finally got the courage to cut it off.&quot;
 Regarding his shooting, Bryant said: &quot;I had good looks, they felt good. I've been working on my outside jump shot all week for the playoffs and I'm going to continue shooting. Hopefully they'll fall for me.&quot;
 Bryant found himself with room because the Blazers opted to collapse on O'Neal, who attempted only two shots in the first quarter, making both, and went 10-for-17 overall.
 &quot;They were doubling and tripling me,&quot; O'Neal said. &quot;We just have to move the ball, and other guys just have to step up and make shots, just take the high-percentage shots.&quot;
 The Lakers, trying to become the fifth team in NBA history to win three or more consecutive championships, used a 14-3 run early in the fourth quarter to take command in winning for the 17th time in 18 playoff games dating to the last game of the 2000 NBA Finals.
 The Blazers scored the first five points of the fourth quarter to draw within one, before a 3-point shot by Derek Fisher triggered the decisive spurt, which gave the Lakers an 82-70 lead with 8:04 remaining.
 The Blazers got within five points before a basket by Robert Horry and a 3-pointer by Fisher made it 92-82 with 3:44 left.
 The Blazers got six offensive rebounds before either team scored, but only six the rest of the way. And they made only 30-of-82 shots (36.6 percent) to 32-of-75 (42.7 percent) for the Lakers.
 Rasheed Wallace led the Blazers with 25 points and 14 rebounds. Derek Anderson scored a playoff career-best 22 points in a reserve role. Ruben Patterson, another reserve, added 13 points. Scottie Pippen had 11 points, eight rebounds and five assists.
 Bonzi Wells and Damon Stoudamire, Portland's starting guards, shot 4-of-12 and 1-of-8, respectively. And Pippen, shooting mainly from the outside, was 4-of-11.
 
 <strong>
Detroit 85, Toronto 63. </strong>Ben Wallace had 19 points, 20 rebounds, three blocks and three steals as the Detroit Pistons beat the Toronto Raptors on Sunday night.
 
One day after he won the NBA's defensive player of the year award by a record-breaking margin, Wallace showed he could produce on the other end, too.
 He matched his season-high with 19 points, and fell one short of matching his career-high.
 Antonio Davis led the Raptors with 15 points, and Williams added 11 against his former team. For Detroit, Jerry Stackhouse scored 20 points, and reserve Corliss Williamson added 14 against his former team.
 The Raptors managed only 11 points in the third quarter and finished with it's lowest point total in three post season outings.
 An ugly start to the game followed the booing of the Canadian national anthem by the sold-out crowd at The Palace. The crowd included a couple thousand Toronto fans, who were decked out in Raptors gear and were waving Canadian flags.
 &quot;That was a little distasteful,&quot; Stackhouse said. &quot;I don't think anyone enjoyed it. But our fans stuck up for us all season, so I'm going to stick up for them. I'm sure they were booing Toronto the team, not Canada the country.&quot;
 When Toronto made a 12-2 run midway through the second quarter to cut its deficit 29-28, the crowd chanted &quot;USA, USA!&quot;
 
 <i>
(For other results, see Scorecard) </i>

TITLE: Carr Goes To Texans, Bills Deal For Bledsoe
AUTHOR: By Barry Wilner
PUBLISHER: The Associated Press
TEXT: NEW YORK - David Carr was the most newsworthy quarterback of the NFL draft's opening round. Drew Bledsoe stole the headlines in the final round. Carr, the Fresno State star, joined the Houston Texans to begin the proceedings on Saturday.
 
Carr got right into the mood of things, declaring, &quot;They do it big in Texas. ... I can't say enough how I feel about the Texan organization. I'm proud to be a Texan and I want to beat up on the Cowboys more than anyone else.&quot;
 He'll get a chance in the season opener on Sept. 8. That same day, Bledsoe will make his regular-season debut with the Buffalo Bills against the New York Jets.
 Bledsoe was acquired from New England during Sunday's seventh and last round of the draft. The Patriots received Buffalo's first-round choice next year for the nine-year veteran who lost his job to Super Bowl MVP Tom Brady.
 &quot;Everybody talks about the need for quarterbacks,&quot; Bills general manager Tom Donahoe said. &quot;All we know is, we're happy to know that we were in that position and had a chance to do this.&quot;
 Among the teams helping themselves at the position were Detroit, which took Oregon's Joey Harrington third overall, and Washington. The Redskins traded down twice in the first round, gathering extra picks, and still got Tulane's Patrick Ramsey.
 Even Harrington was stunned when the Lions chose him right after North Carolina defensive end Julius Peppers went to Carolina.
 &quot;I was just about to sit down with my mom and dad and watch the Lions pick someone else, and I got a phone call. I was shocked. I was caught off guard, but I'm thrilled to be there,&quot; Harrington said.
 The most popular position in the draft was defensive back: Fifty-two cornerbacks or safeties were chosen, including CBs Quentin Jammer of Texas (fifth overall to San Diego), Phillip Buchanon of Miami (17th to Oakland), Lito Sheppard of Florida (26th to Philadelphia) and Mike Rumph of Miami (27th to San Francisco) in the first round. Safeties Roy Williams, the eighth overall choice by Dallas, and Ed Reed, 24th to Baltimore, also were first-rounders.
 While the Hurricanes and Vols were dominating the draft, with 11 and 10 players chosen respectively, such big time programs as Penn State (2), Syracuse (2), Georgia Tech (2) and Illinois (1) didn't have nearly the presence.
 Contrary to recent years, tight ends were in demand. Three went in the first round: Shockey to the Giants, Daniel Graham of Colorado to New England, and Jerramy Stevens of Wa shington to Seattle. In all, 24 tight ends were selected.
 Heisman Trophy winner Eric Crouch went in the third round to St. Louis.

TITLE: Detroit Bounces Back With Road Win Over Vancouver
PUBLISHER: The Associated Press
TEXT: VANCOUVER, British Columbia - Dan Cloutier's big mistake might take some of the pressure off Dominik Hasek.
 
Nicklas Lidstrom's 27-meter slap shot fluttered under Cloutier's catching glove with 24:6 left in the second period, pushing the Detroit Red Wings to a 3-1 victory over the Vancouver Canucks Saturday and new life in their best-of-seven series.
 &quot;I was surprised,&quot; Lidstrom said. &quot;I was just trying to get the puck low on net for a rebound and I didn't really see how the puck went in. I just saw the light go on. Getting a goal like that late in the period was huge for us.&quot;
 Hasek, mocked and jeered by Detroit fans after allowing eight goals on 45 shots during the first two games, finished with 22 saves. He stopped Todd Bertuzzi on a penalty shot and was named the game's first star as the Red Wings ended a six-game playoff losing streak that dated to last season.
 &quot;It was a tough situation for me after two games in Detroit, so I was pretty nervous, I was more nervous than usual,&quot; Hasek said. &quot;I wasn't really calm, I was nervous to be down 2-0.&quot;
 The six-time Vezina Trophy winner and two-time NHL MVP robbed Markus Naslund from the slot early in the third, made a sprawling save on Ed Jovanovksi and stuffed Bertuzzi with 3:01 left.
 Cloutier finished with 23 saves, including several spectacular stops before whiffing on Lidstrom's long shot. Shanahan beat him cleanly between the pads 3:18 into the third period to give the Red Wings a 3-1 lead.
 The Red Wings came out playing a physical style and quieted a towel-waving sellout crowd of 18,422 by outshooting Vancouver 13-4 in the opening period and jumping out to a 1-0 lead on Steve Yzerman's power-play goal at 10:41.
 The Detroit captain fought off Murray Baron behind the net and squeezed a wraparound between the legs of Cloutier.
 Vancouver tied it on its first power play early in the second period. Andrew Cassels won the ensuing faceoff inside the Detroit blue line and passed to a streaking Bertuzzi on a set play. Bertuzzi beat Hasek with a roofed back-hand .
 With the win Detroit ended a nine-game winless slide with its first victory in April.
 
 <strong>
New Jersey 4, Carolina 0. </strong>Brian Gionta woke up the Devils with an early goal and New Jersey got back into its first-round playoff series with a victory over the Hurricanes on Sunday.
 
&quot;You have to try to keep an even keel in this game,&quot; said Gionta, who was very upset on Friday night after his giveaway led to Bates Battaglia's game-winning goal in overtime, giving Carolina a 2-0 lead in the best-of-seven series.
 If they had lost, the Devils would have faced the brutal task of rallying from a 3-0 deficit against a team that is out to avenge a playoff loss to New Jersey a year ago.
 &quot;We stayed alive today,&quot; said Devils goaltender Martin Brodeur, who stopped 16 shots in recording his 13th career postseason shutout. &quot;We have to even the series out. But it's going to be tough. They still have home-ice advantage.
 Bobby Holik added a goal and an assist and Patrik Elias had three assists as the Devils responded with one of their best games of the season.
 Carolina didn't help itself. Hurricanes goaltender Arturs Irbe was off and his teammates were guilty of some very undisciplined play.
 Irbe, who had stopped 64 of 66 shots in winning the first games by 2-1 margins, helped New Jersey get going with a soft goal at 7:48 of the first period.
 Brodeur was rarely tested. His most important stop came late in the first period with New Jersey ahead 2-0. 
 Jaroslav Svoboda and Martin Gelinas had a 2-on-1 break. Brodeur stopped Svoboda's shot and Gelinas missed the rebound with the net open. 
 Carolina never threatened again.
 
 <i>
(For other results, see Scorecard) </i>