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Press review: US response to diplomatic staff cuts and Russia's fragile economic recovery

August 14, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Monday, August 14

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© Donat Sorokin/TASS

Izvestia: US might limit movement of Russian diplomats

The United States might limit the radius of movement of Russian diplomats working in the country. Moreover, a notification procedure could be introduced for all employees of diplomatic missions, sources in diplomatic circles told Izvestia. According to the sources, this is one of the possible retaliatory steps considered in Washington. As expected, the US will announce its final decision by September 1.

According to the newspaper’s sources, this is the most stringent measure considered by the State Department. Most likely, the Russian embassy in Washington will not be an exception to the restrictions.

"Restricting movement of Russian diplomats in the United States might become one of the possible options for retaliatory measures. Restrictions imposed during the Obama administration include 25 miles for diplomats of junior and middle levels. Employees of the Russian diplomatic missions are required to notify the State Department if their travel distance exceeds 25 miles. This does not apply to advisors and higher-level diplomats. There is a possibility that these standards could be tightened. The distance can be reduced to 10-15 miles, and notifying the State Department might become mandatory for all workers of diplomatic missions," sources told Izvestia.

According to the sources, these measures might be more painful for the Russian diplomatic corps than just closing one of the four consulates.

Former Russian Deputy Foreign Minister and former UN Deputy Secretary-General Sergei Ordzhonikidze told Izvestia that these restrictions on Russian diplomats seem likely.

"This greatly hinders the professional work of diplomats. They must travel around the country, meet people, give lectures, visit universities. How can this be done under such restrictions? Closing one of the Russian diplomatic missions in the United States or dismissal of another group of diplomats are also possible. In any case, all these measures will not lead to anything good," Ordzhonikidze said.

According to the expert, any restrictive measures to be imposed by the US authorities will lead to retaliatory action from Moscow.

 

Kommersant: US and Venezuela fight for international support

US Vice President Mike Pence began his first tour of Latin America, focusing on the Venezuelan crisis, which escalated after US President Donald Trump said he did not rule out the possibility of a US military operation in the country. Latin America is split in two camps - opponents and allies of Nicolas Maduro.

The ongoing crisis is not limited to the confrontation between Venezuela and the US - all states of the region have been involved in it one way or another. The only idea that unites the countries of the region is rejecting military intervention in the conflict, the newspaper writes.

According to Kommersant, Moscow remains one of the few international allies of Caracas, providing financial support. The Russian Ministry of Foreign Affairs believes that unilateral sanctions, isolationist measures - an ultimatum to Caracas from several countries in unacceptable. Earlier, Venezuelan ambassador to Russia Carlos Faria Tortosa in an interview with Kommersant said that Moscow’s position is courageous, noting that the difficult situation did not affect the level of bilateral economic cooperation.

According to the newspaper, this cooperation is based on oil production. In 2016, Russian oil major Rosneft had five projects in the country with 2.67 mln tonnes of oil produced. Without Moscow's support, Venezuela's financial situation would be even worse, and the country could have faced a debt default, the newspaper writes.

According to Valery Nesterov, analyst at Sberbank Investment Research, on the one hand, Russian oil companies entering Venezuela faced obvious political risks; on the other hand, they received access to the largest hydrocarbon reserves in the region. The expert told Kommersant, during the presidency of Hugo Chavez, Russia was able to expand other areas of cooperation, but now Russian companies are not in a hurry to increase their investments. In the case of Rosneft, according to the newspaper, so far it enjoys considerable political and economic influence in Venezuela, regularly announcing prospects for new projects in the country.

 

Izvestia: Hackers steal 650 mln rubles ($10.87 mln) from Russian payment cards

The amount of money stolen by cyber criminals from Russian bank cards with the help of social engineering amounted to 650 mln rubles ($10.87 mln) in 2016, which is still 15% less than in 2015, as Russians become familiar with the most popular fraud schemes. Izvestia is citing a report of Zecurion, a company specializing in banking services security, that in 2017 the figure might increase to 750 mln rubles ($12.54 mln).

According to the newspaper, cyber criminals use social engineering techniques for theft, constantly improving their schemes, for example posing as tax officers. Scammers also use robot-assisted calls. According to Zecurion, cards of around 4,000 people were compromised with that method for a total of 550,000 rubles ($9,196), and it is only gaining momentum.

Fraud prevention manager at Jet Infosystems Information Security Center Alexey Sizov told the newspaper he is sure that the new scheme will remain relevant for at least a month. "The number of successful attacks will depend on how well-prepared the calls are and whether they are used on real debtors. Usually the lifespan of a fraudulent scheme is a month or a little more - financial literacy of Russians is growing, and the number of advanced clients of banks is increasing," the expert said.

"Hackers use new remote payment services as bait - for example, Avito, as well as emerging payment services for taxes, duties. It is easier to deceive ordinary citizens by impersonating employees of state bodies," Sizov added.

 

Nezavisimaya Gazeta: Russia’s economic recovery might end quickly without additional investments

According to the recent report of the Russian State Statistics Service, the Russian economy grew by an annual rate of 2.5% in Q2 of 2017, reaching the highest quarterly figure in the last 3 years. According to Nezavisimaya Gazeta, despite the fact that the results might have impressed the West, it might be too early to manifest success, as without additional investment, the economic recovery will be short-lived.

Some experts interviewed by the newspaper, believe that Russia has partly overcome the crisis. Pavel Segal, First Vice-President of Opora Rossii, believes that this is evidenced by the growth of sales of new cars for three months. "This market serves as an indicator of the economic health," the expert said.

At the same time, the majority of experts interviewed by Nezavisimaya Gazeta suggest that it is too early to show unrestrained optimism. "In my opinion, we can talk about coming through the crisis when the sentiment of at least 50% of Russian citizens and entrepreneurs can be characterized as optimistic, when consumer demand grows," Alor Broker analyst Kirill Yakovenko said.

"When real disposable incomes of the population start to grow and full-scale modernization of production capacities begins - that is when we can think about the economic recovery," Nikita Isayev, Director of the Institute of Contemporary Economics, told the newspaper.

Oil might have made the biggest contribution to the current success of the Russian economy. "This slight optimism that we can feel in the economy today is an echo of relatively stable oil prices, as well as the ruble rate strengthening. These trends were formed due to external stimuli, which we do not control and which can as suddenly go away as they came," Kirill Yakovenko told Nezavisimaya Gazeta.

 

Kommersant: Flint Capital invests in Flo app together with model Natalya Vodyanova

Venture fund Flint Capital and model and philanthropist Natalia Vodianova invested $5 mln in the Flo application, Flint Capital told Kommersant. Vodianova’s representatives confirmed the information, adding that the model joined the company’s Board of Directors alongside the founder of Flo, former Vice-President of Mail.ru Group Yuri Gursky. The application uses artificial intelligence to monitor women’s health. Market participants interviewed by the newspaper consider Flo to be a niche app with a non-obvious business model.

Since its launch in October 2015, Flo has attracted more than 10 mln monthly active users, and now, according to the company, the audience grows by 1 mln people every month. "Our goal is to move to an active monthly audience of 100 mln people. We have grown tenfold in a year and do not plan to slow the pace down," Gursky told Kommersant.

The current stage of the project implies growth of the audience, monetization is not a current focus of the app’s team, according to Flint Capital partner Andrew Gershfeld. "We will definitely not introduce subscriptions - the application will be free - and we will not let in ad networks," Gursky added, noting that the team might consider partnerships with other services.

Experts interviewed by Kommersant are skeptical about the prospects of Flo app. Medme Managing Partner Ilya Slutsky believes that the main problem of the service is monetization. "Flo’s business model is not clear. Even transparent business models are not easy to implement sometimes, and when the value created for the consumer is not at all obvious the risks increase out of proportion," he told the newspaper. Sistema VC fund President Alexey Katkov told Kommersant the app’s value is "very niche".

 

TASS is not responsible for the material quoted in the press reviews

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