SOURCE: The St. Petersburg Times
DATE: Issue #946 (14), Tuesday, February 24, 2004
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TITLE: Surgeon Uglov Still Active At Age 99
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: The handshake of the world's oldest surgeon St. Petersburg's Fyodor Uglov, 99, who was still doing operations last spring, is as firm as that of a 30-year-old athlete.
Uglov's hands don't shake, he wears no glasses and can cite Pushkin's poems by heart.
"I would still be operating too, if I hadn't broken my leg last year," he said.
Academician Uglov is a phenomenon, not only for his professional, but also for his physical longevity. The average life expectancy for Russian men is 59 years.
Uglov continues to work as a consultant for medical students, surgeons and patients at the Second Hospital Surgery Clinic at the Pavlov Medical University.
Asked why he thinks he has kept going so long, Uglov said he "had no special secret for a long life apart from leading a healthy life," adding that his longevity was obviously not inherited because neither of his parents lived even to the age of 80.
"I have lived so long not because I've had an easy life, but rather because I didn't abuse my health with unnecessary things," he said.
Uglov, who is considered the spiritual father of the sobriety movement in Russia, was a big supporter of Mikhail Gorbachev's prohibition law, said he "has never drunk a drop of alcohol, never smoked, and kept the same weight since he was 18."
In addition, all his life Uglov has taken cold showers, preferred to walk rather than drive a car, and never done harm to others.
"Evil people don't live long. Evil eats a person and destroys his body and personality. So I try to do only good toward others."
Uglov's good deeds are innumerable. Uglov said he had performed "thousands" of operations, while some newspapers put the total as high as 10,000.
Uglov is a pioneer of many new international trends in surgery, especially in regards to the operations on the lungs and heart.
When he speaks of his work his eyes sparkle and he remembers every detail, so that anyone can immediately see what has been the most important thing in his life.
Once, when he was performing an operation in besieged Leningrad, a shell exploded outside the window and the shock wave sent glass fragments into the room.
"I remember that at that moment I didn't think a second of my own safety but just bent over the patient to protect his wound from the dirt," Uglov said.
One of his life principles is his belief that "there are no completely hopeless situations, and there should always be a way out."
So, when the nurse told him that the explosion had made her drop the only clean scalpel on the floor, Uglov did not hesitate.
"Give me a razor," he said.
Uglov said he got his best experience as a surgeon, when after graduating the Pavlov Medical Institute in Leningrad he went to work in his native town in far away Siberia.
"Since there were not many doctors I got to do almost every kind of operation," he said.
Once, he had to treat a man whom his colleagues told him, had had his head bitten off by a bear.
"It was a strong Siberian hunter who accidentally stepped on a sleeping bear. It then attacked the man. The hunter was so strong that he managed to fight with the bear for quite a while until help arrived, but the bear still managed to scalp the man's face," Uglov said.
"When I saw him he literally had no face, but we managed to save him."
One of Uglov's most famous operations was the one in which he cut out 40 percent of a patient's weight by successfully removing a giant tumor on a thigh.
"None of the doctors in Moscow or St. Petersburg agreed to operate on that man, and even the star surgeon of St. Petersburg oncology medicine, Nikolai Petrov, refused. And then I dared."
Uglov said he saw no reason to retire as long as he was able to work physically and still loves his job.
Uglov was born to the family of an exiled worker and a village girl in a distant Siberian town on Oct. 5 of 1904. He and his five siblings took care of a cow, pigs, and an orchard and went to school when it was minus 40 degrees Celsius.
It was in his childhood that Uglov learned the first lessons of healthy living and chose his future profession.
"My Mom, who had never received any education, always taught us not to drink alcohol, not to smoke, to wash in cold water or rub ourselves with snow, and to leave the table a little bit hungry with our stomachs not completely full," he said.
His illiterate mother insisted that her children got higher education and five of them graduated from universities. One sister who was born in 1914 is still alive.
Uglov said he first thought of becoming a doctor in his childhood when he saw the work of the town's surgeon, who seemed to be to able help every one.
He enrolled in the medical faculty of Irkutsk University after a month's travel overland from Kering.
While a student he became infected with two different forms of typhoid at once and his condition was complicated with sepsis.
"I was unconscious for 24 days, but I survived," he said.
Uglov has been married twice, the second time when in his 60s. At that time his wife Emilia, also a doctor, was 30.
"I have never felt that I am old, neither in my soul nor in my body," Uglov said. "I don't feel that I'm old even now."
"Why should I feel old if I lead a healthy life: don't drink, sleep at night for at least seven hours, do physical work?"
Uglov said sexual activity is also very important for human health.
"Only people should not abuse themselves with that. Twice a week would be a norm for a person of any age. When people are old, once a week is more preferable," he said.
When elderly men marry much younger women, those men should not show off with extra sexual activity. That can lead them to collapse three years later, he said.
Uglov said he had never done any serious sports or special exercises because his work had prevented that.
"However, I always preferred to walk to my destinations instead of driving a car, and did lots of work at our dacha," he said.
At home, he always washes the dishes and helps his wife with house work.
"It's good for a man to help a woman around the house, because women are overloaded with house work. If a man doesn't help his wife with that she may get old too early."
Uglov said his family likes to have guests and often 50 to 70 people gather at his dacha.
"Our only restriction is that nobody can drink alcohol there," he said.
In the mid-1980s when Gorbachev introduced his unpopular prohibition law, Uglov rallied to the cause.
Uglov was convinced that the national tradition of drinking too much vodka has "played a decisive role in mass killing of the nation". In addition, vodka has often been the last straw for those contemplating suicide.
He calculates that drinking alcohol shortens a human lifespan by 20 to 25 years, while smoking steals from seven to nine years of one's life.
In fact, the idea of a teetotal life was so strong in Uglov's family, that his son Grigory, now 33, even experienced a shock at the age of seven, when his mother brought a bottle of good wine for their Georgian guest, who visited them at the dacha.
"I remember how Grisha's eyed filled with tears and he said that we betrayed him because we always said nobody would drink alcohol at our dacha," Uglov said.
"It was hard to explain to him that wine is a very strong Georgian tradition, and that we were afraid to offend our guest by not offering him wine," he said.
Not only did Uglov work as a surgeon, he also wrote several books, including "The Surgeon's Heart," that became best-sellers in Russia, He has been editor in chief of the journal, Vestnik Khirurgii (Surgery News), for the last 50 years.
He has also worked abroad to teach foreign surgeons.
Uglov said nothing ever bothers him much. "My position is that if there is a problem, people should not run away from it. They should think well and solve it. And then go on with their lives," he said.
"There are no completely hopeless situations in life. There is always a way out."
TITLE: Nationalists Disrupt Meeting on Deportations
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Young nationalists disrupted a solemn St. Petersburg commemoration on Monday of the 60th anniversary of the deportation of the Chechen and Ingush people.
Formerly the Soviet Army Day, Feb. 23 is now called The Day of Defenders of the Fatherland. On the same date in 1944 Stalin deported the North Caucasian ethnic groups, allegedly for collaborating with the German invaders during World War II.
"It is a tragic day for our country," said Sergei Khakhayev, chairman of the local human rights group Memorial. "We are often told not to spoil the holiday, but how many people know that Army Day was used against the Chechens back in 1944: it was an excuse to gather them together so that they could be put in railway wagons and sent away. Every third person died on the way to exile."
Not everyone in Khakhayev's modest audience agreed.
"Those nations [Chechens and Ingush] shouldn't exist at all," a young man suddenly shouted during Khakhayev's speech.
He struggled with several companions who prevented him getting closer to the speaker.
Some of the youngsters started distributing a nationalist newspaper. The meeting organizers tried to remove the nationalists, but the youngsters resisted, shouting out more insults against Chechens.
The organizers asked the police, who were monitoring the meeting, for help. Several people were detained.
The gathering was otherwise quiet with a little over 100 representatives of local human rights groups gathered near the Solovetsky Stone on Troitskaya Ploshchad. The stone was brought from the Solovetsky labor camp and is the city's main memorial to victims of totalitarian regime.
The human rights groups remembered Feb. 23, 1944, for bringing pain and sorrow to the families of 400,000 Chechens and 200,000 Ingush, who were deported to the gulags of Siberia and exile settlements in Central Asia. Some people trace the unrest in Chechnya today to the divisions and hatred that arose from the deportation.
The exile of the Chechens launched a greater campaign that eventually resulted in the deportation of 3.33 million people, including 1,247,000 Volga Germans, 228,000 Bulgarians, Armenians, Greeks and Crimean Tatars, 94,000 Turks and Kurds, 91,000 Kalmyks, 50,000 Lithuanians and 41,000 Poles.
In Moscow, authorities banned a rally on Lubyanskaya Ploshchad, where another Solovetsky Stone stands in the center in front of the headquarters of the Federal Security Service.
However, people still went to the stone to lay flowers and light candles and eventually a political meeting took place that was quickly broken up by the police.
Lev Ponomaryov, chairman of the all-Russia movement For Human Rights, was arrested and is due to appear in court on Tuesday, radio station Ekho Moskvy reported.
St. Petersburg has witnessed several apparently racially based actions in the last fortnight, including the murder of nine-year-old Tajik girl Khursheda Sultanova, the desecration of a Jewish cemetery and the painting huge black swastikas over the Eternal Flame monument on the Field of Mars.
Many speakers at Monday's meeting expressed serious concern over a recent trend to blame the entire Chechen nation for the actions of a few individual terrorists. They said this trend is growing across Russia and can be seen in St. Petersburg. A bloody vendetta against a particular Caucasian is seen by local nationalists as a successful support of Russian soldiers in Chechnya, they said.
Human rights advocates said they were frustrated both by the appearance of nationalists and the low turnout of people.
"Thousands of Russians marched against the war in Iraq last year and look at our tiny, wretched gathering - it is shameful," said Peter Rausch, a member of the Committee For Peace in Chechnya and a representative of the League of Anarchists. "Everyone prefers to turn a blind eye to this problem and just hope to miraculously escape from the next terrorist attack."
Yuly Rybakov, a democratic politician and former State Duma deputy, said the Day of Defenders of the Fatherland should not merely be a remembrance day for Red Army soldiers who fought against fascists during the World War II, but also as a memorial day for all soldiers who fought for the independence of their native land.
Sixty years ago hundreds of thousands of Chechens, Ingush and Crimean Tatars were deported because the Soviet authorities decided that these nations could have contributed much more to the victory against Hitler, he said.
"All of them were made accountable: little children, young women, old people," Rybakov said. "Everyone knows that there were plenty of war heroes among Chechens, Ingush and Tatars."
Human rights advocates are warned against a repeat genocide. Rausch went so far as to say that those who disagree with the Russia's policy in Chechnya should go as far as to boycott the presidential elections on March 14.
"The war has been going on for seven years now, having taken the lives of more than 200,000 civilians and 15,000 Russian soldiers," Rybakov said. "The government is now trying to turn everything upside down so that the Russians - living in poverty and uncertainty - will direct their anger against the Chechens, Jews, anyone else but not against the authorities who are really to blame."
Khakhayev said aggression and intolerance against Caucasians has become widespread.
"Didn't you all hear that young man shouting that all Chechens must die," he said. "There are dozens of nationalist groups in town that hold the same views. But imperial ambitions in any country anywhere in the world only result in mass killings, on both sides."
At least one voice at the meeting was strictly self-critical. "When we hear about another blast in Moscow or elsewhere and begin to feel hatred against Chechens growing inside our heart, we should suppress it - and if everyone wins this little battle with themselves, then there will be more peace in the country," said Pavel Viktorov, who edits a pacifist newspaper in St. Petersburg.
TITLE: Khakamada To Appeal
PUBLISHER: The St. Petersburg Times
TEXT: Presidential candidate Irina Khakamada said she will take the Central Election Commission to court after it rejected her complaint and one by communist candidate Nikolai Kharitonov about unequal access to state television, web site Gazeta reported Friday.
The candidates made their complaints after state-run television channel Rossia broadcast President Vladimir Putin's address to his campaign staff on Feb. 12.
Khakamada and Kharitonov said it was unfair that Putin could broadcast his election program to the whole country, and they could not. By law, candidates enjoy equal access to the media and are required to pay for any air time they get in addition to the free slots allocated to them. Earlier, Putin openly refused to use any free air time to participate in televised debates.
Khakamada, Kharitonov and another candidate Ivan Rybkin have said they will ask Rossia to provide equivalent slots for covering their meetings with their campaign representatives.
Rossia, however, rejected the accusations, saying it has the right to cover Putin's activities.
Khakamada said Putin made his speech not as president but as a presidential candidate.
Meanwhile, election officials said Thursday that Rybkin would not be allowed to participate in televised debates.
Rybkin decided to stay in London for the election campaign because of alleged security threats at home.
TITLE: IN BRIEF
TEXT: Nationalists Probed
ST. PETERSBURG (SPT) - The city prosecutor's office has opened a criminal case of inciting racial hatred against the nationalist organization Shultz-88, Interfax reported Friday.
The report said the action was the result of an investigation and the seizing of materials that could have been used for printing racist materials, the report said.
Three issues of the journal Gnev Peruna (the Anger of Perun [Perun is a pagan god]) contained materials that are humiliating and denigrating to non-Russians, the report said.
The people responsible are still being sought. In November, the leader of the group, Dmitry Borbov, was the first person to be charged under a law that forbids running an extremist organization.
Matviyenko Returns
ST. PETERSBURG (SPT) - Governor Valentina Matviyenko has hailed the visit by her and a delegation of city businesspeople to Central Asia last week as a success, Interfax reported Saturday.
"The economic results of the visit are very serious, because St. Petersburg entrepreneurs met face-to-face with the business representatives in three Central Asian republics, were able to exchange suggestions and obtain conditional agreements," she was quoted as saying.
The visit also had political consequences, she said.
"We are starting to lose our markets in the Commonwealth of Independent States and now Turkey and Iran are going there," she added. "We really should not lose these partners and this was why the business community should understand that the political signal was given at the highest level."
Local Police Injured
ST. PETERSBURG (SPT) - Four members of the Leningrad Oblast OMON special police unit were injured in an explosion in Grozny on Friday, Interfax reported.
They were traveling from the Khankala military base and passing between two checkpoints when a mine went off.
The Ural vehicle they were traveling in was seriously damaged and all required medical attention, although their lives were not in danger, the report said.
Those responsible for the explosion were being sought.
Library Safe From Fire
ST. PETERSBURG (SPT) - Extinguishing a fire in the building housing the Alexander Blok Library at 20 Nevsky Prospekt on Thursday afternoon, resulted in water damage to indexes, books and journals in storage, but the rare books and recordings held in the library were undamaged, Interfax reported Friday.
The cause of the fire had not been established.
Ecstasy Dispenser
ST. PETERSBURG (SPT) - A raid on an unnamed nightclub on Vasilevsky Island last week uncovered a dispenser for ecstasy tablets, Interfax quoted city police as saying Friday.
Ten people who had been attending a private party at the club were detained and found to be in possession of the tablets, the report said.
"When they said that they had received them from an automatic dispense, the police thought they were being lied to," an unnamed police officer was quoted as saying.
Use of the dispenser cost 300 rubles ($10.50), the report said.
TITLE: Germany to Host Pipeline
AUTHOR: By Mara D. Bellaby
PUBLISHER: The Associated Press
TEXT: MOSCOW - Russia sought German support on Friday for a new pipeline that would transport natural gas across the Baltic Sea to northern Germany and, ultimately, to the east coast of Britain.
Gas monopoly Gazprom has been pushing the idea since 2002 in a bid to expand its position in lucrative markets in Western Europe and to give it leverage over Belarus and Ukraine, two countries that have siphoned off gas meant for European consumers in the past.
This week, Gazprom accused Belarus of failing to pay for its gas and illegally taking gas intended for Poland and Lithuania. Russia temporarily cut off all gas supplies to Belarus, but restored them Thursday. However, the dispute sparked one of the greatest crises in relations between the ex-Soviet neighbors and highlighted Gazprom's vulnerability.
Gazprom's proposed North European Gas pipeline is expected to cost $5.7 billion and would carry up to 1,059 cubic feet of gas per year on a direct route to the West.
Russia's energy minister, Igor Yusufov, said Friday that Moscow and Germany are preparing a bilateral accord that pledges to encourage development of the line. He said it will be along the same lines as an agreement signed with the British government in June.
Yusufov acknowledged, however, that interest from investors has so far been tepid.
"We don't feel much activity on the part of investors," he said, adding that the pipeline would be built even if no external financing could be attracted.
Gazprom officials have said they hope the gas could begin flowing by 2007.
Russia's efforts to secure German support came as the chiefs of German gas companies met Friday with Russian Prime Minister Mikhail Kasyanov, the ITAR-Tass and Interfax news agencies reported.
Gazprom, the world's biggest gas producer, supplies more than a quarter of Europe's natural gas. The company depends heavily on exports because domestic prices are capped low and many Russian regions and factories cannot pay their bills.
Central to Gazprom's dispute with Belarus was its demand that Minsk begin paying a non-subsidized price for gas rather than the internal Russian price.
TITLE: Illarionov Lashes Out At EU for 'Kyotoism'
AUTHOR: By Greg Walters
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW - Presidential economic adviser Andrei Illarionov lashed out Thursday at the Kyoto Protocol, likening the plan to limit greenhouse gas emissions to Soviet-era state planning and accusing the European Union of trying to impose "Kyotism" on Russia.
"I have called my speech 'The Return of Gosplan,'" Illarionov said, in a reference to the Soviet agency that set production quotas.
"But the proposed mechanism would decrease quotas year by year. ... So it may be more correct to call it the return of the gulag," he said, speaking at the opening of a two-day international forum dedicated to the Kyoto Protocol.
The Kyoto Protocol calls on signatory countries to reduce greenhouse gas emissions by 5.2 percent of 1990 levels by 2012. Without ratification by Russia, the treaty cannot come into force.
Illarionov is a staunch opponent of the protocol, arguing that cutting greenhouse gas emissions would hurt Russia's economic growth.
Illarionov on Thursday accused the EU of putting "unprecedented pressure" on Russia to ratify the treaty and embrace the ideology of what he called "Kyotism."
"Attempts to pressure Russia into taking a decision can only be seen as an attempt to interfere in the internal affairs of the Russian Federation," he said.
"During the 20th century, Russia seriously suffered from another ideology that came from Europe. ... Not only Russia, but the whole world suffered," he said, referring to Marxism.
Illarionov's speech elicited laughter and looks of befuddlement from the audience. Illarionov appeared to be speaking tongue in cheek at times, but participants said the Kremlin's firm stance came through loud and clear.
"Mr. Illarionov is mocking those who have an incorrect understanding of the [ratification] process," said Arkady Volsky, president of the Russian Union of Industrialists and Entrepreneurs. "Can we really say Europe is asking us to reinstate Gosplan or to reinstate the gulag?"
EU officials at the forum insisted that Russia would benefit by ratifying the Kyoto Protocol.
"Ratification will attract investment and help Russian companies that will have to increase their energy efficiency, cooperate with international partners," Richard Wright, the head of the European Commission's delegation in Russia, told the forum.
"Russia's emissions of greenhouse gases are now 30 percent lower than emissions at 1990 levels. That means Russia doesn't have to cut emissions today," he said.
TITLE: Regions Get Comprehensive Guide
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW - A book that is being billed as the most comprehensive resource on investment in Russia's regions was presented in Washington on Thursday.
Published by the Council for Trade and Economic Cooperation (CTEC), "Russia: All 89 Regions Trade and Investment Guide" gives provincial leaders a chance to pitch the economic attractiveness of their regions.
"The investment potential of the Chechen Republic is enormous," writes Chechen President Akhmad Kadyrov, while Nikolai Dudov, governor of Magadan region, calls Kolyma, which is often associated with Gulags, "one of the most wonderful places in Russia."
Published simultaneously in English and Russian, the 1,030-page reference guide includes economic background, tables and maps in an easy-to-read format.
Phone numbers, sometimes e-mails, are listed for regional heads, who stare grimly out of color photographs.
"This is the new Russian revolution," said Kevin Hennessey, the investment banker who provided financial backing for the project.
"It is not about Moscow and St. Petersburg nor Yekaterinburg and Vladivostok, not about Gazprom, LUKoil nor Yukos. It is about real markets growing in the regions."
With its attractive maps that have special symbols for "reindeer breeding" and "melons and gourds," the book is the brainchild of Veronika Krasheninnikova-Berger and Boris Alekseyev of the CTEC.
The CTEC is the successor of the Cold War-era U.S.-USSR Trade & Economic Council.
The guide was completed in 18 months, thanks largely to strong support from both domestic and Western organizations.
"The World Bank, the Department of Commerce and the U.S. National Association of Manufacturers were instrumental in pinpointing the kind of information foreign investors are interested in," said Krasheninnikova-Berger.
Regional governments then provided information on current investment projects and the largest enterprises of the regions.
CTEC recruited CentreInvest Group, a financial, legal and strategy consulting group, to process the data obtained from the regions and compare it against official Goskomstat and Central Bank data.
Hennessey addressed data integrity concerns.
"We did our best, checking the data and polishing it to have it most clearly reflect the situation in the regions," he said.
TITLE: Kirovsky Plant to Sell Tractors To Central Asian Republics
PUBLISHER: The St. Petersburg Times
TEXT: ST. PETERSBURG - The governments of Turkmenistan and Kyrgyzstan are eyeing St. Petersburg's Kirovsky Zavod as a source of tractors, the factory's general director Pyotr Semenenko told Interfax Friday in Ashgabat, the capital of Turkmenistan.
The Kirovsky plant already supplies Kazakhstan with tractors.
Semenenko was a member of the St. Petersburg delegation that accompanied Governor Valentina Matviyenko on her trip to the three Central Asian republics last week.
Preliminary agreements were reached during meetings with Turkmen agriculture and water ministry representatives, Semenenko said. Also, a meeting with Nikolai Tanayev, prime minister of Kyrgyzstan, led to the government expressing interest in buying Kirovsky tractors or reaching an agreement on assembly of the tractors in Kyrgyzstan.
Kirovsky tractors have been in use in Turkmenistan for 15 years, but recently that Central Asian republic has preferred U.S. brand John Deere. The high cost of these tractors has led the Turkmen agriculture ministry to seek a less expensive alternative, which Semenenko said the Kirovsky plant provides.
Kirovsky would also service the John Deere tractors already operating in Turkmenistan.
TITLE: IN BRIEF
TEXT: $12M Investment
NOVGOROD (SPT) - The Novgorod Metallurgy Plant will invest $12 million in construction of a copper rolling facility, Interfax reported Friday.
The project is scheduled for completion during the first six months of 2004.
The facility will roll 40,800 tons of copper per year. With round-the-clock operation, the plant could up production to 75,000 tons per year.
The plant will use its own cathode copper to produce the rolled product.
The plant's press service also said in a press release that copper cathode production had reached projected levels since the plant's opening in August 2003.
From September to December 2003 the plant produced 7,485 tons of copper cathode and sold 7,213 tons of the product.
Eurobonds a 'Go'
MOSCOW (SPT) - The Finance Ministry approved an additional issue of Russian eurobonds to be redeemed in 2010 and 2030, RosBusinessConsulting reported Friday.
The bonds will be swapped for debts of the former USSR to the International Bank for Economic Cooperation and the International Investment Bank, totaling not more than $700 million.
A resolution to this effect was published on the Finance Ministry's official website. According to the resolution, the additional issue will be divided into two issues, for which the dates of redemption will be March 31, 2010, and March 31, 2030, respectively.
Gazprom Borrowing
MOSCOW (SPT) - The executive board of Gazprom approved the strategy of long-term borrowings of the holding until 2013, the company's press service reported Friday.
In 2004, Gazprom plans to borrow 150 billion rubles (about $5.26 billion). Total expenditures on servicing the gas giant's debt portfolio are forecasted at 166.2 billion rubles (about $5.83 billion) this year.
The board decided to include the strategy in the agenda for the meeting of Gazprom's board of directors on Feb. 25, 2004.
The goal of the strategy is to provide stable financing for Gazprom and its subsidiaries until 2013, to reduce expenses for servicing the credit portfolio, and to minimize the total debt of the company.
Rosneft Merger
MOSCOW (SPT) - Russian Energy Minister Igor Yusufov declared Friday that the Russian government has given preliminary consent to a joint venture between the Rosneft state company and Marathon Oil, RosBusinessConsulting reported.
The joint venture is intended to unify the two companies' operations in the northern regions of Russia.
"A preliminary political agreement on this joint venture has been reached at the government level," Yusufov said at a news conference in Moscow Friday. "This move by the two companies is a move in the right direction, intended to strengthen the partnership between Russia and the USA in the energy sector," the minister added.
Transneft Pipeline
MOSCOW (SPT) - Transneft chairman Semyon Vainshtok reported on successful completion of the second stage of the Baltic Pipeline System (BTS-2) at a meeting Friday with President Vladimir Putin, RosBusinessConsulting reported.
The capacity of BTS-2 is 42 million tons of oil per year. According to Vainshtok, the second line of BTS-2 will operate at full capacity by March. Semyon Vainshtok also stressed that "for the last three years the export port of Primorsk was built with the capacity which is equal to that of Novorossiysk."
Texas Poultry Ban
MOSCOW (SPT) - The Veterinary Service of Russia temporarily banned all poultry imports from Texas USA to Russia, due to reports that bird flu had been found on one farm there, RosBusinessConsulting reported Friday.
This restriction concerns birds, eggs, poultry meat, and all kinds of poultry products that have not gone thorough thermal sterilization, as well as birdseed.
The Animal and Plant Health Inspection Service, or APHIS - part of the U.S. Department of Agriculture - said in a statement issued by the U.S. Poultry and Egg Export Council Friday that one herd of chickens in Texas was infected with H5N2 chicken flu.
Texas veterinary officials said samples had been sent to the national veterinary service laboratory for further testing.
TITLE: Club Owner's Maxim is Haven for Humanity
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: From a sub-Saharan plain in the landlocked state of Mali to the subzero temperatures of Russia, Aliou Tunkara, 44, has learned how to conquer the harsh extremes of life.
Not only that, he has weathered life from Leonid Brezhnev's business-hostile Soviet Union to Vladimir Putin's business-welcome Russia. Tunkara has created his own business that gives African national pride a Russian flair. With academic degrees and international recognition as a human rights activist, Tunkara has something to offer the country where he has spent half his life.
Tunkara has managed to bring business ethics to what in Russia has been an infamous and mafia-infested business, himself serving as a role model among members of the local African community and local intellectuals. Thanks to the Maxim nightclub, his main business on Lanskoye Shosse and a base for advocating ethnic minorities' rights, Tunkara has won respect and recognition in the eyes of his fellow activists the world over.
"If you really wanna write about me, then don't ever separate the two selves in me. I'm a businessman because I'm a human rights activist, and vice versa," warns Tunkara, defensive over what he usually suspects to be negative press coverage on businesses like his own. "I have to earn a living because I'm a man, but I have to fight injustice because I am also humane," he said, implying his two personae.
Tunkara runs his club in a unique way. By day, it is an office in which he presides over the only high-profile African organization in Russia, African Unity, which integrates Africans and Afro-Russians from all walks of life. It is also a center for overseeing a network of bridges with the ethnic minority rights groups around the world.
By night, the club is a gigantic multi-hall two-story entertainment venue including a chain of restaurants, together holding up to 800 visitors on public holidays. Run by a team of 40 permanent staff members and about a dozen part-timers, the club enjoys regular clientele of about 200 on weekdays and up to 500 on the weekends.
Tunkara says the club owes its popularity to what he calls its "target audience." "This is an unsophisticated middle-class spot where you don't have to carry a bulging wallet or be dressed in a special style," he says, noting the cover charge ranges "from free packages and discounts to a maximum of 250 rubles ($9) during peak days." Moreover, "it is a roundtable mostly for ethnic minorities who feel insecure going to nighttime places," he says.
"Boredom, frustration, street and police harassment would have killed me were it not for Aliou," says Baladce Traore, Tunkara's compatriot who has been living in St. Petersburg for 18 years. He says Maxim is the only place he feels safe, even safer than at home. At his apartment one night the police knocked on his door and put him in jail for two months for allegedly not possessing proper registration papers. "It took Aliou to come forward with people from Amnesty International to seek my release," says Baladce, describing Tunkara as an influential personality and a champion of the oppressed.
When asked about his business Tunkara says "We've been keeping the business up and running since 1995 and still wanna go forward."
Indeed, it is a remark that tells volumes since the nine-year-old Maxim has outlived most of its peers. Its owner recalls a famous Nigerian nightclub mogul who owned, among others, the then high-class Dominico's nightclub on Nevsky Prospekt. The Nigerian was gunned down in a mafia-style hit hardly a year after Tunkara had started his own club.
But "the old-time bandits are no more..." Now "long waits for papers and signatures eat me up," he says of frustrating bureaucratic red tape and corruption in the corridors of power.
However, it is what he calls "a mixture of police abuse of power and mafia-style treatment by landlords" that forced him into closing his higher-class nightclub on Prospekt Metallistov last year after three years of operating. He is planning to expand by looking for a space to house the African Cultural Center, as Maxim grows older and overburdened.
The son of a provincial governor in his homeland, Tunkara was an activist with a youth organization before coming to Russia 22 years ago to pursue a degree in engineering at the St. Petersburg Poly-technical Institute. His degree completed, Tunkara went into "contraband," moving everything from makeup and refrigerators to computers and tractors within his "West-Soviet-Mali" business triangle.
It was during the period of what he calls the "computer boom" in the late 1980s and early 1990s - that Tunkara built himself a base for serious and legal business in Russia, and developed a plan to build a factory for tractors back home. But in the early 1990s, during Russia's period of legal and political instability, Tunkara had to go to court in Mali to recover his business, then returned to find himself stripped of an apartment and a car he had bought. As a result, the father of two started from scratch in 1994 when he came back to Russia.
Having earned a degree in ecology and natural resources along the way, in 2000 Tunkara was awarded a diploma in economic management. He is currently a Ph.D student in business law.
Nikolai Garenko, a member of the St. Petersburg Council of Scientists and a researcher with the St. Petersburg Museum of Anthropology says he admires Tunkara as a "promising intellectual and a social activist rather than a money lover." After all "he's too generous and kind to become a millionaire."
Among other world venues where ethnic minority rights are discussed, Garenko met Tunkara in Strasbourg and in Durban at the 2001 World Conference Against Racism.
TITLE: Market Slow After Growth
AUTHOR: By Angelina Davydova
PUBLISHER: Special to The St. Petersburg Times
TEXT: In the week leading up to Monday's public holiday, the stock market did not demonstrate any outstanding activity. On the contrary, the market paused after steady growth since the beginning of the year.
The end of last week saw largely volatile trading. Early morning optimism on Thursday "soon fizzled out and the market spent most of the day struggling to gain any ground," a Troika Dialog report said. "The main sources of negativity were Yukos (down 2.2 percent on MICEX), Mosenergo (down 1.8 percent) and LUKoil and Rostelecom (both down 1.3 percent). On the other hand, several recent laggards performed well: Sberbank (up 1.8 percent), Surgutneftegaz (up 1.4 percent) and UES (up 0.9 percent)," Troika Dialog analysts said in a report.
UFG also agreed that the equity market retreated on Thursday from its all-time high of the previous day, with recorded volumes also somewhat lighter. "But there remained ample buying interest across the board to cushion the natural interest in profit-taking." Meanwhile, there was no stopping the market's top current performers - Gazprom locals, which were up 1.4 percent, and MTS, which was up 2.7 percent to resume its out-performance over Vimpelcom (down 0.6 percent) after news came out of more regulatory discrimination against Vimpelcom.
In the meantime, the benchmark RTS index closed down 0.7 percent on the day to 650.40. This raises the question of whether the symbolic 650 mark can be maintained despite the added incentive to take profits from the long weekend. "Even if the market does slip back further, there are no signs of a meaningful correction," a UFG report said.
The State Statistic Committee disclosed information on foreign investment in 2003 on Thursday. Foreign investment rose by 50 percent to $29.7 billion in 2003. Foreign direct investment, or FDI, amounted to $6.8 billion, up by 69.4 percent, while portfolio investment fell by 15 percent to $401 million. Other investment - mostly loans - accounted for 75.8 percent of the total at $22.5 billion, up 47.1 percent on 2002. Foreign investment entering Russia since 1994 totaled $57 billion, the committee said, of which $26.1 billion was FDI and $1.4 billion portfolio investment. Although Germany contributed most - with 17.9 percent - to this accumulated total, Cyprus was second, having invested about $8.1 billion since 1994, much of which was probably returning Russian capital.
UFG experts consider that, in itself this is good news, although the overall volume of FDI - $26.1 billion on a cumulative basis - is still insignificant. Russia's cumulative FDI to GDP ratio is only about 6 percent, which is much lower than for emerging market peers. The figure is 26 percent in Poland, 43 percent in Hungary, 35 percent in Argentina and 75 percent in Kazakhstan, according to a UFG report.
"Moreover, most of this 'foreign investment' comes from off-shore zones (including Cyprus, the British Virgin Islands and Luxembourg). This is essentially Russian capital rather than real foreign investment. Indeed, according to Goskomstat, about 55 percent of investments in the power industry last year came from Cyprus. That said, we still expect FDI to be the most important component of total foreign capital for Russia's long-term economic prospects," UFG analysts said.
Russian external debt was lower at the end of the week in line with global emerging debt market trends, which were driven by a political scandal in Brazil. "Brazilian bonds lost more than 1.5 percent and EMBI+ Russia lost 0.5 percent, with its spread widening by 6 basis points to 256.
The domestic debt market rallied again Thursday on the ample liquidity, strong ruble and forthcoming long weekend. Roughly 5 billion rubles worth of new bonds were sold, including two corporate issues and 3 billion rubles worth of unsold OFZ issues, according to UFG report.
On the foreign currency front, the U.S. dollar rate against the ruble hardly changed during the week. Analysts say Central Bank interventions keep the rate stabilized at 28.4850 rubles per U.S. dollar, and the situation might continue for the next month.
On Friday the euro rate against the U.S. dollar lost two cents down to 1.25 U.S. dollars per euro.
TITLE: A Development Bank?
AUTHOR: By Philip Poole
TEXT: Having recently spent a week in Moscow I found a somewhat negative, self-critical air. The focus seemed to be more on what has not been accomplished during President Vladimir Putin's first term than on recognition of the considerable progress that has been made in a relatively short period of time (a glass seen to be more half-empty than half-full). Without a doubt, there are areas where reform has suffered from a lack of ambition but, of necessity, the first term of the post-crisis administration needed to be mostly about stabilization. Recall that following the implosion of 1998, the economy was in ruins. The government machine simply did not function, the state and much of the corporate sector was in default, the fiscal accounts were shot to pieces and the economy had been contracting for more than a decade.
Under Putin this macro environment has been transformed - courtesy of political recentralization, sustained high growth, tight fiscal policies and, of course, high oil prices that facilitated remonetization and a dramatic rebuilding of Central Bank reserves to a level that now represents a very comfortable cushion against external shocks. The government debt-to-GDP ratio has fallen from a post-crisis level of more than 90 percent to a little above 30 percent and, in recognition, Moody's has awarded Russia an investment-grade credit rating.
However, life moves on, and with economic stabilization complete, the focus of the second term needs to be very different. It should be about fostering growth and broadening the economic base to reduce the residual risk from commodity shocks that is still the most obvious Achilles' heel for the economy. On the growth front there are structural concerns. Growth has so far been largely about the top-down restructuring of large, former Soviet enterprises. Oil and gas still account for 30 percent of GDP and 55 percent of exports, and the service sector, in particular, remains small and underdeveloped. Bottom-up growth generated by small and medium-sized enterprises has not featured enough. One of the reasons has been a lack of available, affordable financing. In this respect the current macroeconomic environment provides Putin with a major opportunity during his second term.
Consider the following: The fiscal accounts are in surplus, government debt ratios are low, and the Central Bank has dollars coming out of its ears - putting unwelcome upward pressure on the ruble. At the same time, there is a need for investment in infrastructure as well as for the provision of loans to small businesses to stimulate bottom-up growth. In addition, the administration seems to have a strategic desire to rebuild noncommodity domestic industries such as aviation. Given the favorable macro background, the government could address these issues in the following way. Effect a relaxation of fiscal policy - say from a projected surplus of 1 percent of GDP to a small deficit of 2 percent - generating a dollar equivalent value of some $15 billion to be financed by domestic borrowing. These funds, potentially augmented in the same way in subsequent years, could then be used to capitalize a development bank, the purpose of which would be to allocate funding to competing investment projects in the public and private sectors with an emphasis on developing noncommodity sectors. From the government's perspective, the resulting fiscal deficit would still most likely be significantly below the level of real economic growth. This would ensure that the downward trajectory of the government debt-to-GDP ratio could be maintained although, in any case, as owner of the balance sheet of the new bank, the government would have an offsetting asset.
Such a vehicle could provide the long-term financing that is currently lacking in size from either the bond or bank market, and could also lend in conjunction with commercial lenders just as the EBRD and World Bank do through their cofinancing programs. A component of the funds that such a bank would have available to on-lend could be denominated in convertible currencies to directly fund imports as part of the regeneration process (preferably capital equipment rather than finished goods, with the aim of building domestic manufacturing capacity). By using the allocated rubles to purchase these dollars from the Central Bank, the authorities would also create a subsidiary benefit of helping to take pressure off reserve growth, and so easing revaluation pressures on the ruble.
The most obvious problems with such a proposal are, first, that it could be open to abuse in respect of the allocation of funding between projects and, second, that it could end up generating uneconomic investment decisions if it was not anchored in a market-determined allocation mechanism. In this regard, careful control would need to be exercised over the bank's operation and governance, particularly to ensure that the allocation process for funding was competitive. While these are undeniable concerns, they are not insurmountable, and the net result of such a scheme would be to foster and broaden economic growth while helping to reduce the current overdependence on commodities and the resultant systemic fiscal and balance-of-payments risks.
Philip Poole is head of emerging markets research, ING London. This comment first appeared in Vedomosti.
TITLE: Transfer Pricing and Calculating GDP
AUTHOR: By Christof Ruehl and Mark Schaffer
TEXT: In the debate about Russia's economic recovery from its post-Soviet depression and the 1998 financial crisis, there has never been much doubt that hydrocarbon exports played a crucial role. Russia is the second largest oil exporter after Saudi Arabia, and many observers have warned about the vulnerability of an economy excessively dependent on natural resources. The point has not been lost on the government either which is trying to guard against the long-term threat of natural resource dependency using a variety of policy measures, such as diversification based on taxation of the oil industry's "windfall" profits, differentiated taxation contingent on oil prices and the introduction of a stabilization fund.
Yet, looking at Russia's national accounts makes one wonder: Goskomstat figures show that the oil and gas sectors combined account for no more than 9 percent of GDP - so why worry? However, according to the very same Goskomstat statistics, natural resources constitute more than 80 percent of Russia's total exports, and oil and gas export revenues alone make up about 20 percent of GDP.
The problem is not one of arithmetic alone. The national accounts suggest an intuitively implausible picture, by portraying Russia as a modern service economy, where the production of services exceeds the production of goods by a wide margin (60:40); moreover, it is portrayed as a modern service economy where the state has withered away, and where market services outweigh the public sector much more than employment figures would suggest (implying a extremely productive market service sector).
The explanation for these apparent enigmas lies in transfer pricing. And what may look like a simple idiosyncrasy in national accounting, in fact hides interesting information about the corporate structure of modern-day Russia, as well as the country's growth and productivity prospects.
Many large Russian firms benefit from transfer pricing by employing trading companies to avoid taxation. Companies sell their products to trading subsidiaries at below-market prices; these trading subsidiaries then sell the product to the end customer at market prices and pocket the difference. Hence, most of the value added accrues not to the production but to the trading arm of the company. To the extent that these trading subsidiaries succeed in avoiding taxation, this "transfer" of revenue results in effective tax relief for the company where the valued added originated. There are legal and less legal means of getting tax relief through transfer pricing: typically shell trading companies are registered in remote regions. Until recently, for example, regional and local authorities could grant tax breaks on their portion of the profit tax (a practice the government has now largely abolished), but tax avoidance by less conventional means is prevalent as well. One illegal but common variant is to set up shell companies that simply disappear after they have concluded as many transactions with end customers as possible.
Transfer pricing thus cuts tax payments for individual production companies by lowering their profits - and by so doing, it also distorts the national accounts. The effect is simple and direct: Profits or value added are moved from the sector that produces them to the trade sector. Since Russia's national accounts are not adjusted for these schemes, this has the effect of greatly exaggerating the value-added of service sectors (of which trade is a component) and underestimating it in industry, especially in industries that make heavy use of transfer pricing, such as oil and gas. As a result, the trade sector appears to be highly profitable, generating almost one third of GDP and almost half of economy-wide profits, whereas the oil and gas industries officially account for less than 9 percent of GDP.
It is possible to recalculate the composition of GDP by going back to the underlying input-output tables and by correcting the inflated trade margins, using international comparisons. The results dramatically alter the composition of production: the oil and gas industries almost triple in size, accounting for about 25 percent of GDP; industry replaces services as the largest sector of the economy, gaining the about 20 percent of GDP that is deducted from services; and the ratio of market to non-market services shifts considerably in favor of the non-market service segment.
One immediate consequence is a clearer picture of what has driven growth in Russia. Industrial production (which includes natural resources production) emerges as the most productive sector in Russia's economy by far, with productivity in the oil and gas sectors (which employ less than 1 percent of the work force) obviously towering above the rest.
After the decline in labor productivity during Russia's long recession had bottomed out, productivity increases in industry (partially driven by spare capacity) propelled growth in the economy as a whole. Productivity gains in the service industries, by comparison, remain limited. This is particularly true for the low-productivity non-market services. Above all, the recovery of industrial production is driving economic grow much more than the structural shift toward market services. In short, the oft-cited structural shift toward services is exaggerated and the dependence on natural resources is underestimated in the national accounts.
In addition to the implications for policies geared to supporting long-term growth, it confirms the skeptics (and the government's) view that in the short term the economy is more exposed to the volatility of world energy price fluctuations than official GDP figures suggest.
Second, the scale of value added transferred is very large and the pervasive use of shell companies to avoid taxation has clear budgetary consequences, despite the cap recently imposed on regional and local authorities' legal powers to offer profit tax breaks. The immediate losses to the budget are hard to calculate since the tax relief achieved by individual trading companies will differ from region to region, and from company to company.
However, they are likely to add up to several percentage points of GDP. By way of illustration, if transfer pricing to avoid taxation resulted in reducing the effective tax rate on the transferred profits by 10 percent (certainly not implausible, given that combined profit and value added tax rates are of the order of 40 percent), the scale of the revenue losses incurred by the budget would already amount to about 2 percent of GDP. Small wonder that the government is getting more determined to close tax loopholes.
Finally, the whole thing suggests conclusions about the state of corporate governance in Russia. The data suggest that state-owned companies engage in these practises as much as private ones. The scale of the problem suggests that there are strong interests involved in maintaining the existing, non-transparent status quo.
Christof Ruehl is chief economist of the World Bank's Russia country department in Moscow and Professor Mark Schaffer is director of the Centre for Economic Reform and Transformation at Heriot-Watt University in Edinburgh. They contributed this comment to The St. Petersburg Times.
TITLE: Spurs Spurn Lead to Draw With Leicester
PUBLISHER: Combined Reports
TEXT: LONDON - Wasteful Tottenham Hotspur threw away a 3-1 lead in an extraordinary 4-4 draw with 10-man Leicester City on Sunday.
Jermain Defoe scored his second goal of the game two minutes from time at home to avert another disastrous defeat for Spurs by a battling Leicester side that recovered from 3-1 down to lead 4-3 at one stage.
Tottenham Spurs' last four games have featured a remarkable 28 goals. The way they tossed away their lead mirrored their extraordinary 4-3 FA Cup defeat at home by 10-man Manchester City on Feb. 4 in which they led 3-0. It was enough to drive Spurs' acting manager David Pleat to distraction.
"I don't intend to get a psychologist in, not at the moment, but there is a nervousness," he told Sky Sports television.
"It's not good. It's not good for the heart, it's not good for the mind but it makes for incredible entertainment."
Within six minutes against Leicester, they were in front when the visitors' former Spurs keeper Ian Walker helped a Michael Brown free kick into his net.
Spurs defender Gary Doherty, who endured a nightmare performance, then swivelled and miscued an attempted clearance into his own net to hand Leicester their equalizer before Defoe's angled drive restored Spurs' lead.
Robbie Keane made it 3-1 with a low drive after a free kick in the 28th minute of a frantic first half.
Leicester's Les Ferdinand gave them hope six minutes into the second half but James Scowcroft then earned a straight red card for a late tackle on Spurs full back Mauricio Taricco.
City were not finished, though. Incredibly ex-Spurs player Ben Thatcher equalized with a header after 72 minutes and five minutes later Marcus Bent made it 4-3 after Doherty's back pass sold keeper Kasey Keller short.
Defoe, though, saved Tottenham's faces with a thunderous close-range finish.
Spurs are 10th in the Premier League on 34 points while Leicester stay second from bottom on 22, one less than fourth-bottom Portsmouth.
After Saturday's loss to Arsenal, Chelsea coach Claudio Ranieri admitted his side's title chances were over. Unbeaten Arsenal stretched their league lead to seven points ahead of second-placed Manchester United and nine points ahead of third-placed Chelsea.
British newspapers on Monday predicted that Russian oil-billionaire Roman Abramovich, who has spent Pound120 million ($223 million) on new players since buying Chelsea last July, would sack Ranieri and 10 players at the end of the season.
(Reuters, AFP, SPT)
TITLE: Lovebirds Hewitt, Clijsters Share Back-to-Back Wins
AUTHOR: By Raf Casert
PUBLISHER: The Associated Press
TEXT: BRUSSELS, Belgium - While Kim Clijsters was accepting the trophy for another tournament win, her fiance Lleyton Hewitt was on his way to a victory of his own.
Only one hour after Clijsters won the Diamond Games tournament in Antwerp, Hewitt added the ABN Amro title in nearby Rotterdam, Netherlands. By nightfall, the top couple in tennis was celebrating together in Clijsters' hometown of Bree.
Last year, before their official engagement, they already had won the Indian Wells titles on the same day.
On Sunday, Clijsters flashed her diamond engagement ring, which went perfectly with the Antwerp trophy racket that has 1,702 diamonds encrusted in gold.
"It is one of the most beautiful trophies of the year," she said.
Unlike Hewitt, Clijsters had an easy match. She beat Italian veteran Silvia Farina Elia 6-3, 6-0 in the final for her second title in as many weeks.
It was her 21st overall - to go with her upcoming 21st birthday, she said.
And it proved she's back in form after an ankle injury affected her Australian campaign in January. She lost to fellow Belgian Justine Henin-Hardenne in the Australian Open final, but has bounced back with wins in Paris and Antwerp.
"Since last week in Paris, I have been able to train full out again and it has done me so much good," Clijsters said after she was cheered to victory by 15,000 fans. "It even gave me goose bumps in my face. This is why I want to return here.
"It is a good sign for the rest of the season."
The same applies to Hewitt, who still has much winning to do to recapture his No. 1 ranking. Hewitt was seeded only sixth in Rotterdam, but made it seem like a mistake with a spirited performance, beating No. 2 Juan Carlos Ferrero 6-7 (1), 7-5, 6-4.
Hewitt, a two-time major champion, overcame early serving jitters and got stronger from the baseline to improve his record against the French Open champion to 5-3.
It was Hewitt's second title of the year.
TITLE: Feofanova Reclaims Record
PUBLISHER: Combined Reports
TEXT: ATHENS - Svetlana Feofanova dramatically reclaimed her women's indoor pole vault world record on Sunday just a week after she had lost it, clearing 4.85 meters at the Athens 2004 International Association of Athletics Federations' permit meeting.
Feofanova of Russia made the jump at the first attempt to eclipse the mark of 4.83 meters set at the Russian Indoor Championships in Donetsk, southern Russia, a week ago by her compatriot Yelena Isinbayeva, who was also taking part in Athens.
Feofanova's record-breaking vault sets up a close rivalry with her fellow Russian ahead of next month's tenth IAAF world indoor championships in Budapest, Hungary.
Feofanova had held the previous world record of 4.80 meters, which she achieved at last year's world indoor championships in Birmingham, England.
"Something was making it difficult for me to gather my strength, but today I am very pleased because at last I have managed to do this jump," Feofanova said through an interpreter.
Isinbayeva finished second with a jump of 4.50 meters, with Iceland's Edda Elisdottir third after clearing the same height.
Isinbayeva holds the world outdoor record with a vault of 4.82 meters set at Gateshead, England last July.
In other successes for Russian women in Athens, Tatyana Kotova won the long jump event with a jump of 6.81 meters ahead of second-placed Italian Fiona May and Russian Olga Rublyova, who finished third.
Natalya Yevdokimova took third place in the women's 1,500 meters event behind Belarussian Alesia Turova who finished second and race winner Kutre Dulecha of Ethiopia.
(Reuters, SPT)