SOURCE: The St. Petersburg Times
DATE: Issue #890 (58), Tuesday, August 5, 2003
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TITLE: Mirilashvili Handed 12-Year Jail Term
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: The Leningrad District Military Court on Friday handed down a 12-year jail term to local businessperson Mikhail Mirilashvili, who has spent the last 2 1/2 years in jail on charges of creating a criminal gang, kidnapping and attempted murder.
While dropping the attempted-murder charge, the court gave its verdict based on articles 33, 126 and 127 of the Russian Criminal Code. The articles cover illegitimate entry into a person's living space, kidnapping and illegitimate deprivation of freedom, respectively.
Three other defendents, Mark Sidler, Andrei Demenko and Yevgeny Kazmirchuk, were acquitted of charges of withholding information relevant to the case, the illegal sale of precious metals and the illegal storage of weapons, respectively.
Defendent Viktor Petrov was sentenced to 5 months and 17 days in jail for storing ammunition.
Mirilashvili's attorneys angrily denounced the conviction, which they labeled "ridiculous" because, while the alleged kidnappers walked free, Mirilashvili got a jail term for organizing a kidnapping with a group of people yet to be identified.
"This decision is no surprise to us," Mirilashvili spokesperson Dmitry Mirapolsky said in a telephone interview on Monday. "We expected this would happen."
"It proves once again that the target of this hunt is specifically Mikhail Mirilashvili and no-one else," he said. "We're going to appeal to a higher court, and this situation will be cleared up there."
According to Mirapolsky, Mirilashvili's final statement to the court on July 25 alleged that city Deputy Prosecutor Boris Salmaksov was demanding a bribe of $1 million to close the case.
"He's already been singing this song for more than a year and half," Salmaksov said in a telephone interview on Monday. "I'm not going to justify myself to anyone, because there is nothing to justify."
Salmaksov said he is still sure that more careful work by investigators would have produced more evidence.
"The case turned out as it did because there was evidence against [Mirilashvili] and no evidence against the other suspects," he said. "There are tapes of telephone conversations with [Mirilashvili's] voice. There are tapes with other people's voices, but Mirilashvili says he wasn't in the office [from where the calls were made] at the time, and doesn't know who these people are."
"It's like an assassination in which the killer has blood on his hands but his two accomplices are clean," Salmaksov said.
The tape of the telephone conversation was the key and most controversial part of the investigation. Mirilashvili said that the testimony of court expert Sergei Koval, who identified the voice on the tape as Mirilashvili's, should be thrown out on the grounds that Koval had a personal interest in the case. He said Koval was looking for revenge after Koval's wife, Tatyana, was forced to resign her job at the Mirilashvili-owned Conti group for not fulfilling her obligations.
Mirilashvili, 43, is a native of Georgia who now holds dual Russian-Israeli citizenship. With his father and brother, Gabriel - both of whom now are reported to live in Israel - he is said to have a wide range of business interests in St. Petersburg, including real-estate, pharmaceutical, trading, entertainment and construction companies.
The chain of events leading to the case began with the kidnapping of Mirilashvili's father, also called Mikhail, on Aug. 7, 2000, as he was being driven along Vyborgskaya Naberezhnaya. According to the police, his black Toyota was stopped by unknown people wearing police uniforms, who checked the documents of the car's occupants, showed them a gun, and then asked the driver to get out of the car.
They then drove away with Mirilashvili Sr., who was released the next day, although the circumstances surrounding his release remain unclear, and police and family members have not made any comments about whether a ransom was paid or even demanded.
A month later, on Sept. 8, two men and a woman of Caucasian origin were shot in broad daylight in front of the Hotel Astoria, where an international forum on investment and business in St. Petersburg was being chaired by Mirilashvili Jr. and was attended by luminaries such as President Vladimir Putin's chief economic adviser, Andrei Illarionov.
Mirilashvili was charged with being involved in the abduction of two other people, whom, prosecutors say, he thought were involved in kidnapping of his father.
Salmaksov was earlier involved in another bribery allegation related to the Mirilashvili case. He publically denied an accusation made in December 2001 by Vladimir Pratusevich, head of the Mirilashvili-owned industrial holding Petromir, that Salmaksov's son Andrei, together with a Georgian criminal gang, tried to extort a $50,000 bribe to get Mirilashvili released.
"The formula they're using just makes me laugh. Just imagine: My son, who lives in Moscow, finds Pratusevich, whom he doesn't know, and says, 'Listen, do you want me to solve the Mirilashvili case through my dad for $50,000?' And then he comes to me and says, 'Dad, I've got some money here, can you release Mirilashvili?'" Salmaksov said in an interview with the Agency of Journalistic Investigations published in January 2002.
"The people who made this up have no idea how decisions are made in the Prosecutor's Office," he said.
Last month, Mirilashvili became embroiled in a public argument with exiled tycoon Boris Berezovsky, who in the mid-1990s tried to take over local television station Channel 11, of which Mirilashvili was president at the time. At the time, Channel 11 was 75-percent owned by media oligarch Vladimir Gusinsky, an opponent of Berezovsky.
In an open letter published on July 24 in the newspaper Kommersant Daily, Berezovsky accused Mirilashvili of being involved in an underhanded deal in the early 1990s to privatize St. Petersburg-based alcohol producer Samtrest. Berezovsky alleged that Mirilashvili was helped in the deal by President Vladimir Putin, who was then head of the City Administration's External Affairs Committee, and called Mirilashvili a "criminal authority ... Misha Kutaissky."
Kutaissky is an adjective derived from the name of a city in Georgia from which Mirilashvili does not come.
Mirilashvili responded with an open letter published July 31 in the daily Izvestiya, in which he accused Berezovsky of lying.
"It looks like President Vladimir Putin ... does not need my protection," he wrote. "When he was working in St. Petersburg's City Hall, he was busy with completely different questions, and had no connection to the privatization process."
"Now, Berezovsky, using this 'Misha Kutaissky' nickname, calls Mikhail Mirilashvili a 'criminal authority,'" he wrote. "If that was the case, the 'law-enforcement agencies' that have been hunting me for three years would have used it [in their investigation] right away."
TITLE: N. Ossetia Mourns Victims of Bombing
PUBLISHER: Combined Reports
TEXT: VLADIKAVKAZ, North Ossetia - Soldiers and civilians in North Ossetia observed a day of mourning Monday in honor of the victims of a deadly suicide truck bombing that killed 50 people at a military hospital.
Officials dedicated a memorial stone at the ruins of the military hospital, which was destroyed Friday when a truck packed with explosives crashed through the hospital gates and exploded in a giant fireball.
"Those who think that they can bring us to our knees with such atrocities are deeply mistaken," Colonel General Vladimir Boldyrev, the chief of the North Caucasus Military District, said during a ceremony, his voice tense with emotion. "We will avenge that, we will kill the bandits always and everywhere until we have killed them all."
A spokesperson for the Prosecutor General's Office in the North Caucasus said Monday that the authorities suspect Chechen rebel warlord Shamil Basayev of masterminding the attack on the military hospital in Mozdok, a city that serves as a staging ground for the war in Chechnya.
Meanwhile, a powerful radio-controlled explosive device was detected and safely defused Sunday in the town of Malgobek in Ingushetia, officials said Monday.
Funerals for the victims of Friday's blast began Sunday and continued Monday. The cabinet allocated compensation payments to families of the victims and for those who were wounded in the attack.
Sixty four victims remained hospitalized, many in grave condition, officials said Sunday.
In Vladikavkaz, flags flew at half-staff over government buildings. Workers and military units began their day by observing a moment of silence for the victims of the attack.
Security was tightened throughout the region, with police patrols placed around hospitals and public facilities. Troops sealed off the main military hospital in Vladikavkaz, barring all nonmilitary visitors from entering the building.
Federal Security Service chief Nikolai Patrushev said Monday on a trip to southern Russia that his service had "general" information prior to the explosion about a possible attack, but no specific tips. He and other officials criticized lax security at the hospital.
In a meeting with officials late Sunday, Putin castigated the authorities for negligence, saying that "the laxity that we have seen in a series of cases, and which is conducive to crimes and terrorist acts, has gone beyond all bounds."
The attack on the hospital was the latest in a series of suicide bombings in and around Chechnya and in Moscow since May, shattering the Kremlin's claims that the nearly four-year war was winding down.
Putin has vowed that recent attacks will not stop efforts to restore "normal peaceful life" in the region.
Rescuers stopped searching for victims of the bombing on Sunday. Overnight, rescuers with sniffer dogs had pulled the body of a surgical nurse and at least four others from the rubble of the four-story brick building, bringing the death toll to 50 before the search was called off, said Lieutenant Colonel Yury Miroshnichenko, spokesperson for the Emergency Situations Ministry in southern Russia.
A truck packed with explosives crashed through the hospital gates Friday night. Authorities have said they believe one suicide attacker was in the Kamaz truck, which they said had been bought and sold several times in recent weeks.
Two people who sold the truck have been detained as suspects, the Interfax news agency quoted Deputy Prosecutor General Sergei Fridinsky as saying. He said authorities hope the detainees will lead them to "other participants in the crime" and that investigators are focusing on Chechnya, North Ossetia - where the attack took place - and nearby regions.
Weeping mothers gathered outside a hospital in the region, waiting for information. No official list of the injured was posted; instead relatives were urged to call information hot lines. Meanwhile, authorities began the process of handing out compensation to victims and their relatives.
Suicide bombings in and around Chechnya and in Moscow have killed more than 150 people since May. Friday's blast also was the third devastating truck-bomb attack in southern Russia since last December, when the headquarters of the Moscow-backed administration in Chechnya was heavily damaged in an attack that killed 72 people.
Putin, who gained popularity partly because of his tough stance on Chechnya, has been unable to fulfill promises to crush resistance and bring peace to the region.
On Sunday, military officials announced heightened security measures throughout the military district, which encompasses Chechnya and much of southwestern Russia.
Large trucks will be barred from military communities and the grounds of military hospitals and clinics, Interfax quoted Colonel Igor Konoshenkov, an aide to the district commander, as saying.
Parking lots will be moved at least 100 meters from buildings and other areas where people gather at military bases and units in the district, Konoshenkov said. Security also was stepped up at fuel storage areas, weapons and ammunition dumps and living quarters of military personnel.
Russian authorities have been at pains to show that stability is returning to Chechnya and the surrounding provinces, which have been targeted by rebels in years of war and chaos. Putin has vowed that terrorist acts will not stop efforts to restore "normal peaceful life" there.
Russian forces withdrew from Chechnya following a 1994-1996 war that left separatists in charge. They returned in 1999 after incursions into an adjacent region and apartment-building bombings in Russian cities that that killed some 300 people. Defense Minister Sergei Ivanov said the explosives used Friday resembled those used in the apartment-house bombings.
The Kremlin refuses to negotiate with rebels and has taken steps its says are designed to bring peace to Chechnya, including a regional presidential election scheduled for Oct. 5.
Critics have questioned how fair elections can be held in conditions of war and have suggested that the vote is an attempt to legitimize Moscow-backed administration chief Akhmad Kadyrov's control over the region. On Sunday, Kadyrov formally announced his intention run in the election.
Criminal investigators will look into "the personal guilt of commanders of specific units" in failing to prevent the attack, Ivanov said, adding that he has relieved the head of the Mozdok garrison of his duties.
The Chief Military Prosecutor's Office later said that Lieutenant Colonel Artur Arakelian, head of the destroyed military hospital, had been arrested for suspected "criminal negligence" and "failure to carry out an order."
"One can realize why Defense Minister Ivanov and accused mid-level commanders of criminal negligence and oversights: the top-ranking officials in the Defense Ministry do not want to bear the responsibility for the bombing that took place in an allegedly peaceful republic and claimed the lives of more than 40 people," independent defense analyst Pavel Felgenhauer said.
Ivanov said that investigators have made rapid progress in tracing the history of the truck used in the bombing. "We already know quite a lot about how this vehicle has been resold many times over the past few weeks, and other things," he said. "But I will not plunge into greater detail, for it is an investigative secret."
While it should have been difficult for terrorists to get onto the grounds of a military hospital, Felgenhauer said: "This is Russia. The Russian Armed Forces, just as the country on the whole, are notorious for a slipshod attitude to everything, including security issues."
(AP, LAT)
TITLE: Berezovsky Lashes Out at Writer of Yukos Report
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Stanislav Belkovsky, the political analyst behind a report suggesting that the oligarchs are planning to turn Russia into a parliamentary republic, is an educated master of black PR and probably working for the special services lobby in the presidential administration, other political analysts and his former employer Boris Berezovksy said.
The "State and Oligarchy" report, released by Belkovsky's Council of National Strategy think tank in mid-June, is widely credited with triggering the Yukos crisis. It warned that Russia is "on the verge of a creeping oligarchic coup" that could seek to remove Putin from power.
"He is well educated. He is creative, but creative when it comes to black PR ... and he doesn't overprice himself," Berezovsky said of Belkovsky in a telephone interview from London, adding that he most recently hired Belkovsky to work on a campaign to unite "patriotically minded" political forces. He said the campaign was never finished and Belkovsky is no longer working for him.
Belkovsky called a rare news conference last week in an attempt to distance himself from growing media speculation that he is one of the people behind the monthlong attack on Yukos by law-enforcement authorities.
Among the media reports, the Kompromat.ru Web site published what it claimed were transcripts of Belkovsky's conversations with the president of state-owned oil major Rosneft and officials in the presidential administration. The conversations indicated that Belkovsky was playing a role in the Yukos attack.
Belkovsky said the transcripts were fake. He said his think tank acts entirely on its own accord and has not been in contact with law enforcement authorities, the presidential administration or President Vladimir Putin himself.
"I would actually very much like if there were some kind of mechanism to discuss or implement our ideas. But there isn't one," he said in an interview.
He said he is not on anybody's payroll and earns most of his salary through political consulting in the regions.
Belkovsky, who at his news conference clearly took delight in tossing out quotes from the likes of Sigmund Freud and Niccolo Machiavelli, insisted that his only goal is to help Russia find solutions to problems such as the growing poverty gap between the rich and the poor.
Berezovsky poured scorn on Belkovsky's statements, saying he is well aware of how Belkovsky works from personal experience. He said he is convinced Belkovsky is connected to the so-called Chekist wing in the Kremlin believed to be orchestrating the Yukos attack. The attack is thought to be part of a political and financial struggle ahead of State Duma elections in December.
Political analysts agreed with Berezovsky, saying the Council of National Strategy appeared to have been set up specifically to serve special interest groups in political power struggles.
"Of course he is working for you-know-who," a respected political analyst said on condition of anonymity, referring to the Chekists.
Belkovsky worked in relative obscurity until the "State and Oligarchy" report surfaced in June and, aside from breaking into the limelight of big politics, he has managed to stir up Russia's small community of political analysts. According to Belkovsky, the Council of National Strategy counts among its members a number of prominent analysts who largely backed the report. However, many of those named by Belkovsky denied supporting him or his work.
"He is a provocateur, and the whole thing smells bad," said Lilia Shevtsova, an analyst with the Carnegie Moscow Center whom Belkovsky identified as a Council of National Strategy member.
Shevtsova said she attended a Council of National Strategy meeting once about a year ago but decided not to participate because she felt uncomfortable not knowing exactly what the think tank was hoping to achieve and where its funding was coming from.
TITLE: Russia Still Hesitant on Ratifying Kyoto
AUTHOR: By Greg Walters
PUBLISHER: Special to The St. Petersburg Times
TEXT: The Soviet Union and its successor states have never been renowned as great champions of environmental causes. However, an ironic twist of history means that the fate of the Kyoto protocol, the highest profile attempt to date to safeguard the future of the world's environment, now rests squarely on Russia's shoulders.
In simple terms, if Russia ratifies the Kyoto Protocol, it comes into force. If not, the protocol dies.
The protocol aims to control atmospheric levels of greenhouse gases, which many scientists say are the root cause of global warming, by making countries responsible for their emissions. To come into force, the protocol must be domestically ratified by 55 or more of the countries that signed it and that, collectively, produced 55 percent of the world's total greenhouse-gas emissions in 1990.
Despite signing the protocol on Nov. 12, 1998, the United States, which produced 36 percent of 1990 emissions, declared in 2001 that it would not ratify it, claiming that reducing greenhouse-gas emissions would hurt its economy. With the next-highest 1990 emissions, at 17 percent, Russia therefore became the de facto arbiter of the protocol's fate after the U.S. withdrawal.
At least publically, Russian officials have appeared enthusiastic about ratifying the protocol, adopted on Dec. 11, 1997, at a meeting of the United Nations Framework Convention on Climate Change in Kyoto, Japan. Russia signed on March 11, 1999.
In September 2002, Prime Minister Mikhail Kasyanov told the BBC that "we consider that ratification will take place in the very near future."
Almost a year later, there is little sign - if any - of progress. So what is causing the delay?
"It's a rather serious document," Oleg Pluzhnikov, deputy head of the Energy Ministry's Ecological Department, said in an interview on Friday.
"Nothing [about the protocol] has been obvious from the very beginning."
Pluzhnikov suggested that the hold-up has been caused by bureaucratic thoroughness - but that this thoroughness has yielded "very positive results."
"We believe that ratification can still happen in the near future," Pluzhnikov said, although he declined to be more specific.
To many observers, Russia's reticence to ratify the Kyoto Protocol is all the more puzzling given that the country stands to benefit from an economic windfall if the protocol comes into force.
According to the terms of the protocol, countries that now produce lower greenhouse-gas emissions than in 1990 can sell their "surplus" - the difference between 1990 emissions and the current level - to overproducing countries to bump up those countries' emissions limits.
Russia currently pumps some 30 percent less greenhouse gases into the atmosphere than the Soviet Union was in 1990, meaning the Kyoto Protocol effectively provides the country with an instant international commodity - if it ratifies the treaty.
A "pessimistic" estimate by Natalya Olefirenko of the Moscow office of environmental pressure group Greenpeace put Russia's potential earnings from quota selling at at least $20 billion. Pluzhnikov, however, said between $1 billion and $2 billion is more realistic.
Some critics say Russian authorities are stalling in hopes of getting an even better deal.
"Both President Vladimir Putin and Prime Minister Mikhail Kasyanov promised ratification, but appear to be taking their time, evidently wishing to gain some further advantages," Viktor Danilov-Danilyan, director of the Russian Academy of Sciences' Institute of Water Problems, wrote in an article for RIA Novosti on July 22.
The advantages could include a guarantee that countries seeking credits will purchase from Russia before other countries with a surplus, or would provide Russia with "clean" technology to help keep its emissions low.
However, Igor Leshukov, director of the Institute for International Affairs, St. Petersburg, said Russia is unlikely to get further concessions.
"Russia already got the maximum," he said in a telephone interview on Wednesday. "I can hardly imagine what type of better deal you could get."
According to Leshukov, the problem is the nature of the bargain to be struck, rather than its terms.
"In any country, politics is about money, but normally it's about real money," he said. "Russia does not consider this money [from quota trading] substantial or real. It's more or less virtual."
Leshukov also said that Russia may be only partially to blame, and that the European Union may be less enthusiastic about the Kyoto Protocol than it appears.
"Kyoto is suspisciously lacking from the EU-Russia energy dialogue," he said, noting that, when Putin and British Prime Minister Tony Blair met for talks in June, Kyoto was conspicuously absent from the agenda.
"This means that the EU doesn't consider Kyoto a priority, contradictory to its official declarations. Otherwise it would press Russia harder," Leshukov said.
Like any drawn-out political question in Russia, however, there is also at least one conspiracy theory - in this case, the American connection.
The argument goes that, should the protocol come into force, the United States could face pressure as the lone industrialized foot-dragger. Therefore, it has a key interest in blocking the protocol, and may be maneuvering behind the scenes to stop Russian ratification.
"It's entirely possible," said an American environmental policy expert, who asked that her name be witheld. "And anything that they might be doing would definitely be done below the radar. I'm sure they wouldn't want to be seen as pressuring Russia."
Both U.S. and Russian officials denied the allegation.
"We think nations should independently evaluate whether ratification of the Kyoto Protocol is in their national interest," a U.S. State Department official was quoted as saying in an article in the Wall Street Journal on July 16.
"As far as I know, there is no [U.S.] pressure," the Energy Ministry's Pluzhnikov said.
For Leshukov, though, these three factors would be enough to explain the delay. "Insufficient interest in Europe, lack of interest on the side of Russia, and some maneuvers on the side of the United States" spell immobility for the protocol, he said.
Greenpeace's Olefirenko, however, laid the blame firmly on Minister for Economic Development and Trade German Gref. According to Olefirenko, the requisite documents have been ready for a year, but Gref is deliberately holding them up.
"The Russian Ministries and governmental agencies headed by the Ministry of Economic Development either have showed their inability to prepare a minimum set of papers required for ratification, or have been deliberately sabotaging the process," she wrote in an email last week. "In any other country, such a situation would have triggered a thorough investigation, because corruption can be the only thing standing behind these delays."
Whatever the reason for the delay, ratification may, in fact, be just a matter of time. The first piece of the puzzle, wrote Danilov-Danilyan of the Russian Academy of Sciences, is realizing that "nothing is done quickly in Russia."
TITLE: Authorities Close Off Moscow's Red Square
AUTHOR: By Anna Dolgov
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW - Natalya Borisovna, a 45-year-old doctor from Novosibirsk, could barely hide her disappointment.
She had been planning a trip to Moscow for months, saving money and dreaming about reliving some of the fondest memories of her student days with a stroll around Red Square.
Instead, she found the square sealed off Monday by police fences. Taped on the fences was a sign: "Red Square closed for renovation until September."
"I am really upset, this is just too bad," said the woman, who only gave her first name and patronymic. "Of course, there are other places I want to see in Moscow, but I was really looking forward to visiting this one."
Authorities shut down Red Square to tourists and passers-by in mid-July. No official explanation has been given, but unofficially the word is that authorities fear a terrorist attack. The closure came shortly after the double suicide attacks at a July 5 rock concert killed 17, including the two female bombers, and a July 10 explosion on Tverskaya-Yamskaya Ulitsa that killed an explosives expert.
While the Russian-language signs say Red Square is sealed off only because of repairs, guards readily acknowledge that the explanation is not true.
"I was constantly being asked about what was going on. Now I've hung up this sign and am asked a lot fewer questions," said Vladimir Komarov, a security guard at the State Historical Museum on one edge of Red Square.
A police officer stationed nearby said laughingly that the square is undergoing repairs of "border stones," but he could not explain what a border stone was. He then added that the explanation about repairs was only an excuse for curious tourists.
"If you had stood here as long as I have, then everything would be clear," said the officer, who gave his name as Stepan Ivanov.
A narrow fenced-off passage on one side of the square was packed with tourists and abuzz with frustrated exclamations in Russian, French, German, Korean and other languages.
"Too bad Red Square is closed," said one tourist.
"Those idiots, why did they have to seal off the whole square if they are doing renovations in some part of it?" said another.
The State Historical Museum is covered with banners for exhibitions about the lives of French leader Charles de Gaulle and Russian poet Feodor Tyutchev and the history of World War II. But the attractions seemed to provide little consolation.
"It's disappointing," said Jaochim Schleich, a tourist from Germany. "This will not spoil the vacation, but I guess they could have done a better job at informing people."
His wife, Corinne, suggested that if authorities were so worried about possible terrorists attacks, they could have set up security checks at the entrance to Red Square and let people through.
St. Basil's Cathedral and Lenin's Mausoleum are still open to visitors, as are the palaces and gardens inside the Kremlin - although sightseers can only get there by joining an organized group. Walking on Red Square's cobblestones, however, is out of the question.
The Federal Guard Service, in charge of providing security for Red Square, would not comment on the closure Monday. A City Hall spokesperson said she could not release any information.
TITLE: Center Gets Kids Thinking About Water
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: How much water does the average St. Petersburger use every day? Any of the schoolchildren at the new Children's Environmental Center can tell you that the answer is at least 300 liters.
They could also tell you that a five-minute shower consumes about 100 liters, as does a typical laundry cycle.
These kids with water on the brain got their facts and figures from Saving Water Together, one of the new center's flagship programs.
The center is funded by Vodokanal, the local water and sewage-treatment monopoly, and the only one of Russia's water-treatment giants to support such a project.
"The idea of the center is to show children how water comes into their homes and to show that the value of water is important in their life," the center's director, Natalya Koriakina, said on Monday. "The main idea is to show that environmental problems are very important and why everyone should care."
The center, at 42 Kavalergardskaya Ulitsa - next to Vodokanal's headquarters - cost approximately $1 million to build, and programs are free to all school-age children. Individuals as well as groups from schools can join programs year round.
Yulia Danilova, the center's senior specialist, said the center's interactive, practice-oriented classes give kids a fresh type of education.
"The main problem with regular school lessons is that they are all about theory," Danilova, who holds degrees in biology and environmental studies, said on Monday.
"We show the kids how things work and, more importantly, that they themselves can make things work," she said. "It's important to develop their skills, their creativity, their abilities. They're very excited, and they come back again and again."
The center's programs juxtapose lectures and quizzes with research activities and trips to the countryside around St. Petersburg. Through a digital camera connected to a microscope, they can discover the variety of microorganisms living in local waters. Another task focuses on how local fauna suffers from polluted water, while the extensive list of skills the children can learn ranges from fixing a broken tap to cleaning water hit by oil spills or other pollution.
Saving Water Together also teaches the children to measure and reduce the amount of water they use at home every day. The kids are supposed to show the progress they make in saving water, and those who save the most water win a prize.
At the center on Monday, 12-year-old Yulia said she most enjoyed the lessons about sea and river flora and fauna as well as the practical tasks, when she gets to see the results of her research.
"One of the most interesting [exercises] is to determine the levels of pollution in the water," she said. "We measure those levels through estimating the concentration of microorganisms, chemical elements and so on."
Yulia did her testing in a small river near Tosno, in the southeast outskirts of St. Petersburg
"I chose that river because I had heard that water is very dirty there," she said. "What I found was that the water derives from a swamp and contains a lot of iodine, which explains its dark color."
Another student, Boris, 14, said his favorite lessons involve cleaning up oil-polluted water.
"Although we do it in the classroom, everything is real," he said. "The oil is real, and the devices we use - cords, ropes, pipettes - are miniature versions of those used in real life."
Vodokanal has long been fiercely criticized by local environmental groups for not punishing companies which illegally discharge pollutants into local waters, and for not making enough effort to build more water-treatment facilities.
"We would observe those ugly oily spots in the Neva River for weeks, and Vodokanal would do nothing," Dmitry Artamonov of the local office of environmental pressure group Greenpeace said in a recent interview.
"Ordinary people don't seem to have a proper idea of how polluted the Neva is - they swim and fish there carelessly in dirty water, just meters from discharge sites," he said. "Our efforts are not enough to such a big city to raise public awareness and concern to the necessary level."
Koriakova, the director of the Children's Environmental Center, said that the center's specialists emphasize Vodokanal's efforts in this area.
"We explain that Vodokanal uses new water-treatment technology, we can arrange a trip to the water-treatment station and show how they produce high-quality water there," she said.
Danilova, the center's senior specialist, said one of the most popular lessons among the children involves cleaning up polluted water, for which water samples are taken directly from the Neva and the technology employed is like that used at the St. Petersburg's Southwest Water-Treatment Plant.
"We need to show them how much time and effort it takes to purify the water, so the basic technological chain is exactly the same," Danilova said.
The students first let the water settle, then run it through a mesh filter to remove larger fragments and admixtures. After that, they treat the water with coagulants, which help to stick smaller pieces together, before running the water through another, finer mesh filter. The final stage is to reduce the water's acidity level, using chemical agents.
"The Neva water has very high levels of acidity, which makes it tasty, but also very bad for the teeth, so we have to reduce it," Danilova said. "Of course, the water is still not drinkable but, when the students do all this, they have a better idea of what a complicated, multi-stage process it is to make the water clean."
TITLE: Faberge Descendent Presents Latest Egg to City
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Representatives of Theo Faberge, grandson of legendary Russian jeweler Carl Faberge, on Monday presented St. Petersburg with a Faberge Easter egg made specially by the 80-year-old jeweler for the city's 300th anniversary.
"My Easter egg is dedicated to the jubilee of your city, which my family has numerous connections with," Theo Faberge, who could not make the trip from the United Kingdom to Monday's ceremony for health reasons, wrote in a letter addressed to city residents.
The jubilee egg comprises a crystal body covered with hand-done engravings of nine palaces in St. Petersburg and its suburbs, and each palace includes an engraving of a tsar or tsarina. The Grand Palace at Peterhof, for example, is accompanied by an image of Peter the Great, the city's founder, while the profile of Nicholas II, who was deposed by the revolutions of 1917, is placed under the image of his last residence, the Winter Palace.
The egg is topped with a three-headed gold eagle, while the base is made of rare serpentico fantastico marble, gold and silver.
According to Philip Birkinstein, chairperson of the St. Petersburg Collection foundation, which owns all of Theo Faberge's St. Petersburg-themed works, it took the jeweler two years to complete the new egg.
"Theo spent thousands of hours to make all those engravings," Birkinstein said, adding that the egg has a market value of $35,000.
Theo Faberge began work on St. Petersburg-themed eggs in 1985, dedicating them to various places in the city where the eggs are housed upon completion. The new egg will be housed in the Grand Palace at Peterhof.
Theo Faberge is the only living grandson of Carl Faberge, official jeweler to the Russian court in the late 19th century.
The Faberge jewelery firm, of which Carl was the best-known representative, was founded in the middle of the 19th century and produced items ranging from watches to binoculars to cigar cases - and, of course, the famous eggs.
The firm was famous for its unique techniques, beautiful stylings and the unusual ideas executed in every item, and produced works in a range of styles from rococo to classial. The items were usually fabulously richly decorated with all kinds of precious stones, and often featured secret mechanisms.
Birkinstein, of the St. Petersburg Collection, said that, while Theo Faberge followed the traditions of his dynasty, he never copies the works of his ancestors.
Traditionally, Faberge eggs contain secrets or surprises hidden inside. The new egg includes a miniature replica of the Bronze Horseman, the monument to Peter the Great on Ploshchad Dekabristov that is one of St. Petersburg's most recognizable symbols.
Alexander Prokhorenko, head of the City Administration's External Affairs Committee, said the city was proud of its long links to the Faberge family.
"Something that once started as an applied art has turned into high art," Prokhorenko said.
TITLE: IN BRIEF
TEXT: One Less Candidate
ST. PETERSBURG (SPT) - Alexander Gabitov, one of the candidates for the vacant post of governor of St. Petersburg, withdrew his candidacy without waiting for the ruling of the city's Electoral Commission on his registration, Interfax reported on Saturday.
Dmitri Krasnyansky, the deputy chairperson of the Electoral Commission, told Interfax that the committee meeting that would have ruled on Gabitov's candidacy was to have met on Saturday.
Gabitov was the first to hand in his signatures of support. However, upon a verification of the signatures, it was determined that some of them seemed unreliable.
Krasnyansky claimed that the number of unreliable signatures signatures could have been sufficient grounds to remove Gabitov from the race.
The vote, called after former incumbent Vladimir Yakovlev was appointed as deputy prime minister in charge of communal-services reform on June 16, will be held on Sept. 21.
Regional Prosecutor
ST. PETERSBURG (SPT) - Sergei Romanyuk officially took up his job as Northwest District Prosecutor on Monday, Interfax reported.
Romanyuk's assignment was approved by federal General Prosecutor Vladimir Ustinov on June 30.
Since January 2002, Romanyuk has worked as a regional prosecutor in charge of regional corrective facilities.
Insert Hot Finns Joke
HEINOLA, Finland (AP) - Braving heat of over 100 degrees Celsius, a dozen men and women sweated in wooden cubicles Saturday as long as they could stand it, aiming to grab the Sauna World Championship title in southern Finland.
With a time of 13 minutes, Belarus' Natalia Trifanova won the Sauna Queen title under the watch of doctors and judges, beating out local favorite Annikki Peltonen.
"I'm pink but happy," beamed Trifanova, 36, a music teacher from Minsk, displaying blotchy red neck and arms. "I got a lot of satisfaction sitting in there today. It's an extreme sport for me."
The men's winner, Timo Kaukonen, a Finn from nearby Lahti, lasted 16:15. He beat three-time champion Leo Pusa from the capital, Helsinki, by 0:07.
New Azerbaijan PM
BAKU, Azerbaijan (AP) - Azerbaijan's parliament on Monday confirmed ailing President Heidar Aliyev's son as prime minister, which could ultimately catapult the younger Aliyev to the presidency.
Ilham Aliyev received the support of 101 of parliament's 124 members. One lawmaker abstained, and the opposition boycotted the session. Heidar Aliyev, who has a history of heart problems, has been in a Turkish military hospital since July 8 and has not appeared in public during that time. The 80-year-old leader is running for re-election in October, but many observers believe he is laying ground to transfer power to Ilham Aliev, who is also registered as a candidate.
According to constitutional amendments passed last year, the prime minister becomes acting president in the event that the president is incapacitated or resigns.
Ilham Aliyev, 41, heads the national Olympic committee and is deputy chairman of his father's party, Yeni Azerbaijan (New Azerbaijan).
Heidar Aliev, a former KGB official and Soviet-era leader of Azerbaijan, took the helm of independent Azerbaijan in 1993. He is credited with bringing stability to the country, which was plagued by a separatist war and bitter infighting in the government.
TITLE: Sibneft Targets Gasoline Sector
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Sibneft, Russia's sixth largest oil producer, has opened a subsidiary in St. Petersburg, the company announced at the end of last week. While the company says that the goal of the local subsidiary will be to grab a significant share of the city's retail-gasoline market, energy-sector analysts believe that Sibneft is also planning to use its refinery capacity to take a bigger chunk of the local wholesale petroleum-products sector.
"We want to develop an extensive chain of gasoline stations in the region," Sibneft spokesperson Alexei Firsov said in a telephone interview on Monday.
Firsov added that Sibneft has yet to decide whether to build its own chain of filling stations in St. Petersburg or to acquire an existing chain. He did say that the subsidiary will come under the new corporate entity that will be generated by the merger of Sibneft and Yukos, presently Russia's second largest oil firm. The new company will move past LUKoil and into the No. 1 spot and become the world's sixth-largest publicly traded oil-and-gas producer. Crude-oil production for the company created by the merger will be 2.3 million barrels per day, more than a quarter of total Russian production.
Sibneft first announced its plans to launch itself onto the St. Petersburg market last year, when the company said that it was hoping to garner a 20-percent share of retail gasoline sales. At the time it was rumored that Sibneft was due to acquire Phaeton, a St. Petersburg company operating 36 gasoline stations. While the deal apparently fell through at the time, industry sources say that Phaeton is still on the selling block.
Slavneft, half of which was acquired by each of Sibneft and TNK earlier this year and currently holds a 9-percent share of the local retail market by virtue of the 20 stations it operates here, had also been rumored as a suitor for the Phaeton chain. The fact that it's operations already give Sibneft a foothold in the retail sector leads some analysts to suggest that the company has other goals in mind in opening the new subsidiary.
"Sibneft is already present on the local retail-gasoline market by means of Slavneft, so it seems that the newcomer is more likely to develop wholesale gasoline sales," Oleg Ashikhmin, the head of St. Petersburg Gasoline Club, said in a telephone interview on Friday.
A source within one of the other major gasoline retailers in St. Petersburg, who spoke on condition of anonymity, said that Sibneft was looking to develop a distribution network for a range of petroleum products produced at its refinery in Yaroslavl, about eighty kilometers east of Moscow.
Yukos already has a subsidiary, Yukos-M, operating a chain of gas stations in the Leningrad Oblast.
The retail-gasoline sector in St. Petersburg has seen a shift to fewer, bigger operators in recent years. According to the AU92 research company, between 1999 and 2002, the number of gasoline stations in the city jumped by 45 percent, while the number of retail companies involve dropped by fifty percent.
The leading gasoline retailers are PTK, with 69 stations and 28 percent of sales, Phaeton, with 36 stations and a 14-percent market share, Neste-St. Petersburg which operates 25 stations and holds a 9-percent share, and LUKoil St. Petersburg Service with an 11-percent stake in the market garnered by its 25 stations.
Experts say that gasoline prices in St. Petersburg have risen at an annual rate of 4.33 percent since the beginning of 2003, with the average price for a liter of gasoline being about 11 rubles ($0.36).
TITLE: Large Farming Idea Hurts Little Farmers' Big Dreams
AUTHOR: By Yevgenia Borisova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Deep in breadbasket territory, a debate is raging over how big farms should be, illustrating just how deeply the agriculture sector is rooted to its Soviet past - and just how conflicted those ties are.
A preference for large collective farms that feed the masses, instilled over seven decades of socialism, still runs deep. Colliding with that is a growing desire among individual farmers to have a piece of land they can call their own.
The Stavropol region, for example, earlier this month passed legislation that makes it almost impossible for farmers to take the small patch of the collective farm, or kolkhoz, that was signed over to them a decade ago and register it as their own small, private farm.
The rich-soil region nestled between the Black and Caspian Seas now requires private farms to be of 300 hectares or larger.
Back when the country's kolkhozes were transformed from state enterprises into joint-stock companies in the early 1990s, farm workers were granted a share of land that was only a fraction of the land they worked, much as the urban population was given privatization vouchers.
The sizes of the plots varied with the region and the kolkhoz, but in Stavropol individuals were given 10 hectares on averge.
This means that, to register a private farm, an enterprising farmer looking to strike out on his own must go into business with 29 friends who agree to pool their plots - a Herculean task - or obtain rights to the 290 hectares another way, either through buying or leasing from the land's private owner. This, too, is no mean feat since the plots are not staked out within the kolkhoz.
Under federal laws governing joint-stock companies, a meeting of 20 percent of land shareholders - often meaning several thousand people - must agree on how the land will be divvied up and which concrete plots will be handed over to those who wish to leave the kolkhoz.
The turnover law last year lowered the quorum level. Previously, all landowners were required to be present, an unrealistic demand because, over the decade, many of the owners have either died or moved away.
But it is still a challenge to obtain land that is both farmable and contiguous with the main plot, which would allow for the cost-effective use of tractors and big machinery.
"It is practically impossible to single out so many land plots from collective farms," said Viktor Pylenok, the head of the Farmers' Association in the Petrovsky district of Stavropol.
Everyone wants their name on the choicest pieces of land, and no one wants the swampy, hilly or forest sections. The kolkhoz, with its own business interests at heart, has no incentive to give up anything but the most undesirable scraps of its territory.
"Management of the farms will cling to its land to the death, offering those who said they are leaving the worst land plots," Pylenok said.
Yury Tkachenko has a farm in Krasnodar that operates on 350 hectares of land, 153 hectares of which he rents from the local municipality.
"To add private land to the farm, I have to talk other people into singling out their plots from the collective farm and renting them to me," Tkachenko said. All the while, he said, the collective farms work against him by lobbying people not to rent.
And it is even harder if you start from scratch.
"If you want to start up a farm, you can collect, say, 80 people. But at the last minute, five split off and you have to start all over again," he said.
Only if the kolkhoz is insolvent or bankrupt will farm workers be able to get their plots, Pylenok said. Some 3,378 collective farms throughout Russia have been declared bankrupt, Vremya Novostei reported last Tuesday. Relative to the total number, though, this figure is but a small slice.
Observers said that the Stavropol law came about due to the lobbying efforts of inefficient kolkhozes worried that their survival was threatened by the potential exodus of independent-minded farmhands.
"I believe that such legislation is wrong. It has been made in favor of big holding companies and collective farms," said Vladimir Bashmachnikov, the head of the Russian Farmers' Association in Moscow.
Vladimir Vinogradov, an assistant to the head of the Stavropol legislative assembly's land-use commission, however, said individual farmers have more than themselves to think about.
"We cannot encourage people to leave collective farms with their small land plots and just feed themselves," he said. "We must think of feeding the country. And only big farms can buy big machinery and are economical enough."
Stavropol is not the only region to pass such legislation; it is merely the most recent. In neighboring Krasnodar a similar law has been in place since January. Since then not one new farm has been registered and seeing this, the regional assembly lowered the bar to 200 hectares.
Zarema Kadochnikova, the deputy head of Krasnodar's land cadastre chamber, said that only once, about a month ago, a group of farm workers walked into her office with documents hoping to register the fertile sections of their kolkhoz as their own farm.
"We cannot accept such documents," Kadochnikova said. "[The kolkhoz shareholders] must agree at a meeting which bits they are eligible for." The group has not come back, she said.
Both the Stavropol and Krasnodar laws contradict not only the Civil Code, which gives citizens the right to own land, "but the very definition of entrepreneurship," Bashmachnikov said.
Pylenok of the Petrovsky district farmers' union agreed that the new legislation effectively blocks the creation of new private farms.
And there aren't many to start with. Privately owned farms account for only 11 percent of Stavropol's 5.4 million hectares of farmland.
On the federal level, the law on agricultural land turnover, passed last summer - and separate from the Land Code passed in the fall of 2001 - gives citizens the right to buy and sell farmland, though the time frame, plot size and a few other details were left up to regional authorities to decide.
Through the law, Moscow gave regional parliaments the right to set a minimum farm size but exempted all private gardens, orchards and vineyards, as well as vegetable, poultry, fish, seed, flower and bee farms. The law essentially concerns grain farms.
Apart from Stavropol and Krasnodar, the other 11 regions in the Southern Federal District, Russia's most bountiful, have yet to pass their own farmland legislation. The Agriculture Ministry said this week that only about 10 of Russia's 89 regions have done so.
The Saratov region, with its relatively progressive regional administration, was one of the first to pass a farmland law. There, legislators set 5 hectares as the minimum size for a private farm. Draft legislation in Tatarstan proposes no minimum limit.
Before the law went into effect, 15,000 private farms had been registered in Stavropol, averaging 40 hectares each, Pylenok said, expressing a concern that the law might be applied retroactively to these existing farms.
"We are in Russia, where everything is possible and a lot depends on local bureaucrats," he said, adding that hundreds of farms that do not clear that minimum bar could face closure. "Each farm now feeds five people on average. I fear that thousands of people will be left without means of existence."
Vinogradov of the Stavropol legislative assembly said that there had been talk of setting the minimum farm size even higher than 300 hectares before final consensus was reached.
"We were discussing even 500 hectares as a minimal size, but decided to leave 300 hectares," he said, arguing that such a size was necessary in order "to save big agriculture businesses."
But that does not mean the legislature opposes an entrepreneurial spirit among the region's farmers, he said.
"Just the opposite: We encourage the creation of a new type of cooperatives, on a new basis," Vinogradov said, suggesting that farm workers "unite on a good economic basis" or voluntarily rent out their land plots "to a good farmer or investor."
Viktor Burmakin, who was a consultant to the Krasnodar legislative assembly as it drafted its law, said that agricultural scholars in his region had insisted that 300 hectares is an optimal farm size, because it allows for proper crop rotation.
"If farmers want to grow sunflowers, they can grow them in the same field only once every seven years," he said. "In the other years they must grow other crops so that they don't destroy the land."
At the national farmers' group, Bashmachnikov argued that grain farmers can run a successful operation with as few as 100 hectares of land.
Tkachenko, the farmer in Krasnodar, said farmers confront the same problem they faced when there was no legal foundation even now, after both federal and regional farmland legislation has gone into effect - the problem of obtaining the actual land. Getting land is difficult, he said, even if you propose to lease - not buy - it from the people whose land is trapped within the kolkhoz.
"Once it is impossible to get land, what use is it to debate whether it is 100, 200 or 300 hectares?" he asks.
The process of lobbying the kolkhoz, together with the paperwork, can take a year or more, he said. As a result, he has yet to extract his parcel of land from his old kolkhoz. Blizhneye was cobbled together from separate plots.
While not an advocate of the time lags within officialdom, Tkachenko did admit that 300 hectares is a sort of magic number - only when he expanded his own farm beyond 300 hectares did it become profitable.
"Why create all this fuss?" Tkachenko asked, puzzled at all the talk of minimums and optimums.
"I have been in the United States. There they allow people to take as much land as they want."
TITLE: Yakovlev: Railways Ministry's Days Numbered
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - By the end of 2003, for the first time in 138 years, Russia will no longer have a Railways Ministry, Deputy Prime Minister Vladimir Yakovlev said Sunday.
"In principle this issue has been already resolved," news agencies quoted Yakovlev as saying on national Railway Worker's Day.
He said that the ministry's regulatory functions will be absorbed by the Transportation Ministry after the new Russian Railroads Co., which will take over its commercial operations, is up and running.
In June, President Vladimir Putin appointed Yakovlev, who was then governor of St. Petersburg, as the sixth deputy prime minister, tasking him with overseeing construction, transportation and the overhaul of the troubled housing sector.
The reform of the Railways Ministry, one of the so-called natural monopolies, involves splitting up the ministry's regulatory and commercial operations to foster competition in the industry, with the government retaining direct control of the former.
"Sometime in September the Cabinet will have a hearing and in October the Russian Railways Co. will most likely [begin operating]," Yakovlev said. "The second part of the Railways Ministry will most likely be transformed into a department of the Transportation Ministry, just like the waterways department and the sea department."
Yakovlev's remarks surprised officials at both ministries.
"It is obvious that the Railways Ministry and the Transportation Ministry will eventually merge. However, I have never heard about the exact terms and timing of the merger," Transportation Ministry spokesperson Alexander Filimonov said by telephone. "The railroads are such an important part of Russia that any haste regarding this issue might be harmful."
TITLE: Oil Exports Remain Near Record Levels
PUBLISHER: Combined Reports
TEXT: MOSCOW - The country's pipeline oil exports fell slightly in July but still stood near last month's all-time high while oil output hit another post-Soviet peak, Energy Ministry data showed Monday.
July oil exports via the state pipeline monopoly Transneft fell by 50,000 barrels per day compared with June to 3.48 million bpd. Oil output rose to 8.50 million bpd from 8.38 million bpd in June.
Traders said that export capacity, the second largest in the world after Saudi Arabia, had reached a peak and would stay at these levels until the end of the year.
"I can't see another significant boost before Transneft upgrades Primorsk [on the Gulf of Finland] by another 240,000 bpd by the end of 2003," said a Moscow-based trader with a Western major.
The country is heavily dependent on oil export revenues and its private oil majors have boosted investments in oil production over the last five years due to high oil prices.
Oil output rose by 11 percent in July compared to the same month last year while exports rose by 13 percent year-on-year. Domestic oil production has risen by nearly 50 percent over the last five years.
Transneft exported a total of 12.98 million metric tons (3.07 million bpd) of Russian crude in July and another 1.75 million tons (415,000 bpd) of transit crude, mainly from Kazakhstan and Azerbaijan.
Transneft carries more than three quarters of total oil exports. Traders estimate volumes leaving the country by rail and small ports and thus bypassing Transneft at 600,000 bpd and put real volumes of crude oil exported from and via Russia by all means and routes at above 4 million bpd.
(Reuters, Bloomberg)
TITLE: Russia Is Cut Out for an Economic Miracle
AUTHOR: By Andrei Illarionov
TEXT: In his state of the nation address to the Federal Assembly, President Vladimir Putin set the target of doubling GDP over the next 10 years. In order to achieve this objective, average GDP growth must be no less than 7.2 percent per year.
This is an entirely realistic goal, as is corroborated, first, by the experience of those 68 countries that in the past half-century have managed to double their GDP over a 10-year period and, second, by Russia's actual GDP growth between 1999 and 2003, which averaged 6.2 percent per annum.
Growth in the first half of this year, as compared to the same period of last year, also looks rather encouraging. The numbers are as follows: GDP growth of 7.2 percent; significant growth in industrial output; double-digit growth in investment and the export and import of goods; and growth of household incomes by more than 14 percent in real terms. Russia is currently experiencing an economic boom.
However, even such an invigoration of the economy should not give grounds for complacency, as Russia's real place in the world is far from what it is sometimes made out to be.
Comparing the basic indicators for Russia - territory, population, GDP - with those of the United States and China, one can see that it is only in the size of territory that Russia outstrips those countries. In terms of population, Russia is half the size of the United States and one ninth the size of China; in terms of GDP (adjusting for purchasing-power parity) Russia is approximately one ninth the size of the United States and 17 percent of China.
There are two main groups of factors affecting economic growth. One is "luck," or the factor of favorable external economic conditions; the other concerns government policy.
The "luck factor" in essence revolves around the national terms of trade, i.e., the relative price of goods that the country exports and imports. Money received as a result of movements in the price of these goods constitutes a "grant" from the world economy. For example, when a Russian exporter sells a ton of oil and gets $240 for it instead of the $80 he was receiving, ceteris paribus, he can purchase three times more goods by physical volume. If, in addition, the price of imported goods falls, then the "grant" from the world economy increases and the exporter can purchase even more goods and services.
Over the past four years, Russia has been receiving a sum equal to 9 percent to 13 percent of GDP each year from the world economy. Part of that sum - a pure grant of 6 percent to 9 percent of GDP - automatically increased the size of GDP. Thus, economic growth in Russia in recent years has been closely tied to external factors.
Growth is possible only when the national economy is competitive. The main impediment to competitiveness is the high costs of doing business in Russia, which are primarily a result of the size of the nonmarket sector (the government sector, monopoly sector, government regulation, as well as the level of the real exchange rate).
I will focus on one element - the government sector's share in the Russian economy.
Over the past 40 years, OECD member countries' experience has demonstrated that there is a negative correlation between the size of the government sector (measured in terms of government expenditure as a share of GDP) and economic growth rates. In other words, the larger the government sector, as a rule, the slower economic growth.
This holds not only for highly developed countries but also for transition economies. When the share of government spending in transition countries exceeds 40 percent of GDP, as a rule, economic recession ensues.
China's experience over the past quarter of a century provides a particularly graphic example of this. China achieved its highest growth rates in the mid-1990s, when government expenditure as a share of GDP was minimal - approximately 14 percent (in 1979, it was 36 percent). In recent years, however, with the government share in GDP increasing, growth has slowed somewhat, although it remains extremely impressive.
In what areas did China reduce spending as a share of GDP? Reductions were made almost across the board, but in particular on subsidies to the economy, on social security and consumer subsidies; even spending on education and culture was reduced. And defense expenditures were substantially reduced, from 5.5 percent in 1979 to 1.1 percent in 1995. In fact, the essence of China's economic success has been its acceleration of economic growth by reducing the share of government expenditures in GDP. However, in the past six or seven years, there has been a rapid increase in government spending as a share of GDP up to 22 percent, though it is still far lower than it was in 1979.
In 1992-1994, when Russian government expenditure was at its peak, at about 50 percent of GDP, there was no growth; in fact, the average annual growth rate was negative, at minus 12 percent per year. In 1995-1998, the government's share of GDP was reduced to 41 percent, and economic recession became milder, at minus 3 percent per annum.
The best results of the past 12 years were achieved in 1999-2001, when the share of government expenditures in GDP was reduced to 33 percent and economic growth was more than 7 percent per year. Finally, in 2002, with government spending rising to 37 percent of GDP, economic growth fell to 4.3 percent.
What would be the optimal level for government expenditures? In order to ensure sustained growth of 8 percent per annum, we need to reduce government spending as a share of GDP to between 20 percent and 22 percent.
There are three possible scenarios for economic policy in the medium term:
1) Increasing government spending to 40 percent of GDP (this seems to be the option favored by left-wing economist Sergei Glazyev).
2) Reducing the share of government expenditure in GDP to 30 percent, as was reluctantly suggested by the Center for Strategic Research in the spring of 2000.
3) Reducing the share of government spending in GDP to 20 percent, as proposed by the Institute of Economic Analysis and by me.
One can make forecasts regarding average annual GDP growth based on these scenarios, irrespective of the terms of trade index. Under the first scenario, the trend growth rate is going to be minus 0.4 percent per year; under the second, 3.8 percent per year; and, under the third scenario, up to 8 percent per year.
Looking ahead to 2015, under the first scenario, per capita GDP could grow by 5 percent; under the second scenario, by 72 percent, and under the third scenario, it could increase by a factor of 2.8.
The most striking fact in this comparison is that the most significant increase in per capita government expenditure would also be achieved under the last scenario, not under the first.
In other words, one can say that not only the optimal policy but also the most "statist" policy (i.e. that leads to an increase of real government expenditure) is that of gradually decreasing the share of government expenditure in GDP. This will ensure the highest per capita GDP and the highest level of government spending per capita in the medium-term.
Reducing the share of government spending to 20 percent of GDP could be a condition for ensuring high economic-growth rates in the medium term, the first step toward doubling the country's GDP in the coming years, and a necessary, though insufficient, basis for bringing about an economic miracle in Russia.
Andrei Illarionov is the economic adviser to President Vladimir Putin. He contributed this comment to The St. Petersburg Times.
TITLE: Setting a Poor, Market-Driven Example
TEXT: A Pentagon-sponsored project made news headlines last week. It was called FutureMAP and aimed to create a market to trade futures on some fundamentals of Middle Eastern politics, including coups and terrorist acts. The Pentagon was expected to formulate the subjects for the futures, while the Economist Intelligence Unit was to provide the country analysis. The market was open to government bodies and private traders, with winners and losers being determined by their ability to predict political developments. The pilot stage of the project was to be funded by $8 million of taxpayers' money.
Like many, my first reaction to the story was that it had to be a joke. It was to absurd to be real. But it was a serious project developed by serious people.
The organization behind the idea turned out to be DAPRA - a multi-million-dollar research branch of the Pentagon. Apparently, the U.S. government thought that trading on human lives and the fates of the countries is a business like any other.
I wasn't the only one shocked as, a few days later, came the news that the project had been canceled and its supervisor was retiring.
The name of the director was another surprise for me: retired Admiral John Poindexter - the onetime national-security adviser to Ronald Reagan, who was convicted for his involvement in the Iran-Contra scandal.
While I'm happy that the idea was squashed, I can't say that I'm totally relieved. The idea itself was insane and the person who suggested it was probably a little bit crazy, but what about all other people who in due course authorized and sponsored the whole thing? It took a public-opinion firestorm to kill the misadventure.
Journalists tried in vain to get answers from Pentagon officials. Deputy Secretary of Defense Paul Wolfowitz said that he, himself, had only learned about the project from newspapers. That type of statement sounds suspiciously like what Soviet bosses used to say in a similar situations. This is a scary kind of funny. When a system authorizes a crazy idea, there must be something wrong with that system.
This is borne out by the fact that it is not an isolated incident. Earlier in July, the U.S. Congress cut off funding for another innovative project - the Total Information Awareness program. That idea of total electronic control was regarded as Orwellian and in clear conflict with constitutional guarantees of privacy.
Something dangerous is obviously happening in the administration of President George W. Bush. Its obsession with technology is inspiring it to introduce new tools while ignoring any questions about legality or ethics. Combined with a quasi-religious belief in the value of market forces in all spheres of human life, this tendency becomes even more dangerous.
Nobody should question the generic link between business and politics. But betting on future oil prices, ticket sales or even election results are different matters than wagering on political stability or human casualties resulting from a terrorist attack. I understand that real politics is neither a clean nor a moral business, but certain lines have to be respected.
Some media sources report that FutureMAP was a technologically difficult project with prospective problems in avoiding the collapse or manipulation of the markets. The difficulties the United States has had in the last year in safeguarding financial markets against this type of manipulation bear this out.
The United States has long been accused of improper acts of intervention into the internal affairs of smaller countries, and the crusade it claims to be waging against global terrorism has led the government to act as if it now enjoys carte blanche to act more aggressively and openly and where it feels that it is necessary, to change political regimes through military intervention. How a political futures market on the Middle East could be immune from speculation under these conditions from is a rhetoric question. From the point of view of pure business logic, there is an built-in conflict of interests. There can be no fair play or trading on such a market. All the failed project could have achieved was to make terrorism and regime change emerge as legitimate markets like any other.
The worry is that, while Poindexter will retire, those who masterminded the idea will still be around. Those who initiated this risky project probably counted Poindexter as an essential part of their exit strategy if the things went wrong. He has experience in the role of the fall guy.
Orwell's gloomy dystopia "1984" considered the future of totalitarian governance and, in many ways, predicted the end product in the Soviet Union. What he didn't write about was the possibility that distortions of this magnitude could also come from what is portrayed - economically, politically and ideologically - as the opposing position.
It is also unfortunate that, at the same time that Russia is trying to navigate its way through a dramatic transition, it is next to impossible to find an appropriate positive example to follow. The Soviet past brought the country to national catastrophe, while the present in an advanced Western democracy appears to be immoral and humanly degrading.
Igor Leshukov is the director of the Institute of International Affairs, a St. Petersburg-based think tank.
TITLE: Share in the Credit, Share in the Blame
AUTHOR: By Marshall I. Goldman
TEXT: Give Anders Åslund credit - he has no shame. After all the misleading advice he offered before the Aug. 17, 1998 crash ("How Russia Became a Market Economy"), he apparently has no hesitation in urging Western investors again to plunge into the Russian market.
More than that, in an article for The St. Petersburg Times on July 22, he seems blind to the fact that as an adviser to some of the Russian reformers, he bears some responsibility for the flawed nature of the reforms and the current chaos. That 17 oligarchs should emerge as dollar billionaires simply because they managed to gain control of already existing state property while at the same time, one-quarter of the population has fallen below the poverty line does not seem to concern him. There are no Russian self-made Bill Gates adding value to what they do among the present 17. No wonder more than 70 percent of those polled in Russia are critical of the oligarchs and the privatization process. After the lamentable voucher and subsequent loans-for-shares programs, the owners of these privatized enterprises lack legitimacy.
Now because the foundation was poorly constructed, it is inevitable that there will be periodic cracks in the privatization edifice. Nor can we entirely rule out that some day there will be a crash. Sure, Russia is rich in resources, but that does not necessarily mean that future investors can be sure that future governments will accept the status quo and present ownership arrangements and refrain from efforts to reclaim ownership or institute new rents or taxes. This a condition fraught with uncertainty that investors, not only now but in the years to come, ignore at their peril.
I agree with Anders when he criticizes President Vladimir Putin (even though as recently as two months ago he praised him) and the Viktor Ivanov and Igor Sechin team (Putin's advisers and former KGB colleagues). Their behavior in this affair hardly differs from the way the KGB operated in the Soviet era. But to call a three-year statute of limitation on claims against privatization a "sensible suggestion." as Anders does, ignores the terrible way the reforms were implemented and the just anger the public has toward what they see as massive theft.
Perhaps the most unfortunate part of this sorry episode is that now that the damage has been done, there seem to be few remedies available except to undo the whole experiment and, of course, that would be just as disruptive. If he were more self-critical, Anders would have to acknowledge that having taken credit for helping with the reforms, he must now share the blame not only for the current but for future messes.
Marshall I. Goldman is the associate director of the Davis Center for Russian and Eurasian Studies, Harvard University. He contributed this comment to The St. Petersburg Times.
TITLE: Oblast Investors Get More Concessions
AUTHOR: By Ruslan Vasutin and Zhanna Vlasova
TEXT: For years, the Northwest Region (particularly the Leningrad and Novgorod oblasts) has been the established leader in the enactment of progressive regional tax concessions, with a disproportionately high level of investment being attracted. But, since the adoption of Chapter II of the Tax Code in 2002, which generally limits the regions' authority to grant new tax concessions, the concession front has been rather quiet.
The Leningrad Oblast broke this silence with the recent enactment of new concession legislation, which will likely come into effect on Jan. 1, 2004. The new law reasserts the Leningrad Oblast's readiness to provide incentives to draw new investors to the region, as well as to allow existing investors to expand their current production facilities.
Once again, favorable tax treatment is being extended to qualifying investment projects for the duration of a "payback" period, plus another two years in certain cases. Determining the payback remains the same: When net, after tax profit plus accumulated depreciation equals the initial investment.
The law provides investors with a 4-percent reduction in the regional portion of profit taxes, the maximum allowed under the Tax Code, making the potential overall profit-tax rate 20 percent when the federal and local portions are included. Qualifying investors also enjoy an exemption from the 2-percent property tax during the actual payback period (but not exceeding the forecast payback period). These concessions are generally extended for two years beyond the actual payback period for investments exceeding $1 million.
The law contains a potential further concession available in the form of a "subvention" system for portions of regional profit-tax not eligible for direct exemption. This is essentially a refund from the Leningrad Oblast budget of previously paid taxes, which arguably circumvents the Tax Code limitation on direct tax exemptions.
Subventions will be granted for the actual payback period (but not exceeding the forecasted payback period) for the full regional profit-tax liability. For two years after the payback, subventions are granted for 33 percent of the regional liability for investments of $10 million to $50 million, rising to 100 percent for those exceeding $50 million.
The potential sticking point on subvention rebates, however, is that they may only be disbursed if the funds are specifically provided for in the annual Leningrad Oblast budget. The law is not clear whether the subvention budget will be a lump sum amount, available on a first-come-first-served basis, or whether specific funds must be earmarked for each qualifying company.
The law further contains a "grandfather" provision, whereby any newly enacted Leningrad Oblast legislation that is detrimental to a taxpayer who is covered by a pre-existing investment agreement will not apply.
While the recent legislation is good news, as always, there remain further vital questions. One example stems from the July 2003 changes in Federal Law 117-FZ, which amended the Tax Code to reduce the amount of profit tax payable to the federal budget from 6 to 5 percent, effective Jan. 1, 2004, while correspondingly increasing the regional budget share from 16 to 17 percent. Presumably, this means that Leningrad Oblast authorities may grant concessions reducing the regional rate to 13 percent, but not to the 12 percent stipulated in the Oblast concession law, since any further concessions would contradict the Tax Code.
Also unclear is whether charter capital "in-kind" contributions, used by many investors to exempt customs duties and VAT on imported production assets used in constructing facilities, will qualify as "investment expenses" under the definition in the new Oblast law. We believe that they should, but the language needs to be refined to eliminate doubt.
Investors should consider all of these unresolved questions with regard to the new legislation, and address them properly in both their internal financial plans as well as in negotiating any investment agreements with oblast officials in order to avoid unpleasant surprises later on.
Ruslan Vasutin is a senior manager and Zhanna Vlasova a tax consultant with Ernst & Young St. Petersburg. Vasutin is also the chairperson of the Tax Committee of the American Chamber of Commerce in St. Petersburg. They submitted this comment to The St. Petersburg Times.
TITLE: Powell May Resign if Bush Wins
PUBLISHER: The Associated Press
TEXT: WASHINGTON - U.S. Secretary of State Colin Powell and his top deputy have told the White House they will not serve a second term if President George W. Bush is re-elected, The Washington Post reported.
Citing "sources familiar with the conversation," the paper said in a story for Monday's editions that Powell deputy Richard L. Armitage recently told National Security Adviser Condoleezza Rice that he and Powell will leave on Jan. 21, 2005, the day after the next presidential inauguration.
The Post said Powell has indicated to associates that a promise to his wife, rather than any policy disagreements with others in the administration, is a key factor in his intention to serve only one term.
That would follow the pattern of recent administrations. Only George Shultz under President Ronald Reagan has served more than one term in recent decades. He took office midway through Reagan's first term and then stayed on for the second.
Powell was widely touted as a potential Republican presidential candidate after retiring from the Army as chief of staff during former President Bill Clinton's administration, but announced he would not run even as polls indicated he had overwhelming popularity with American voters.
Powell, who turned 66 in April, has consistently declined to respond to speculation about how long he planned to head the State Department, but has made clear that he has many interests beyond government service, specifically a commitment to improving education opportunities for black Americans.
"I serve at the pleasure of the president," he said last month. "That's the only answer I've ever given to that question, no matter what form it comes in."
TITLE: Hussein, Bin Laden Differ in Hiding
AUTHOR: By Paul Haven
PUBLISHER: The Associated Press
TEXT: ISLAMABAD, Pakistan - The American administration's public enemies No. 1 and 2 - Saddam Hussein and Osama bin Laden - have taken a night-and-day approach to life on the lam.
The ousted Iraqi dictator has kept up a near-weekly verbal barrage, issuing taped warnings from hiding that have grown more frequent as the U.S. search for him expands. But messages from bin Laden, the elusive terrorist mastermind, have all but stopped.
Bin Laden, the mastermind of the Sept. 11 terrorist attacks, was last heard from on April 7, exhorting Muslims in a tape obtained by The Associated Press to rise up against Kuwait, Saudi Arabia and other governments he claimed were "agents of America."
The tape, which CIA analysts said appeared to be authentic, made a vague reference to the Iraq conflict, although it was not specific enough to determine whether it had been recorded before or after the war began on March 20.
Fresh television images of the bearded leader of the al-Qaida terrorist organization have not been seen for more than a year and a half, since just after U.S. troops ousted his Taliban hosts from power in Afghanistan in late 2001.
In contrast, Hussein has made at least a half dozen audio broadcasts since the Iraqi capital, Baghdad, fell to American troops on April 9. In the latest audiotape, aired Friday, the deposed Iraqi leader urges followers not to lose faith.
"One day the occupation army will falter ... victory is possible at any moment," the speaker said on the tape that the CIA said was most likely authentic.
Last Tuesday, the al-Arabiya television network played a tape in which Hussein said his sons, Odai and Qusai, died "for the sake of God, the nation, the people" when U.S. forces killed them in a shootout on July 22 in the northern Iraqi town of Mosul.
"Even if Saddam Hussein has 100 sons other than Odai and Qusai, Saddam Hussein would offer them the same path," said the voice identified as Hussein.
Another Hussein tape was aired by al-Arabiya on July 23. Yet another recording attributed to the former Iraqi president was purportedly made on July 14.
U.S. intelligence officials have said that all the recent recordings probably were authentic.
Talat Massood, a retired Pakistani general and security analyst, said bin Laden's relative silence is more ominous than promising.
"Saddam knows the game is up and everything he does now is an attempt to secure his place in history. He wants to go down as someone who stood up to the Americans and sacrificed his two sons for the cause of Iraqi freedom," said Massood.
"Bin Laden, on the other hand, thinks he is in it for the long haul. He's trying to stay alive to continue his mission," the analyst added.
Bin Laden's restraint has served him well. Shortly after the Sept. 11 attacks, U.S. President George W. Bush vowed to capture the Saudi millionaire "dead or alive."
But nearly two years later bin Laden is still out there, and his terrorist group, while tattered, has managed to allegedly carry out several devastating attacks - including the October 2002 bombing that killed 202 people in Bali, Indonesia, and the May 12 bombings in Saudi Arabia that killed 34 people, including eight Americans.
Intelligence officials believe bin Laden is hiding in a mountain region that straddles the Pakistan-Afghan border, protected by loyal followers and surrounded by ultra-conservative Pashtun tribesmen who are mistrustful of the United States. It is an immense and forbidding area, with countless caves and hidden passes - an ideal place to hide.
Hussein, meanwhile, is believed to be desperately hopping from house to house, perhaps sticking to a patch of Iraq known as the Sunni Triangle where he still has support - the same strategy that proved fatal to his sons.
U.S. forces are expanding their search, however. Military sources in Mosul said the Americans may be shifting the focus from his home region to a swath of northwestern Iraqi desert stretching to the Syrian border.
TITLE: Nigerian Peace Keeping Force Arrives in Liberia
AUTHOR: By Alexandra Zavis
PUBLISHER: The Associated Press
TEXT: MONROVIA, Liberia - The first West African forces arrived in Liberia on Monday, beginning an international mission to end 14 years of carnage and oversee departure of warlord-turned-president Charles Taylor.
The first helicopters took off at early morning from an airfield in neighboring Sierra Leone, each bearing 20 Nigerian soldiers in camouflage on the flight to Liberia. Authorities said a total of 192 men and 15,000 kilograms of equipment would deploy Monday.
Allan Doss, UN Secretary-General Kofi Annan's representative in Sierra Leone, saw off the first troops.
"I wish you God speed and well in this historic mission to Liberia," Doss said. "The people of Liberia have suffered a lot, for too long. They need your help."
In all, 675 Nigerian soldiers and 18 of their officers assembled on the airfield to take part in the first deployment.
West African leaders have promised a 3,250-strong force to quell fighting in Liberia, where two months of rebel sieges on the capital have killed more than 1,000 civilians outright and all but cut off the refugee-crowded city of more than 1.3 million from food and water.
The Nigerians are peeling off from a UN mission in Sierra Leone, where large-scale military intervention by Britain, neighboring Guinea and the United Nations helped end a vicious 10-year civil war.
A UN fixed-wing aircraft, borrowed from a separate UN peace mission in Congo, was flying in to Sierra Leone on Monday to speed up the Liberian deployment, force organizers said.
General Daniel Opande, commander of the U.N. force in Sierra Leone, spoke of "the very difficult task to try to bring Liberia back to normalcy."
"We shall follow what you have to do, and I am sure you will succeed," Opande said, drawing three cheers from the soldiers.
Soon after the first two helicopters took off, troops loaded the first equipment - rumbling an armored personnel carrier up to another aircraft.
Separate flights also were planned at another Sierra Leone airfield for equipment.
On Sunday, the leader of the peacekeeping force for Liberia sought to temper high expectations among the country's suffering people, saying the first troops would only secure the airport on the capital's outskirts.
"We are going in with as much troops as possible," Nigerian Brigadier General Festus Okonkwo, the force's commander, told reporters late Sunday. "We know that the situation is bad in and around Monrovia."
Two of three U.S. warships full of Marines arrived off the country's Atlantic Ocean coast, waiting to support the peacekeepers. It was unclear whether the U.S. Marines will ever go ashore.
Taylor, a former warlord, pledged Saturday to cede power on Aug. 11 -meeting one demand by fellow African leaders and the United States. However, his government has hedged on his promise to go into exile in Nigeria -saying he would leave the country only when enough peacekeepers are on the ground, and when a war-crimes indictment against him is dropped.
TITLE: Juve Gains Revenge With Super Cup Win
PUBLISHER: Combined Reports
TEXT: EAST RUTHERFORD, New Jersey - For Juventus coach Marcello Lippi, Sunday's victory over AC Milan in the Italian SuperCup championship wasn't about revenge - it was about paying tribute to a long-time friend.
After rallying in the first overtime to tie the match at 1, Juventus prevailed 5-3 in penalty kicks to win its fifth SuperCup title and second in a row.
The game was a rematch of May's UEFA Champions League final, won by AC Milan in Manchester, England. But Lippi said his team's inspiration came from team president Vittorio Chiusano, who died Thursday in Turin, Italy.
"We were here, so we didn't get a chance to say goodbye to our chairman," Lippi said. "This was our way of honoring him. We dedicated the win to him and that's the most important thing."
Chiusano was involved with Juventus since 1960 and was the team's president and chairman since 1990. He died of heart failure the same day Juventus lost 4-1 to Manchester United at Giants Stadium as part of the ChampionsWorld tour.
The SuperCup, which began in 1988, pits the winner of the previous season's Italian league title against the winner of the Italian Cup. Sunday afternoon, the league champions prevailed. Neither team scored during regulation, and each scored a goal in the first overtime.
After a scoreless second overtime, the match went to penalty kicks. Juventus converted all five of its attempts, and goalkeeper Gianluigi Buffon made a diving save against Christian Brocchi on Milan's third shot to give Juventus the edge. Ciro Ferrara scored on Juventus's final penalty kick to seal the win.
Sunday's game was scoreless until the first overtime, when AC Milan's Andrea Pirlo scored on a penalty kick in stoppage time.
Twenty seconds later, still in stoppage time, Juventus forward David Trezeguet knocked home a rebound to tie the game at 1.
Germany. Marcio Amoroso prevented Jupp Heynckes' return to the Bundesliga from ending in victory, as a late strike from the Brazilian helped Borussia Dortmund to share the spoils with local rival Schalke 04 in a 2-2 draw at the Arena Auf Schalke.
A brace from Turkish youngster Hamit Altintop (39, 58) had put Schalke 04 in the driving seat but substitute and Bundesliga debutant Flavio Conceicao levelled for Dortmund, thundering home a 20-meter free kick at 65 minutes.
Schalke 04 looked set to win the 122nd Ruhr derby thanks to Altintop's double before Amoroso struck late on to snatch a point for the visitors and disappoint most of the capacity 61,000 the crowd.
Heynckes was disappointed to concede the late goal but lauded the effort of his charges.
"To have a game such as this on the opening day of the season is extraordinary," he said. "My team played good football in patches but, obviously, I am disappointed to lose two points at the end."
Bayer Leverkusen was indebted to its Brazilian connection for a 4-1 triumph over newcomers SC Freiburg at the BayArena.
Brazilian midfielder Robson Ponte seized the initiative for Bayer, coolly slotting home on 17 minutes, but Sascha Riether equalized three minutes later.
However, Bayer restored its lead through Brazilian World Cup winner Lucio on 28 minutes, before compatriot Juan made it 3-1 heading into the interval.
German international Oliver Neuville netted a fourth just after the hour mark to cap a stellar display from Bayer, which forgot about all its woes of last season.
Leverkusen fans will now have hopes of resurrecting their days of challenging Bayern Munich for the German championship.
The defending champion started the defense of its Bundesliga title with a 3-1 win over newly-promoted Eintracht Frankfurt on Friday.
Goals from Ze Roberto (16), Bosnian international Hasan Salihamidzic (20) and Peruvian striker Claudio Pizarro (42) underlined why Bayern will be the team to beat this season.
Russia. Former Russian international Vladislav Radimov scored twice to lead Zenit to a 2-1 win over Premier League struggler Spartak-Alania Vladikavkaz.
Zenit stays in fourth place with 32 points, a point behind Dinamo Moscow, which was held to a 1-1 draw by Rostov on Friday.
Croatian striker Ivica Olic justified his tag as Russia's most expensive player by scoring on his debut to secure leader CSKA Moscow a 1-1 draw at Shinnik Yaroslavl on Saturday.
Olic, signed by CSKA for a Russian league record fee of $5.73 million from Croatian champion Dinamo Zagreb earlier this week, equalized in the 46th minute after Bulgarian striker Martin Kusev had put the home team in front at 10 minutes.
Defending champion Lokomotiv warmed up for its European campaign by crushing city rival Spartak 5-2 in a high-scoring Moscow derby.
Ex-Spartak striker Maxim Buznikin and Georgian international Micheil Ashvetia fired the railway club 2-0 ahead midway through the first half, before Vladimir Maminov and Ashvetia again made it 4-0 shortly after the interval. It was Ashvetia's third goal in two games since joining Lokomotiv from Vladikavkaz.
Spartak captain Yegor Titov pulled one back in the 63rd minute, but Russia defender Sergei Ignashevich restored a four-goal cushion.
Newcomer Alexander Belozerov made the score a bit more respectable for the former champions in the last minute.
(AP, AFP, Reuters)
TITLE: Ventura's a Hit in His L.A. Debut
PUBLISHER: The Associated Press
TEXT: LOS ANGELES - Bobby Cox called Darren Bragg's play "one of the greatest catches I've ever seen."
Robin Ventura didn't see it, though - he was too busy lumbering around the bases for the first inside-the-park home run of his career.
"Usually, someone has to go on the DL for me to get even a triple," Ventura kidded.
While Bragg insisted he caught Ventura's drive up against the wall in center field, the umpires ruled no. The unlikely shot helped the Los Angeles Dodgers beat the Atlanta Braves 8-4 Sunday and end a five-game losing streak.
The Dodgers got Ventura from the New York Yankees in a trade Thursday, hoping he could provide some hits for a punchless offense. He delivered at Turner Field, only not how his new team imagined.
Ventura led off the seventh with a drive to left-center field and Bragg tried to make a backhanded catch. The ball popped loose and, while sitting on the warning track, Bragg grabbed it with his bare hand.
Bragg held the ball aloft and shouted out that he'd made the catch. Second-base umpire Jeff Kellogg, however, ruled it hit the wall.
While Ventura kept running, Bragg tried to flip the ball to left fielder Chipper Jones but tossed it over his head. Ventura slid home and beat the eventual relay.
"That was a fall, not a slide," Ventura said with a smile.
Cox ran out to argue. After listening to the Atlanta manager, the umpires held a short conference and let the play stand.
Adrian Beltre hit a three-run homer for the Dodgers, who scored four unearned runs in the first off Russ Ortiz (15-5).
Guillermo Mota (3-2) got the win.
Oakland 2, N.Y. Yankees 1. Miguel Tejada came through with another clutch hit Sunday, driving a two-run double off Mariano Rivera in the bottom of the ninth inning to give the A's a thrilling, 2-1 victory over New York.
The reigning AL MVP made a winner of Mark Mulder (15-7) and spoiled a one-hit performance by Andy Pettitte, who gave way to Rivera after walking Mark Ellis to start the ninth.
Eric Chavez moved Ellis to third with a one-out single off Rivera (5-1), who was pitching in his fourth straight game for the first time in his career.
Rivera threw a low fastball to Tejada and the shortstop launched a drive off the elevated wall in deep left field.
Left fielder Hideki Matsui got too close to the wall and the carom bounced over his head, taking away any chance the Yankees had to get Chavez.
In other games, it was: Seattle 8, Chicago 2; Kansas City 2, Tampa Bay 0; Boston 7, Baltimore 5; Minnesota 7, Detroit 2; Toronto 4, Anaheim 0; Texas 8, Cleveland 5; San Francisco 7, Cincinnati 3; Chicago 2, Arizona 1; San Diego 5, Philadelphia 2 (10 Inns.); Houston 3, Florida 1; Colorado 16, Pittsburgh 4; N.Y. Mets 13, St. Louis 5; Montreal 4, Milwaukee 2.