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Press review: Russia’s plans for post-war Syria and Medvedev’s clues for foreign investors

October 16, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Monday

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© AP Photo/Hassan Ammar

Izvestia: Russian-Syrian post-war recovery plan to top Yalta forum

Moscow is gearing up to take on mutually beneficial projects with Damascus as part of efforts to rebuild Syria’s post-war economy, Izvestia says with reference to high-ranking sources in Russian diplomatic circles.

"Russia may invest in Syria’s post-war reconstruction. The issue is about mutually advantageous projects. The European Union is willing to participate, though it links its contributions with President Bashar Assad’s resignation, which means Damascus is unlikely to receive any help from Europe now," sources told the newspaper.

The first contracts may be endorsed at the fourth Yalta International Economic Forum (YIEF) in April 2018, according to co-head of the forum’s organizing committee Andrey Nazarov. A delegation from Syria comprising government members, MPs, experts, and businessmen will attend the forum for the first time.

"We plan to discuss scenarios for Syria’s post-war recovery, which will later be developed by YIEF’s experts," he told Izvestia, adding that "Russian and Syrian entrepreneurs will also meet on the sidelines of the forum to discuss potential joint projects."

A special section on the forum will be devoted to the post-war revival of the Syrian economy, which has faced losses of around $226 bln over the past six years of military conflict, according to the latest World Bank estimations, the publication writes. Experts assume that the country will need another 10 years to bring the economy to pre-war levels provided that the war ends this year. Syrian politicians who plan to attend the YIEF next year see Russia as a reliable partner not only in fighting terrorism, but for business as well, Izvestia says, while businessmen consider it necessary to establish direct trade without intermediaries between the two countries.

 

Izvestia: We won’t permit one single nuke blast to occur — military expert

One massive nuclear explosion in a megapolis may be seen as causing deadly destruction, Chief Scientist of the Institute of World Economy and International Relations of Russia’s Academy of Sciences, retired Major General Vladimir Dvorkin, who is also head of the organizing committee for the International Luxembourg Forum on Preventing Nuclear Catastrophe explained to Izvestia’s Internet portal in an interview on the forum’s sidelines. When asked about the minimum number of warheads and carriers able to cause unacceptable damage to the adversary, he replied that no such number exists now.

"The situation has changed since the time it was assumed that 400 megaton - class charges delivered to an adversary’s territory would deter it, and the unacceptable damage has been constantly receding. I consider an explosion of only one massive nuclear bomb in a megapolis causing tens and even hundreds of thousands of deaths, to be unacceptable," Dvorkin said, adding that western countries “put the unacceptable damage at the same level.”

When touching upon the structure of Russian nuclear deterrence forces, he said that the Yars mobile missile complexes, together with maritime systems, "provide quite a good deterrence potential", and there is no need to return to the production of rail-mobile missile systems on the Yars base, a move widely discussed now in the professional community.

"From a technical viewpoint this rail-mobile missile system coupled with the Yars missile would be a good solution, of course, and in any case better than its predecessor, the RT-23. The trouble is that this development has been lobbied by the military-industrial complex, while there is no pressing need for it. In general, it would be a good complex, but it is unnecessary," Dvorkin stressed.

 

Vedomosti: Foreign investors await Medvedev’s signals on future agenda of Russian authorities

As Russian Prime Minister Dmitry Medvedev gears up to hold an upcoming meeting with foreign businessmen later in the day, investors who have poured more than $160 bln into the country’s economy are mostly concerned about what lies ahead for them after next year’s presidential election, representatives of global companies belonging to the Foreign Investment Advisory Council (FIAC) told Vedomosti business daily. "What counts most is clear and understandable guidelines," one of the members of the council said. Another source said that confidence is what foreign businessmen are waiting for, as it is possible to adjust to any changes, but they should be clarified and announced beforehand.

As the government expects foreign businesses to invest and localize production, it is simultaneously putting up barriers in the way of capital, according to the FIAC’s report obtained by the newspaper. So far, no barriers have been lifted, the report said. Issues related to exports and localization will be the key areas to focus on, Vice President, Sustainable Business & Comms at Unilever Irina Bakhtina said, adding that weakly developed local production and complaints against the quality of locally-made products are the main problems for the company in Russia.

Due to meager local demand, foreign producers that have localized production in the country sometimes find it difficult to sell production, according to Deputy Director of the Center for Macroeconomic Analysis & Forecasting Vladimir Salnikov. Real revenues are falling, retail sales are stagnating, while consumer demand remains weak. For example, car-making plants have been facing a reduction in capacity utilization to an average of 50% due to a halving of demand. Some foreign investors say that it is unreasonable to deepen localization without entering global markets. FIAC members interviewed by Vedomosti await the upcoming meeting to find answers to their questions despite the fact that many requests have been unanswered for a long time.

 

Kommersant: Russian Post proposes automatic collection of duties on foreign purchases

Russia’s national postal service has offered a mechanism of automatically collecting duties on imported goods delivered within the Eurasian Economic Union (EAEU) as a new option to tackle the pressing issue of a reduction in the duty-free import threshold, Kommersant says. Russian Post has suggested that the government should negotiate the issue within EAEU member-states in order to set a new identical schedule for reducing the duty-free import threshold, as stated in the request of the company’s head Nikolai Podguzov to Deputy Prime Minister Arkady Dvorkovich dated October 10, the newspaper writes.

According to the national postal service, it is possible to cut the limit to 200 euros as of January 1, 2019, then to 100 euros as of January 1, 2020, and to 50 euros starting January 1, 2021, which will enable maintaining “the growth rates of cross-border online trade, while maximizing mid-term federal budget revenues.” Currently, Russia’s duty-free import threshold for international postal deliveries amounts to 1,000 euros. According to Russian Post’s estimates, the cost of 93% of deliveries do not exceed 50 euro. The plan developed by the Eurasian Economic Commission (EEC) suggests a reduction to 500 euros starting September 1, 2019, and to 200 euros in 2020.

A representative from the Eurasian Economic Commission Natalya Sachenok said that the project might be considered at the commission’s council by the end of this year. "The countries are allowed to tighten imports regulations at national levels, while the commission only sets the upper threshold," she added. The plan is to impose the proposed mechanism on AliExpress.com, which accounts for almost 80% of all trans-border purchases at the moment, as a pilot project until April 1, 2018, after which Russian Post will agree on integration "with other major online trade platforms," the newspaper said.

 

Vedomosti: Otkritie shares worth 40 bln rubles sold prior to recovery procedure

Right before a temporary administration was slapped on Russia’s Otkritie Bank, ranked 8th in the national banking system in terms of assets, several transactions worth around 40 bln rubles ($698 mln) were conducted through structures close to the bank, Vedomosti says citing sources. The Bank of Russia announced measures to improve the financial stability of Otkritie Bank on August 29, which was preceded by large transactions with the bank’s shares, with the last one worth almost 14 bln rubles ($244 mln) concluded on August 28, the newspaper writes. Trust Bank, which is currently going through its financial recovery procedure through Otkritie, was the buyer, while the sellers were three pension funds, two sources close to Otkritie told the newspaper.

The deals were conducted in August before the regulator made the recovery procedure decision, one of the sources stressed. A source in the Central Bank confirmed to Vedomosti that Trust acquired 13.07% of Otkritie shares in August in several stages from pension funds. Market players consider such transactions suspicious, saying that the regulator should check them. "Only a transaction where participants are not interrelated may be considered a market deal, whereas in this case there is a certain dependence between the parties," one of the sources said.

The temporary administration for Otkritie started on August 30. The Bank of Russia has been participating in the bank’s capital as a majority investor, providing financial support to it at the expense of the banking sector consolidation fund created this summer. After the financial recovery procedure was announced several global rating agencies have downgraded Otkritie.

 

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

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