Press Review: NATO reconnaissance flight near Russia’s borders and economy minister arrest

Nezavisimaya Gazeta: NATO and Pentagon reconnaissance creep towards Russia’s borders

As the Russian President Vladimir Putin talked to US President-elect Donald Trump on the phone, an RQ-4 Global Hawk - an unmanned (UAV) surveillance aircraft - was making another reconnaissance flight near Russia’s southern borders. Earlier, a US strategic reconnaissance RC-135W was spotted near the main base of the Baltic Fleet in the Kaliningrad region, other intelligence and anti-NATO aircraft tried to find three Russian nuclear submarines in the North Atlantic.

Over the last few months, Pentagon and NATO reconnaissance aircraft have been making regular day-to-day appearances, up to two or even three times daily, at Russia’s borders. According to the newspaper, US military intelligence has been snooping on almost all Russian military facilities on the Baltic Sea, in Crimea, the Arctic, off the coast of Kamchatka and along the Kuril Islands. In addition, the Western alliance has been eyeing Russian bases in Syria and areas of deployment of the Russian Navy combat ships in the eastern Mediterranean.

"Moscow is concerned about NATO’s infrastructure getting closer to Russia’s borders. According to European public opinion - and likewise Russia’s viewpoint - the intensity of the confrontation could be reduced by the next US president. However, so far there is no evidence that something will change once the new administration enters in the White House," Nezavisimaya Gazeta wrote.

"It is too early to draw conclusions about any hostility by the new administration towards Russia," Member of the Academy of Military Sciences Colonel Edward Rodyukov told the newspaper, adding "although, the US still is likely to increase military spending in the future." The expert fears that Russia might again be drawn into an arms race, and Trump "could be the hawk, in comparison with which the Obama administration would seem like a dove."

On the other hand, another military expert, Lieutenant-General Yuri Netkachev is sure that the US will not be able to impose its will on Moscow in the future. "Russia will be able to fend off the threats by asymmetric measures that would be trouble-free for the economy," he told the newspaper.

Kommersant: Admiral Kuznetsov arrives bringing Russian air power to Aleppo

The Russian armed forces on Wednesday beefed up military operations in Syria. A large-scale operation in the provinces of Idlib and Homs was launched involving Kalibr-NK cruise missiles, Oniks from the Bastion anti-ship missile systems and Sukhoi Su-33 jet fighters from the aircraft carrier Admiral Kuznetsov. According to Kommersant, in the future, the question will arise about using airstrikes on Aleppo neighborhoods controlled by terrorists.

According to Kommersant source in the military leadership, the participants in the operation were tasked with eliminating material and technical base of the Islamic State and Jabhat an-Nusra (terrorist organizations, banned in Russia). The targets, according to the source, were selected based on space and unmanned intelligence, as well as with the help of covert data. According to the Defense Ministry’s official representative, Igor Konashenkov, Russian and Syrian aircraft have not been conducting attacks on Aleppo for 28 days.

Meanwhile, the situation in Syria’s once second largest city is extremely difficult - the practice of "humanitarian pauses" has failed because the rebels used this timeout to regroup and replenish their forces. The humanitarian situation in Aleppo is catastrophic. According to a Kommersant source close to the Russian General Staff, the issue about involvement of Russian and Syrian aircraft in Aleppo will arise in the near future. "Everything is useless without air support," the source told the newspaper, adding that President Vladimir Putin needs to decide on using aircraft in Aleppo.

Vedomosti: What does Economy Minister Ulyukayev’s arrest mean?

The arrest of Alexei Ulyukayev took everyone by surprise and radically changed the perception of the current situation for government officials, specifically for the economic bloc. President of the Institute for the Development and Modernization of Public Relations in Ekaterinburg Fyodor Krasheninnikov delves into the reasons and possible ramifications of this high-profile case in a column for Vedomosti.

According to the expert, "once again in our political practice heavy charges against high-ranking officials sort out several important problems."

"First, it once again shows the resoluteness of the fight against corruption. Second, President Putin demonstrated to certain groups of his supporters that he is indeed the decisive leader they need. In addition, in light of the domestic economy’s deteriorating state it was necessary to trot out to society a potential "pest", and the Economy Minister accused of bribery is the perfect choice," Krasheninnikov said.

On the other hand, according to the expert, the scandal reveals the current situation within the government’s circles. "It demonstrates a certain helplessness of the authorities at the highest level, as it turns out, there are no peaceful, political methods for solving conflicts," he wrote.

Krasheninnikov believes that this will not be the last time a high-ranking official is removed from office. He thinks it will continue as the economy continues to slide further. "However, every new official arrested for bribery will only bring society closer to the inevitable raising the question of whether it is necessary to change the whole system" the expert concluded.

Izvestia: Despite Ulyukayev scandal, state plans to privatize Rosneft on schedule

Despite the arrest of Economic Development Minister Alexey Ulyukayev, the Russian Government is not going to revise Rosneft’s privatization and intends to complete the transaction as scheduled, a senior government source told Izvestia. Also, the government will not reconsider the results of Rosneft buying shares in Bashneft - the transaction was legitimate and other options are not discussed.

The Government plans to privatize Rosneft before December 5, 2016. The company’s shareholder - Rosneftegas - needs to sell 19.5% of shares for at least 710.85 bln rubles ($11.08 bln).

Finam analyst Alexey Kalachev told the newspaper that Rosneft’s privatization will be carried out, if the federal budget needs money. "At the same time, it is obvious that there are no other contenders for purchasing this package, except for Rosneft itself. The Economic Development Ministry did not initiate this mechanism - quite on the contrary. Now the last objections will be removed," he said.

Teletrade analyst Mark Goikhman also believes that the privatization of Rosneft will not be delayed, despite the fact that the Economic Development Ministry is a key structure in preparation of the deal.

"First of all, we are talking about the timing of the budget receiving the revenues from the sale of Rosneft. It is crucial to do it before the end of December. Without that, the deficit could exceed 4%, which would be a fundamental breach of budgetary projections and may cause the Russian economy to generally stagnate." Goikhman also pointed out to Izvestia that if the government fails to obtain revenue from the deal, key national institutions will lack their necessary funding.

Izvestia: Retail trade recovers from 2014 shock

The Russian trade market has recovered and foreign brands in the low price segment have started to return to the market from the beginning of 2016. Izvestia interviewed representatives of the budget segment in the Russian business and some experts.

A network of non-food consumer goods of the French retailer Auchan - Lillapois Beauty - is among those who intend to expand into Russia’s budget segment. The retail chain is ready to open up to 20 stores in Russia. Communication & CSR Director at Auchan Retail Russia Maria Kurnosova noted, "As soon as the project was ready to be launched in Russia and all agreements were reached, the first store was open."

Israeli coffee shop chain Cofix is also among the newcomers in the Russian lower price segment. Director of Business Development at Cofix Russia Alexander Mekhrishvili noted that the network offers products at low prices of 50 rubles. "A year ago, the price of 150-200 rubles for a cup of coffee did not stop consumers, but now they are looking for more affordable options," he said.

In total, by October 37 international brands opened in Russia. The majority of the foreign newcomers (57%) are working in the mid-price segment.

"In 2015, the market recovered from the shock of 2014, at that time many companies had left the market. Thus, in 2016, it became cheaper for companies to enter the Russian market than even before the crisis, or a year earlier - in 2015 - when prices still had not been settled," Y Consulting CEO Daria Yadernaya told Izvestia.

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