The Asia-Pacific Economic Cooperation (APEC) summit adopted a "toothless resolution that is unlikely to have any noticeable effect on trade between the members of the association," according to Nezavisimaya Gazeta.
"The meeting, however, demonstrated profound changes in the balance of power and influence in the most dynamic region of the world," the newspaper wrote. According to Nezavisimaya Gazeta, the meeting showed that the United States is losing ground to China, as Beijing set the tone in the international forum.
The meeting was no doubt affected by the promises made by US President-elect Donald Trump to protect jobs in the United States, by exiting the Trans-Pacific Trade Partnership (TPP) project, which has not even been implemented yet.
In an interview with Nezavisimaya Gazeta, Professor of Higher School of Economics, leading researcher at IMEMO Alexei Portansky said, "Reconciliation and the subsequent signing of the TPP in February 2016 was largely possible thanks to the impressive work of American commercial diplomacy. Now 11 members of TPP who were preparing for the ratification of the agreement are at a loss."
"China is pushing the United States out of the driver’s seat," the newspaper writes, adding that it was evident at the forum, where the spotlight was on China’s President Xi Jinping, who encouraged challenging protectionist ideas with that of free trade for the entire Pacific Rim.
According to the newspaper, "China has what it takes - its recent initiatives, such as the New Silk Road, the Asian Infrastructure Investment Bank, have shown the ability to change the rules in international affairs."
As for Russia, President Vladimir Putin held a number of important discussions on the sidelines of the summit. As for Russia’s place on the changing international landscape, according to Nezavisimaya Gazeta, so far Russia accounts for only a small share of trade in the Asia-Pacific region.
Moscow believes that joining a joint coalition with the United States to fight terrorism in Syria is possible, but putting it together could take months, Chairman of the Federation Council's (upper house of parliament) International Affairs Committee Konstantin Kosachev said in an interview with Izvestia.
"For us, it is important to understand that the US strategic goals in Syria will change, because until now their aim was not so much to fight terrorism, but for regime change. If Washington's main task will be to quash terrorism in Syria, I do not see any problems for us in joining a coalition with the United States, provided that they will be guided solely by the rules of international law in their actions," Kosachev explained. He noted that this window of opportunity has opened, especially, in the context of Donald Trump’s victory in the US presidential elections, as he noted that "the US will no longer interfere in the affairs of other states."
The question of Russian and American involvement in the war on terror within the framework of a coalition has been a topic of discussion in recent months. According to the Russian side, the activities of the coalition do not comply with international law because they were not sanctioned by the United Nations Security Council.
The newspaper noted that Russia entering a coalition with the United States could be done only after the UN Security Council adopts a corresponding resolution. Another option - which would still require approval by the Security Council - would be forming a new coalition.
Reforming the country’s economic management and administration might add about 2% to GDP growth annually, Izvestia wrote citing Russia’s Deputy Minister of Justice, Yury Lyubimov.
"All our economic growth currently depends on the system of administration. Red tape holds back 1-2% of growth every year due to ineffective state control and supervision," Lyubimov noted.
According to business sector representatives, the country still has a significant amount of superfluous and obsolete requirements that create obstacles for legitimate business. Lyubimov proposed listing sectors with such onerous, ineffective regulations on businesses and closely examining their lists and guidelines in order to trim bureaucracy.
One of the main objectives of the reforms is to reduce the amount of administrative red tape burdening organizations and individuals. Currently, there are about 160 distinct types of state controls in Russia, while more than 2 million inspections are conducted annually.
According to various estimates, adhering to and carrying out such inefficient administrative obligations costs businesses anywhere from 1.8 to 3.8% of GDP per year. At the same time, 5-10% of these costs are associated with excessive administrative pressure, and 90-95% - with implementation of obsolete, redundant regulatory requirements.
The heads of Russia’s oil majors - Rosneft, Lukoil and Gazprom Neft - Igor Sechin, Vagit Alekperov and Alexander Dyukov have sent a letter to the Russian President Vladimir Putin dated October 28 with a request to extend preferences on the mineral extraction tax and export duties for new shelf fields, RBC wrote citing a copy of the letter.
According to the letter, "Under the current conditions, Russian companies are forced to reduce the rate of development of shelf resources, which is reflected in postponing a number of projects and reducing the volume of exploration work," the letter said. Representative of the Energy Ministry and a source in the Finance Ministry confirmed to the newspaper the letter had been received.
The law on incentive measures for hydrocarbon shelf production was adopted in September 2013. However, since then, oil prices more than halved, companies’ costs rose due to inflation, the tax burden on the industry also increased due to international sanctions slapped on Russian oil and gas companies.
Postponing the start of production means that the companies will be able to take advantage of tax breaks much later than was originally anticipated. "Thus, there is a risk that the governmental incentives for shelf production will be ineffective," according to the authors of the letter. They ask the President to change the term for the benefits (currently up to 2022-2042) counting the period from the moment oil and gas production actually begins.
According to the letter, this adjustment will help ease the financial burden at the primary, the most capital-intensive stage of development of shelf marine deposits. It will also be "an effective measure to stimulate investment in the development of hydrocarbon shelf resources."
The Energy Ministry does not oppose postponing the dates, a source in the Ministry told the newspaper, but the Finance Ministry need to make the final decision. The changes will not result in lost income for the budget, so the Finance Ministry most likely would not be against it, a source in the Ministry told RBC. According to the source, it will be possible to make the necessary amendments to the legislation at the State Duma’s (lower house of parliament) spring session.
According to recent surveys by the research pollster, Obshestvennoe Mnenie Fund, virtually every third Russian household’s income decreased in the last year. According to the official statistics, the drop in incomes even accelerated in October. Declining consumer consumption makes it difficult to bring about an economic recovery, which was recently forecasted by the Economic Development Ministry, according to Nezavisimaya Gazeta.
Together with falling incomes, the decline in retail trade accelerated as well - in October it sank 4.4% year-on-year to 2.4 trillion rubles ($37.14 bln). The plunge in consumer activity came as an unpleasant surprise for analysts, and it did not go unnoticed by the Economic Development Ministry. According to the forecasts for 2017-2019, consumer demand was supposed to make a positive contribution to economic growth. However, the Government’s expectations might not be justified, and the forecasts will have to be revised.
According to experts interviewed by the newspaper, this scenario should not be dismissed. "The forecast for this year is unlikely to be revised - the draft budget has already been introduced in the State Duma (lower house)," FBK Institute of Strategic Analysis Director Igor Nikolaev told Nezavisimaya Gazeta, adding that the forecast for 2017 might well be revised.
"There is a possibility of an even more pessimistic scenario," Mani Fanny CEO Alexander Shustov told the newspaper. "Taking into account seasonal inflation in December, real incomes may fall 6.5% in annual terms," the expert resumed. "Then import substitution and improving the population’s standard of living included in the Economic Development Ministry’s economic policy priorities will be difficult to attain given the current economic climate," Shustov added.
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