SOURCE: The St. Petersburg Times
DATE: Issue #796 (61), Tuesday, August 20, 2002
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TITLE: Sunken Ship Causing Neva Chaos
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: More than 90 ships had piled up in the Neva River and in the Gulf of Finland by Monday night, waiting for the weather to allow emergency officials to clear away enough of a vessel that struck a pier of Liteiny Bridge on Friday morning to allow navigation of the river route to be resumed.
The 93-meter, 2,250-ton Kaunas, carrying a cargo of 2,000 tons of steel, sank in a 15-meter-deep channel near the drawbridge at 6 a.m. Friday, two hours after the collision.
The eight crew members and two teenage passengers aboard the vessel were rescued from the sinking ship by a tugboat.
In the early hours of Monday, workers cut the deckhouse off the submerged vessel and then loaded it on to a barge in order to allow enough clearance for ships to pass over it safely.
According to Vladimir Ushakov, the deputy head of the Baltic Emergency Board, four to five meters of clearance are necessary to allow vessels with displacements of up to 5,000 tons, the maximum allowed along the waterway, to pass over.
The head of the Transport Ministry's Internal Waterways Department, Vladimir Krivoshei, said that removing the deckhouse, which was torn off with a 150-meter cable attached to two tugboats, should allow traffic to resume along the waterway, Interfax reported. At 9 p.m. on Monday, however, the news agency quoted Krivoshei as saying that high winds and a storm warning were hampering the salvage efforts, and that it was debatable whether workers would be able to complete the operation in time to allow traffic to resume overnight.
Vessels with displacements of 1,000 tons or less and with low profiles have continued to pass along the Neva route since Friday, as they have slipped under another, fixed section of the bridge. For those ships that have been unable to make it along the waterway - part of a route linking the Baltic and the Caspian and Black seas and allowing goods to be shipped between southern and central Russia and Europe - the financial losses have been substantial. On average, about 40 ships pass through the raised bridges along the Neva every night.
On Monday, Vedomosti newspaper quoted Viktor Telushko, the deputy director of the Belomor-Onega Steam Line, as saying that 30 river and sea-going vessels belonging to the company were currently piled up on either side of the blockage, and that daily losses for Belomor-Onega were about $100,000.
Andrei Kleimyonov, the head of the marketing department for Volgotanker AMS said that, according to the steam line's analysts, the damages to ship lines would likely amount to about $50 million per week.
Beside the difficulties the weather was generating for emergency workers, questions also remain related to the cause of the sinking and how the ship and its cargo - 2,000 tons of metal plating belonging to Severstal - will ultimately be raised.
Ushakov said that, once the waterway has been reopened for navigation, the work will turn to unloading and salvaging the vessel.
"It is still unclear how the sunken ship will be raised, but cutting it into smaller segments is already one of the variants being considered," Ushakov said.
The age of the ship, which was launched in 1957 and is owned and operated by Volzhskoye Transport of Nizhny Novgorod, is another factor behind the difficulties in the salvage efforts, officials said Monday.
Anna Markova, the St. Petersburg vice governor in charge of the local Emergency Situations Ministry department, said that the raising of the Kaunas' cargo should begin as early as this week.
The reason for the ship's collision with the bridge is also under debate. Initial reports on Friday cited navigation error by the pilot responsible for guiding the vessel along the Neva as behind the collision. On Monday, however, Russian media were reporting that the accident was caused by a malfunction in the ship's steering mechanisms.
Ushakov said the last case of a ship sinking in the Neva was in 1985, when the fishing boat Komsomolets Tatarii sank near the Alexander Nevsky bridge. He said that the boat did not end up blocking transport along the waterway and took about two weeks to salvage.
The St. Petersburg Transport Prosecutor's Office has opened a criminal investigation into the incident under Article 263 of Russian Criminal Code - obstruction of safe movement along and operations of railway, air or water-transport routes.
TITLE: Copter Crash Leaves 74 Dead
PUBLISHER: Combined Reports
TEXT: MOSCOW - A Russian military helicopter loaded with troops crashed in Chechnya on Monday, killing at least 74 people, possibly after it was shot down by Chechen rebels, Russian news agencies reported.
The Mi-26 - the most powerful transport helicopter in the world - went down near the Russian military headquarters at Khankala, near the Chechen capital, Grozny.
The 33-meter helicopter, which news agencies said had more than 100 people on board, burst into flames, and the fire was hampering rescue efforts, officials said.
Investigators were examining two main possible causes of the crash - that the helicopter was shot down from the ground or suffered a technical problem, Deputy Prosecutor General Sergei Fridinsky told the Interfax news agency.
Chechen rebels said they shot down the Mi-26 transporter, but a top defense-ministry spokesperson quoted by Russian agencies blamed an engine fire for the disaster.
"With the help of a Zenit missile a Russian Mi-26 transport helicopter was shot down," said a statement on the rebel Web site www.chechenpress.com. Russian military-intelligence troops were on board, it added.
A Russian military source told Interfax that a missile downed the aircraft. "It would appear that the helicopter was shot down by a Zenit missile," the source told Interfax.
Khizri Aldamov, a rebel representative in Georgia, the ex-Soviet republic that borders Chechnya, also said the helicopter had been downed by guerrillas.
"About 80 Russian soldiers and officers were killed by our fighters," he said by telephone.
Earlier, Defense Ministry spokesperson Nikolai Deryabin told state-run ORT television that the Mi-26 helicopter, one of the largest in serial production, had been forced to make an emergency landing close to Khankala.
"The pilot of the Mi-26 said that, according to his instruments, there was a fire in one of the engines, and he asked for permission to make an emergency landing," he told ORT.
There were varying reports of how many troops were killed. The Russian military headquarters in Chechnya initially said there were no deaths. But, hours later, Defense Minister Sergei Ivanov offered condolences to relatives of service personnel killed in the crash - though he did not say how many.
The Interfax and ITAR-Tass news agencies reported that at least 80 soldiers were killed, citing sources at the headquarters. Interfax later adjusted its toll to 74, saying 106 service personnel were on board the helicopter and 32 survived. Interfax had earlier reported 112 on board.
The military headquarters said there were at least 25 injured, but that fire and smoke from the crash hampered efforts to determine the full number of casualties. All five crew members survived, said Colonel Boris Podoprigora, the deputy commander of Russian troops in Chechnya.
There were indications the helicopter may have been overloaded. The Mi-26, which has a 12-meter-long passenger compartment, is supposed to carry a maximum 82 people, Podoprigora said. The craft, which has a single eight-rotor blade on top, is designed to carry loads of up to 20 tons.
The crash came amid a spate of rebel actions against federal forces, including attacks late last week in southwestern Chechnya that killed nine servicepersonel and five civilians. Some analysts said rebels were intensifying their actions to press the Russian government to enter peace negotiations. A Chechen rebel representative met last week in Geneva with Ivan Rybkin, a former head of Russia's Security Council, to talk about restarting talks stalled since last year.
The government maintains that the current war in Chechnya, launched in fall 1999, is all but over, with just isolated groups of rebels holding out. However, rebels unleash daily attacks that sap the military's troop strengths and morale.
Most of the attacks are small-scale, targeting soldiers and Chechen police and civilian officials who cooperate with them. But the rebels have made some high-profile hits against top officers.
In September 2001, two generals and 11 other Russian service personnel died when their helicopter was shot down by a shoulder-fired missile shortly after takeoff from Grozny. Another helicopter, an Mi-8 carrying two top Interior Ministry officials and 12 other people, crashed in Chechnya in January. The Kremlin said that crash was due to an accident, but an official with the Moscow-appointed civilian administration for Chechnya said that investigators had found some fragments of the helicopter that suggested it, too, was hit by a shoulder-fired missile.
President Vladimir Putin, who dispatched Russian troops back to Chechnya in October 1999 after a three-year absence, was being kept informed of developments, the Kremlin said.
"I would like to receive fresh information about the incident in Chechnya," he told RTR state television. "This catastrophe should be thoroughly investigated and we should send a competent commission there as soon as possible."
(AP, Reuters)
TITLE: Kasyanov Changes His Tune Over Federal-Budget Surplus
AUTHOR: By Victoria Lavrentieva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Prime Minister Mikhail Kasyanov reversed course on Friday, saying the government intends to draft a federal-budget surplus each year through 2005 - a day after he said a surplus would stop being a priority after repayments peak at over $17 billion next year.
Kasyanov said foreign-debt payments are financed from international and domestic borrowing, the reserve fund, privatizations and sales of precious stones and metals, but that these sources will not cover debt payments in 2003-2005.
"I hope that, after 2005, there will be no need to create a surplus," Interfax quoted him as saying.
On Thursday, Kasyanov said that after 2003 the government would "be able to cut the tax burden and allow the private sector the chance to finance spending, previously covered by the state, that can't be effectively made by the government."
The about-face confused economists, who hope to see the beginning of real tax reform once budgetary constraints are lifted.
"We probably just have to ignore Kasyanov's remarks, since no one can be 100 percent sure that Kasyanov will still be signing the budget in three year's time," said Alexander Korchagin, head of research at Prospekt brokerage.
There is also growing consensus that the price of oil, which is the country's biggest earner, will decline over the next few years to $15 per barrel or lower from more than $25 now, which would make it difficult for the government to post a surplus anyway, Korchagin said.
The government is forecasting an average price for Urals-blend crude of $21.50 in 2003, which would allow a budget surplus of 72.065 billion rubles, or 0.6 percent of the projected gross domestic product. Sovereign foreign debt totaled $131.9 billion as of April 1.
Renaissance Capital economist Alexei Moiseyev said that Kasyanov's remarks also highlighted another problem the government has yet to tackle - policy coordination.
"Kasyanov has his opinion, Kudrin has his opinion, Economic Development and Trade Minister German Gref has his own, too," Moiseyev said. "We have always seen contradictions between them, and the latest is a very good example."
TITLE: Air Force Turns 90, Looks to Future
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - President Vladimir Putin wound up a week of celebrations to mark the 90th anniversary of the Russian Air Force by taking control of an Su-27 fighter simulator and carrying out a series of complicated aerial maneuvers.
Putin performed the stunts during a visit Friday to the headquarters of aircraft maker AVPK Sukhoi in northwest Moscow, where he also promised state support for the aviation industry.
Hosted by Sukhoi chief Mikhail Pogosyan and Yury Koptev, the head of the Russian Aviation and Space Agency, Putin inspected two modernized Su-27 flankers and a light agricultural Su-38L plane before having a go on the Su-27 simulator.
TVS television showed Putin climbing into the simulator and successfully completing a mission with guidance from Hero of Russia test pilot Yevgeny Frolov. But Kommersant reported Saturday that the simulated flight, which took place over Gibraltar, did not go entirely smoothly.
The newspaper said that, on Putin's first attempt, the plane slid off the deck of an aircraft carrier into the sea.
On his second try, the president took off, performed a few aerobatic maneuvers and landed on a virtual airstrip. But even then the simulator would not gather speed. It later turned out that the problem was due to a parachute being accidentally deployed from the back of the plane without the pilot noticing.
It was Putin's second experience of an Su-27 fighter, although not as risky as his first one. While running for president in 2000, he surprised everyone by taking a real flight to Chechnya in the back seat of an Su-27.
Rather than trying to relive his experience of two years ago, however, Putin was more interested Friday in discussing Russia's next-generation fighter jet.
In April, Sukhoi won a government tender to lead the $1.5-billion development project with contributions from rivals the Russian Aircraft Corp. MiG and the Yakovlev Design Bureau. The aircraft is to test-fly in 2006 and enter mass production in 2010, although industry analysts have cast doubt on this time frame.
Putin's discussions with Sukhoi about the aircraft remained behind closed doors Friday. The president was quoted by Interfax as saying only that "the country's leaders will pay close attention to developing this [aviation] industry" and that he is counting on military aircraft manufacturers to stick to the plans they set for themselves.
Sukhoi is one of the most successful firms in Russia's vast defense-industry complex, with its aircraft accounting for half of the country's arms exports abroad. Sukhoi's biggest clients are China and India, and Sukhoi fighters are also participating in tenders in Brazil and Malaysia. The company estimates its export potential at $17 billion until 2005, Sukhoi spokesman Yury Chervakov was quoted by Interfax as saying Friday.
Sukhoi head Pogosyan has said that, by modernizing its current fourth-generation aircraft, Sukhoi can extend its lifespan by at least another decade, but that the company also needs to develop a new product for the future.
At a news conference Saturday, Air Force Commander Colonel General Vladimir Mikhailov said the air force is relying on the next-generation fighter to come through. In the meantime, the air force can only afford to modernize its planes, primarily by upgrading their avionics, he said.
"I've always said that we don't have a sufficient [level] of avionics ... so that we can use aircraft around the clock in all types of weather," Mikhailov told reporters. "That's what we need and this is being put as the main basis for the fifth-generation fighter."
Mikhailov said the air force is expecting to get an unspecified number of new Su-30 fighters with various modifications next year.
TITLE: Russia's Fire Fighters Face Burning Issues
AUTHOR: By Sarah Karush
PUBLISHER: The Associated Press
TEXT: MOSCOW - At a training center of the Russian fire service, intricate homemade models depict some of the worst emergencies a firefighter could face: an inferno raging at a soccer stadium, a blaze spreading through the aisles of a crowded theater, even a nuclear mushroom cloud hovering ominously over residential high-rises.
Such scenes are rare in everyday life. Russia's real fire emergency is far more insidious and goes largely unnoticed.
Fifty people a day - 18,000 a year - die in fires caused mostly by people smoking while drinking or others who are just plain careless. That's 4 1/2 times the number of fire deaths in the United States, which has twice the population.
The contrast is even starker with the United Kingdom, which sees 600 fire deaths a year, or one per 100,000 people - compared to 12.5 per 100,000 in Russia.
Experts say fire fatalities have skyrocketed since the end of the Soviet Union because of lower public vigilance, a disregard for safety standards and a dramatic rise in the number of homeless desperate to keep warm during icy winters. These factors - and the country's many stove-heated, wooden houses in isolated villages - have led to some of the world's grimmest fire statistics.
"It's mostly drunk people with a cigarette," says Didivan Chichinadze, head of the training center and adjacent fire department in southern Moscow.
In summer, the culprit is often the upstairs neighbor, casually enjoying a cigarette on his balcony, Chichinadze said. When he finishes his smoke, he throws the still-lit butt down to the street below. It falls on another balcony, where the downstairs neighbor keeps extra furniture, paint and other flammable substances - and they ignite instantly.
According to the Moscow fire department, 137 of the 226 fire deaths in the capital in the first half of 2002 were caused by smoking. Alcohol also seems to have played a role: 142 of the victims were drunk.
Increasingly, victims include elderly and disabled people, said Moscow fire chief Vladimir Rodin.
Meanwhile, the homeless, whose ranks have swelled in the past decade, start fires in abandoned buildings and the basements of apartment houses. "We conduct education programs fairly actively," Rodin said, with frustration in his voice. "But these people don't read the papers, listen to the radio or watch TV."
In the countryside, where telephones are rare, one spark can ignite an inferno. "The stations are far apart, and the those wooden houses are like candles," Chichinadze said.
Russia wasn't always a tinderbox. A few decades ago, it was a model of fire safety, said Sergei Lupanov, head of the statistics department at the State Fire Service's research center.
In 1965, there were one-tenth the fire fatalities of today. In that year, 2,500 people died in all of the Soviet Union, including about 1,800 in Russia, he said.
A vestige of the Soviet Union's heavy-handed fire safety campaigns sits atop a building across from the city zoo. "Muscovites, observe the rules of fire safety," the giant lettering reminds residents.
Few appear to be listening. In apartment buildings, hallways are frequently blocked with junk, and residents install illegal metal doors in front of staircases - which might help keep out intruders but could also trap people fleeing a blaze.
Public spaces are not much safer: Theaters and concert halls often keep all but one door locked in an effort to conserve heat and control crowds.
Firefighters say fines for violations are too small to make people obey the law, and citizens complain that fire inspectors are more concerned with extorting bribes from businesses than preventing fires.
Both problems are addressed in a new Administrative Code that took effect this month. The code raises some fines but also leaves it to the courts to impose them, Rodin said.
Officials insist that the fire service itself is not to blame for the soaring death rate. Average response time in Moscow has been falling in recent years and now stands at 6 1/2 minutes, Rodin said. More fire stations are being built, and firefighting remains a popular job for young people - in part because it exempts them from army service.
TITLE: IN BRIEF
TEXT: Kim Rail Chaos
VLADIVOSTOK, Far East (Reuters) - Travelers can breathe a sigh of relief. North Korea's plane-shy leader Kim Jong-il is preparing to visit Russia, but this time he will not be allowed to snarl up the railway system.
Kim, like his father and state founder Kim Il-sung, does not like flying. Last year he visited Moscow and St. Petersburg in an armored train and plunged the rail system into chaos during the summer holiday season as officials juggled timetables to accommodate him.
Thousands were stranded. One family sued the railways after being kept waiting for 10 hours.
Officials assured travelers on Monday that the chaos would not be repeated.
"The railway authorities have ... affirmed that the timetable will be drawn up so that passenger train schedules are not violated," said Yevgeny Anoshin, a regional official in the Pacific port of Vladivostok.
Buddhist Protest
MOSCOW (AP) - Leaders of Russia's Buddhist community on Monday protested the government's decision to deny the Dalai Lama permission to enter the country, saying the delegation for his proposed visit to Russia is made up of religious - not political - figures.
Last week, the Foreign Ministry turned down a request for the Dalai Lama to visit Russia, saying his delegation had a "political orientation" and included members of the Tibetan government-in-exile. The ministry said it was taking into account China's "sharply negative" view of the Dalai Lama's political activities.
But Russian Buddhist leaders denied the Dalai Lama's proposed visit had any political aims and said it was designed simply to tend to the spiritual needs of the Buddhist community.
"We have no political aims and no politicians are involved," said Telo Tulku Rinpoche, the Buddhist spiritual leader of the Kalmykia republic, in southern Russia.
Bus Crash Kills 24
MOSCOW (AP) - A bus, packed with villagers travelling to a Sunday market, crashed in Chuvashia, a region on the Volga River, killing 24 passengers, the Emergency Situations Ministry said Monday.
There were 61 people on the bus, which had seating for 28 passengers and a maximum capacity of 55. Twenty-one people were killed when the bus plunged into a deep ditch about 520 kilometers east of Moscow and two more died in a hospital later Sunday. Another injured passenger died Monday, said Irina Andriyanova, a spokesperson for the ministry.
Lance Bass Deadline
MOSCOW (AP) - The Russian space agency has given 'N Sync singer Lance Bass five days to come up with payment for a trip to the international space station this fall, a spokesman said Monday.
Konstantin Kreidenko, spokesman for the agency, said that, if payment is not received by Friday, Bass will not be permitted to take part in the mission, which is scheduled to begin Oct. 22. The price tag for such a space tourist trip is said to be about $20 million.
Bass, who is hoping to be the third tourist to travel to the station, has been training since July at Star City, the cosmonaut center outside Moscow. Bass, 23, would be the youngest person yet in space.
TITLE: Former Rosneft VP Repeats Vodka Grab
AUTHOR: By Alex Nicholson
PUBLISHER: Staff Writer
TEXT: MOSCOW - For Alexander Romanov, laying siege to the country's largest Vodka distillery is becoming a biennial event.
On Monday, for the second time in two years, the former vice president of oil major Rosneft marched into Kristall's tsarist-era compound in eastern Moscow and declared himself in charge.
Flanked by marshals, with a court injunction appointing him acting general director, Romanov occupied an office building near Kristall's main production facility and refused to speak to the press, according to witnesses.
Meanwhile, incumbent general director Alexander Timofeyev emerged from his nearby office to dispute the legitimacy of the injunction, which was issued Thursday by the Butyrsky inter-municipal court. Armed with the same injunction, court marshals on Friday froze all of Kristall's settlement accounts at six different banks.
Timofeyev said by telephone late Monday that Romanov had left the complex.
He also said he was considering filing a criminal complaint with the General Prosecutor's Office first thing Tuesday morning.
Earlier in the day, Timofeyev told reporters that a board-of-directors meeting that formed the basis for the court action was illegal. He said the Aug. 12 meeting, at which Kristall's board of directors voted to replace him with Romanov, was not binding, because only three of the nine directors were present. He said signatures were forged to make it seem like a majority of directors had voted for his removal.
Kristall board chairperson Yakov Mastinsky was quoted by Interfax as saying the vote been by mail, which the company's charter does not allow.
"This is a typical corporate conflict based on lies, falsifications and illegal actions," Mastinsky said.
He said that a legitimate board meeting had been held Monday overturning the Aug. 12 decision.
According to Timofeyev, Romanov only left Kristall after learning that the board voted six to three to overturn the results of the earlier meeting.
Few of the events surrounding Kristall have been typical, however.
The federal government, through the 51-percent stake held by state vodka holding Rosspirtprom, controls the distillery, which is on pace to post revenues of $250 million this year. Ownership of the remaining 49 percent is unclear, although management and several distributors who work with the company are believed to own stakes.
Shortly after being elected president, Vladimir Putin called on the government to rein in the notoriously criminalized vodka industry.
Prime Minister Mikhail Kasyanov created Rosspirtprom with a government decree in May 2000. About the same time, Kristall's board voted to fire Yury Yermilov as general director and replace him with Romanov, which was seen as a way to ease Rosspirtprom's takeover of the distillery.
But Yermilov wouldn't go quietly, and a protracted legal battle ended with a court ruling that Yermilov's firing and Romanov's appointment were both illegal.
Eventually, Vladimir Svirsky became acting director, but this time it was Romanov who refused to go quietly. A months-long duel between the two ensued during which Romanov, in a joint interview on Ekho Moskvy, accused his rival of illegally acquiring a blocking stake in Kristall through front companies.
Months passed as the case wound through the court system until, in August 2000, Romanov laid siege to the Kristall compound, locking himself inside the plant with 30 armed guards, shutting out Svirsky.
Svirksy tried responding in kind, entering Kristall with a couple of dozen guards himself. But Moscow Mayor Yury Luzkhkov publicly backed Romanov, and Svirsky eventually went away, diffusing what could have been a violent confrontation.
Another bizarre court case resulted in Romanov's removal just three months later. He was temporarily replaced by Kristall's chief engineer, Sergei Lukashuk, who was followed by Timofeyev.
But now Romanov is back - and, apparently, doing Rosspirtprom's bidding again.
Justice Ministry spokesperson Boris Kalyagin said that Rosspirtprom was behind the court action and that Romanov himself appealed to the court to issue an injunction against Timofeyev personally from hindering his activities.
TITLE: Paper-Plant Rulings Muddy the Waters
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: A fight over the ownership of the Vyborg Pulp and Paper Plant between two groups of shareholders has landed in court - or, more accurately, has landed in two courts that have handed down conflicting rulings. While the argument continues as to which ruling is binding, one side in the conflict is complaining that it cannot get the decision favoring it enforced.
On Friday OOO Vyborg Pulp (OOO Vyborg) filed complaints with the Prosecutor's office of St. Petersburg's Vyborg region and with the Justice Ministry, claiming that bailiffs of the St. Petersburg City Court were not acting to enforce a decision the court had made.
The Vyborg Pulp and Paper Mill is one of the largest in the Leningrad Oblast, and its recent success has made it a valuable asset over which to argue. The plant's revenues in the first half of 2002 were $14 million and company officials say that the mill will turn a profit for this year, a significant improvement over the $5 million it lost in 2001. The plant employs more than 2,000 workers.
OAO Vyborg Pulp (OAO Vyborg) became the owner of Vyborg Pulp and Paper after the plant went bankrupt in 1999. Alcem UK Ltd., an offshore company, held 100 percent of the shares in the company. Fifty percent of the shares in Alcem were held by Sphinx, an offshore based in Switzerland owned by Alexander Sabadash, while the other 50 percent was owned by another offshore, Aimet UK Ltd., owned by Michael Schlossberg and Alexei Shmargunyenko.
In 2001, a 100-percent stake in the Vyborg Paper Mill was sold to OAO Syassky Pulp and Paper Plant, which is controlled by Shmargunyenko, for $8 million. Syassky increased the charter capital of the Vyborg mill by $13 million, claiming those shares for itself, and, later in the year, reorganized OAO Vyborg Pulp into OOO Vyborg Pulp. OOO Vyborg came under Shamargunyenko's control, while OAO remained under the control of Sabadash, with both sides now claiming to own the facility.
At the end of June, the Smolninsky District Federal Court of St. Petersburg, in accordance to a suit claiming that the reorganization was unlawful filed by Harry Itkin, one of Sabadash's associates, ordered that the property of OOO Vyborg be seized and put under the control of Anatoly Karagapolov, the deputy director of the mill until October of last year. Karagapolov then ordered that Shmargunyenko, the general director of OOO Vyborg, not be allowed onto the plant, OOO Vyborg's press service said on Friday.
Shmargunyenko fought back, attaining a decision from the St. Petersburg City Court suspending the first ruling. But, according to the press service at Shamargunyenko's company, court bailiffs never came to enforce the ruling. On Aug. 9, OOO Vyborg's property was seized by bailiffs a second time, on the strength of a decision by the Vyborg City Court, but the Leningrad Oblast Court countered this decision again, on August, 12. Once again, however, bailiffs did not show up.
On Friday, OAO Vyborg Pulp's press-service issued an official statement saying that Karagapolov had been appointed General Director and had taken over management at the plant.
OAO Vyborg representatives also complain about the legal battles.
"They have moved very slowly in reestablishing the control of OAO Vyborg Pulp," Dmitry Kolomiyets, a spokesperson for the firm, said in a telephone interview on Monday. He also said that a plant is operating in a normal fashion and that the staff has been supportive of the new director.
The conflict at the Vyborg Pulp and Paper Plant has been taking place against a backdrop of struggles within the industry. A battle continues between Ilim Pulp, a huge pulp-and-paper conglomerate, and Base Element (formerly Siberian Aluminum) and Kontinental Management over the Archansgelskaya Oblast's Kotlas Paper and Pulp plant. Ilim, which previously held 90 percent of Kotlas stock, says a 61-percent share of stock has been stolen from it with the help of St. Petersburg banker Vladimir Kogan, who was formerly a partner in Ilim. In March, Kogan was already reported to hold a 20-percent stake in Kotlas.
"What is happening here is beginning to look like what is going on with the Kotlas Paper Mill," Maria Nikolaeva, a spokesperson for OOO Vyborg, said in an interview on Monday. "It seems that there is a redivision of the pulp-and-paper market taking place."
Leningrad Oblast Governor Valery Serdyukov said on Friday that the Oblast administration would not take sides in the conflict.
"The Oblast administration will not interfere in the relations between plant owners," Serdyukov said in a telephone interview. "The most important thing for us is that the paper mill continues to operate and provide employment for its workers."
TITLE: Airlines Urge Import-Tax Cut on Foreign Planes
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: DOMODEDOVO, Moscow Oblast -The country's top airlines on Friday urged the government to slash import duties on foreign aircraft to avert what they say is a looming industry crisis.
Chief executives of leading domestic carriers told Transport Minister Sergei Frank that, if domestic jet makers continue to miss delivery deadlines and fail to service existing craft adequately, they will not be able to operate when new European environmental regulations come into effect in 2006.
"In 2006 we will ... have nothing to fly," Vladislav Filyov, CEO of Sibir, the country's second-largest carrier, told Frank during a round-table discussion at the Civil Aviation-2002 air show at Domodedovo Airport.
In an effort to salvage the once-mighty industry, the government has refused to lower a 40-percent tariff on foreign-made planes, but it has yet to come up with the funds necessary to boost production at state-controlled Ilyushin and Tupolev, the top Russian manufacturers. Just seven civilian planes were produced in Russia in 2001 - a year in which passenger volumes jumped by 15 percent.
"Aviation transport is now facing a serious threat. There is no guarantee that, in 2006, we will get modern aircraft from our aviation industry. And I ask you, minister, and I speak for many of my colleagues ... let us at least temporarily import Western aircraft that do not have domestic [analogs]," Filyov said.
Of the 2,000 or so airplanes currently in service, only a few dozen are either Airbuses or Boeings, and only 20 of the Russian-made planes are considered "modern," meaning they were developed in the 1980s. These include 11 Ilyushin Il-96-300 long-haul jets and seven Tupolev Tu-204 and two Tu-214 medium-range liners.
KrasAir has been expecting a new Tu-204 since last summer and Aeroflot has been expecting the first of six Il-96-300s it ordered early last year, but neither company has been given a firm delivery date.
"The Russian aviation industry has a very low reputation among domestic carriers," said Andrei Martirosov, general director of Tyumenaviatrans, which operates 15 types of aircraft and runs the largest helicopter fleet in the world. "We do not believe anything the aviation industry is saying, minister," Martirosov told Frank. "When someone from the aviation industry says 'we will do this or that,' we all laugh, because we know better."
KrasAir CEO Boris Abramovich said that the "modern" airplanes currently being produced domestically are more akin to experimental craft than mass-produced airplanes. "We teach the planes to fly," he said.
Andrei Elistratov, head of the State Civil Aviation Service's airworthiness department, said that, if a company has two of the same type of aircraft in operation, one is likely to remain on the ground as a spare parts store for the other one. He pointed to Dalavia, which leases two Tu-214s that, because of the lack of spare parts, fly only 140 hours per month, roughly half of what the company needs to meet its lease payments.
"It is practically impossible to work in the market today ... we get the money and the traffic but we cannot work regularly," Tyumenaviatrans' Martirosov said. "For example, the aircraft we send for repairs in May won't be returned until October; spare parts that we buy in November get delivered in April."
The delay has led to the emergence of semi-legal firms that offer speedy delivery of spare parts, raising safety issues.
"Everyone knows about it but nothing is changing," Martirosov said.
Tupolev engineering chief Valery Solozobov defended the quality of his company's planes but admitted that maintenance support is lacking. "The airlines know only too well why this is happening. Aviation plants cannot recover in five seconds - they need money," he said.
With few companies able to afford the 40-percent duty on foreign craft, virtually no new planes being produced domestically and lengthy wait periods for replacement parts, many airlines are worried they will be driven out of business when "stage four" European regulations hit in just over three years.
The industry suffered several tense months of negotiations this year as "stage-three" regulations came into effect, which would have banned most Russian airlines from European skies had a compromise not been reached at the last minute. The government is hoping to avoid a repeat of this year's drama in 2006 by pushing the development of a new regional jet and medium-range liner, but it has yet to find funding.
The government says the much-anticipated 100-seat Tu-334 project, on which work began in 1992, before being starved of money, will be certified next year, with deliveries to start in 2004, but many are skeptical the planes will be ready.
Meanwhile, firms have no choice but to lease expensive foreign jets. Sibir is after two Airbus 320s, KrasAir is planning to acquire two Boeing 767s and Tyumenaviatrans is negotiating with Canada's Bombardier for a regional craft.
Abramovich said it was time to face reality and stop trying to support the aviation industry at the expense of carriers. "If we keep talking about how to support the aviation industry, we can find ourselves under its debris," he said.
Valery Voskoboinikov, first deputy head of the Russian Aviation and Space Agency, rushed to defend the troubled industry. "If you want to buy a Mercedes for the price of a Volga then do it. But without the tax breaks," he said, referring to Western versus domestic jets.
Frank urged both sides to strive for a balanced relationship, but said the government was not considering lowering tariffs on foreign-made airplanes, hoping instead that the domestic industry will deliver by 2006.
TITLE: Russian Majors Set Sights On Kuwaiti Oil Project
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Oil majors Sibneft and LUKoil are contending for key roles in a delayed project to boost oil production in northern Kuwait.
A day after Russia said that it was preparing to sign $40 billion worth of contracts with Iraq, a delegation led by Energy Minister Igor Yusufov on Monday opened discussions with officials from neighboring Kuwait on expanding economic and technical cooperation in the oil industry.
Talks focused on "Project Kuwait," a $7-billion investment project that would use foreign oil companies' technical know-how to double production at four oil fields in northern Kuwait. These fields lie close to the Iraqi border, and their wells were badly damaged during Iraqi President Saddam Hussein's 1990 invasion.
Sheikh Ahmed Al Fahd Al Ahmed Al Sabah, the head of the Kuwaiti delegation, also said Kuwait is interested in developing all-around relations with Russia, including in the military, scientific, technical and tourism spheres, news agencies reported.
"Project Kuwait," originally conceived in 1997, has so far been held back by Kuwait's parliament, although Kuwaiti officials say it is now moving forward.
"We attach much importance to this program," Itar-Tass quoted Yusufov as saying.
Sibneft is the only Russian company that has been approved for a non-operator role by Kuwait's Supreme Oil Council. So far, the council has given the nod to 17 companies worldwide and has made a shortlist including all oil majors for the coordinator position.
"Sibneft is interested in diversifying its portfolio of upstream activities but, in doing so, we want to maintain the same level of returns that we have in Russia," said Sibneft spokesperson Nick Halliwell.
LUKoil submitted documentation for the council's approval two years ago, said Nikolai Manvelov, a spokesperson for LUKoil subsidiary LUKoil Overseas.
Russia's largest oil company, LUKoil has been in past years on a drive to expand its asset base around the globe. The firm owns refineries in Europe, filling stations in the United States, and licenses to fields in the Caspian basin. LUKoil qualified earlier this year to participate in the development of Brazilian fields.
"Like any other oil company, we assign priority to any place with potential," Manvelov said. "And Kuwait fits the bill."
Along with Saudi Arabia and the United Arab Emirates, Kuwait has significant excess production capacity. The country holds an estimated 94 billion barrels of reserves, more than 9 percent of the world total, according to the U.S. Energy Information Administration.
Manvelov declined to estimate the amount of investment LUKoil is considering sinking into Kuwait, but said the company was looking for a 5 to 10 percent stake in the final consortium.
LUKoil has so far met with little success in the Middle East. The company has made little headway in developing the giant West Qurna deposit in Iraq since contracts were signed in 1997.
Manvelov said LUKoil stills holds out hope for Iraq, so much so that company officials inquired about how "Project Kuwait" could change their relationship with Iraq before going ahead with their application.
TITLE: NASDAQ Abandoning Its Japan Venture
AUTHOR: By Hans Greimel
PUBLISHER: The Associated Press
TEXT: TOKYO - Citing bad market conditions, the U.S.-based NASDAQ Stock Market called an end to expansion in Asia on Monday and said it will refocus on Europe.
The announcement comes three days after the company decided to pull out of its NASDAQ Japan joint venture. John Hilley, chief executive of NASDAQ International, Inc., said Monday that NASDAQ was now planning no other ventures in the region.
"At this point, we are not considering any other options in Asia," Hilley said at a press conference to announce the decision. "If there is a culprit, that was due overwhelmingly to economic and market conditions. There is not a viable economic venture going forward."
Tokyo Internet firm Softbank Corp. and NASDAQ each owned 43 percent in NASDAQ Japan, which was based in the western metropolis of Osaka.
NASDAQ will now focus on its European operations, Hilley said.
Key to that plan is a new electronic stock exchange in Germany that will compete with the country's dominant exchange, the Frankfurt-based Deutsche Borse.
The new exchange, called NASDAQ Deutschland, will begin trading in January, and the company said it planned for 3,000 stocks to be traded eventually.
"There will be our focus in terms of international strategy," Hilley said.
The shift underlines how startup companies in Japan have failed to fire investor interest as Japan wallows in a decade-long economic slowdown. NASDAQ Japan managed to attract only 98 companies.
Among them were Starbucks Coffee's Japan unit and Tokyo software vendor Digicube Co., but their performance was also disappointing.
Hilley said restrictive Japanese trading rules crimped business by preventing NASDAQ Japan from more freely trading international shares. He also blamed the unwillingness of Japanese brokerages to adopt an upgraded computer system that would link NASDAQ's Japanese listings with the NASDAQ's U.S. and European markets in 2003. The system is already adopted in Europe.
Hilley said NASDAQ would still have a presence in Asia by selling its U.S.-based and European-based shares there, and by soliciting Asian companies to list on its exchanges.
Although NASDAQ has not disclosed figures for its Japan losses, its cumulative losses here are estimated at more than 5 billion yen ($43 million), following the tech bubble's burst before it fully blossomed in Japan.
Earlier this month, NASDAQ said it was taking a $20 million charge on its losses from its Japan investment.
The Osaka Securities Exchange will continue using the NASDAQ brand until the end of the year, but Hilley ruled out leasing the rights to the name beyond that. He said NASDAQ Japan would eventually be dissolved, but did not say when.
TITLE: WORLD WATCH
TEXT: Balanced Bush
CRAWFORD, Texas (AP) - U.S. President George W. Bush, weighing new tax cuts he said would stimulate the economy, pledged to bring the U.S. federal budget back into balance.
"We cannot go down the path of soaring budget deficits," Bush said Saturday.
The president used his weekly radio address to promote the no-deficits theme that emerged from the economic summit held last week near his ranch. That forum also yielded ideas for fresh tax cuts for small investors that could form the basis of a new White House economic plan.
At the same time, he insisted upon fiscal discipline, drawing parallels between economic conditions during the Vietnam conflict and those now surrounding his war on terrorism.
In the 1960s, war spending was not balanced by cuts in the rest of government spending and, as a result, the 1970s saw deep unemployment, growing deficits and spiraling inflation, he said.
Flooded Fighters
PRAGUE (Reuters) - The Czech Republic's plan to buy 24 supersonic jets to replace its aging fleet of MIG-21s has been cancelled due to the expected high costs of record flooding through the country, Defense Ministry spokesperson Milan Repka said on Monday.
Repka tsaid that Defense Minister Jaroslav Tvrdik will not submit a plan on the purchase - at $2 billion it was to be the largest Czech military order ever - to the government.
"The minister will instead submit a different plan on how to defend Czech airspace from 2004," Repka said.
The Czechs, NATO members since 1999, had planned to buy up to 24 Gripen fighter planes from a consortium of Sweden's Saab and Britain's BAE Systems.
A Later Bell
NEW YORK (AP) - In deference to the first anniversary of the Sept. 11 terrorist attacks, the New York Stock Exchange said it will delay the opening of trading.
In a statement released Friday, NYSE chairperson and chief executive Dick Grasso said the decision was made out of respect for the memorial services being planned Sept. 11 in New York City. The exchange, which begins trading at 9:30 a.m., will start at 11 a.m.
After the attacks last year, the NYSE, the NASDAQ and the AMEX were closed for four days. They resumed trading Sept. 17.
Leaky Taps
LONDON (Reuters) - OPEC said on Monday that its 10 member countries with oil-output quotas pumped 1.8 million barrels per day (bpd) above their official limits in July.
Using secondary sources to estimate its own flow rates, the Organisation of Petroleum Exporting Countries said those countries produced 23.50 million bpd of crude in July, versus a formal ceiling of 21.7 million.
Quota-busting was 338,000 barrels per day greater in July than a revised estimate for June, the group's monthly oil market report showed.
Total production from OPEC's 11 members, including sanction-bound Iraq, which does not have a quota, stood at 25.25 million bpd in July, the report said.
North African producer Algeria continued to be OPEC's biggest quota buster in percentage terms, pumping 23 percent above its limit of 693,000 bpd.
Hitachi Seiki Files
TOKYO (Reuters) - Machine-tool maker Hitachi Seiki Co. Ltd. said on Monday it had filed for court protection from creditors with 50.4 billion yen ($429 million) in debts, becoming the 25th publicly traded company in Japan to do so this year.
Hitachi Seiki said the rapid slowdown in capital spending after the burst of Japan's asset bubble in the early 1990s and the strengthening of the yen triggered a sharp slide in sales since the 1991/92 business year.
Company president Katsunobu Maeda told a news conference that it was in negotiations with fellow machine-tool maker Mori Seiki Co. Ltd. to sponsor its rehabilitation.
TITLE: The Stakes are High for Brazil and the IMF
AUTHOR: By Joseph E. Stiglitz
TEXT: THE world is waiting to see how the market will judge Brazil and whether the International Monetary Fund's rescue package, announced over the last week, will bring the country back from the brink. It would be foolish to try to predict the movements of a global market that has demonstrated a proclivity for excessive pessimism. Yet those who have looked closely at the numbers and the politics are almost unanimous: There is no reason for Brazil to collapse. The United States has every reason to hope that it doesn't.
In recent years, Brazil has created a vibrant democracy with a strong economy. Differences of opinion exist, but, on key issues, a consensus prevails, one that includes all the major contenders in Brazil's presidential election in October.
There is agreement, for instance, on sound fiscal and monetary policies: No one wants to return to the hyperinflation of earlier decades. Brazil's monetary policy has been managed extraordinarily well by Arminio Fraga, president of the central bank, and the analytic resources of his staff match those of central banks in highly developed countries.
There is also agreement that, while markets are at the center of a successful economy, there is an important role for the state. For example, Brazil's government managed one of the most successful privatizations of telecommunications; it also pushed for stronger competition and regulatory policies. Unlike the United States, which responded to an electricity crisis by letting market forces (and companies like Enron) handle the matter, Brazil took strong action to handle its own electricity crisis at the same time.
Brazil may be an emerging market, but it has first-rate financial, educational and research institutions. In Sao Paulo, economics discussions are as sophisticated as in New York. University seminars in Rio are as lively as in Cambridge, Massachusetts, or Cambridge, England. Brazil produces one of the finest airplanes in the world, so good that competitors in more industrial countries have tried to raise trade barriers against it.
Brazil has one major weakness: a high level of income inequality. Yet, even here, and unlike in many other countries, the problem is recognized. There is consensus across partisan lines that income inequality has to be addressed. All agree education is the key, and the progress that has been made is impressive: Ten years ago, 20 percent of Brazil's school-age children were not attending classes; now only 3 percent don't attend. Similarly, landless farmers present a grave economic and social problem, but there is agreement among the left and right about the need for land reform. Already there is a reform program supported by the World Bank, and it will surely continue. Brazil has likewise faced the AIDS epidemic with resolve. What the government has already done puts it in the global forefront; it has gotten drug companies to allow Brazilian firms to manufacture the critical drugs and provide them to the suffering at low prices. In short, Brazil has carved out a path that is not based on ideology or simplistic economics, but a consensus behind a balanced and democratic market economy.
Unlike in most other IMF packages - which insisted on contractive monetary and fiscal policies that weakened the economy- in this case the IMF insisted only on the continuation of existing policies, aiming at a primary budget surplus of 3.75 percent. It would have been even better if they had set a cyclically adjusted target, which would be more flexible and therefore have enhanced stability and confidence.
If the markets understand the state of affairs in Brazil, interest rates and exchange rates should adjust to reflect that understanding and, with these adjustments, Brazil should have no difficulty meeting its commitments. That being the case, it would be in the interests of all, no matter what their politics, to see the country's debt commitments fulfilled.
Much is at stake: It was widely thought that the failure of the Argentine rescue would be the final nail in the coffin of the big-bailout strategy. Evidently those who thought so were wrong. But a failure in Brazil would certainly cast further doubt on that strategy and further weaken the credibility of the IMF. The Financial Times may have put it only slightly too strongly when suggesting that the IMF had "bet the house" on Brazil. Certainly a failure would give greater credence to the arguments of those, including George Soros and myself, who believe there are fundamental flaws in the current global financial architecture. In any case, the continuing instability facing emerging markets around the world - even those with seemingly sound economic policies - should renew the resolve to understand why the global financial system is operating so poorly.
Within Latin America the effects of a failure in Brazil would be profound. Already there is disillusionment throughout the region with the IMF and the so-called market-oriented reforms of the 1980s. The question is repeatedly put: If the top students like Argentina and Brazil can fail, what awaits us? Anxieties are reinforced by the data. The growth of the early 1990s appears to have been but a brief interlude between the lost decade of the 1980s and the lost half decade of the late 1990s, in which per capita incomes declined. Growth for the decade of the 1990s as a whole is only slightly greater than half that of the pre-reform period of the 1950s, 1960s and 1970s. Even if there has been growth, the fruits have disproportionately gone to the rich, with many at the bottom worse off.
In the Americas, certainly, something like emergency tariff reduction would be of enormous political and economic benefit to the whole region - a good-neighbor policy for a new era. And it could help us move away from these battles over international lending and fiscal and monetary policy, battles that have become too frequent and far too costly, for the lender as well as the borrower.
Joseph Stiglitz, a professor of economics at Columbia University, was chief economist of the World Bank and won the 2001 Nobel Prize in economics. He is the author of "Globalization and its Discontents." This comment appeared in the New York Times.
TITLE: In Defense of Fatherland Or Their Own Pockets?
TEXT: AMUSING things are occurring in the country's defense industry. In July, the state-owned Komsomolsk-on-Amur Aviation Production Plant, or KnAAPO, sued the (also state-owned) Sukhoi Aviation Military Industrial Complex, or AVPK Sukhoi. The grounds for the suit were that AVPK Sukhoi had tapped into the earnings from a contract signed by KnAAPO to supply China with Su-27 fighter jets. The reason: They need money to develop a fifth-generation fighter plane. Let's try to get to the heart of the matter.
Should a production plant hand over money for the development of a fifth-generation fighter?
"No it should not," they will tell you in Khabarovsk region, "because in the state-owned enterprise in Moscow the money will just be looted." "Yes it should," they will say at AVPK Sukhoi, "because the top management of state-owned KnAAPO lives only for today - but what is it going to sell tomorrow?"
Both are right. In this country, the problem of constructing a fifth-generation fighter jet simply cannot be resolved by a state holding company. All the money designated for technological modernization will be pilfered and the earnings received from exporting existing planes will be used up.
What you could do is privatize KnAAPO. Then the owners themselves could put aside funds for modernization, not so that the money could then be spent on lavish dachas for corrupt officials, but to fund R&D at a design bureau controlled by the owners.
There is a precedent. Irkutsk Aviation Plant, which produces the same Su fighters (only its contracts are with India, not China) blows huge amounts of money on research. It recently bought Russkaya Avionika, the best Russian design bureau in the field, and set about serious modernization of the Su planes. The only difference between the Komsomolsk and Irkutsk plants is that the latter is private. Furthermore, privatization of KnAAPO at the moment would be pure fantasy, as it contradicts the prevailing economic trend toward strengthening state ownership in the defense industry.
The official concept for restructuring the defense industry not only envisages the creation of 48 centralized holding companies, but also would include in these holding companies already privatized enterprises. The Irkutsk plant is to be swallowed up, which would ruin a genuinely successful enterprise in the name of some mythical modernization in the future.
If any modernization did take place in the past 10 years it was at the expense of privatized enterprises. Now, the plan is to take money from these enterprises and pour it into a bottomless pit in the name of modernization. In the past, it would have been said that the authors of such proposals were in the pay of the CIA, Mossad and MI5. I am much more inclined to believe that those involved are just trying to fill their own small pockets.
Yulia Latynina is a journalist with ORT.
TITLE: On Turkmenistan and Turkmenbashism
AUTHOR: By Oleg Panfilov
TEXT: SEVERAL years ago, I was attending Tajik peace negotiations as an expert on human rights, and one of the rounds took place in Ashgabat. In my first days of communicating with Turkmen Foreign Ministry officials, I could not understand the all-encompassing love for Turkmenistan's president, Saparmurat Niyazov, otherwise known as Turkmenbashi. On the lapel of every diplomat's and clerk's jacket was fastened a pin with Turkmenbashi's profile on it. After a while, I noticed that these pins were not all the same - they differed in the quality of the metal from which they were made. A Turkmen government official explained to me that you do not have to ask those in the Turkmen corridors of power what their position is or where they stand in the hierarchy of presidential courtiers. All you have to do is look at their pins and the metal from which it is made: If it is gold, then they must be a minister or deputy prime minister; silver is for a deputy minister; and so on, right down to the aluminum pins worn by clerks.
It seems that there are not many experts who can explain the Turkmenbashi regime - in particular Turkmenistan's place in the world, and its role in the geopolitics of Central Asia (and, more broadly, from the Persian Gulf to the Hindu Kush). Turkmenistan's official neutrality was something that Niyazov needed for domestic consumption, in order to convince the people of his peaceableness. And, in fact, he did indeed maintain this neutrality until recently. Turkmenistan has not participated in a single armed conflict and has not directly supported any military operation. The Taliban had an official representation open in Ashgabat from 1996, and, on the streets of the Turkmen capital, one could see exotic, bearded men in Afghan clothing and turbans. However, immediately after the commencement of military operations in Afghanistan by the Western coalition, Turkmenistan just as quietly switched to supporting the war against its recent allies.
Ashgabat occupies a similarly curious position within the executive structures of the CIS. Although a full member, Turkmenistan has refused to sign roughly half the intergovernmental agreements, and those that it has signed it has not implemented. Last year, in Vienna, I heard an official from the Organization for Security and Cooperation in Europe saying Turkmenistan had a very good chance of being the first country to be kicked out of the organization. In contrast to Moscow, which pays no attention to the lack of freedoms and the numerous human-rights violations, the OSCE continually criticizes Ashgabat for the absence of free speech, religious freedom and political pluralism. Russia's Foreign Ministry, strangely, didn't even pay any attention to the standoff between Turkmenbashi and Turkmenistan's Russian community, which has declared that it is forming an opposition movement. It seems it is easier for Foreign Minister Igor Ivanov to defend Vasily Kononov, the former NKVD officer in Latvia, than the ethnic Russian population in Turkmenistan, which lives in worse economic and political conditions than ethnic Russians in the Baltic states.
However, after Sept. 11 the attitude toward Turkmenistan has changed. Western countries do not have any military units based in the country, but Ashgabat's regime has not remotely opposed the changes in Afghanistan. Its primary interest is in reviving the project to build a gas pipeline across Afghanistan to Pakistan - and it doesn't seem too bothered who is running the country.
Turkmenbashi is a wealthy man and he does not try to conceal the fact, putting his collection of rings on public display, which, according to wagging tongues, is just a small part of the jewelry that the former Armenian President Levon Ter-Petrosyan brought to Ashgabat as payment for Turkmen gas. The number of monuments and place names changed in his honor outstrip the glorification attained during the lifetime of any other dictator. In addition to the hundreds of new place names, schools, kindergartens, universities, stadiums, streets and squares, bank notes and airport, a Turkmen calendar has now been created in which January has been replaced with the month of "Turkmenbashi."
The most recent changes in sociopolitical life have occurred at a time when the new Turkmen opposition is declaring with increasing frequency its aspirations to assume power. Almost every month, it is announced that another former minister, ambassador, or high-ranking official has joined the ranks of the opposition. However, it would appear that Turkmenbashi pays no attention to this group of former comrades-in-arms that has united behind Boris Shikhmuradov. These former members of the Turkmen government were, just a few years ago, helping to build and entrench the authoritarian regime of Turkmenbashi. Shikhmuradov, who was for many years foreign minister and first deputy prime minister, was himself responsible for handling the dictator's external relations, tending to his every whim, while simultaneously destroying the shoots of a democratic opposition.
At the start of the 1990s, with the tacit consent of Shikhmuradov and other former Turkmenbashi loyalists (now calling themselves the new opposition), the Agzybirlik political movement was destroyed and "dissidents" were thrown in prison.
Turkmens call the new opposition "the oligarchic opposition." In principle, there can be no other kind of opposition in Central Asia, insofar as there are no traditions of democratic political culture and no dissident tradition, which often served as a catalyst for political activity. The new Turkmen opposition has no possibility to exercise influence over the internal political situation, and the Web site funded by Shikhmuradov can only be read by Turkmens outside the country.
Now, as to why Turkmenistan is given a free hand to do as it pleases and a country such as Iraq is not. There are many things that Ashgabat and Baghdad have in common: strategic energy reserves, a single-party system (in Turkmenistan it is called the Democratic Party), a leader who is cowardly in foreign-policy matters, while being a complete dictator domestically, and the absence of a proper opposition. What it boils down to is geopolitics: Iraq has all of the distinction of being at the center of attention, while not every politician can even find Turkmenistan on the map. Also Turkmenbashi has not been selling weapons to "unacceptable" regimes (with the exception of selling gasoline and electricity to the Taliban).
Why is Russia so unconcerned by the perversions of a former Communist Party First Secretary of the Soviet Socialist Republic of Turkmenistan? I think there are two answers, one economic, the other political. The first concerns the unrelenting attempts to persuade Turkmenbashi to sell gas on Gazprom's terms via Russia's gas-pipeline system. The second has to be taken in the context of post-Soviet political intrigue: Would not Alexander Lukashenko, Nursultan Nazarbayev, Heidar Aliyev and Vladimir Putin want to have the same concentration of individualized power? Of course they would. They just didn't move fast enough.
The Russian Foreign Ministry's taste in foreign policy dishes is messed up - putting economic interests before political and humanitarian ones. Ivanov with a tremor in his voice denounces Latvia for its tough position toward the ethnic Russian population. At the same time he embraces new feudal lords, for whom ethnic Russians at home are superfluous people, who do not wish to learn the local language or culture. Even Dmitry Rogozin, chairperson of the State Duma foreign-policy committee and the contemporary Robin Hood of foreign policy, does not have the strength to denounce Turkmenbashism. Gazprom wouldn't stand for it.
Oleg Panfilov, the director of the Center for Journalism in Extreme Situations, contributed this comment to The St. Petersburg Times.
TITLE: A Glimpse of the Media Sector in 2109?
TEXT: Plus ca change,
plus c'est la meme chose.
DO you recall the pitched battles over freedom of speech that marked President Vladimir Putin's accession to the throne? The fight over NTV and TV6, the rallies and demonstrations of support held across the country? The reports delivered in the Council of Europe on freedom of speech in Russia? The intervention on behalf of the journalists by the U.S. government and the European Union? It seemed then to many that Russia was moving inexorably toward the rebirth of totalitarianism.
Then, suddenly, everything changed, as if someone had waved a magic wand. In June of this year, at a conference called The Media Industry: Directions for Reform, the government and the press reached the consensus that the mass media is not just about freedom of speech, but also about business. The government promised to create a business climate in which the press could work honestly and profitably, while the press, for its part, promised to learn how to work profitably and honestly. It was a sort of "velvet revolution" carried out by the very same people, in the very same jobs, who not so long ago were fighting the free speech wars.
The atmosphere in the media community has calmed to such an extent that, on Aug. 9, one of the main "persecutors of free speech," Press Minister Mikhail Lesin, met at the Soros Foundation in Moscow with some of the most ardent free-speech advocates - representatives of Western organizations such as USAID, Tacis, the World Bank, the Eurasia and Ford foundations, the Dutch Matra/ KAP, and others. The conversation dealt with a very mundane question: how the Press Ministry and foreign donors can coordinate their efforts to improve training for people working in the media sector and to improve the business culture in the sector.
The meeting had its share of sharp exchanges, of course. A representative of the European Union asked Lesin: "You talk a lot about the government getting out of the media market. Is there a timetable in place?" The minister clearly gets asked this question a lot, and he doesn't have a hard-and-fast answer. But Lesin and his staff had done their homework. His deputy, Vladimir Grigoryev, leapt into action, handing out photocopies of an article from Printing Trade Bulletin, a publication put out by the Society of Owners of Printing Establishments in St. Petersburg. The article was dated February 1909.
The article states: "Above all, our publishing entrepreneurs encounter entirely abnormal competition from our state-owned printing houses, which not only monopolize certain aspects of the printing trade, but also undermine prices industry-wide."
"Whereas Austria, Germany, the North American United States and France all have a single state printing house, and whereas England has none whatsoever, here in Russia every regional capital has its own 'state printing house.' Petersburg has more than 20 state printing houses, and Moscow, 10 or so. All of these printing houses not only accept private orders, they even solicit such orders through the newspapers."
"Russian state printing houses need not amortize their equipment nor pay taxes - in a word, they do not bear all of the expenses that fall inevitably to the lot of private entrepreneurs. Their monopoly on many types of printing ensures them a steady stream of work. Russia's state printing houses are, therefore, thriving at a time when private printing houses are struggling to make ends meet."
Upon reading this text dating back almost 100 years, I thought to myself: It's just like an editorial in The St. Petersburg Times or Vedomosti about the state of the television industry or privately owned provincial newspapers today. The Ford Foundation representative asked aloud: "And when do you expect the next October Revolution?"
It's really true: The more things change, the more they stay the same.
Alexei Pankin is the editor of Sreda, a magazine for media professionals (www.internews.ru/sreda)
TITLE: Global Eye
TEXT: The Past is PrologueThere is a thread running through modern U.S. history, a thin red cord that weaves in and out of the shifting facades of reason and respectability that mask the brutal machinery of power. At certain rare moments, the thread flashes into sight, emerging from the chaotic jumble of unbearable truth and life-giving illusion that makes up human reality. It appears, bears witness, then vanishes again, forgotten behind the next facade.
It's a thread that runs from horrified young intelligence operatives stumbling into the death camps of Nazi Germany to hardened agents running assassination programs in the jungles of Vietnam to august representatives of the state building a shadow government with secret decrees authorizing tyranny, murder, torture and deceit. It's a thread of moral corruption, corruption by an idea, a temptation, a perversion of reason, the whisper of evil that says: "The end justifies the means."
That thread fetched up briefly again this month, then was buried, literally, in a Maryland grave. The family of Frank Olson laid his exhumed remains to rest, closing the book on their half-century of struggle to find out why he died so violently in the hands of the government he had served - and whose deepest secrets he had guarded.
Frank's son, Eric, believes he knows the answer now: His father was murdered to keep the thread from sight, to "protect" the American people from the knowledge that their own government had taken up and extended Nazi experiments on mind control, psychological torture and chemical warfare - and that it was conducting these experiments as the Nazis did, on unwilling subjects, on captives and "expendables," even to the point of "termination."
Frank Olson was a CIA scientist at Fort Detrick, Maryland, the U.S. Army's biological-weapons research center. Ostensibly, he was a civilian employee of the Army; his family didn't know his true employer. Olson worked on methods of spreading anthrax and other toxins; some of his colleagues were involved in mind-control drugs and torture techniques.
In November 1953, one of these colleagues slipped him a drink laced with LSD - part of a secret "field experiment" with the new hallucinogen. A few days later, a supposedly mentally unhinged Olson leapt to his death from a hotel room in New York City. The government told the family it was simply a tragic suicide. They didn't mention the LSD - or the fact that Olson worked for the Central Intelligence Agency.
In 1975, during congressional hearings into CIA abuses, Eric Olson learned for the first time about the CIA's involvement in his father's death. After threatening to sue, the family was hastily given an audience with President Gerald Ford, who personally apologized for the Agency's indirect involvement - that LSD test gone awry - and arranged a $750,000 settlement to keep the case out of court. The director of the CIA, William Colby, also met the family and gave them what he claimed was the CIA's complete file on the unfortunate case.
But it was all a lie. Once again they concealed the CIA connection. They didn't tell the family that Olson had been considered a "security risk" or mention what he'd discovered about his colleagues' research. All this was left to Eric Olson to piece together over the years - in obscure archives, through lucky accidents and strained meetings with old CIA hands, revealing dribs and drabs of the truth - a quest documented by Michael Ignatieff in The New York Times.
In the summer of 1953, a few months before his death, Frank Olson made several trips to Europe to investigate secret U.S.-British research centers in Germany. There he found the CIA was testing "truth serums" and other torture drugs on "expendables," including captured Russian agents. He told a British colleague that he had witnessed "horrors" there. And it called into starkest question his own work on biochemical weapons. He came home a changed man, troubled, morose. He told his wife he wanted to leave government service.
But it was too late: The brutal machinery was already grinding. His British colleague told his own superiors about Olson's concerns; they in turn informed the CIA that Olson was now a "security risk." Not long after his return, Olson was given the LSD. Then he was flown to New York, ostensibly for psychiatric treatment, at the hands of a CIA doctor - who prescribed whiskey and pills. Then he was taken to a CIA magician - yes, a magician - who apparently tried to hypnotize him for interrogation.
Finally he checked into a cheap hotel - with a CIA handler in tow. Olson called his wife, told her he was feeling better and would be home the next day. But that night, he was found dead on the street, 10 floors below. The handler said that Olson had apparently thrown himself through the closed window in a suicidal fit. And so the first coverup began: 22 years, until the 1975 meeting with Ford.
Then the second cover-up began. The Olson family's threat of court action threw the White House into a panic. The truth might come out: Olson's death, the "expendables," everything, the whole thread of murder and torture in the name of "national interests." So two of Ford's top aides hastily contrived to help bury the truth and shield the moral corruptors of a nation.
Mark them well, for these two minions would go far, their names eventually known to all the world: Dick Cheney and Donald Rumsfeld.
This is the first of two parts. The conclusion will appear in next week's Global Eye.
For annotational references, please see Global Eye in the "Opinion" section at www.sptimesrussia.com.
TITLE: Israel, Palestinians Reach Latest Accord
PUBLISHER: The Associated Press
TEXT: JERUSALEM - Israeli and Palestinian security officials reached agreement on Sunday on a plan for Israeli troops to withdraw from the West Bank town of Bethlehem and from parts of the Gaza Strip. The deal was the first concrete sign of progress between the two sides in months.
The troop withdrawal - which was expected to begin Monday - was limited, and left major Palestinian cities in the West Bank still under occupation. However, both sides said the withdrawals, if successful, were considered a prelude toward a cease-fire agreement that would halt the cycle of Palestinian suicide attacks and Israeli reprisals.
The withdrawal plan, known as "Gaza First," is meant as a pilot scheme, whereby Palestinian forces retake security control of areas vacated by the Israeli troops, and work to prevent attacks on Israelis. If the attacks stop, the pullout will be gradually extended throughout areas that are supposed to be under the control of the Palestinian Authority.
The deal was reached Sunday evening between Israeli Defense Minister Binyamin Ben-Eliezer and Palestinian Interior Minister Abdel Razak Yehiyeh. Israeli forces would withdraw on the condition that "the Palestinian side takes responsibility to calm the security situation and reduce violence," the Defense Ministry said in a statement.
Also Sunday, Israeli security forces arrested 16 suspected Palestinian militants who the army said were "suspected of terrorism."
In a meeting that lasted three hours, Ben-Eliezer met with senior Palestinian security officials in Tel Aviv to discuss the pullout plan, under which Israeli troops in Bethlehem and parts of the Gaza Strip would leave Palestinian areas.
Nabil Abu Rdeneh, an aide to Palestinian leader Yasser Arafat, said the withdrawal would "prepare the atmosphere" for troop pullbacks in other Palestinian areas. Both sides had agreed the withdrawal would be complete within 48 hours, he said.
"The talks are aimed at getting a cease-fire and reducing tension," Ben-Eliezer told Israeli army radio, prior to the meeting.
Ben-Eliezer told a cabinet meeting that the number of Palestinian attacks against Israelis had decreased over the past week. But he ascribed the drop to army operations and said there was no decline in Palestinian attempts to strike military and civilian targets.
Prime Minister Ariel Sharon told the same meeting that it was in Israel's interest to reach a political agreement with the Palestinians that would lead to genuine peace, but there would be no let up in "activity against terrorist leaders," according to a statement from his office.
The Defense Ministry said that, during the meeting, Ben-Eliezer ordered the army to allow the passage of medical and humanitarian traffic in Palestinian areas with the minimum delay possible.
Bertini noted that, sometimes, Israeli government policy toward the Palestinians was not carried out by security forces on the ground, the ministry statement added.
Israel has imposed curfews and sent troops into West Bank Palestinian towns and cities to stop militants from entering Israel and launching attacks, including suicide bombings.
Palestinians trapped in their homes for days at a time call it collective punishment that has devastated the Palestinian economy. The incursions have been accompanied by roundups of Palestinian suspects.
Palestinian prisoners' organizations estimate that Israel is currently holding about 3,500 Palestinians who have been arrested since the outbreak of violence in September 2000. About 900 are being held under military regulations that allow for indefinite detention without trial, according to Israeli human rights group B'Tselem.
The army said that, as of Aug. 4, the latest date for which figures have been collated, a total of 2,600 Palestinians were being held in military installations.
In addition, an unspecified number are in the custody of the civilian prisons service and the Shin Bet security service.
Israeli human-rights group Adalah said that the Supreme Court on Sunday granted a temporary injunction prohibiting the army from using what it calls "the neighbor procedure," in which Palestinian civilians are ordered to knock on the doors of houses slated for search and arrest operations.
The army took widespread criticism at home and abroad last week after soldiers forced a Palestinian teenager to approach the house of a Palestinian militant to tell him to surrender. The youth, Nidal Daraghmeh, 19, was shot and killed, though it was unclear who opened fire.
Adalah said the court ordered the practice suspended for seven days, while the state responds to a joint petition by several Israeli and Palestinian rights groups demanding that such use of civilians be outlawed.
A court official was unable to confirm or deny that such an injunction was issued.
TITLE: Pope Bids Farewell To Fellow Poles
AUTHOR: By Andrzej Stylinski
PUBLISHER: The Associated Press
TEXT: KRAKOW, Poland - As enthralled with his fellow Poles as they were with him, Pope John Paul II bade a sad farewell to young people who tried to cajole the aging pontiff to stay with them.
The pope's four-day journey home, which ended Monday with a Mass at a monastery where he used to pray with his father, has been steeped in nostalgia as he visits the places of his youth.
But some of the most moving moments have been with young pilgrims who are united in their admiration of the first Polish pope.
"Stay with us," the crowd chanted Sunday, the third and final night of their vigil outside the archbishop's residence.
"In my heart and my mind forever," John Paul replied. Then switching to the dialect of his beloved Krakow, he said: "The farewell wish to the one who departs is, 'May you come again.' I hope that this is your wish for me."
The pope showed an easy rapport with young people, urging them back each night until Sunday, when he said goodbye.
He responded in kind to their singing Sunday evening, chanting "Welcome, Alleluia," and later, choruses of "Farewell, Alleluia"
"Unfortunately, it's the farewell meeting," the pope said.
Standing in the crowd, 19-year-old Bozena Chojnowska said: "I don't want this to be farewell. He will come for sure, because he's as young as we are."
The ailing, 82-year-old pope has brushed aside any notion he might step down while making his ninth trip to his homeland. At the same time, the visit has emphasized Poland's extraordinary bond with its favorite son.
The pope had tears in his eyes Sunday at the outdoor Mass when the crowd of 2 million Polish faithful asked him to stay. Many devotees, fearing it would be the pope's last visit, were teary-eyed, too.
Taking leave of the enthusiastic crowd, the pope chose his words carefully: "Until next time, but this is entirely in God's hands."
Continuing his trip down memory lane Sunday, the pope visited the Wawel Cathedral, where he celebrated his first Mass as a priest in 1946. He meditated for 30 minutes at an altar named for Poland's patron saint, Saint Stanislaw.
Later, speaking to crowds from his popemobile at a church where he was pastor from 1948 to 1950, John Paul made rare mention of his own mortality.
"I ask for prayers for all the current parishioners at St. Florian, a prayer for the living and the dead, and a prayer for the pope during his lifetime and after his death," John Paul said.
He then went to Rakowicki Cemetery and, from the popemobile, blessed the graves of his parents and older brother. He prayed briefly and lit a candle, but did not get out of his vehicle.
TITLE: Beem Tames Tiger, Takes PGA
AUTHOR: By Doug Ferguson
PUBLISHER: The Associated Press
TEXT: CHASKA, Minnesota - Playing as if he had nothing to lose, Rich Beem buried Tiger Woods on Sunday and captured a PGA Championship even he thought he had no business winning.
Beem hit a 5-wood to within 2 meters for an eagle on the 11th hole to seize control, then put the finishing touches on a fearless round by rolling in an 11-meter birdie putt on No. 16 to thwart a final charge from Woods.
Seven years ago, Beem was selling car stereos and cell phones for $7 an hour. Even after the third round, he said guys like him weren't supposed to win majors.
Beem stared down the world's best player under the stifling pressure of a major championship at Hazeltine on Sunday, closing with a 4-under 68 for a one-stroke victory over Woods.
"I'm still surprised at myself," Beem said. "I'm elated beyond belief. I was a lot more in control of my emotions than I ever have been under that kind of pressure."
Woods did his part. Unwilling to give up after back-to-back bogeys, Woods birdied the final four holes to keep alive fleeting hopes of becoming the first player to win the three U.S. majors in the same year.
Beem never flinched.
He finished off his incredible round with a harmless three-putt bogey on the 18th, lifted his arms and did a shimmy shake under the bright skies of Minnesota before taking a bow.
Woods closed with a 67, matching the best score of the day.
The season's final major has seen this before. Beem, who finished at 10-under 278, became the 12th player in 15 years to make the PGA Championship his first major victory.
What set Beem apart from a long list of surprising winners - John Daly, Wayne Grady, Mark Brooks - was the guy chasing him.
Woods showed up quickly with three birdies and two amazing pars on the front nine, putting him just one stroke behind Beem with nine holes to play.
Beem didn't buckle. He simply continued to blast away.
Hitting a driver on just about every hole and attacking the pins, Beem turned a one-stroke advantage into a six-stroke lead over Woods in a matter of four holes.
The biggest was his 5-wood second shot on the 545-meter 11th hole.
"Come on! Come on!" Beem yelled as the ball soared over a cluster of bunkers, landed on the front of the green and didn't stop rolling until it was 2 meters from the cup. He made that for eagle to get to 10-under.
Woods played in the group ahead of Beem, although he knew who was on top.
A scoreboard was directly behind the cup on No. 13 as Woods stood over a 4-meter birdie putt that would have pulled him within two strokes of the lead. Instead, he three-putted for bogey, then dropped another shot on the next hole.
The key putt came on No. 16, the hole where Payne Stewart won the 1991 U.S. Open at Hazeltine. Beem begged his 9-iron to clear a marsh on the corner of Lake Hazeltine, and it barely did. His 12-meter birdie putt was true.
Beem pumped his fist and heaved his ball in celebration.
The best part was still to come. After holing out on the 18th, he jogged over and kissed the Wanamaker Trophy.
Beem collected $990,000 and a five-year exemption on the PGA Tour and to the three other majors. He can return to the PGA Championship as long as he likes.
Not bad for a guy who gave up the game in 1995 and decided he was better off in a blue-collar job.
TITLE: Rusedski Powers Past Mantilla To Take Title
PUBLISHER: The Associated Press
TEXT: INDIANAPOLIS - Greg Rusedski's T-shirt read 149 mph, a reminder of the booming serve that once placed him among the world's top tennis players.
Rusedski is serving notice he's back.
On Sunday, Rusedski hit serves as fast as 132 miles per hour (211 kilometers per hour) as he rallied for a 6-7 (8-6), 6-4, 6-4 victory over Spain's Felix Mantilla to win the RCA Championships title.
"I feel great, I have had no knee problems," Rusedski said after winning his second title of the season. "I'm fit, I'm strong and I'm excited about the [U.S.] Open coming up."
Rusedski, seeded 14th, blew the unseeded Mantilla away with first serves that consistently reached speeds higher than 110 miles per hour (176 kilometers per hour) and second serves that were only a bit slower. He had 16 aces, including one to close out the eighth game of the final set after falling behind 40-0. Even 60 unforced errors couldn't stop Rusedski, who complained to the chair umpire about calls two times and tossed his racket after he lost the tiebreaker 8-6 on a ball he thought sailed long.
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In Montreal, Amelie Mauresmo beat Jennifer Capriati, 6-4, 6-1, on Sunday in the final of the Rogers AT&T Cup, a hardcourt tuneup for the U.S. Open.
Serving at 4-4 in the first set, Mauresmo won two points on serves the second-seeded Capriati argued were out and took a 5-4 lead. Mauresmo then took the set by breaking Capriati's serve when a backhand flew wide.
Mauresmo, now 3-3 against Capriati, also won their meeting in the Wimbledon quarterfinals.