LOCAL NEWS

CITY HANDED A VERY PRICY REPUTATION

A shirt, a cup of coffee or a taxi ride costs more in St. Petersburg than in London, Paris, or Berlin, according to a survey released last week by Geneva-based Mercer Human Resource Consulting.

Among the 144 cities covered in a world-wide cost-of-living survey carried out by Mercer, St. Petersburg ranks as the eighth most expensive city in the world and the second most expensive in Europe, trailing only Moscow.

Hong-Kong tops the list as the world's most expensive city, immediately followed by Moscow. Tokyo, which was last year's most expensive city worldwide, ranks third, followed in order by Beijing, Shanghai, Osaka, New York, St. Petersburg, Seoul and London.

TOLSTOY HOUSE A TRAILBLAZER - AND A RELIC

At the Tolstoy House, a luxury apartment building on the Fontanka River, the socialist system may be dead, but the class struggle lives on.

A Communist-turned-entrepreneur who owns a sprawling $600,000 apartment uses Marxist jargon to complain about the messy "lumpen proletariat" among his low-income neighbors, who live in single rooms, sharing kitchens and baths in the building's communal apartments.

NATIONAL NEWS

DIPLOMATS LECTURED ON FOREIGN POLICY

MOSCOW - Having summoned all of his ambassadors to Moscow, President Vladimir Putin on Friday explained his new pro-Western foreign policy and laid out his vision for a more modern and economically savvy diplomatic corps.

Formally dedicated to the Foreign Ministry's 200th anniversary - in 1802, Tsar Alexander I for the first time called the foreign service a "ministry" - the meeting of more than 130 ambassadors at the ministry was more than just an office party.

CONSERVATORY INVESTIGATION ON HOLD

The section for the investigation of organized crime in the Interior Ministry for St. Petersburg and the Leningrad Oblast has put a criminal investigation of Vladislav Chernushko, the rector of the Rymski-Korsakov Conservatory in St.

LOCAL BUSINESS

NEW PIPELINE PLAN CERTAIN OF APPROVAL

Analysts believe that the BTS, or Baltic Pipeline System, will allow Russian exporters to avoid shipping oil through the Baltic states and will significantly cut transportation costs.

The first phase of the BTS project has already been implemented by Baltneftprovod - a pipeline-construction company - with the renovation of the Yaroslavl-Kirishi pipe, which connects an oil-refining plant in the Leningrad Oblast; the construction of a new Kirishi-Primorsk pipeline; and a new oil terminal in Primorsk.

POWER STRUGGLE AT SLAVNEFT FINALLY CONCLUDED - MAYBE

Neither the ministry nor Slavneft was available for comment, but Interfax reported that the ministry's investigative committee decided that the actions of current Slavneft president Yury Sukhanov and vice president Dmitry Perevalov did not harm shareholders, which include the government, which has a 75-percent stake.

KUWAIT IN RUSSIA ON ARMS-SHOPPING TRIP

MOSCOW - Officials from Kuwait's Defense Ministry were in Moscow last week to discuss acquiring weapons, including Smerch multi-launch rocket systems, BMP combat infantry vehicles and an Il-76 cargo plane.

The 18-strong delegation expected to conclude a round of talks with Rosoboronexport, the state arms-exporting agency, on Friday, Brigade General Hamed Al-Qallaf, head of the delegation, said in an interview late Wednesday.

PACE OF INDUSTRIAL GROWTH SLACKENING

MOSCOW - Industrial production rose 3.2 percent in the first half of 2002, down from 5.5 percent in the same period last year, according to State Statistics Committee data released Friday.

OPINION

RESTRUCTURING UES: WHAT IS THE MOTIVE?

SINCE Anatoly Chubais announced his plan to restructure Unified Energy Systems, or UES, the energy giant's stock has plunged in value. Its investors are unhappy. The government shouldn't treat their complaints as a cause for concern, however. Reforming any malignant monopoly is bound to reduce its share price, but it should also improve the market potential of the economy as a whole.

NEW RULES FOR OPENING YOUR BUSINESS

UNTIL now, starting a business in Russia has been a tedious and time-consuming experience involving a plethora of procedures and registering bodies. All of this was supposed to change, however, with the arrival of the long-awaited Federal Law "On the State Registration of Legal Entities," which came into force on July 1, 2002, and has been clarified by several government regulations.

CONVICTING THE CRIMINAL 'UPPERWORLD'

WITH all the hand-wringing about the cesspool that is Wall Street, a new arrival to the planet might assume that large-scale corporate corruption is something new. But not only is institutional fraud and wanton lawlessness as old as civilization, a case can be made that it is as American as apple pie.

AIDS: A MATTER OF EQUALITY

"ONE more day, please." It's a plea I hear every time I return to Africa, a plea from mothers dying of AIDS who need time to find someone to care for their children after they die.

REPORT ONLY REINFORCES THE RIP OFF

LAST week, Geneva-based Mercer Human Resource Consulting released its annual cost-of-living survey, which ranks St. Petersburg as the second most-expensive city in Europe, trailing only Moscow, which, in turn, trails only Hong Kong in the world rankings.

A DECADE LATER, NOT TOO MUCH GOOD TO SAY

FOR 10 years now, a chorus of politicians, journalists and sociologists has been telling the public a story as simple and appealing as the fairy tale about Little Red Riding Hood.

Global Eye

Your Global Eye is repairing to a secure undisclosed location this week, undergoing all manner of privations - that Cheney guy is always hogging the bathroom, for one thing - to better serve our faithful readers. (All three of them.) But we leave you in good hands with not one but two special guest columnists.

WORLD

WORLD WATCH

JERUSALEM, (NYT) - An Israeli F-16 warplane fired missiles at the home of a Palestinian militant in the Gaza Strip town of Khan Yunis on Monday after he escaped from the building. The missiles destroyed the three-story structure and wounded several people.

SPORTS WATCH

PHILADELPHIA, Pennsylvania (AP) - As he awaited arrest on assault charges, Allen Iverson played host to an all-night party at his mansion, where guests swam and played basketball in the rain.