SOURCE: The St. Petersburg Times
DATE: Issue #834 (2), Tuesday, January 14, 2003
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TITLE: Confusion Reigns Over Dam Money
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: President Vladimir Putin said Friday that a "very large" sum of money has been found to complete St. Petersburg's long-awaited flood-protection barrier - but the news seemed to be a surprise to Putin's personal representative to the Northwest Region, Viktor Cherkesov
 
At a press conference Monday, Cherkesov could account for only just over half of the funds, which, according to Interfax, total $600 million, and failed to specify all the sources.
 "There is the [European Bank for Reconstruction and Development] loan of $245 million, and loans from the European Investment Bank and the Scandinavian Northern Bank," he said.
 The latter two loans are each worth $40 million, giving a total of $325 million, well short of Putin's $600 million.
 Putin's statements were made at a meeting with Cherkesov on Thursday, at which he sprung another surprise for his representative by putting him in charge of completing the project.
 "The construction time has doubled, and a huge amount of money has been spent but, unfortunately, there is no end in sight yet," Putin said. "I ordered an investigation, and the government has taken some decisions, including providing financial support for the project."
 Cherkesov has until 2008 - the latest in a series of dates set by the government since the project was put on hold in 1991 - to sort out the financial and technical aspects of the project, supervise the selection of a development company and monitor the progress of the construction. 
 However, his figures also fall $93 million short of the $418 million estimated by the federal Housing Committee to be necessary to complete the barrier.
 "We have a slight [funding] shortage, so the rest of the money could come from the federal budget," said Margarita Rudakova, head of the Northwest Region Presidential Office's Inspections Department, in an interview on Monday.
 Cherkesov said Monday that the $600-million package could also help to finance the completion of another long-awaited project - the St. Petersburg Ring Road. If the planned barrier is constructed, it will not only protect the city from any flood under 5.15 meters, but also serve as a link in the Ring Road, which is designed to alleviate the city's traffic problems.
 Reaction from City Hall - which has a strained relationship with Cherkesov, whom many at Smolny see as a Putin appointee to keep Governor Vladimir Yakovlev in his place - was predictably gleeful.
 "At least Cherkesov will have something to keep him busy from now on, so he won't just be sitting around breathing maliciously down [the governor's] neck all the time," said Alexander Afanasyev, Yakovlev's spokesperson, in a telephone interview on Monday.
 The news about the finances "unexpectedly found by the president," according to Friday's edition of Kommersant daily, came almost exactly one month after the federal government approved the $245-million EBRD loan, on Dec. 19. The state-guaranteed loan is due to be paid back over 18 years, and was issued on conditions to be paid back with 1 percent above the London InterBank Offered Rate, a standard European inter-bank interest rate.
 The flood-protection scheme - 11 dams separated by gates to regulate water flow into and out of the Neva River delta - was initiated by a Communist Party decree in 1979. Ironically, the original completion date was set for Aug. 19, 1991 - the date of the attempted putsch in Moscow that effectively finished off the Soviet Union and, with it, the funds it had provided for the project.
 Work resumed in 1995, when City Hall lobbied the federal government to complete work by 2001. However, according to officials, federal-budget money has, until now, been used only to maintain the structures built so far.
 "The money was spent on securing the structures against collapse, guarding [what had been built], and pumping out water," said Rudakova. "Every year, the losses total about 15 million to 18 milllion rubles at 1991 rates [$990,000 to $1.18 million at the August 1991 dollar rate], three to four times more than the amount gained from the federal budget."
 Rudakova said that inspections by her office in the last 2 1/2 years concluded that the site does not have the necessary equipment to continue building, no construction zones have been mapped out, and that large amounts of land have been rented out to private companies and businesspeople at very low cost.
 "Morzashchita, a former dam developer, has rented out 450,000 square meters of [real-estate] space in management buildings, production facilities and construction sites, and 20,000 square meters of harbor space, cranes and railroads," she said. "As a result, in two years, the federal budget has lost over 500 million rubles [about $17 million]."
 In addition, Rudakova said, about 70 percent of the paperwork will have to be reviewed and rewritten, as it has not been touched since 1994, and a new developer will have to be found. She said some 65 percent of the barrier is now complete.
 St. Petersburg is flooded almost every year, when the Baltic Sea rises to more than 1.6 meters above its normal level. The floods are caused by atmospheric cyclones moving across the Baltic Sea from the southwest. The cyclones, with an average diameter of 1,000 kilometers, pull the sea upwards and create high waves - which then come crashing down on low-lying St. Petersburg.
 The city has been hit by truly devastating floods three times in its history - in 1777, 1824 and 1924. During the 1824 flood - described in Pushkin's poem "Medny Vsadnik," ("The Bronze Horseman") - the water level rose 4.21 meters, killing more than 200 people and destroying 462 buildings.

TITLE: Government Makes New Year's Resolutions
AUTHOR: By Torrey Clark
PUBLISHER: Staff Writer
TEXT: MOSCOW - Leading bureaucrats from key ministries and a smattering of lesser committees and agencies offered up their New Year's resolutions for 2003 on the government Web site Thursday. Whether talking about security or economics, the main message appeared to be that Russia must put its interests first and strengthen its position, or risking losing ground.
 
In terms of economic reforms, 2003 is shaping up to be another year of intense discussion and preparation, rather than concrete actions - much as expected, given the upcoming State Duma and presidential elections. Most of the resolutions focused on developing new legislation in the budget, economic and social spheres and seem to leave the more painful implementation to a later date.
 On the foreign stage, Foreign Minister Igor Ivanov emphasized the importance of international cooperation to improve security and foster domestic development, making the defense of Russian interests abroad - political and economic as well as linguistic and cultural - a priority.
 He listed international cooperation on terrorism, arms of mass destruction, and "other threats and challenges in the global era" as hot issues, and emphasized the importance of multilateral diplomacy in resolving conflicts involving Iraq, the Middle East, the Korean peninsula, South Asia and the Balkans.
 Ivanov named the United States, the European Union, China, India, and the G-8 as important partners.
 Interior Minister Boris Gryzlov also put security high on his list, in particular the fight against narcotics, terrorism, organized crime and illegal immigration.
 In addition, he said the ministry would work to normalize the situation in Chechnya, in part by carefully selecting and training recruits for a Chechen Interior Ministry. President Vladimir Putin announced that Gryzlov had ordered the creation of the regional ministry in mid-November, in the aftermath of the Moscow theater siege.
 The upcoming elections are themselves a focus for the Interior Ministry, which will work with election commissions to keep criminals out of public office, said Gryzlov, who re-entered politics in November when he was selected for the pro-Kremlin party United Russia's top post.
 Gryzlov promised to be more open with the mass media and renewed an almost two-year-old pledge to pay more attention to criticism and build the population's trust in the police.
 State Statistics Committee head Vladimir Sokolin said analysis of the results of last year's national census would be his primary focus in 2003, and he promised a preliminary population count by March 31.
 Finance Minister Alexei Kudrin named as his main task budget policies to stimulate the economy and improve living standards. The most important goals, though, were to stick to the budget and the debt-repayment schedule, regardless of external economic factors, he said.
 "We'll meet budget targets to the last kopek under any conditions," he said, cheering some economists who feared spending could burgeon ahead of elections.
 However, Kudrin also promised that financial assistance to the regions may increase, as long as the funds go for social needs.
 At the same time, Kudrin said the government would work to lower the overall tax burden by 0.7 percent of gross domestic product (about $2.5 billion), while taxation of small businesses should decrease by 50 percent to 75 percent.
 Kudrin praised 2002's economic successes - economic growth of an estimated 4 percent; an increase in real incomes of 8.5 percent and a drop in capital flight of about 66 percent - for laying the foundations for economic stability in 2003.
 Economic Development and Trade Minister German Gref said GDP growth had exceeded 4 percent, though a far cry from what he sees as the country's potential - 6 percent to 10 percent annual growth.
 His ministry's focus in 2003 will be on continuing initiatives begun earlier, "from reforming the natural monopolies to protecting producers' rights on the world market," he said.
 Gref listed six priorities for 2003: streamlining state regulation, tax and budget reforms, institutional and infrastructural reforms, economic diversification, increased economic transparency and social welfare and services. The priorities form the basis of the government's 2003 action plan for carrying out its social-economic program for 2002 to 2004, to be submitted to the government by Jan. 15.
 "To increase economic transparency, it is necessary to finish the active phase of Russia's WTO negotiations," Gref said. "We can already talk about noticeable progress; there is hope that we will be able to find acceptable solutions to all key issues with our trade partners."
 In particular, Gref said priorities in the realm of external trade were passing the Customs Code, laws on anti-dumping, countervailing duties and other trade protection measures and a package of legislation on intellectual-property rights.
 Gref stressed that banking reform must match currency and banking liberalization, while the cost of banking activities needs to be brought down. "If the situation doesn't change, resources will go to banks in other countries," he said.
 Gref also foresaw the completion of the Tax Code, in particular production-sharing agreements - long-awaited by foreign investors - and amendments aimed at encouraging investment.
 VAT reimbursement - a nightmare identified by both foreign and domestic manufactures as a major hindrance to developing exports of processed goods - will also come up for an overhaul, Gref said. He reiterated the government's commitment to supporting exports of processed goods by developing export guarantees and export contracts insurance.
 Gref said carrying out development plans drawn up for the automobile, aviation and forestry sectors in 2002 would be a focus.
 Despite the worrying delays in power reforms, Kudrin, Gref and Anti-Monopoly Minister Ilya Yuzhanov were bullish about planned revamps at Unified Energy Systems and other so-called natural monopolies, including the railroads and gas. Yuzhanov also spoke of the need to break up the communal-housing monopoly before meaningful reforms could take place.
 Economists and analysts sniffed at the lack of details in many of the 2003 resolutions, but noted only a few omissions.
 "If they wanted to be more open, they should have said something more concrete and new," said Alexei Moiseyev, an economist at Renaissance Capital.
 "It's hard to believe in any concrete steps. My expectations are that this will be a year of much discussion, without much being done," said Yevgeny Gavrilenkov, chief economist at Troika Dialog. "In general, they're talking about refinishing, polishing and testing in 2003."

TITLE: Many Russians Still Left Without Heat
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: As temperatures in St. Petersburg inched up to a balmy minus 5 degrees Celsius, many other parts of the country remained in a deep freeze Monday, with more than 28,000 Russians shivering in unheated apartments, the president chiding his cabinet and northern ports threatened with shutdowns due to ice (see story, p. 6).
 
Holiday spirits have been "very much dampened" by heating problems, President Vladimir Putin told a cabinet meeting, as a government commission toured the areas hardest hit by this winter's unusually cold temperatures.
 "Unfortunately, the situation has not improved yet," Putin said in televised remarks. "So I ask the government, when considering the distribution of financial aid for January, to keep in mind the entire complex of these problems."
 As of Monday morning, 267 residential buildings housing 28,400 people - more than 20,000 of them in the Leningrad region - remained without heat, the Emergency Situations Ministry said. Forty-one administrative buildings were also cut off. 
 Other areas suffering from the cold have been the Arkhangelsk, Karelia and Novgorod regions in the northwest and several parts of the Far East.
 NTV television showed repair workers bundled in fur-lined jackets welding rust and snow-covered pipes in Arkhangelsk and Karelia, as residents breathed clouds of steam inside their freezing apartments.
 As the country's heating woes entered a third week with little sign of easing up, public officials angrily exchanged recriminations. 
 The Emergency Situations Ministry blamed regional authorities for the snail's pace of repairs to burst waterpipes and dilapidated heating mains.
 Deputy Emergency Situations Minister Gennady Korotkin, a member of the government's crisis commission, admonished local officials for poor organization, too few repair workers and insufficient supplies.
 "Repair teams involved in restoring heating have been switched to a 24-hour work schedule and a timetable for restoring heat to homes has been put together and presented to residents," Korotkin said Monday after a visit to Karelia, Interfax reported.
 Prosecutors in Karelia have opened eight criminal investigations into local officials suspected of negligence in the heating crisis, Itar-Tass reported. One probe has been opened in the Novgorod region city of Valdai, RIA Novosti said. Officials convicted of negligence could be fined between 45,000 and 90,000 rubles ($1,400 and $2,800) or sentenced to six months of correctional labor.

TITLE: Surgeon Found Guilty of Malpractice
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW - In a rare outcome for malpractice complaints, a court in southern Russia found a neurosurgeon guilty of improperly treating a patient and handed down a three-year suspended sentence, although the verdict will not bar the doctor from practicing medicine.
 
The Pyatigorsk city court on Friday ruled that Khasan Bolurov, head of the neurosurgery department at Pyatigorsk City Hospital No. 1, failed to provide adequate care for his patient, Federal Security Service colonel Alexander Mandrikin, who died after 47 days under Bolurov's supervision while recovering from a stroke.
 Bolurov's lawyer plans to appeal the decision, which he said marred the name of one of the best medical specialists in the region.
 "The decision damages Bolurov's professional reputation and we are determined to go as high as the Supreme Court to have the unfair verdict anulled," lawyer Robert Abramyan said Monday in a telephone interview from Pyatigorsk.
 Mandrikin, 48, was hospitalized in Feb. 2001 with a stroke and was treated at Bolurov's department. After a brief improvement in his condition, he suffered another stroke, which turned out to be fatal.
 The lawyer for Mandrikin's widow, who filed the lawsuit, insisted that Bolurov and his subordinates failed to provide the necessary treatment for her husband and kept him in the wrong department.
 "Mandrikin was kept in the wrong department for 47 days and did not receive proper medication. On the contrary, the treatment he received, in part, led to the deterioration of his condition," lawyer Galina Roslyakova said by telephone from Mineralnye Vody, adding that Bolurov should have been stripped of the right to practice medicine.
 Abramyan, however, argued that Mandrikin should not have been taken from intensive care to Bolurov's department in the first place; instead, he should have been brought to the department of general medicine, but doctors there were wary of admitting a patient who was almost certain to die.
 "Bolurov was confronted by his colleagues with a fait accompli - he had to deal with a terminally ill patient. It is only to his credit that he did not refuse to treat Mandrikin," Abramyan said.
 He also said Mandrikin had been suffering from high blood pressure for a number of years, and was in serious condition by the time he reached Bolurov's department.
 Cases of relatives complaining and threatening to sue doctors for the death of their loved ones are not unheard of in Russia these days, but they rarely result in court battles - and even more rarely in convictions. 
 "Patients have become more educated about their rights and the compensation they can claim from clinics," said a Moscow-based surgeon who asked that his name be withheld.
 Under the Criminal Code, a doctor ruled guilty of a patient's death can face up to five years in prison and be stripped of his right to practice for three years on top of that.
 When malpractice complaints do surface, medical institutions sometimes conduct internal investigations or otherwise try to settle the case out of court, for instance by sacking or suspending the doctor, the surgeon said.
 Consumer rights advocate Dmitry Yanin said that those who take doctors or medical institutions to court are highly likely to encounter problems with expert evaluations, due to doctors' unwritten code of corporate solidarity.
 Moreover, Yanin said, the Russian court system has no practice considering such cases.
 "This legal sphere remains dark and incomprehensible," he said.

TITLE: City Charter Turns 5 Years Old
AUTHOR: By Claire Bigg
PUBLISHER: Staff Writer
TEXT: The City Charter, which has been at the center of disputes between some Legislative Assembly deputies and the City Administration over the past year, celebrates its fifth birthday on Tuesday.
 
To mark the occasion, the City Charter Court, set up over two years ago to settle charter-related questions, invited all Legislative Assembly deputies, as well as prominent political figures such as Economic Development and Trade Minister German Gref and Deputy Head of the Presidential Administration Dmitry Kozak to a special get-together.
 It took almost a year for the city's first Legislative Assembly to pass the City Charter - an event that most local politicians remember as a crucial step in defining the city's political landscape. It was finally approved on Jan. 14, 1998, all of the document's points having been voted on separately in the assembly.
 "A monument should be erected to the deputies of the first Legislative Assembly for passing the City Charter," said United Russia deputy Oleg Sergeyev, who served in the first assembly. "It was a great achievement, and happened under very difficult conditions. The atmosphere was that of a fight."
 "The first Legislative Assembly was very professional, with professional deputies who did a lot to pass the charter," he said. "It was a victory for the Legislative Assembly and for the whole city, as the charter is vital to preventing many political and economic abuses."
 The charter was drawn up by a commission of deputies, city-administration representatives, legal and political experts, and other political figures. Some of those involved are now members of the federal government, including Kozak and Federation Council Speaker Sergei Mironov, although the latter was not an official committee member.
 Committee members say every point of the charter was a prospective question of power for the assembly and the City Administration, and was, therefore, discussed in detail by both sides.
 Even after the draft charter was completed, according to Yabloko faction leader Mikhail Amosov, who served on the committee, it faced the danger of remaining only a draft, as the city administration balked at signing it into law.
 "Although the text was a compromise, [Governor Vladimir] Yakovlev was still opposed, and refused to sign it," he said. "The City Administration thought that the city did not need a charter at all. It was pushed through by the Legislative Assembly with serious difficulty."
 A two-thirds vote in the assembly - requiring a 'yes' vote from 34 of the 50 members - is necessary to overcome a gubernatorial veto. After garnering only 32 votes in the first round of voting, the charter finally received the support of the 34 deputies that was needed.
 Even now, Smolny officials say they are not happy with the City Charter, and dismiss suggestions made by City Charter Court President Nikolai Kropachyov that a public holiday, similar to Russia's Constitution Day, should be declared to mark the day it came into force.
 "The biggest problem is that [the charter] contradicts federal law in at least a dozen places," said Yakovlev's spokesperson, Alexander Afanasyev. "It needs important changes."
 "I disagree with Kropachyov; we don't think that it is a document that should be considered in the same light as the constitution," he added.
 The charter made headlines in the second half of last year, when Yakovlev expressed his desire to run for a third term in office. Although a ruling in July last year by Russia's Constitutional Court allows some regional leaders a third and, in some cases, a fourth term in office, the City Charter limits St. Petersburg's present governer to two. On Oct. 2 last year, the City Charter Court ruled that the city governor can not legally run a third time.
 In order to be allowed to run again, Yakovlev would have to force through amendments to the charter, a move requiring the support of 34 deputies, which analysts say he is unlikely to achieve.
 Deputies opposed to Yakovlev running for a third term expressed caution about introducing changes to the charter.
 "Amendments can be introduced but, before doing so, it is necessary to think carefully about the consequences, and whether they will bring positive or negative changes," said United Russia's Sergeyev.
 City Charter Court officials, meanwhile, are pushing for a wider readership of the charter, despite its successes over the past five years and its increasingly influential role.
 "Like any legal document, the City Charter is now better known than when it was created," said court spokesperson Olga Tulsanova. "But, unfortunately, you can't buy it anywhere. Have you seen it on sale in any bookshop?"
 "The City Charter needs to be read and followed," she said. "It would make people's lives a lot better."
 Those Legislative Assembly deputies yet to read the City Charter will soon have one fewer excuse - the City Charter Court is sending a copy of the document to each deputy for the anniversary.

TITLE: Poll: Most Russians Favor Peace Talks for Chechnya
PUBLISHER: Combined Reports
TEXT: MOSCOW - More than half of Russians favor peace negotiations with Chechen separatists over the military campaign in Chechnya, and many of those opting for peace are pro-Communist retirees and nationalist young men, according to a leading pollster.
 
The findings suggest that public opposition to the war in Chechnya, which is now in its fourth year, has returned to highs seen for much of 2001 and 2002. Support for the war swelled for about a month after the Moscow theater siege last fall.
 Although public opinion has rarely swayed government policy, the Kremlin will have to show more sensitivity to public expectations over Chechnya in the run-up to parliamentary and presidential elections, analysts predicted.
 In a national poll of 1,600 Russians in late December, 56 percent said they wanted peace talks with the rebels, while 36 percent said the war should continue, the All-Russia Center for Public Opinion Research, or VTsIOM, said Thursday. The margin of error for the poll, which was conducted in 83 cities, was about 3 percent.
 The doves had consistently outnumbered the hawks in public opinion since January 2001 and neared 60 percent before Chechen rebels seized the theater in late October, said VTsIOM official Leonid Sedov. In November, support for peace talks fell to 45 percent, while 49 percent called for war.
 Sedov said the December poll found that supporters of the Communist Party and the ultranationalist Liberal Democratic Party of Russia are major proponents for peace in Chechnya. He said the showing might reflect the fact that the Communist electorate is dominated by retirees who remember the ordeals of World War II. As for the LDPR, he said that many of its backers are young men with little education from poor neighborhoods who don't want to land in Chechnya after being drafted into the military.
 Sedov said the pro-war respondents mainly come from liberal parties and the centrists behind President Vladimir Putin, whose tough-talking rhetoric on Chechnya helped him climb to the presidency in 2000.
 Nikolai Petrov, an analyst with the Moscow Carnegie Center, said that while the Kremlin has paid little heed to public sentiment over Chechnya, it has certainly not written it off.
 "The Kremlin's repeated declarations about there not being any negotiating partners among the Chechen rebels and its claims about the lack of legitimacy of the best possible negotiator, [rebel leader Aslan] Maskhadov, show that Moscow is following public opinion and attempting to explain to Russians its reluctance or inability to hold talks," he said.
 Another sign that the Kremlin is listening to public opinion is the appointment of a new Chechen prime minister and new military commander to the North Caucasus, Petrov said.
 "Officials who had well-developed relations with the locals and obligations to them were swapped for outsiders," he said. "If you don't want to change the situation quickly and radically, there would be no logic to such a reshuffle."
 Meanwhile, election officials announced Friday that Chechnya will vote for a constitution on March 23 in a referendum that the Kremlin hopes will push the republic closer toward stability.
 Some 530,000 Chechen residents and 38,000 federal troops permanently stationed in Chechnya will be eligible to vote in the referendum, said Central Election Commission head Alexander Veshnyakov.
 "We will do all that is possible to create the conditions for a democratic and free vote," Veshnyakov said.
 Chechens must be able to "cast their vote freely, with no one prosecuting them for participating or for not participating," he said.
 Foreign election observers and international groups such as the European Council will be invited to observe the vote and receive information about the pre-vote preparations, he said.
 The March vote is a forerunner to the eventual elections of a Chechen president and parliament.
 
 <i>(SPT, AP) </i>

TITLE: Prosecutors To Appeal On Budanov
PUBLISHER: The Associated Press
TEXT: MOSCOW - Prosecutors have appealed the verdict against Colonel Yury Budanov, who was found mentally ill and not criminally responsible in the killing of an 18-year-old Chechen woman, the chief military prosecutor said Friday. A lawyer for the victim's family has protested the decision.
 
State prosecutor Alexander Derbenyov wants an annulment of the verdict and new court hearings for Budanov, who admitted killing Elza Kungayeva in Chechnya in 2000, chief military prosecutor Alexander Savenkov said.
 Derbenyov has urged the court to find Budanov guilty of all charges against him, sentence him to 12 years in prison, strip him of his military rank honors and bar him from holding official posts for three years, Savenkov said.
 Budanov, the first military officer to face trial for abuses in Chechnya, was ordered confined to a psychiatric hospital in the Dec. 31 decision by the North Caucasus Military District Court in the southern city of Rostov-on-Don. A court official said Friday that he was still being held in jail and might remain there until all appeals and complaints are considered.
 According to Budanov's lawyer, Anatoly Mukhin, a lawyer for Kungayeva's family filed a complaint earlier in the week protesting the insanity ruling. He said the lawyer, Abdulla Khamzayev, wants a new trial with a different panel of judges.
 Savenkov said that, since the latest war began in 1999, 46 service personnel have been convicted of abuses, including six officers, and that 11 of the defendants were convicted of murder.

TITLE: Murdered Web Designer Buried
AUTHOR: By Larisa Naumenko and Andrei Zolotov Jr.
PUBLISHER: Staff Writer
TEXT: Holding red carnations and brushing away tears, a mixed crowd of academics, Internet specialists and visitors to Vladimir Sukhomlin's military Web sites stood in silence Monday morning at Moscow State University's Department of Computing Mathematics and Cybernetics to pay tribute to its recent graduate and youngest teacher, who investigators say was beaten to death by two police officers hired for the job.
 
Three hours later, in a ritual usually reserved not for computer geeks, but for men in epaulets, 23-year-old Sukhomlin was buried at the prestigious Troyekurovskoye Cemetery to the sounds of a military salute and the Russian national anthem played by a military band. 
 Despite the arrests of the suspected attackers and a young businessperson accused of ordering the attack, the motives behind Sukhomlin's death on Jan. 4 remain shrouded in mystery. His death highlights the dangerous intersections between the supposedly civilized IT world, the rough world of Russian business and the activities of security agencies.
 &quot;He has gone away like a rocket,&quot; the programmer's father and mentor, Moscow State University professor Vladimir Sukhomlin, said at the farewell ceremony. &quot;He stepped into the business world, which has grown together with the criminal government bodies. I blame this state criminal system, which covers up this criminal business world. We need to unite to be able to protect the rights of those in the IT business.&quot;
 Gathered around Sukhomlin's coffin, his mother and several friends also spoke to those who had come to say farewell.
 &quot;The main thing in a man is his character, intellect and the ideas that rule his life,&quot; said his mother, Lyudmila, who like her husband and her son's widow, Alla, was overcome with grief.
 Following the ceremony, the mourners moved to the cemetery, where a religious service was held before the burial.
 Ivan Fedin, an investigator with Nikulino district prosecutor's office, confirmed Monday that Sukhomlin's body was found Jan. 7 in an empty lot in Solntsevo on the outskirts of Moscow. Two police lieutenants from the town of Balashikhka and a private guard were arrested Thursday, five days after the killing. They said they were paid $1,150 to heavily beat, but not kill, Sukhomlin, Fedin said.
 The lieutenants, both in their early 20s and identified only as Goncharov and Vorotnikov, pointed to Dmitry Ivanychev, 22, director of a company called Plastorg as the person who hired them, Fedin said. Ivanychev was arrested and charged with organizing a pre-meditated action to cause serious damage to Sukhomlin's health. The two lieutenants were charged with kidnapping and pre-meditated action to cause serious damage to someone's health. While premeditated murder can lead to a prison term of 20 years, a plan to damage someone's health that results in accidental death is punishable by up to 15 years in jail.
 Professor Sukhomlin insists his son was deliberately killed. &quot;I will urge the severest punishment for those who have killed my son,&quot; he said at the funeral. 
 Investigators said the motive was not clear. &quot;We are questioning Sukhomlin's relatives and colleagues to find out what connected Ivanychev and him,&quot; Fedin said. 
 His relatives and colleagues, however, said they did not know of any business he had with Ivanychev, and disagreed over who might be behind his death.
 Sukhomlin, who was known on the Web as Cliver, was involved in several commercial and non-commercial projects. He worked as a software designer at Jera Systems, a small company that develops software to integrate companies' business processes. He also developed and edited an online portal called Military Historical Forum at www.vif2.ru, which gained authority among military experts and buffs. Seen as a pioneer of Internet-based informational warfare - a subject that may have led to his cooperation with the secret services - he created the anti-NATO Serbia.ru site during NATO's bombing in 1999 and the still-active site Checnya.ru, designed to oppose separatist sites such as Kavkaz.org.
 &quot;In such a short time, Volodya managed to do what many don't do in a lifetime,&quot; Igor Starodumov, a friend and colleague, said at the funeral.
 Professor Sukhomlin singled out as a possible reason behind his son's murder his work at Jera Systems on an integration system for a chemical holding, which led to a business conflict. 
 Jera Systems director Viktor Denisov said the conflict was resolved peacefully. Instead, he pointed to Sukhomlin's possible ties with the security agencies.
 &quot;I'm inclined to believe that Volodya by accident found out something that he was not supposed to know,&quot; Denisov said Sunday. But he did not rule out crime as a possible reason. 
 &quot;The IT industry involves bigger and bigger money,&quot; he said at the funeral. &quot;The more money that gets involved in this industry, the more criminal it will eventually become.&quot;
 While the capitalization of Russian IT companies and the size of their contracts remain relatively small, their involvement in the affairs of multi-million-dollar companies and the impact they can have on the companies' accounting gives them a certain clout.
 Although Sukhomlin's funeral was attended by about 300 people and more than 200 visitors left condolences on a memorial Internet page his friends launched, his murder did not appear to be sending shock waves through the IT industry. Managers of several leading IT companies contacted Monday refused to comment on the consequences of the murder for the industry, which prides itself as being calmer and cleaner than other spheres of Russian business. Citing the unclear nature of the motives behind it, industry sources said Sukhomlin's murder was not a topic of discussions among the broader IT community. 
 One industry source said the lack of reaction could be explained by the fact that Sukhomin was not at the top of his field, that he was politically alien to its predominantly liberal core, and could be connected with the secret services.
 Denisov said the IT community is internally divided, and not ready to digest the news. 
 &quot;Nobody knows yet how to react,&quot; he said. &quot;Until now, the Internet was a sand box in which kids played safely, disregarding their real age. It suddenly turned out that it is a jungle and one can be bitten quite severely.&quot;

TITLE: Foreigners Feeling Strain Of Life in Today's Russia
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Some Westerners living in Russia are feeling nervous. With the Peace Corps made redundant, the Organization for Security and Cooperation in Europe squeezed out of Chechnya and a respected U.S. labor activist deported with no explanation - all in the space of a few weeks - other foreigners are wondering who could be next.
 
The latest diplomatic hassles for foreigners from the nonprofit sector, experts say, reflect the steadily growing influence of the intelligence agencies under President Vladimir Putin and a realignment of their priorities with those of the state writ large.
 So far, the restrictive measures have been aimed at non-Russians believed to be nosing around in sensitive areas or somehow doing damage to the country's prestige. They don't pose a threat to foreigners across the board. But that could change if the Kremlin loses hold of the long leash now restraining the special services.
 &quot;It's quite a troubling sign,&quot; Nikolai Petrov of the Moscow Carnegie Center said Friday.
 The enhanced clout of the intelligence agencies &quot;is like a gas that expands, filling up all the available space,&quot; Petrov said. Rather than resulting from some recent event, the current tightening of the screws reflects traditional chekist thinking: &quot;no information, no problems.&quot;
 Under former President Boris Yeltsin, &quot;they felt this was impossible, unacceptable. ... Now, they believe they have carte blanche inside the country to do whatever is convenient for them,&quot; Petrov said.
 A senior foreign diplomat who has been involved with Russia and the Soviet Union for nearly 20 years, who spoke on conditions of anonymity, agreed.
 &quot;It's an old battle being fought on a new battlefield,&quot; he said.
 The intelligence services have gotten a boost from the West's new tolerance for their methods since the terrorist attacks of Sept. 11, 2001, the diplomat said, and from the weakness of other institutions - an anemic nongovernmental sector, an unfair and overburdened court system and a passive diplomatic corps.
 Despite the latest problems for Western nonprofit groups and an explicit effort by Moscow to tighten up its migration policy, there is no sign of an all-out attack on foreigners.
 &quot;If a person doesn't stick his nose in anything, if he doesn't make contact with people and organizations that pose an inconvenience to the government, if he doesn't pass on some kind of unofficial information, then he can go ahead and work and feel completely safe,&quot; Petrov said.
 &quot;The current authorities see what they can do and what they can't,&quot; Alexei Makarkin, an analyst with the Center for Political Technologies, said in a telephone interview. &quot;Foreign policy is no longer based on emotion, as it was for much of the 1990s, but on cool common sense and pragmatism.&quot;
 Under Putin, the country will not espouse politically suicidal policies - like unconditional support for pariahs such as Saddam Hussein - and it will be willing to compromise on issues crucial to its national interests, such as Kaliningrad, when it sees its options are limited.
 But Moscow also wants to show that it is on equal footing with its Western partners, Makarkin said. And it will happily get rid of eyesores that suggest the contrary - such as the Peace Corps, which is meant to help developing countries, or the special status of U.S.-funded Radio Liberty, which was revoked last October - if it can do so without jeopardizing its overall well-being.
 One thing that makes the incidents seem ominous is the heavy-handed, undiplomatic way Russia handles them.
 When imposing restrictions, the government either fails to offset them with constructive counterproposals or presents such compromises much later, after the damage to relations has already been done.
 Federal agencies often do a poor job coordinating and give contradictory explanations for their actions - or no explanation at all.
 U.S. labor activist Irene Stevenson is still in the dark about the cause of her deportation on Dec. 30. Similarly, when Moscow refused to extend the visas of 30 Peace Corps volunteers last summer, it also gave no official reason.
 &quot;It was very frustrating,&quot; Alex Wendel, who worked as a teacher in Sakhalin and was among the volunteers denied re-entry, said in a telephone interview from his native Kansas City, Missouri.
 &quot;I think the unfortunate decision was made by bureaucrats and administrators in Moscow who probably do not know what Peace Corps activities are,&quot; Wendel, 27, said.
 Months later, only after Moscow announced it would accept no more volunteers at all, the Foreign Ministry explained that the country had outgrown the need for such aid.
 But Federal Security Service chief Nikolai Patrushev offered a different take. Patrushev told reporters in December that the volunteers had worn out their welcome because they were too inquisitive, collecting socioeconomic and political information in the regions. He alleged that one of the volunteers had a CIA background and was hunting for information about the Russian military industry.
 &quot;The special services of all countries harbor an internal dislike for information-gathering by outsiders. There's no surprise there,&quot; Makarkin said.
 The latest wave of visa denials for foreigners working in sensitive areas, such as environmental protection or Chechnya, is not the first one since Putin - himself a former KGB agent - rose to power.
 The trend was apparent as early as Putin's first year in the Kremlin, when a number of foreigners working in nongovernmental organizations were barred from entering Russia. These included well-known Czech journalist Petra Prochazkova, who set up two orphanages in Grozny, Greenpeace activist Tobias Munchmeyer, a German national, and Briton Chris Hunter, who organized schooling and psychological counseling for Chechen refugee children.
 The government's implied reason for the visa denials at the time was that the foreigners were seen as a security threat.
 Petrov and Makarkin agreed that the squeeze on foreigners has met with apathy from a Russian public less concerned with civil liberties than with making ends meet.
 &quot;At most, some 10 percent of the population is even remotely interested in these issues,&quot; Makarkin said.
 For now, he added, the authorities seem to be keeping the anti-outsider zeal of the intelligence agencies within some logical bounds.
 &quot;What's dangerous is the prospect of a chain reaction going out of control: Today they kick out one group, tomorrow another and so on,&quot; Makarkin said. &quot;That would be most regrettable.&quot;
 
 <i>
Staff Writer Oksana Yablokova contributed to this report. </i>

TITLE: New Vatican Rep Arrives
PUBLISHER: The Associated Press
TEXT: MOSCOW - The Vatican's new top representative for Russia arrived Saturday, expressing hope for improving relations that have grown tense over accusations that Roman Catholics are trying to undermine the dominant Russian Orthodox Church.
 
Papal nuncio Archbishop Antonio Mennini said at Sheremetyevo-2 international airport that he hopes relations between Russia and the Vatican &quot;can develop with joint trust and cooperation.&quot;
 The Roman Catholic Church &quot;harbors a feeling of respect and esteem, great and sincere gratitude for the spiritual and cultural traditions of the Russian Orthodox Church,&quot; Mennini said in Russian.
 The Russian Orthodox Church complains that Catholics are trying to convert people who traditionally would have been Orthodox. Under decades of Soviet atheism, the church's membership fell precipitately, and the post-Soviet church is highly sensitive to what it views as obstacles to restoring its flock.
 Russian Orthodox Patriarch Alexy II long has said he will not agree to a visit by Pope John Paul II - which the pontiff deeply desires - unless relations improve and Catholics stop their alleged proselytizing.

TITLE: Shipping Left High and Dry at Sea Port
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: As a result of poor weather conditions, the Maritime Administration of the St. Petersburg Sea Port has banned low-power vessels from entering the port, it said in a statement on Monday. 
 
The severe cold hasmeant that cargo-handling has been delayed, with up to 90 vessels having to wait in line for access to the port, and over 6,000 railroad wagons being kept on sidings, and unable to unload onto ships. 
 And with the area around the Gulf of Finland already frozen up, the ice is expected to continue spreading out across greater areas of the Baltic in the next few days, meteorologists are predicting. Oleg Kashkaryov, head of the St. Petersburg Weather Information Center, said that, on average, such severe conditions are experienced only once every 50 years, with the last comparable fall in temperature having occurred in 1947.
 The Maritime Administration estimates that the ice is now 50 centimeters to 1.2 meters thick as far as 320 to 400 kilometers offshore. As a result, towing vessels into the St. Petersburg port with the aid of tugs and icebreakers can take over 50 hours.
 Andrei Markelov, a spokesperson for the St. Petersburg Maritime Administration said that eight ice-breakers and five high-powered tugs are working to clear the backlog of ships wishing to gain access to or leave the port. &quot;None of the vessels can moor up without the help of a tug, and all the tugs are working round the clock,&quot; he said. 
 In an official statement released on Monday, Mikhail Sinelnikov, the port captain, said that 54 vessels had been towed in and 73 vessels towed out of the port in the first eight days of 2003. 
 For comparison, since the beginning of winter navigation on Nov. 17, 1,375 vessels have been serviced by the port. Sinelnikov added, however, that, despite the delays, the turnover of cargo at the port has not decreased over the same period last year, when there was relatively little ice on the Gulf of Finland.
 Following further increases in the thickness of the ice, the port has now restricted access to vessels with over 3,500 horsepower and of the L2 class, a measure of the craft's resistance to pressure caused by ice. For the most part, this prevents the entry of small cargo vessels that would normally carry cargoes on both the Baltic and the Neva River.
 Disturbingly, it is local breweries that could be worst hit by the upheavals at the port, with supplies of barley and wheat already running low. &quot;Since December, we've been experiencing serious breakdowns in our grain supplies, and we've had to shift to local barley purchases,&quot; said a spokesperson for Sufflet, a local malt-producing plant that is part-owned by the Baltika Brewery and usually relies on grain imports from Europe. 
 The Sufflet spokesperson said, however, that &quot;It isn't the severe frosts that are responsible for the delays - it's the uncoordinated actions of the port and the railroad management who can't decide who's doing what.&quot;
 Yevgeny Koryushkin, operations-coordination director for the St. Petersburg Sea Port, said that it is the weather conditions that have caused delays in cargo-handling at the port. On Jan. 5, as a result of the backlog of railway trucks that had built up at the port, the Transport Ministry banned cargo deliveries by rail. The ban is due to terminate on Wednesday, and Koryushkin predicted that the situation would drastically improve in the coming days. 
 Experts estimate that a ten-day delay for a railway truck entails an additional cost of $620, while losses for small vessels run at $500 to $600 per day and $5,000 to $7,000 per day for large vessels.
 The risks of the ice on the Baltic can entail more than delays, however. On Monday, the Sormovsky cargo ship, carrying mineral fertilizers from St. Petersburg to Britain, got stuck just off the coast, Interfax reported. The crew issued an SOS signal, fearing that the vessel would break up, and the Sormovsky was only later freed with the aid of the Sorokin icebreaker.
 Specialists at the port are predicting that it will take a thaw of several weeks in order to resolve the problems created by the thick layer of ice spreading across the Gulf of Finland. Meteorologists, however, are predicting that the cold spell is set to continue.

TITLE: Potter Casts Spell Over Box Office
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Harry Potter, the bespectacled children's book hero, has worked his record-breaking magic on the local film world, leading &quot;Harry Potter and the Chamber of Secrets,&quot; the movie version of the second book in J.K. Rowling's series, to the top of Russia's box office charts.
 
The movie earned some $3.1 million in its first week of release and $5.7 million in the two weeks immediately following its Dec. 26 premiere, Roman Isayev, a spokesperson for the film's local distributor Karo Premier, said Monday.
 About 1.9 million of the tickets were sold in the two first weeks at the 44 Moscow theaters and 112 regional theaters showing the film, said Isayev, who expected the movie to run at least another 10 weeks.
 &quot;'Chamber of Secrets' has beaten all other films and is an absolute leader in Russia,&quot; said Feliks Rosenthal, an executive director of Independent Film Distributors Alliance, or ANKO.
 The second Potter film by director Chris Columbus has outpaced all recent American blockbusters, ANKO reported, including the latest James Bond, Star Wars and Lord of the Rings offerings, trumping even its predecessor, &quot;Harry Potter and the Sorcerer's Stone.&quot;
 WorldwideBoxoffice.com figures published this month rank &quot;Soccerer's Stone&quot; second only to &quot;Titanic&quot; in all-time box office receipts, having raked in $975.8 million worldwide since its debut.
 Total box office tallies for movies shown in Russia doubled in 2002 to about $110 million, ANKO estimates, with $80 million garnered by Hollywood films.
 Rosenthal said that 80 percent of the box office remains in Russia, with the cinemas keeping 50 percent of ticket revenues, and about 30 percent going to distributors.
 The Potter movies have been successful, but so, too, have the books: The four published so far, of a promised seven, have sold more than 175 million copies worldwide in hard and soft cover and are published in at least 43 languages.
 Moscow-based Rosman publishing house has released Russian-language editions of all four, selling a total 3.5 million copies.
 The loveable boy wizard has his detractors. Last month a woman representing the International Fund for Slavic Literature and Culture publicly alleged that Potter was &quot;drawing students&quot; to Satanism and inciting religious extremism among young people. Prosecutors looked into these complaints and dismissed them.
 With the substantial financial largesse linked to Harry Potter, it's little surprise that some enterprising souls have moved to tap the goldmine.
 Dmitry Yenets' Tanya Grotter parody books have steadily gained on the children's book market, having sold over 170,000 copies, Interfax reported Thursday. Two radio programs have been launched as well, based on &quot;Tanya Grotter and the Magic Double Bass&quot; and &quot;Tanya Grotter and the Disappearing Floor.&quot;

TITLE: Foreign Banks Race To Invest In Consumer-Lending Boom
AUTHOR: By Victoria Lavrentieva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Splurging shoppers are reaping the rewards of their efforts, with consumer lenders dropping rates and Western banks racing to enter a booming industry that was virtually nonexistent just a few years ago.
 
Austria's Raiffeisenbank on Monday became the first major foreign bank to offer unsecured consumer loans, affording clients up to $10,000 at 14 percent, an annual rate second only to state savings bank Sberbank.
 &quot;We introduced unsecured lending in the fall and it tested rather well, so now is the right time,&quot; said Michel Perhirin, chairperson of the board of Raiffeisen, the leading foreign retail bank in the country. &quot;We are striving to become a leader in our target audience, which is the upper-middle class.&quot;
 Richard Hainsworth, head of bank-rating agency RusRating, said that Raiffeisen's strategy is simple: to establish itself on the market before other players come.
 &quot;It is trying to be one step ahead of its competitors,&quot; said Hainsworth, who also covers the banking sector for Renaissance Capital.
 Raiffeisen may be one step ahead, but Citibank is not far behind.
 The world's largest banking conglomerate, which only recently launched retail services in Russia, says it, too, will soon move into consumer lending.
 &quot;We are planning to launch consumer-lending operations in early February,&quot; a Citibank spokesperson said Monday.
 The only other foreign bank offering unsecured consumer loans is DeltaBank, which is part of DeltaCapital, an investment fund and mortgage pioneer that was created by the U.S. Congress. Delta currently charges 18 percent for its dollar loans. 
 Sberbank, which has 40 percent of the estimated $2.7-billion-and-growing industry, is already moving to protect its market share.
 Last week, it lowered its rates on dollar loans for so-called &quot;urgent needs&quot; - its own euphemism for consumer loans - to 12 percent from 13 percent for the general public and to 11 percent from 12 percent for employees of its corporate clients.
 Hainsworth, however, said that Sberbank can't really be considered a competitor to the foreign banks, because its consumer-lending policy is so opaque.
 &quot;The closest competitors of Raiffeisenbank at the moment are Russky Standart and, in the future, Citibank, which will find this market interesting, for sure,&quot; Hainsworth said.
 Russky Standart charges the highest rates for unsecured loans - 18 percent for dollar loans and 39 percent for those in rubles - but it is attracting new borrowers in unprecedented numbers because it has lending programs with nearly 1,500 retailers and rarely refuses to extend a loan. 
 &quot;We are targeting a different client base than Raiffeisen or Citibank, as we usually provide loans up to $3,000, and most of our loans are for $1,000,&quot; Russky Standart chairperson Dmitry Levin said Monday. 
 It takes more than a low rate, Levin said, to make a lending product successful. 
 Hainsworth agreed, saying that the demand for consumer loans is so high that it is not as important how much a bank charges as how much it actually lends. 
 &quot;Most popular products involve an alliance between banks and retailers, which, so far, has been mainly by Russky Standart,&quot; said Dmitry Alenouchkine, an analyst with Interactive Research Group.

TITLE: Turnover Rises at City's Exchange
PUBLISHER: The St. Petersburg Times
TEXT: The turnover of the St. Petersburg Stock Exchange increased by 32.6 percent in 2002 over 2001, reaching 428 billion rubles ($13 billion), it reported in an official statement last week. The volume of foreign currency transactions fell from 200 billion in 2001 to 192 billion in 2002. The volume of trade in federal bonds increased by 60 percent, reaching 72 billion rubles, while the volume of trade in corporate securities fell by 39 percent to 1 billion rubles.



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TITLE: Luzhkov's Wife Buys Into Russky Zemelny
AUTHOR: By Torrey Clark
PUBLISHER: Staff Writer
TEXT: MOSCOW - Yelena Baturina, the wife of Moscow Mayor Yury Luzhkov, has bought a controlling stake in one of 21 banks authorized to handle City Hall's finances.
 
The stake, bought by Baturina late last month for an undisclosed amount, brings her total holding in Russky Zemelny Bank, or Russian Land Bank, to 52.96 percent, the bank's deputy chairperson, Alexei Glinyany, said by telephone Friday.
 Before the deal, Baturina owned about 20 percent of the bank, according to Kommersant.
 Glinyany said that the Bank of Moscow, which is partly owned by the Moscow city government, and the Moscow Fund for Support of Small Businesses remain significant shareholders in Russky Zemelny Bank, but he said that he did not know offhand the exact ownership structure.
 Baturina has served on the bank's board of directors since 1999, and is currently board chairperson. 
 Viktor Baturin, her brother and vice president of her chemicals-and-plastics company, Inteko, is also a board member. 
 A board meeting is expected to be held by the end of the month, Glinyany said.
 Inteko, a plastics, chemicals and construction-materials producer, has been one of Russky Zemelny Bank's main clients. Other clients have included the Moscow city government, Moscow City Hall's land committee and related construction companies Mosstroirezurs and Stroitelno-Montazhnoye Upravleniye No. 1.
 Inteko has been a high-profile name in Moscow construction. As well as manufacturing plastic goods ranging from stadium seats to plastic bags, Inteko owns a controlling stake in DSK-3, one of the major producers of PZ-M cement-panel apartment blocks, and most recently bought a 93.4-percent stake in Oskolcement last month for $90 million.
 The stake in Russky Zemelny Bank was registered in Baturina's name, rather than belonging to Inteko or an affiliated company.
 &quot;For banks of that size, it is not unusual,&quot; said Mikhail Matovnikov, deputy director general of Interfax Rating Agency. 
 &quot;It's not typical, but it happens. In the near future, this will probably happen more often as the Central Bank looks more closely into bank ownership,&quot; he said.
 As of Sept. 30, 2001, Russky Zemelny Bank was ranked No. 233 in the country by assets (1.47 billion rubles, or $46 million) and No. 319 by capital (230 million rubles), according to Interfax Rating Agency.
 Matovnikov said that the bank's assets grew rapidly, by 73 percent, over the first nine months of 2002, partly due to increased work with government funds. In addition, the bank received a 500-million-ruble loan ($16 million) from the Bank of Moscow.

TITLE: New Rules To Hit Drink Bootleggers
AUTHOR: By Alex Nicholson
PUBLISHER: Staff Writer
TEXT: MOSCOW - New rules on how the tens of billions of rubles collected each year in alcohol excise taxes are divvied up will help drive bootleggers out of the market and boost federal budget revenues, a leading industry expert said Friday.
 
Under changes that came into effect Jan. 1, excise taxes levied in the region where vodka and spirits are produced will no longer go to the local administration but straight to the federal budget, while taxes collected at excise warehouses in the region where the products are sold will be transferred to that region.
 &quot;This is positive news,&quot; said Pavel Shapkin of the National Alcohol Association. &quot;It will sanitize the market and bring more money into the federal budget.&quot;
 Previous legislation allowed local authorities to top up their coffers by restricting the sale of vodka and spirits manufactured in other regions.
 &quot;[The regional authorities] would distribute recommendation letters to retailers saying that they should have no less than 80 percent locally made vodka in their assortment,&quot; said Shapkin.
 Authorities would also make it harder for distilleries from other regions to receive the necessary permits to sell their goods, he said.
 Bottles of vodka and other spirits require two excise stamps. One tax is paid at the point of manufacture, while the other is paid at special warehouses located in the region where the liquor is sold.
 Under the old rules, 25 percent of the excise collected from a region's distilleries and 25 percent of the excise from its excise warehouses went to that region's budget, while the remainder was transferred to the federal budget.
 Forcing producers to cover regional demand and keeping distilleries out of neighboring regions encouraged bootlegging, Shapkin said, adding that letting legitimate producers ship their vodka to any region they want will give bootleggers &quot;a kick in the teeth.&quot;

TITLE: Not Just Another Chip off the Old Soviet Bloc
AUTHOR: By Larisa Naumenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - The year was 1972, U.S.-Soviet detente was in full swing and a 22-year-old chemistry graduate named Steve Chase was deciding where to start his career, one that would eventually carry him to the highest echelons of Russia's IT industry.
 
Courses in Russian and Soviet history in his junior and senior years at Ohio Wesleyan University had sparked Chase's interest in Russia and led him to pursue Russian language studies at the U.S. military's Defense Language Institute in Monterrey, California.
 &quot;All I had to do was give up a couple of years in my life to join the army,&quot; Chase recalled. &quot;I thought it would be a really good combination to have a technical degree as well as Russian language and that there was probably a future there.&quot;
 Chase was right, there was indeed a future.
 Twenty years later, he was put in charge of opening Intel's office in Moscow, and 10 years after that he was appointed president of Intel Russia, the local branch of the world's leading maker of microprocessors that now employs more than 90 people in Moscow, 200 engineers at its Nizhny Novgorod development center and 150 contractors in Sarov in central Russia.
 But such success did not come easily. Back in the early 1970s, after passing countless hours trying to master the language, he discovered a better way to learn. &quot;I ended up marrying one of my instructors,&quot; Chase said. She was a Russian-born U.S. citizen, and during the eight years the two spent together they &quot;literally spoke Russian every day at home,&quot; he said.
 In 1978, Chase graduated from Monterrey with a master's degree in international business. Earlier that spring, the son of an accounting professor had spoken to his class about working at Intel and Chase was inspired to apply for a job.
 Chase waited a month without good news before receiving a telegram in May from Intel asking him to come for an interview as soon as possible. &quot;On Friday I went to the interview and the following Monday I started work,&quot; Chase said.
 His first job was in marketing and it's one he fondly remembers.
 &quot;It was an ideal place to start at Intel at that time,&quot; he said. &quot;I was actually inside the factory, so I got to understand how products were produced. I also had time to go out into the field to work with customers and salespeople from all over the world.&quot;
 Two years later he moved to Oregon to work for the company's international marketing department. After two years there, he told his superiors he was interested in working abroad.
 The German branch at that time just happened to be looking for somebody with his qualifications, Chase said. &quot;I was just lucky to have been at the right place at the right time.&quot; He moved to Munich in 1982 and has lived there using it as a home base ever since.
 During his first nine years living abroad, Chase held several positions ranging from sales and business development to distribution and telecommunications. It was then that he married for the second time and his three daughters were born.
 In May 1991, Chase learned that Intel was looking to open a representative office in Moscow and needed somebody to head it.
 Chase recalled showing the job description to his wife, who said &quot;'It's interesting that they didn't put your weight in there,'&quot; he remembered. &quot;It really sounded just like me, so I jumped on it.&quot;
 The new job didn't require that he move to Russia, so Chase traveled frequently back and forth between Moscow and Munich.
 &quot;We started with nothing,&quot; Chase said, reflecting on Intel's early days in Russia. &quot;We didn't have any employees, we didn't have any customers. We didn't even have an office.&quot;
 When Intel finally got an office, it was a room - &quot;a broom closet&quot; - about 20 meters long and two meters wide where three foreigners worked with five or six Russian staff. It had been a kindergarten classroom, Chase said, and &quot;because of the heating, it was a sauna all the time.&quot;
 Business talks with local entrepreneurs were a new experience, he said.
 When Chase would arrive at meetings, ostensibly to arrive at formal agreements, &quot;We always knew it was a bad sign when we came into the room and the table was beautifully set up with zakuski and cognac and vodka. These guys knew how to talk, but they had no clue how to run a business.&quot;
 &quot;It was just a fascinating period,&quot; Chase reminisced. &quot;It was really the time when the new Russian IT industry was starting to form.&quot;
 Their first contract came from a joint venture, and Intel later started working with distributors.
 Although the first years were challenging, Intel was determined to remain in Russia.
 &quot;We never paused. At no time did we say, we're gonna run home,&quot; Chase said. &quot;It was a lot of fun to see how the market was starting to grow, as Intel was growing physically and in revenues.&quot;
 In 1997, Chase's portfolio grew to include markets in Central and Eastern Europe. In 1999, he became regional manager for six equipment manufacturers across Europe, Middle East and Africa.
 From July 2000 through March 2002, he was director of Intel's business and communications-solutions group for this three-region grouping, before being appointed to his current post this spring.
 Nikolai Fedulov, publisher at IT Group, which prints Russian editions of PC Magazine, PC Week and other magazines, considers Chase, whom he has known for more than 10 years, the person behind Intel's success here.
 Fedulov called the role Chase has played in the development of Russia's IT industry &quot;outstanding.&quot;
 &quot;I attribute all the successes that Intel in Russia has achieved to the team he built,&quot; he said. When Intel's staff was only a handful of people, &quot;Steve was bringing them up like a hen sitting on her eggs. Steve is a tough person, but it was incredible to see how he was growing them under his wing.&quot;
 With plans to triple the number of engineers employed in Russia, engineering is a key focus for the company, Chase said.
 He has faith in the country's economy, though he is looking for the business environment to improve.
 &quot;There are positive changes and we like the trends,&quot; Chase said. &quot;When you look at what Russia could be, the government really needs to wake up. Russia has to decide if it's open for business. If yes, then it's got to do a whole lot to be competitive.&quot;
 To help the local IT industry, Chase recommends improvements in customs regulations, the dismantling of legal and financial-services barriers and better protection of intellectual-property rights.
 Moscow has changed dramatically over the 10 years that Chase has spent traveling frequently to the country, he noted.
 &quot;I remember taking a long walk from the Aerostar hotel to Red Square back in 1992. I remember how it was all one color - it wasn't a pretty one,&quot; Chase said with a smile, adding quickly that the landscape today is much improved.
 The competition has changed, too. &quot;Back in the early 1990s, Intel was sort of alone, we were one of the first.&quot; Now, he said, Intel is &quot;one of dozens, even hundreds of companies.&quot;
 Though working for Intel involves a lot of commuter traveling, Chase said that he tries to spend as much time as he can with his wife, Dagmar, and their three daughters, &quot;doing very simple things like getting up and making a breakfast for my kids and getting them off to the school. They're mundane things, but still they make life easier for my wife and kids.&quot;
 And the family shows some understanding, even if that understanding needs two languages - German and English - to express it.
 Two of his daughters - Nina, 19, and Daniela, 16 - have traveled to Russia with him. As for trips with his youngest, Esther, 11, who was born the day before her father started working for Intel's Russian chapter, Chase said that he has twice had to cancel her long-promised visit to Moscow.
 &quot;She's very angry with me now,&quot; Chase said.

TITLE: OPEC Ups Output Targets by 6.5 Percent
AUTHOR: By Bruce Stanley
PUBLISHER: The Associated Press
TEXT: VIENNA - The Organization of Petroleum Exporting Countries decided Sunday to increase its production target by 6.5 percent, to 24.5 million barrels per day. OPEC seeks to push oil prices back below its maximum price target of $28 per barrel. Prices hovered around $30 on Friday.
 
The additional crude should bring some modest relief to consumers in importing countries, analysts said.
 &quot;It's a global oil market and the more oil on the market the better for all,&quot; U.S. Energy Department spokesperson Jeanne Lopatto said Sunday. &quot;Instability in the oil market hurts producing and consuming countries alike.&quot;
 By boosting its nominal crude output by 1.5 million barrels per day, OPEC hopes to reassure markets roiled by a shortfall in Venezuelan exports caused by the ongoing general strike in Venezuela and the possibility of war in Iraq. The agreed output hike was near the upper end of what analysts had expected.
 The strike, launched on Dec. 2 by groups seeking to oust President Hugo Chavez, has squeezed Venezuela's exports by about 80 percent, or 2 million barrels per day. Normally, Venezuela is OPEC's third-largest producer and a key supplier of oil to the United States.
 Fears about a possible U.S.-led war against Iraq have helped stoke upward pressure on world prices. Iraq has the second biggest oil reserves after Saudi Arabia, and there has been a steady buildup of U.S. troops in the Persian Gulf.
 OPEC's increase would take effect Feb. 1, the group's president, Abdullah bin Hamad Al Attiyah, said at a news conference at the group's headquarters in Vienna.
 &quot;OPEC is trying to send a very strong message that it will do its utmost to stabilize demand and supply,&quot; Al Attiyah said after delegates reached their decision in informal talks. &quot;Now, we will wait for the market to react.&quot;
 However, Al Attiyah said that the arrangement would be only temporary. When Venezuela resumes its normal level of exports, the group's members will reassess its production target, he said.
 The actual increase in output would likely be somewhat smaller than 1.5 million barrels per day, as Venezuela is unable now to use its higher quota.
 OPEC's new production ceiling will be shared among 10 members, but not Iraq. Although Iraq is a member, it doesn't participate in the group's production agreements because the United Nations oversees its exports under sanctions dating to the 1991 Persian Gulf War.
 &quot;I think this is a very confusing and difficult message, and it will take a while for the market to work out the logistics of it,&quot; said Yasser Elguindi of Medley Global Advisers.
 The main message for the oil market is that &quot;there will be more barrels,&quot; he said. &quot;But prices won't ease significantly.&quot;
 For their part, OPEC delegates said that they expected the increase would dampen the recent price surge. Algerian Oil Minister Chakib Khelil said that he foresaw the price of OPEC's benchmark blend of crudes settling to less than $28 per barrel. Al Attiyah confirmed that OPEC would continue trying to keep prices at $22-$28 per barrel.

TITLE: U.S. Jobless Total Continues To Rise
AUTHOR: By Leigh Strope
PUBLISHER: The Associated Press
TEXT: WASHINGTON - U.S. companies slashed 101,000 jobs in December as retailers limped through a cheerless holiday season, leaving unemployment at an eight-year high of 6 percent at the close of a year that many workers want to forget.
 
Last month's job cuts, the sharpest in 10 months, were widespread and followed a revised loss of 88,000 in November, the Labor Department said Friday.
 &quot;The labor market seems to have shifted into high gear - except it's reverse, not forward,&quot; said Joel Naroff, president of Naroff Economic Advisors.
 The data offered a snapshot of a sputtering economy that is hemorrhaging jobs, increasing the political urgency for U.S. President George W. Bush as he promotes his $674-billion economic-stimulus plan.
 &quot;Lower taxes, sensible regulation and more freedom, that's the way to lift wages and to build prosperity all across the country,&quot; Vice President Dick Cheney told an audience of business lobbyists at the U.S. Chamber of Commerce.
 Friday's report capped a gloomy year for jobseekers, who saw the unemployment rate rise from 5.6 percent last January to end the year at 6 percent.
 The jobless figures suggest &quot;pretty strongly that the economy was not recovering as much as we thought or hoped for at the end of the year,&quot; said Bill Cheney, chief economist with John Hancock Financial Services. &quot;We're not only stuck in a soft patch, we're spinning our wheels.&quot;
 The country's retailers shed 104,000 jobs last month in a holiday season that turned out worse than expected. Analysts and company officials attributed the weak performance to fewer shopping days, economic uncertainty and consumers' lack of must-buy items.
 Factories slashed 65,000 jobs - the 29th straight month of cuts in which more than 2 million jobs have disappeared - prompting the industry to declare that continued losses have &quot;reached crisis proportions,&quot; said Jerry Jasinowski, president of the National Association of Manufacturers.
 The struggling airline industry drove job losses in the transportation industry, which dropped 23,000 jobs last month.
 Economists said that the recovery, moving in fits and starts, appears to be a reprise of the last recession, when Bush's father was president. High unemployment that failed to start dropping until almost two years later helped cost him a second term, which his son has vowed not to repeat.
 &quot;President Bush could not have asked for a better endorsement for his tax cut proposal than this report,&quot; said Ken Mayland, president of ClearView Economics in Cleveland, Ohio. &quot;This news should light a fire under Congress.&quot;
 White House spokesperson Ari Fleischer said that Bush shares economists' concerns about a jobless recovery. &quot;This is why he calls on Congress to act as quickly as Congress can to pass his job-creating initiative,&quot; he said.

TITLE: After Hot Year, Market Chilling
AUTHOR: By Victoria Lavrentieva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russian equities continued their world-beating run in 2002, with the benchmark RTS index gaining nearly 40 percent to trump all but Pakistan's main bourse. But market players see little chance of similar returns in 2003.
 
The reason? A global slump combined with increasing domestic political and economic stability.
 &quot;We believe the Russian equity market is unlikely to perform the sort of gymnastics seen in the previous years,&quot; Roland Nash, head of research at Renaissance Capital, wrote in a market strategy paper for 2003.
 Strong and steady economic growth and dimishing political risk translated into impressive resistance in the Russian market to the downside trend for global equities.
 Except for the Pakistan Stock Index's impressive 118.21 percent gain, the dollar-denominated RTS outperformed all other indices in the world, followed closely by the main exchanges in Prague and Budapest, which gained 38 percent and 34 percent, respectively. 
 Indonesia's Jakarta Composite Index rounded out the top five with a gain of 26 percent.
 The world's two largest emerging markets - Argentina and Brazil - suffered the most, with Buenos Aires' Merval and Sao Paulo's Bovespa benchmark indices losing 47.11 percent and 45.83 percent of their value on the year, respectively.
 The United States' technology-heavy NASDAQ fared little better, dropping 37.58 percent, followed closely by Turkey's ISE National and the German DAX, which shrank 34.08 percent and 33.88 percent, respectively.
 For Russian equities, the major source of new funds this year will likely come from global investment funds and domestic investors, said Peter Boone, head of research at Brunswick UBS Warburg.
 The ruble-denominated MICEX, which accounts for the lion's share of Russian stock transactions, posted a record turnover of the ruble equivalent of $44 billion in 2002, up 78 percent over 2001, as the MICEX Index gained 35 percent.
 Trading volume on the RTS, on the other hand, was only $4.57 billion, just 2.7 percent higher than in 2001.
 &quot;On MICEX, there is a lot of intra-day trading, when people trade small amounts back and forth,&quot; Boone said.
 &quot;There is also a lot of over-the-counter money that you don't see in the RTS volumes, while the true volumes abroad are much higher,&quot; he added.
 National electricity monopoly Unified Energy Systems was once again the most actively traded blue chip in 2002, accounting for just over one fourth of all deals on the RTS. Oil majors LUKoil, Surgutneftegaz, Yukos and Tatneft were next, with about 10-percent market share each.
 In addition to being Russia's fastest-growing oil company, Sibneft was also the fastest growing stock on the RTS, gaining 195 percent on the year, followed by state savings bank Sberbank, which grew in value by 150 percent. Yukos enjoyed 80 percent growth, while United Heavy Machinery and Uralsvyazinform each gained 50 percent. Sibneft and Sberbank were also top performers on MICEX, rising 222 percent and 189 percent in ruble terms, respectively.
 The worst-performing blue chips on both exchanges were UES and its subsidiary Mosenergo, which dropped 22 percent and 26 percent, respectively, on the RTS and 12 percent and 20 percent on MICEX. The country's flagship airline, Aeroflot, and Surgutneftegaz were not far behind.
 Chris Weafer, chief strategist at AlfaBank, said that Gazprom, which is listed on the St. Petersburg bourse, LUKoil, Golden Telecom, Vimpelcom and Norilsk Nickel are the top investment plays this year. 
 In general, he said, &quot;we will much more likely see the weakness in the RTS during the first quarter of 2003 and early in the second quarter due to the current nervousness with [world] oil prices.&quot;
 But, once that uncertainty is resolved, the stage will be set for growth, particularly among emerging markets, Weafer said.
 &quot;We will have a good second half of the year, particularly in those stocks that do not suffer from import competition, like the telecoms, for example,&quot; he said.
 Boone tapped Yukos and Sibneft as the best picks for the coming year, while Renaissance sees metals giant Norilsk Nickel as the most interesting and safe bet outside the oil sector.

TITLE: Caspian Energy Hype Begins Running Low
AUTHOR: By Ian Bremmer and Edward L. Morse
TEXT: OVER the past decade, the Caspian Basin has been America's top policy priority in Eurasia. U.S. officials have touted the Caspian as one of the world's most significant new energy finds; providing the context of a new &quot;great game,&quot; pitting Russian and U.S. interests in a zero-sum situation, where one's gain is the other's loss. Developing energy reserves and ensuring the independent development of the emerging states from Central Asia and the Caucasus was a central policy focus of the administration of former U.S. President Bill Clinton and the opening months of the administration of President George W. Bush.
 
Since Sept. 11, with U.S. bases in Central Asia, instability in the Middle East looming, U.S.-Saudi relations looking increasingly troubled, terrorist strikes throughout the world and a war on Iraq on the horizon, you might be forgiven for thinking that the Caspian's importance has only increased. It has not, and several factors will ensure a continuing ebb in U.S. interest.
 
. Oil-pipeline politics. U.S.-Russian rivalry for influence in the region was based on oil pipelines. The CPC line connecting Kazakhstan to Russia's Black Sea ports was opened after the attacks of Sept. 11, 2001. Last year, the Baku-Ceyhan line through Georgia and Turkey, America's most important Eurasian strategic initiative since the Soviet collapse, was launched against great odds. Without another pet project to push, success on Baku-Ceyhan has given U.S. policy little reason to focus on the Caspian.
 . The war on terror. Since Sept. 11, U.S. attention in Eurasia has been firmly focused on security issues, to some extent at the expense of energy. Uzbekistan, Kyrgyzstan and, to a lesser degree, Georgia have played most significantly in this new environment - all are energy have-nots in the region. Oil and gas-rich Kazakhstan and Azerbaijan are of little strategic importance in the war on terror. 
 . Political risk. The investment climate in Kazakhstan has worsened over the past year; with a more difficult environment around corruption, taxation and contract-dispute resolution. Meanwhile, the Kazakh government has worried foreign investors with the specter of renationalization of assets. Many U.S. firms have been complaining about greater internal difficulties, though none has chosen to leave thus far. Nonetheless, ChevronTexaco's recent posturing may be a harbinger. The oil company's leaders actively lobbied the Bush administration for assistance when the Kazakh government repeatedly altered the contents of their agreement. But there are significant corporate concerns about a pending lawsuit against U.S.-based merchant banker Jim Giffen and allegations of his involvement in funneling significant money into Kazakh hands. Added to this is the perception of Vice President Dick Cheney's guilt by association because Halliburton, the company he once headed, may also be involved in a pending scandal. This matter appears to have helped keep the Bush administration from playing a more active role in the Caspian.
 . Pipeline tariffs. America's biggest existing investment project is in Kazakhstan, where oil exports are scheduled to travel via the CPC pipeline through Russia and, eventually, the Bosphorus. Russia's pipeline monopoly, Transneft, is eager to preserve its control and has posed problems for the investors in the pipeline, making it difficult for them to sell oil profitably through the line. There is little that Washington can do about this hurdle, which is confronted by Russia's oil companies as much as by foreign investors in the Caspian.
 . The U.S.-Russia partnership. There is a strong energy component to the renewed love affair between the two countries, with the Bush administration actively promoting U.S.-Russia energy cooperation. Such cooperation is certainly seen more favorably by Russia, which viewed Baku-Ceyhan as heavy-handed U.S. interventionism. Many officials, and even some investors, are starting to consider Siberia the new Caspian. Friday's expected proposal of a $6-billion Pacific-pipeline project by Japanese Prime Minister Junichiro Koizumi will only intensify the focus by adding Japan to the mix. Entry costs are high, and China has a head start on local pipeline planning; but the relative size of reserves together with an active push from Washington should tip the balance of future interest away from the Caspian.
 
For all these reasons, there is likely to be significant long-term reduction of U.S. interest in the Caspian states. Foreign direct investment will subside accordingly. The Caspian hype of the 1990s may prove just that.
 
 <i>
Ian Bremmer is president of Eurasia Group and senior fellow at the World Policy Institute, and Edward L. Morse is former deputy assistant U.S. secretary of state for international energy policy. They contributed this comment to The St. Petersburg Times. </i>

TITLE: A Fashion for Inflation Finally Appears
AUTHOR: By Jay Hancock
TEXT: THE price of tin, whose marriage to copper brought humans out of the Stone Age and which is a component of toothpaste and garbage cans, has risen 15 percent since August to $4.60 a kilo.
 
Tin is one of those raw, brandless products, fixed in the commercial bedrock, that sometimes emit crucial economic information. Lately, tin, soybeans, cocoa and other commodities might be signaling at least a pause in the trend of lower and lower inflation that began in the early 1980s.
 It is far too early to say for sure. But if the new course is confirmed by time and a rise in prices for finished goods, the world's monetary authorities will have won a famous victory.
 Inflation used to be bad. Since the 1960s, we have worried about rising prices and the high interest rates and economic friction they caused. Now, at least for the developed world, inflation is seen as good, a thing greatly desired by government and business alike.
 After trying to kill inflation for four decades, and succeeding, the world's financial gnomes are trying to resuscitate it. Central banks have always stoked inflation in tough economic times by increasing the money supply, but the resulting higher prices were seen as a harmful side effect that would eventually have to be snuffed.
 Now, Alan Greenspan and other monetary authorities are seeking inflation for its own sake. They do not acknowledge it in public. 
 Doing so might violate their charters and cause bond investors to drive up interest rates and hurt whatever fighting chance inflation and the economy may have. But the signs are unmistakable.
 Worldwide short-term interest rates are lower than they have been in 40 years. Only three years ago, the Federal Reserve worried that short-term rates of 5 percent were too low to keep inflation under control. Now short-term rates are 1.25 percent, and Greenspan said a couple of weeks ago that &quot;deflation is more of a threat to economic growth than inflation.&quot;
 Deflation, defined as prolonged and widespread falling prices, results from excessive capital investment, as happened in the 1990s. When too much productive capacity meets too little consumption, companies cut prices to win business.
 When the reductions come amid a general slowdown, they can feed on themselves, descending into a destructive spiral. Lower prices mean lower corporate profits. Lower profits lead to debt defaults and layoffs, which reduce consumer demand even further and put new pressure on firms. This was basically the mechanism of the 1930s Depression, as has been noted by many concerned bystanders.
 Discussing ways to counter the &quot;threat&quot; of deflation, as Greenspan did last month, is monetary code for talking about promoting inflation. You can't do one without the other. Any contest of light vs. darkness involves potential overkill, and the anti-deflation campaign does not look like a surgical strike.
 In November, for the first time all year, the word &quot;deflation&quot; was mentioned in the minutes of the Federal Open Market Committee, the U.S. central bank's monetary-control panel. Al Broaddus, president of the Federal Reserve Bank of Richmond, Virginia, and a friend to inflation the way Ronald Reagan was a friend to the Soviet Union, warned recently that &quot;we need to be alert to this risk&quot; of deflation.
 The last piece of the anti-deflation alliance was added last month as the European Central Bank cut short-term interest rates by half a percentage point to 2.75 percent. With the Federal Reserve and the Bank of Japan, whose rates are close to zero, the ECB is flooding the world with paper money, which is what central bankers do when they lower rates.
 The hope is that all the extra cash will bid up the price of Toyotas, toys and tin and head off the deflationary threat. 
 Prices have popped for numerous commodities recently, from oil to cotton, and, because commodities are at the bottom of the economic food chain, some analysts look for higher retail prices this year.
 But deflationary suction is strong, and inflation is not a lock. Worldwide demand is subdued. Capacity is still too high. China, newly arrived at the World Trade Organization, is a bottomless well of cheap labor and low prices.
 Higher prices would be more welcome now than at any time since 1950 or so. They would help companies, which could raise what they charge and improve profits. They could help workers, who could get bigger raises. Debtors could pay off obligations with cheaper dollars. Inflation would raise tax collections and help legislatures reduce budget deficits.
 The enemy of the past 40 years is now the ally. Well, Poland is in NATO, too.
 
 <i>
Jay Hancock is a financial columnist for The Baltimore Sun, to which he contributed this comment. </i>

TITLE: International Monetary Fund Backs Down on Bankruptcy
AUTHOR: By Paul Blustein
TEXT: THE International Monetary Fund, bowing to strenuous objections from banks and investors over its proposed &quot;bankruptcy&quot; system for indebted countries, unveiled a proposal last Tuesday that omits one of the plan's most controversial features.
 
The IMF dropped the mechanism that would block creditors from suing to recover their money for a certain period after a country has suspended payment on its debts.
 That move marks a partial retreat from earlier proposals that were aimed at giving countries legal protections from creditors similar to those available to companies and individuals in the United States and many other states. 
 The IMF surprised the financial world when its first deputy managing director, Anne Krueger, first announced in November 2001 that the fund's management would back an international bankruptcy regime. 
 The &quot;sovereign debt restructuring mechanism,&quot; as Krueger called it, is intended mainly for middle-income, emerging-market states and is separate from another debt-relief program for extremely poor countries. Under the original plan, if a country were deemed by the IMF to be burdened with debts that are unpayable for all practical purposes, it could seek IMF approval to suspend payments to foreigners temporarily - with legal shelter provided by a &quot;comprehensive stay&quot; - and negotiate more realistic terms for repaying its obligations.
 To make the whole scheme work, the laws of many states, including the United States, would have to be changed so that individual bondholders would no longer have the automatic right to obtain court judgments against foreign governments for full repayment of their claims. The stay, and permanent restructuring of repayment terms, would become legally binding once creditors had approved them by supermajority vote - say, two-thirds to three-quarters of the total.
 With few exceptions, international bankers and investors ardently oppose the IMF plan as a violation of their property rights that could cause a drying up of private capital flows. For that reason, many emerging-market government officials have opposed it, too. Armed with formidable political clout, financial firms have lined up behind a proposal put forward by the U.S. Treasury under which creditors and countries would voluntarily change bond contracts to allow supermajority approval of debt restructurings.
 The latest alterations in the IMF plan don't appear likely to appease the bankers. &quot;Quite frankly, serious flaws remain and continue to exist with this basic notion,&quot; said Charles Dallara, managing director of the Institute of International Finance, an organization of major firms that invest and lend in emerging markets.
 As a result, some specialists derided the IMF's move as a futile gesture. &quot;They keep watering the plan down in the hope of reducing the creditors' opposition, and the creditors just get angrier,&quot; said Peter Kenen, a Princeton University economist.
 But dropping the stay doesn't make the plan substantially weaker, IMF officials said. Aggressive creditors are unlikely to pursue litigation for full repayment of their claims because it will be costly and time-consuming, and the reward for doing so could be zero if they end up being legally bound by a debt restructuring approved by a supermajority of other creditors. The plan unveiled last week also proposed other complex provisions to discourage such litigation.
 
 <i>
Paul Blustein is an economics correspondent at The Washington Post, to which he contributed this comment. </i>

TITLE: One More Unsung Tragedy for Russia
TEXT: Editor,
 </i>The end of the year turned out to be an unhappy one for Russian and Ukrainian aviation in more ways than one.
 
Little noticed among the names of those senior engineers, plant managers and other aviation experts who perished in December's crash of an Antonov An-140 near Isfahan, Iran was one of Russia's most prominent aviation journalists. Sergei Skrynnikov was the editor and driving force behind one of the more well-known aerospace publications, &quot;Vestnik Aviatsii i Kosmonavtiki,&quot; and was one of a handful of writers and photographers responsible for making sure that the rest of the world was aware of the rich history and many present-day accomplishments of Russian aviation.
 Skrynnikov was well known to many in the West for many years before it was possible for the average foreign aerospace specialist to travel to Moscow and tour design bureaux or attend a Russian air show. Back in the days of the closed and secretive Soviet Union, he had established a reputation as a talented aircraft photographer, and his name would show up frequently on photo credits in the handful of aviation magazines that were allowed to circulate in the United States and Europe. When the wall came down in 1989 and aviation writers began trickling into Moscow one by one, he already had a small community of admirers who had never even met him.
 In the last dozen or more years, Sergei and his magazine became a permanent fixture at international aerospace exhibitions around the world. We will all miss his gentle manner, his great sense of humor, his broad knowledge and clever insights, and the many contributions he made in bringing a clear picture of Russian aviation to the rest of the world. His loss to Russian aerospace journalism is probably no less than the impact that Sergei Bodrov, Jr.'s passing has had on Russian film making.
 Saying goodbye to a friend and colleague whose departure is so sudden and shocking is not the way one would choose to end the year. I take some small solace in knowing that he died doing that which he loved so much - flying to some far spot of the world to cover the week's latest story in the world of aerospace. Unfortunately, Russia once again shows its infinite capacity for tragedy - a country that is rife with the unluckiest circumstances that consume some of its best as a consequence. Employing the degree of understatement that only a great shock and disbelief can inspire, a friend of mine said years ago - when another colleague of ours was killed in a flying accident - &quot;we lost a good guy the other day.&quot; Yes, we surely did.
 <i>Reuben F. Johnson
 Defense Correspondent
 Aviation International News
 Kiev, Ukraine
 </i>
 <strong>
<b>Same Old Story
 </strong><i></b>
In response to &quot;Putin's Western Kudos Not Counting at Home,&quot; a comment by Pavel Felgenhauer on Dec. 30.
 </i>

 <i>
Editor,
 </i>After Boris Yeltsin, who was a drunk but obviously more emotionally connected to the people, it surprised me that the Russian people elected such a little &quot;autonoman&quot; as Vladimir Putin. The man looks as if he has ice water in his veins straight from the KGB water cooler. Has he done anything for the people since taking over the control of Russia besides waging war and occasionally throwing someone in jail for failure to do something?
 
Russia has a serious hunger and housing problem, and the government should be attacking it with the vigor of the Great Patriotic War to find and pursue a workable solution.
 The common people of Russia, I think, are sick to death of dead leadership in their country. All I see is a stagnant recycling of old failed ideas from leaders who haven't had an original thought in their lives. This includes everyone from the president down to city mayors. Russia is too convinced it needs a military on par with China and the United States. You would be better off building more vodka plants than building more missiles and airplanes. At least somebody would be happy about that.
 I hope that someday soon Russia can find their equivalent of a Franklin D. Roosevelt who cares enough about the people and their horrid conditions really to do something proactive to start helping people solve their problems with love in his heart instead of a lust for power.
 I am sorry to say that I see such a chasm between leadership and the people of Russia and the wound grows bigger by the day. This will go on until there is another 1917-style revolution, unless there is more heartfelt love for the people in your leadership at all levels.
 <i>Dennis Garwitz, Sr.
 Garland, Texas
 </i>
 <i>
Editor,
 </i>One of the things President Vladimir Putin did in his Christmas message was to praise the Russian Orthodox church and religious organizations of other Christian confessions &quot;as their activities bear great meaning in affirming high spiritual values.&quot; This is the third time in a short period he has told not only Russia but also the world - for sure he is aware of the fact that his statements are heard worldwide - that non-Christians are not only inferior to Christians, and especially to Russian Orthodox Christians, but also that they are not able to have high spiritual values. However, as a non-religious person, I can not remember having ever being interviewed by the Russian president in order for him to find out the level of my spiritual values and, surely, that is the case for the majority of the world population, as Christianity is not the world's biggest religion. In other words: Putin is stating something he does not know!
 
According to the press, the president has a good knowledge of history, so he must remember that, 64 years ago, Europe, including Russia, was confronted with the result of a country's conviction it has a racial superiority to others: millions of deaths in a five-year time span. At that moment, the world was awaiting the start of a war by a country that was convinced its values were superior to those of the rest of the world. When following this line, one might start to worry about what lies ahead as the result of these constant presidential attempts to convince his people that they have a religious superiority to the world.
 Putin has the right to state that non-Christians/non-believers are inferior as much I have the right, as a non-believer, to state that, by doing so, he is failing as president. I have always thought him intelligent enough to understand that, as a private person, he has to right to believe whatever he likes, but that, as president of the biggest country in the world geographically, it is not only a stretch to act constantly as the public relations manager of the Russian Orthodox Church, but is he is also creating another threat to peace in the world, as we can learn from history.
 <i>Anneke van Ingen Schenau 
 The Netherlands
 </i>
 <strong>
<b>Take Care of No. 1
 </strong><i></b>
In Reply to &quot;Death Merchants&quot; a Chris Floyd's Global Eye comment on Dec. 30.
 
 Editor,
 </i>I don't agree with the views expressed in this piece. First, the U.S. presidency and government are not responsible for taking care of the poor and needy of the world. They are responsible for, and accountable to, the people of the United States. The government of these pauperized states holds the responsibility for the welfare of its citizenry. It is those governments that should organize their affairs so as to make it possible for their citizens to provide for themselves.
 
Since the United States is by far the world's most powerful country - both militarily and economically - people should adopt the principles or strategies that the United States has used and is using to become as well off as or even better than, they are. I don't care what means the United States has used to gain this state of preeminence, we should use them as an example to follow. People cannot depend on the goodness of man or of other states to look out for us as, like people, states are self-interested organisms and, as such, will only do what they consider to be in their own interest, with little regard for the damage caused to others in the process.
 With regard to Bush and his policies, he was elected by white conservative men and, to lesser extent, women, whose agenda borders on white supremacy, racism and America for Americans, while everyone else can go to hell. He is not going to do much to alienate the people he is counting on for re-election in two years and it is certain that blacks and other non-whites are not going to vote for him in any significantly large number.
 The drug companies in the USA and elsewhere spend millions on developing the drugs that people need, and they are certainly not doing it just because they love us. They are doing it because they want to make profits. If these poor states want to take the technology and information that the drug companies have spent millions developing for little or nothing, why shouldn't they object. After all, we don't see Japan or Singapore or South Korea trying to do this. These countries, along with other developed countries, are able to pay for these drugs. Why are other countries not able to pay for them or why they are not developing these drugs themselves? Because they as a people have not organized themselves properly. They have not been furnished with, or for some reason have not developed, leaders who were sufficiently capable of seeing further than their noses, so as to set them on a path of prosperity.
 Yes, Bush is a redneck, raised in the south and I do not care much for him, but I don't hate or despise him or blame him or the United States for the sorry state in other countries. Bush is doing what he thinks is good for himself and for the United States. That is what he was elected for. I blame the people and the so-called &quot;leaders&quot; that they have had who have done nothing but live like kings, line their pockets and treat their people like servants and beggars who are beholden to them for the crumbs that they give them from time to time.
 <i>Oran St. John
 Montego Bay, Jamaica
 </i>
 <i>
Editor,
 </i>Very closely related to Chris Floyd's viewpoint, there is a recent article in the November/December issue of Bulletin of the Atomic Scientists by Christopher Paine (pp. 19-21).
 
The subject is the so-called Moscow Treaty, which allegedly reduces both US and Russian arsenals. He describes it as &quot;A sham, a 'memorandum of conversation' masquerading as a treaty.&quot; For example:
 &quot;It's a stunningly bad tradeoff. And, as a consequence of the administration's misplaced priorities, the Moscow Treaty imposes no limitation whatsoever on the current or future size of U.S. and Russian nuclear forces and warhead stockpiles. Nor does it require improvements in cooperative monitoring and secure storage for tens of thousands of non-deployed Russian warheads, warhead components, and stocks of nuclear weapon-usable materials.&quot;
 And further ...
 &quot;The agreement fails to require the destruction of a single Russian or U.S. missile silo, strategic bomber, submarine, missile, warhead, or nuclear warhead component. It does nothing to move Russia or the United States down the road toward deep, verified nuclear-force reductions, verified warhead elimination or eventual nuclear disarmament. And it very clearly does not fulfill the U.S. obligation under Article VI of the Nuclear Non-Proliferation Treaty (NPT) to engage in 'good faith' negotiations of 'effective measures' relating to nuclear disarmament.&quot;
 The magazine states that this article is excerpted from Mr. Paine's July 23, 2002 testimony before the US Senate Foreign Relations Committee.
 Like both Mr. Floyd and Mr. Paine, Bush II makes me very nervous. As my late mother was fond of saying during the Senator Joe McCarthy communist witch-hunting days of the 1950s &quot;the ends do not justify the means.&quot; Saddam is indeed a rotten sonnovabitch (among other petty tyrants) - no argument from anyone on that, but it doesn't justify throwing the U.S. constitution and international norms of conduct in the trash. The rash threats of unilateral military action will most assuredly make the United States even more of an international pariah than it already is, regardless of the supposed higher moral rationale.
 We should, in my opinion, be doing a lot more to alleviate human suffering in these places (like Osama and cronies apparently do, hence their good reputation in the middle East streets), and a lot less chest beating.
 <i>Arthur H. M. Ross
 Encinitas, California
 </i>
 <strong>
<b>Give Harvard a Ring
 </strong><i></b>
In Response to &quot;Russian Bells Inspire Tug of War at Harvard,&quot; on Dec. 17.&quot;
 
 Editor,
 </i>I read your article last month about the Bells of Danilov. I was so incensed that I immediatly initiated a campaign called the &quot;Return the Bells Action Commitee.&quot;
 
I have since written every national news orginization, almost every Russian department as well as every senator and a few world presidents. This is an international incident.
 The Harvard Crimson is full of inacuracies. For instance, it refers to the Patriarch of All Russia as the &quot;Archbishop of Moscow&quot; and they insist that they purchased the bells from the Danilov monastery. Yeah right! As if the Igumen had any say in the matter. I guess Harvard has never heard of Joseph Stalin. And these are supposed to be the best of the best?.
 I would ask you to ask your readers to also inundate Harvard with requests for the university to do the morally right thing.
 This is a moral imperative.
 <i>David Savage
 Tucson, Arizona </i>

TITLE: Time for Putin To Choose
AUTHOR: By Lilia Shevtsova
TEXT: IT'S tough being Vladimir Putin these days. History has handed him a true challenge and he must think long and hard before deciding this, his single greatest dilemma: Should he do only the minimum necessary to be re-elected to a second term or remain true, more courageously, to his declared mission of modernizing Russia? His choice is between continuing his role as stabilizer, thus preserving the &quot;elected monarchy&quot; status quo, and becoming a transformer, a pioneer reorganizing for the first time in history the way Russia is ruled, restructuring the power vertical and purging bonds between power and business.
 
If he only wants political survival, he's in good shape. Putin can keep doing what he has been doing: trying to please everyone - the left-wing electorate, the swamp (those politically opportunistic chameleons), the nationalists and the liberals - without being suffocated in the embrace of his own elite entourage.
 Putin has two pillars of support: his consistently sky-high approval rating (now in the 80-percent range) and strong oil prices that have kept the economy afloat. This, seemingly, is enough to guarantee him not only the presidency but also the loyalty of the elites. But Putin should be cautious. He knows the cowardly Russian establishment is watching him, waiting for a mistake, hoping to find a weakness to exploit. The Kremlin is full of Byzantine intrigue and, as he walks the corridors, it must dawn on him that everyone he encounters is jockeying for power and survival.
 No, Putin can't trust Russia's ruling class. No single group constitutes a reliable base. Oligarchs, the government apparatus, regional elites and liberal-technocrats are happy with him for now, but they all want to use him. Each hoped it would be the one to pull the levers of government. For now, Putin has managed to avoid being taken hostage by any one faction. He is curbing the appetites of his own people from St. Petersburg, and he is trying to escape the puppeteers from Yeltsin's &quot;Family.&quot;
 He continues to step cautiously and seems to hate himself for bowing in all directions. But he may be thinking, why do away with the stabilization pattern if it guarantees him victory in 2004? Just follow the old path: pretend and promise. It's a well-known path: He will again face off against Zyuganov and will, again, win as the lesser evil. But to do so, he will have to bargain, deal and compromise, pay debts and enter into new patron-client relationships. He will never be able to be his own self. This is the price of being a monarch.
 But Putin knows - he has to know - that he may not have the luxury of continuing his Kremlin dance. He understands that the leadership potential of the elected monarchy over which he presides shrinks with every passing month. Economic growth is declining. Investments are not flooding as expected. The oligarchy is becoming more demanding. He is losing courage to fight it. The recent privatization of the state oil company Slavneft, snapped up last month by his old Family friend Roman Abramovich for a laughably low price, demonstrates how limited his resources are. Putin is a smart guy who understands that prolonging the status quo may spread the rot or, worse, plunge the country again into crisis. 
 Yet to follow a transformation path is riskier, success is often elusive and he might slip and break his neck. If he doesn't navigate the route wisely, reform could falter Gorbachev-style, with a reformist leader losing control. But Putin could be lucky. If he decides to de-hermetize the regime and manages to cross the thin ice without falling in, he will accomplish what no Russian or Soviet leader ever has. He will begin building a responsible system of governance based not on irrational, opaque, tsarlike power, but on the rule of law. This would truly be a new chapter in Russian history. 
 With his phenomenally wide public support, Putin has the chance to propose to his constituents a new and daring agenda of anti-oligarchic and anti-bureaucratic revolutions. This is a agenda that Russia will support. Will Putin risk it? Judging by his present behavior, it's doubtful. But he's capable of unexpected moves. All alone, he made a pro-Western shift after 9/11, despite the loud protests of generals and apparatchiks. He has the guts and courage to have his way.
 Time is running out, though. If Putin wants to change his pitch, he has to hurry. The best occasion would be his State of the Union address in March. If he doesn't forge a new path soon and if he gets reelected as a guarantor of the status quo, he will cement an oligarchic-capitalistic and bureaucratic-authoritarian regime - and he'll lose the option of pursuing his dream of modernizing Russia. He will be left in history as a mere footnote. Given this dilemma, what choice he will make and when? We'll see soon. Not making a choice is also a choice. 
 
 <i>Lilia Shevtsova is a senior associate of the Moscow Carnegie Center and author of the forthcoming book, &quot;Putin's Russia.&quot; She contributed this comment to The St. Petersburg Times. </i>

TITLE: Resolution For the Old New Year's
TEXT: IF you didn't get around to making New Year's wishes and resolutions by Jan. 1, you got a second chance on Old New Year's, which was Monday. With a few days to spare, members of the government weighed in last week.
 
Foreign Minister Igor Ivanov resolved to help Russia defend its interests abroad, while working to promote international cooperation to tackle terrorism and other security threats. Interior Minister Boris Gryzlov also put security high on his list, and resolved to do his part to &quot;normalize&quot; the situation in Chechnya by strengthening the Chechen police force. He also made nice noises about the need to be more open with the press and to build public trust in the police.
 Finance Minister Alexei Kudrin promised to stick to the budget, help the regions address social needs and try to reduce the tax burden. Economic Development and Trade Minister German Gref put forward a list of ongoing reforms to be continued in 2003.
 It would have been more interesting if Ivanov had said that Moscow would continue to oppose a unilateral U.S. war against Iraq, even at the risk of a falling out with Washington. Or if Gref, with all his plans for reform legislation, had resolved to prevent the inevitable political battles in the runup to this December's parliamentary elections from bringing the country to a political and economic standstill. Or if someone, anyone, had said something about how to fight corruption.
 Although the ministers' resolutions were all right as far as they went, they were a bit vague and predictable. So we at The St. Petersburg Times came up with our own eclectic list of things we'd like to see happen in 2003.
 In no particular order, we'd like to see:
 1) Not having to wish in 2004 for a full resolution of the flood-defense scheme.
 2) Not having to wish in 2004 for the metro between Lesnaya and Ploshchad Muzhestva to reopen.
 3) Russian drivers learning that honking furiously while sitting in a traffic jam does not get you to your destination any faster.
 4) Assurances that, if Russia has given you a visa, you will be allowed in the country once you've landed at the airport.
 5) Sound convictions in the high-profile murder cases, such as that of Galina Starovoitova, that tarnish the city's reputation.
 6) Governor Vladimir Yakovlev to accept that he is bound by the rule of law.
 7) Trash cans on the streets and people who use them.
 9) Pulkovo Airport to look and smell nice.
 10) Zenit to defy expectations and qualify for the European Champions' League.
 12) And, last but not least, no more weeks without hot water in our apartments in the summer - or without any water in the winter.
 Happy Old New Year's!

TITLE: Time To Wake Up to the Real Nuke Danger
TEXT: MASKED men armed with clubs - clubs! - last week forced their way into a once-secret plant. They beat the guards into submission, tied them up, and stole 450 kilograms - 450 kilograms! - of a powder used in nuclear reactors. And then they were gone.
 
How is this not news? True, it happened in one of the more obscure Stans (Kyrgyzstan). And true, the europium oxide powder spirited away on Jan. 8 doesn't explode and isn't radioactive. It's just a pinkish-white powder that can be used in manufacturing the rods that control nuclear reactions.
 But really, when do we finally, groggily pay attention to the loudest of wake-up calls? When do we get serious - in Russia and America - about ponying up the relatively small sums of political and financial capital needed to put in place real security measures around nuclear power plants, chemical-weapons stockpiles and radioactive materials?
 Supposedly, Sept. 11 was the moment we realized terrorists could mobilize on a massive scale (although Aum Shinryko had hit the Tokyo subway with nerve gas six years earlier). And then, last October, the hostage-taking at a Moscow theater supposedly reiterated the point: Well-organized bands of terrorists can carry out complex military actions deep in the heart of a national capital (although, six years earlier, Chechen rebels made a similar point, twice, in their hostage-taking incursions into the Russian villages of Budyonnovsk and Kizlyar).
 So what, if anything, have we learned?
 There's a nuclear reactor in the heart of Moscow at the Kurchatov Institute. I've been underneath it, several years ago, as part of a tour of Moscow's sewers. What's to stop the next band of terrorists from seizing the reactor and Chernobyling it?
 Russia has enough excess plutonium and uranium lying around in storage to build thousands of nuclear bombs. Some of it is &quot;secured&quot; and some of it ain't. But consider just the plutonium that's officially considered &quot;secured.&quot; Could it be held against a surprise assault by, say, 40 well-armed and organized Chechens?
 Before you answer, consider that in the United States, security guards at nuclear power reactors have expressed serious doubts their plant could defeat a terrorist attack. The Project on Government Oversight (POGO), a non-partisan good-government group, interviewed more than 140 nuclear power-plant security guards across America. The guards say morale is low, they are under-manned, under-equipped, under-trained, and underpaid. Some of them say they would only use their guns to fight their way out of the plant and run away.
 Here's the thing. Adequate security - meaning maybe some fences, security cameras, a team of motivated (read: well-paid), well-equipped and well-trained individuals - this costs somebody money. Tiny amounts of money, in the grand scheme of things. But amounts that bring no obvious return.
 So why spend it? Whether it's Kyrgyz federal officials in Bishkek or an American utility company, no one likes handing out money unless &quot;they have to,&quot; i.e., unless someone - the public, the government - makes them do so. And so it will likely go, right up until the day a major city is incinerated - by crazed people who, if not for our carelessness and stupidity, would have been armed only with clubs.
 
 <i>Matt Bivens, a former editor of The St. Petersburg Times, is a fellow with the Nation Institute (www.thenation.com). </i>

TITLE: Global Eye
TEXT: The great wizard, leader of the Wise, once known to all the world as a force for good, has turned bitter, fearful - and ambitious. Aping the ways of the evil he once fought - brutality, dominance, greed, terror - he descends to his secret laboratory, where, with black arts of alchemy and fiendish technology, he breeds a race of mutant warriors, &quot;iron bodied and iron willed&quot;: fierce fighters who can attack day and night, without rest, their combat spirit kept soaring by spikes of lightning from the wizard's wand.
 
A scene from J.R.R. Tolkein's &quot;The Lord of the Rings,&quot; where the corrupted wizard Saruman fashions his monstrous <i>Uruk-Hai</i> to wage a relentless, remorseless war for dominion? No. Unfortunately, it's a very real scheme now being pursued by the Pentagon, whose dope wizards and gene splicers are working on the creation of the &quot;Extended Performance War Fighter,&quot; the Daily Telegraph and Christian Science Monitor report.
 Pentagon dark lord Donald Rumsfeld is shoveling billions of tax dollars into the research furnaces of federal laboratories and private universities across the land in the wide-ranging effort to spawn &quot;super soldiers,&quot; fired by drugs and electromagnetic &quot;brain zaps&quot; to fight without ceasing for days on end. The work is being directed by the Defense Advanced Research Projects Agency (DARPA) - yes, the same outfit now laboring under convicted terrorist-conspirator John Poindexter to build the &quot;Total Information Awareness&quot; network that will allow the government to monitor the electronic records and communications of every citizen.
 The DARPA &quot;war-fighter enhancement&quot; programs - an acceleration of bipartisan biotinkering that's been going on for years - will involve injecting young men and women with hormonal, neurological and genetic concoctions; implanting microchips and electrodes in their bodies to control their internal organs and brain functions; and plying them with drugs that deaden some of their normal human tendencies: the need for sleep, the fear of death, the reluctance to kill their fellow human beings.
 The research is &quot;very aggressive and wide open,&quot; says Admiral Stephen Baker of the Center for Defense Information. Indeed, the U.S. Special Operations Command envisions the creation of &quot;iron-bodied and iron-willed personnel&quot; who can &quot;resist the mental and physiological effects of sleep deprivation&quot; while relying on &quot;ergogenic substances&quot; to &quot;manage&quot; the &quot;environmental and mentally induced stress&quot; of the battlefield. Their bodies juiced, their brains swaddled in Prozacian haze, the enhanced warfighters can churn relentlessly, remorselessly toward dominion.
 And the term &quot;creation&quot; is not just fanciful rhetoric: some of the research now underway involves actually altering the genetic code of soldiers, modifying bits of DNA to fashion a new type of human specimen, one that functions like a machine, killing tirelessly for days and nights on end. These mutations will &quot;revolutionize the contemporary order of battle&quot; and guarantee &quot;operational dominance across the whole range of potential U.S. military employments,&quot; the DARPA wizards enthuse.
 Of course, the Pentagon is not waiting on sci-fi technology to enhance the physical abilities of its warfighters; old-fashioned, off-the-shelf &quot;additives&quot; have long been shoved down soldiers' throats. For example, the use of amphetamines for pilots has been widespread for decades; during the first Bush-Hussein War, whole squadrons were cranked up on the stuff. Not only is the gobbling of speed officially sanctioned, it's actively encouraged, even implicitly mandated - careers can be derailed for pilots who refuse to drug themselves.
 The results of this dope-peddling were clearly seen on the new imperial frontier of Afghanistan last spring, when two U.S. pilots - hopped up on speed - killed four Canadian allies in a &quot;friendly fire&quot; bombing raid. The pilots, now facing legal charges, say Air Force brass pressured them into taking the mind-altering drug before the fatal flight.
 But such glitches are inevitable in any grand scientific undertaking, and DARPA remains undeterred in its bold quest to &quot;push the limits of human input/output,&quot; advance the &quot;symbiotic relationship between man and machine,&quot; and customize &quot;pharmaceutical technology&quot; to &quot;embolden the warfighter and his superiors,&quot; as military scientists declared at a Pentagon-sponsored conference on &quot;future warfare.&quot;
 What happens to the burnt-out husks of these &quot;iron&quot; soldiers after their minds and bodies have been eaten way by relentless modification and ceaseless toil is, of course, of no concern to the Bush Regime. Even now, the White House is cutting back on health benefits to military veterans - even going so far as to <i>order </i>veterans hospitals not to advertise their available services, lest broken soldiers actually seek to claim the promise of support their government once gave them. For men like Bush - protected scions of privilege who sit out wars in safety and booze-addled luxury - such promises are just cynical sucker ploys, aimed at coaxing decent soldiers into acting as the hitmen of empire, then discarding them when they're no longer needed.
 How very strange it is: those who want to turn American soldiers into mindless, drug-addled mutants and send them off to kill and die in far-flung wars of imperial conquest are seen as patriots, noble leaders, doing the will of God; while those who would rather see these good men and women called home, treated with honor and respect - their talents and dedication applied solely to the defense of their own great country, not pressed into the service of a greedy, rapacious elite - are denounced as &quot;traitors,&quot; &quot;anti-American agitators,&quot; or &quot;allies of terrorism.&quot;
 But such is the inversion of values - the wisdom gone astray and turned to fell practice - that now rules in Bush's Washington, and in the Pentagon's fiery crucibles of war.

TITLE: How China Survived in Cambodia
AUTHOR: By Chris Decherd
PUBLISHER: The Associated Press
TEXT: PHNOM PENH, Cambodia - Chinese diplomats survived for months in the jungles of western Cambodia, nearly dying of starvation and disease, after Vietnamese forces invaded the country in the late 1970s, according to a Chinese account of the period.
 
The diplomats were forced to move with retreating Khmer Rouge forces after the Vietnamese army attacked the capital of Phnom Penh, said an account published in the journal Critical Asian Studies.
 Their story is recounted in a chapter from &quot;Chinese Diplomats in International Crisis Situations,&quot; a Chinese-language book by Yun Shui published in 1992 but only now translated into English.
 An ambassador and seven other Chinese diplomats, who marched for days at a time and slept in the rain while being stalked by Vietnamese troops, nearly died of starvation and disease, according to the book.
 They ate elephant and rare wildlife to stay alive while moving through the jungle near the Thai border in Battambang province and later, for 47 days, in a clearing in the Cardamom Mountains near the border town of Pailin, it said. Here, they tried to maintain an ad hoc diplomatic presence.
 To escape the Vietnamese army, the diplomats crossed into Thailand on April 11 after a grueling 15-day, 200-kilometer over some 40 mountains, according to the account.
 The Khmer Rouge's bloody rule of Cambodia lasted from 1975 to 1979, when an estimated 1.7 million Cambodians died from starvation, disease, overwork and execution.
 China was the regime's most prominent international supporter. It has revealed little publicly about its role in aiding the Khmer Rouge, which formally called itself Democratic Kampuchea.
 Ben Kiernan, a Cambodia expert and professor at Yale University, said the account sheds light on how close China was to the Khmer Rouge, which maintained policies against Vietnam, China's historical rival.
 &quot;The gripping story of the Khmer Rouge's flight, despite the propagandistic tone, demonstrates China's role and commitment to the [Khmer Rouge] regime,&quot; Kiernan wrote in an introduction to the translated work.

TITLE: Hurricanes Blowing Weak After Controversial Goal
PUBLISHER: The Associated Press
TEXT: RALEIGH, North Carolina - Rob Blake's controversial goal helped end the Colorado Avalanche's losing streak and added to the Carolina Hurricanes' recent woes. 
 
Blake tied the game with a goal late in the third period and Milan Hejduk scored 2:04 into overtime as the Avalanche rallied for a 3-2 overtime win against the Hurricanes on Sunday.
 Hejduk scored twice and assisted on Blake's goal with 1:22 left as the Avalanche snapped a three-game losing streak. 
 &quot;The mentality was just to try to find a way to win a hockey game,&quot; said Joe Sakic, who assisted on Hejduk's first-period goal. &quot;It was a good break for us.&quot; 
 Jeff O'Neill's goal on a breakaway early in the third period gave Carolina a 2-1 lead, but the Avalanche rallied in the final 90 seconds. Kevin Weekes stopped a shot from Sakic, but the Avalanche controlled the rebound. Peter Forsberg batted the puck into the crease, and Blake poked it past Weekes. 
 Weekes immediately protested to the referees, and video replays showed that Blake knocked the stick out of Weekes' hand while battling with Sean Hill near the crease just before the goal. 
 &quot;Hey I got cross-checked on the play,&quot; Blake said. &quot;I was just trying to keep my balance and I hit [Weekes] on the way down. That's what happens when you're battling in front.&quot; 
 The goal stood, forcing overtime. Hejduk capped the rally by taking a pass from Alex Tanguay and flipping the puck past Weekes from a few feet in front of the crease.
 Weekes, who finished with 30 saves, said little about the goal. 
 &quot;They ended up scoring. The goal stood,&quot; he said. &quot;I don't know what happened and I didn't see anything. That's the best way to put it.&quot; 
 The game was tied 1-1 going into the third when O'Neill scored his 18th of the season. He intercepted a pass near center ice and charged toward Colorado goalie David Aebischer with Tanguay and Adam Foote in pursuit. O'Neill flipped the puck past Aebischer one minute into the period. 
 &quot;I thought our effort was there,&quot; O'Neill said. &quot;It's what we're looking for out of all of us. ... Unfortunately the end result was the same.&quot; 
 
 <strong>
Anaheim 2, St. Louis 1. </strong>The Mighty Ducks did something to the St. Louis Blues that no other team has accomplished this season - beat them in regulation after trailing through two periods. 
 
Jason Krog and Niclas Havelid scored 6 1/2 minutes apart in the third for the Ducks en route to a 2-1 victory Sunday night. The Blues, who entered with the second-most goals per game in the NHL, were held to just 19 shots - and just five over the final 20 minutes. 
 &quot;It doesn't happen very often,&quot; Blues coach Joel Quenneville said. &quot;I can't recall the last time we lost in regulation with a two-period lead. I think it was maybe on opening night last year in L.A. But we had a pretty good run, in that regard.&quot;
 Anaheim is 3-0 against the Blues after going 1-7 against them the previous two seasons. The Ducks have not allowed a third-period goal in five games. 
 The Ducks, 7-2-1 in their last 10 at home, were heading toward their third 1-0 loss in five games before Krog tied it with 12:25 left. 
 Anaheim defenseman Keith Carney's one-timer from just inside the blue line caromed off the end boards and in front of the net, where Patric Kjellberg and Steve Rucchin both fanned on it before Krog swatted the puck past goaltender Brent Johnson's glove for his fifth goal and third in two games. 
 The winning goal came after a costly penalty against Alexander Khavanov for high-sticking Dan Bylsma. Havelid's 55-foot shot from between the circles deflected off St. Louis defenseman Bryce Salvador and past Johnson's left skate with 5:55 remaining. 
 
 <i>
(For other results, see Scorecard.) </i>

TITLE: Lakers Edge Nearer To Passing .500 Mark
PUBLISHER: The Associated Press
TEXT: LOS ANGELES - Now the Los Angeles Lakers need to prove they can beat teams with winning records.
 
The Lakers beat Miami 106-81 on Sunday night to extend their season-best winning streak to four games and move within three games of .500 (17-20), the closest they've been since Nov. 15. Kobe Bryant scored 36 points, and Samaki Walker had a season-high 16 rebounds as the Lakers took command in the third quarter.
 O'Neal added 15 points, Rick Fox scored 12 and rookie Kareem Rush had a career-high 11 for the Lakers, who shot 51.3 percent and outscored the Heat 56-31 in the second half.
 Yet even the three-time defending champions know they still have a long way to go before they begin thinking about a fourth.
 The Lakers have beaten only five teams - Portland, Dallas, Utah, Orlando and Phoenix - with winning records. And they have a miserable 4-14 road record.
 Their next two games are at New Orleans (20-19) on Wednesday night and at Houston (20-15) on Friday night.
 &quot;We have to play with a different presence,&quot; Lakers coach Phil Jackson said. &quot;We wouldn't be happy with a loss on this trip.&quot;
 Miami was outgunned from the start, with leading scorer Eddie Jones missing his fifth game because of a sprained right ankle.
 The Heat shot 52.8 percent in the first half and 30.8 percent in the second in losing their sixth game in a row - a season high.
 &quot;Nobody likes to lose,&quot; said Miami coach Pat Riley, who coached the Lakers to four NBA championships in the 1980s. &quot;We're going through a real hard period right now, our best players are hurt. I hope, getting back to Miami, we can regroup, re-energize.&quot;
 The Lakers put the game away by outscoring the Heat 30-11 in the third quarter for an 80-61 lead. Los Angeles shot 11-of-17 and Miami 5-of-19 in the period.
 The Lakers scored 13 straight points at one stage late in the third quarterto go ahead by 21 points. Miami wasn't closer than 15 points after that.
 
 <strong>
Toronto 105, Minnesota 91. </strong>In Toronto, Morris Peterson scored 20 points, and Rafer Alston had 12 points, eight assists and six rebounds in his second game with Toronto as the Raptors ended a 12-game losing streak.
 
Jerome Williams added 17 points and 14 rebounds for the Raptors, who won despite the absence of All-Star Vince Carter, who missed his 17th straight game with a strained right knee.
 Kevin Garnett had 26 points and just three rebounds for the Timberwolves.
 <strong>
Dallas 96, Clippers 90. </strong>In Los Angeles, Steve Nash scored 24 points and Dirk Nowitzki added 23 as Dallas won its sixth straight and improved the league's best road record to 13-3.
 
Neither team led by more than three points for much of the fourth quarter until the Mavs scored seven straight points to take the lead for good.
 
 <strong>
San Antonio 81, Boston 80. </strong>In San Antonio, Stephen Jackson made a long 3-pointer with 0:09.6 left to cap a game-ending 8-0 run.
 
With the Spurs trailing 80-78 with 0:15 remaining, Jackson inbounded the ball in San Antonio's end and then got it back for a 8-meter shot, his only basket of the second half.
 After Jackson's basket, Paul Pierce's 6-meter jumper from the wing bounced off the edge of the rim as time expired. 
 Tim Duncan led San Antonio with 21 points and Jackson added 18. Pierce led Boston with 25 points.
 
 <strong>
Orlando 107, Philadelphia 105. </strong>In Philadelphia, Tracy McGrady had 34 points and Mike Miller scored 27 as Orlando handed Philadelphia its sixth straight loss.
 
Allen Iverson had 32 points for Philadelphia. The 76ers have lost 14 of their last 18.
 
 <strong>
Phoenix 107, Utah 99. </strong>In Phoenix, Stephon Marbury scored 38 points - 22 in the second half - and Shawn Marion added 31 as the Suns won their 10th home game in a row.
 
Rookie Amare Stoudemire scored nine of his 17 points in the fourth quarter when the Suns pulled away to beat Utah for the first time in three tries.
 The Suns outscored Utah 19-9 over the final 2:34 to win for the 14th time in their last 18 games.
 
 <strong>
Sacramento 106, Grizzlies 98. </strong>In Sacramento, California, Peja Stojakovic scored a season-high 30 points and had eight rebounds as the Kings won for the fifth time in six games.
 
It was the 10th straight loss for the Grizzlies in Sacramento, where they have lost 15 of 16 times in franchise history.
 
 <i>
(For other results, see Scorecard.) </i>

TITLE: Els Smacks New Low Aggregate
AUTHOR: By Doug Ferguson
PUBLISHER: The Associated Press
TEXT: KAPALUA, Hawaii - Ernie Els could not have asked for a better start. He set a PGA Tour scoring record, won the season-opening Mercedes Championships by eight shots, and Tiger Woods is nowhere to be found.
 
Not that it would have mattered Sunday.
 In a record-setting start to the season, the Big Easy crushed his competition at Kapalua with five birdies on the final seven holes for an 6-under 67, shattering the Tour record in relation to par at 31-under.
 Better yet, he stated his case as a legitimate challenger to Woods.
 &quot;I don't miss him,&quot; Els said with a laugh. &quot;He can take another month off.&quot;
 Woods missed the season-opening event as he recovers from knee surgery, but it's hard to imagine anyone stopping Els on a calm and defenseless Plantation Course.
 The 33-year-old South African went wire-to-wire at Kapalua, overcoming a sluggish start to pull away from K.J. Choi and win by the widest margin on Tour in two years.
 &quot;I'm not trying to send a message to anybody,&quot; Els said. &quot;I'm just trying to prove to myself that I can play well. Let's see where it takes me.&quot;
 It took him into the record books this week.
 The previous 72-hole record in relation to par was 28-under, set by John Huston at the 1998 Hawaiian Open and by Mark Calcavecchia two years ago in the Phoenix Open. Els finished at 261, breaking by five shots the tournament record set four years ago by David Duval.
 &quot;You want to say when you win majors, that you played your best then,&quot; Els said. &quot;But this is right up there. It's an unbelievable week for me.&quot;

TITLE: Oakland One Step Closer to Playoff Goal
PUBLISHER: The Associated Press
TEXT: OAKLAND, California - The playoffs have been unkind to the Oakland Raiders for almost two decades. So they took out 19 years of frustration on the New York Jets.
 
League MVP Rich Gannon and the Raiders showed why this season might be different from all the others since 1983 with a 30-10 playoff rout Sunday. They knew the surest road to the AFC championship game was to stay at home and avoid tuck rules and snowy night games in New England.
 Now they get Tennessee, whom they beat 52-25 at home in September, back at the Oakland Coliseum for a shot at the Super Bowl. The Raiders have not been to the big game since winning it against Washington in 1984.
 &quot;These chances are very rare,&quot; veteran All-Pro safety Rod Woodson said. &quot;I think we are a mature team that understands what we have here.&quot;
 &quot;We've been this far before,&quot; said Jerry Porter, who outperformed his more illustrious teammates at wide receiver, Jerry Rice and Tim Brown. &quot;It's time to go farther.&quot;
 Porter caught a 29-yard touchdown pass and set up Rice's 9-yard score with a 50-yard reception as the Raiders (12-5) made it a clean sweep for the home teams this weekend. Gannon began going downfield in the second half after a 10-10 tie, and it paid off.
 The Jets had the most efficient thrower in the league, Chad Pennington, but he had a miserable day. Pennington, in his first season as a starter, had a 104.2 rating. But against Oakland he was 21-of-47 for 183 yards and a 44.9 rating.
 The Raiders, winners of eight of their last nine games, got pickoffs from Tory James and Eric Barton in the second half. They also recovered the two fumbles by Pennington in earning their second trip to the AFC title game in three years. In the 2000 season, they lost at home to Baltimore 16-3 for the conference crown.
 Their most painful loss came at the Patriots last January in the infamous tuck-rule game when an apparent late fumble by quarterback Tom Brady was later ruled an incomplete pass. New England, of course, went on to win the Super Bowl.
 Now, the Raiders think it is their turn.
 &quot;I am trying to seize the moment, seize the opportunity. Of course, three other teams are trying to do the same thing,&quot; said Gannon, who finished 20-of-30 for 283 yards.
 Rice's catch was his 21st postseason touchdown, tying an NFL record. The 40-year-old receiver also set a record for yards in the playoffs with 2,133 in an 18-year career.
 
 <strong>
Tampa Bay 31, San Francisco 6.</strong> The Tampa Bay Buccaneers proved their offense can be just as dangerous as their league-leading defense. 
 
Brad Johnson returned from a monthlong layoff to throw for 196 yards and two touchdowns, and Tampa Bay shut down Jeff Garcia and Terrell Owens to beat the San Francisco 49ers on Sunday. 
 The victory sends Tampa Bay to Philadelphia for next Sunday's NFC championship game against the Eagles, who ended the Bucs' season in the first round of the playoffs at Veterans Stadium the past two years.
 The Bucs have lost all six of their road playoff games, including three years ago in the NFC championship game. 
 At home against the 49ers, the Bucs did just about everything right. 
 &quot;As soon as we got up 7-0, I said: `Hey, our offense is rolling today, fellas,&quot; All-Pro defensive tackle Warren Sapp said. &quot;The only thing we've got to do is stick a couple of three-and-outs on them.&quot; 
 The defense took care of that, then the offense had its way. 
 Mike Alstott scored on a pair of 2-yard runs, and Johnson threw TD passes of 20 yards to Joe Jurevicius and 12 yards to Rickey Dudley after missing the last two regular-season games with a bruised back. 
 A gash over the right eye sent Johnson briefly to the locker room in the third quarter. He left the field on a cart, one hand holding a towel to his forehead, the other punching the air in defiance as fans roared. He returned after missing one series. 
 &quot;I wasn't hurt, but I knew I was bleeding and needed some stitches,&quot; he said. 
 Alstott's first TD snapped the Bucs' 12-quarter touchdown drought in the playoffs, a streak that began in an 11-5 loss to St. Louis in the 1999 NFC championship game. The Eagles outscored Tampa Bay 52-12 the last two years and beat the Bucs 20-10 in Philadelphia when the teams met in October. 
 &quot;We respect Philadelphia this year,&quot; coach Jon Gruden said. &quot;What happened last year is not going to hurt us or help us in any way. 
 &quot;We realize we've got our hands full, but we're going to get on the plane and we're going to go, and we'll play any place, whether it be in the Vet or the Walt Whitman Bridge. We're going to be there.&quot; 
 
 <i>
(For other results, see Scorecard.) </i>

TITLE: Capriati Ousted in First Round
AUTHOR: By John Pye
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia - Jennifer Capriati became the first defending women's champion in the Open era to lose in the first round of the Australian Open, tumbling out of the Grand Slam event Monday with a shocking loss to Marlene Weingartner. 
 
Capriati, who won her first Grand Slam championship at Melbourne Park in 2001 and successfully defended the title last year, won the first set 6-2 and led 4-2 in the second. 
 But her German rival, ranked No. 98 at the end of 2002, rallied to take the second set 7-6 (7-6) and the third 6-4, with Capriati dumping a forehand into the net on match point. 
 &quot;I felt I was getting a bit tired and she got on a roll. ... I felt the momentum swing,&quot; Capriati said. &quot;Mentally and physically I wasn't strong enough, I guess.&quot; 
 The 26-year-old American said an operation to remove sun spots from both eyes in early November had limited her preparation. She lost in the second round in Sydney last week. 
 &quot;I think [the eyes] are OK now,&quot; she said. &quot;It's basically now trying to get back to feeling normal again. 
 &quot;I had stitches in both eyes. For two weeks, basically, I was in the dark because I couldn't be in sunlight - my eyes were too sensitive. I'm not trying to make excuses, that's for sure, but it had a lot to do with my preparation.&quot; 
 She had 10 double faults and 41 errors, while Weingartner had five double faults and 52 unforced errors. 
 Second-seeded Venus Williams looked rusty, but advanced to the second round, beating Russia's Svetlana Kuznetsova 6-4, 6-2. 
 Andre Agassi was as polished as he's been in the years he's won the Australian Open, advancing with a no-frills 7-5, 6-3, 6-3 victory over fellow American Brian Vahaly. 
 The 32-year-old Agassi warmed up for the season-opening major by winning an exhibition tournament at Kooyong, the event where he injured his wrist last year in losing the final to Pete Sampras. 
 The wrist problem sidelined him for the Australian Open, preventing his title defense. But the two previous years, he won at Kooyong and went on to win at Melbourne Park. 
 &quot;It did feel real good,&quot; Agassi said. &quot;I even felt a bit nervous going out there because it's, unfortunately, been a lot longer than I wish it was.&quot; 
 Williams muddled around in her first few games, as though she was back at work after a long vacation. 
 After ending the match with an angled forehand volley on her fourth match point, she flashed a relieved smile and did a little pirouette, looking more as if she'd reached the second week of a Grand Slam than the second round. 
 She fell behind 0-3 because of some erratic shots, relying on a stronger serve to carry her against the 45th-ranked Kuznetsova. She and the 17-year-old Russian were nearly even in errors. 
 &quot;I'm just a little rusty,&quot; Williams said. &quot;I didn't expect to be 100 percent in this match, but in the next one I expect to be at least 150.&quot; 
 Venus hadn't played since limping out of her WTA Championships semifinal while trailing 5-0 against Kim Clijsters in November. 
 Williams' sister, Serena, will open on center court Tuesday against Emilie Loit of France. Serena is seeking a fourth consecutive major to compete her &quot;Serena Slam,&quot; in which she would hold all four Grand Slam titles at once. 
 Serena missed a chance for a true Grand Slam - all four majors in one calendar year - when she twisted her ankle in a warmup tournament and missed last year's Australian Open. She went on to beat Venus in the finals of the French and U.S. Opens and Wimbledon. 
 Asked about beating Serena this time, Venus said, &quot;I wouldn't exactly say that's my goal. My goal is to be my best. I guess if Serena wins a slam, then I'll be there congratulating her.&quot; 
 The sisters, on opposite sides of the draw, can only meet in the final. 
 With organizers promoting the season-opening major as the Grand Slam of the Asia-Pacific, the first match on center court featured rising Thai star Paradorn Srichaphan. The 11th-seeded Paradorn beat Austrian Jurgen Melzer 7-5, 6-4, 1-6, 6-0. 
 &quot;It's really special for me to play the first match on Monday, to open a Grand Slam, and I appreciate it,&quot; said Paradorn, who improved his ranking by 110 places to No. 16 in 2002. 
 Spain's Juan Carlos Ferrero, seeded fourth, beat Argentina's Franco Squillari 7-6 (7-5), 3-6, 6-2, 6-3, and No. 5 Carlos Moya defeated Belgium's Dick Norman 7-5, 6-3, 6-4. 
 Russian Yevgeny Kafelnikov, the 1999 winner, outlasted Jeff Morrison 7-6 (7-5), 6-3, 4-6, 6-3. 
 Top-ranked Lleyton Hewitt begins play Tuesday against Swedish qualifier Magnus Larsson. 
 In women's play, 2000 champion Lindsay Davenport, seeded ninth a year after knee surgery, beat France's Camille Pin 6-2, 6-1. 
 Anna Kournikova, winless in Grand Slam singles play in two years, thrashed Slovakia's Henrieta Nagyova 6-1, 6-2 to earn a second-round match against fifth-seeded Justine Henin-Hardenne. 
 Kournikova won a Grand Slam singles match for the first time since the 2001 tournament, but ended up answering questions about body art. 
 She was surprised when she was asked if she had a tattoo on her lower back. 
 &quot;You actually saw a tattoo on my body?&quot; she replied. 
 &quot;I just have a heat patch,&quot; she said of the patches she has worn at the base of her spine for the last two years. 
 &quot;I have chronic back pain. It just happens to be that my skirt is pretty low right now, and everybody sees the patch.&quot;