Press review: Russian potential reaction to US Syria strike and ruble devaluation benefits

Nezavisimaya Gazeta: Russia may hit back at US strike on Syria with cruise missiles

If the United States decides to use force in Syria in the wake of the alleged chemical attack in Douma, it will get a symmetric response both from Damascus and Moscow, Nezavisimaya Gazeta writes on Wednesday. Russia’s UN envoy Vasily Nebenzya along with other Russian politicians and officials have warned of serious consequences, should such steps be taken by the Americans and their allies. Russian Foreign Minister Sergey Lavrov earlier said the Russian army was ready to protect Damascus.

Several military websites wrote that on April 8-9 Russia’s Armed Forces had been secretly put on full combat alert. No official comments on these reports have been made. However, according to the Russian Defense Ministry’s report, the army and the fleet have stepped up activity, especially in the Black Sea, the Mediterranean Sea and also in the Caspian Sea from where the Kalibr cruise missiles had been fired on targets in Syria. It is not ruled out that preparation for these strikes there is underway now, the paper says.

"The Kalibr strikes may be launched on US facilities and bases in the Middle East if the Pentagon, which accuses Russia of the notorious chemical attacks, decides to deal a retaliatory blow on the Russian bases in Tartus and Hmeymim," military expert Lt.Gen. Yuri Netkachev said.

Reuters reported citing the White House’s sources about possible strikes by the US and its allies on the Russian facilities. The expert stressed that Moscow won’t leave these strikes unanswered. But such a scenario is unlikely as this will spark "a real big war, which neither the US nor Russia want."

Another military expert, Col. Vladimir Popov, did not rule out that if the missiles launched from the US destroyers kill Russian servicemen in Syria, the US vessels will be attacked by Russian missiles or aviation. Chief of Russia’s General Staff Valery Gerasimov had earlier warned of this possible Russian response.

Kommersant: Ruble devaluation to boost Russian grain exports

This week’s sharp ruble devaluation may prop up Russian grain exports, which started declining by the end of the season, Kommersant business daily writes. "The devaluation factor will influence the market for several weeks. Even if the ruble manages to recover losses soon, the short-term jump in the foreign currency rate will significantly help exports," Director of SovEcon analytical center Andrei Sizov said.

Dmitry Rylko, Director General of the Institute for Agricultural Market Studies, expects that exports will revitalize amid the ruble’s decline, but this factor’s influence will be restrained by infrastructure restrictions.

Traditionally, by the end of the season, grain exports diminish. But Russia’s grain exports in March and April turned out to be higher than expected, Sizov said. According to the customs data, on April 4 Russia’s grain export grew 39% year-on-year to 40 mln tonnes, and wheat supplies rose 41% to 31.2 mln tonnes. By the end of the season, the wheat export is anticipated to reach 39.7 mln tonnes, according to SovEcon.

ProZerno CEO Vladimir Petrichenko forecasts that the drop in value of the Russian ruble will positively affect the price climate on the Russian grain market.

The global grain market is racked by drought in North America and problems in Argentina, but due to the ruble devaluation the buyers of Russian wheat will seek to contain prices as the contract value in rubles grows, Rylko noted. According to Sizov, the ongoing ruble devaluation will also affect the growth of domestic grain prices.

If the ruble’s devaluation sends domestic grain prices soaring, the Russian authorities may step in and limit supplies, he said.

Nezavisimaya Gazeta: Pyongyang seeks Moscow’s backing in talks with Seoul, Washington

North Korean leader Kim Jong-un may visit Russia in the run-up to the summits in late April-early June with South Korean and US Presidents, Moon Jae-in and Donald Trump respectively, Seoul’s media reports said citing the US special services. They view the visit of North Korean Foreign Minister Ri Yong-ho to Moscow as a hint at groundwork being laid for a meeting between the Russian and North Korean leaders, Nezavisimaya Gazeta writes.

Russian officials have refuted reports on the possible visit of the North Korean leader. Speculation about Kim Jong-un’s trip to Moscow is being fueled by his recent trip to Beijing, his first foreign tour since coming to power, the paper writes. Experts recall that the North Korean leader’s father Kim Jong-il had held high-level meetings with Russia and China before and after his meeting with South Korea’s then-President Kim Dae-jung in 2000.

These trips by the North Korean leadership come amid the need to secure support of the major global powers in preserving the political system and strengthening their positions at talks, the paper writes. However, Kim apparently remembers that the West’s unilateral guarantees helped neither Saddam Hussein nor Muammar Gaddafi.

"Although Pyongyang is offended by Moscow’s almost unquestioning support of the UN Security Council’s resolutions, and imposing tough sanctions on North Korea, he wants to know Russia’s position if no agreement is reached with Washington on the peninsula’s denuclearization," said Alexander Zhebin, Director of the Center for Korean Studies at the Russian Academy of Sciences’ Institute for Far Eastern Studies. "The deal is unlikely to be clinched soon without providing security guarantees to America."

According to the expert, North Korea wants Russia to understand that the upcoming summits won’t result in any immediate nuclear disarmament. Pyongyang does not want inspections in the country like with Iraq, and the US is very interested in total inspections. "I think the inspections issue will be a key obstacle for agreements between North Korea and the US," he stressed.

Russia needs to develop new tactics in order to remain an active participant in the changing climate on the Korean Peninsula. Therefore, a meeting between the leaders of Russia and North Korea could be useful, the paper writes.

RBC: Weaker ruble to benefit Russian federal budget, exporters

Black Monday’s market carnage sent the ruble into its deepest plunge in two years. The collapse was due to investors’ psychological response to risks from US sanctions, but no further downturn is expected if there are no geopolitical factors, experts questioned by RBC said.

Russia’s federal budget and exporters will benefit from the weakening ruble, analysts said. The falling ruble rate creates very suitable conditions for exporters of raw materials, said Evgeny Nadorshin, chief economist at the Moscow-based PF Capital. The current ruble rate is beneficial for the budget. The ruble price for oil after the falling rate is more than 4,000 rubles per barrel, the analyst said, while the price of 3,300 rubles per barrel is considered to be more than acceptable for the budget, the analyst noted.

A weaker ruble will bolster exports, Chief of the Center for Strategic Research (CSR) and ex-finance minister Alexei Kudrin said. "A number of sectors are likely to profit due to this rate. So, in general, the balance [of payments] will be good and this won’t significantly affect economic growth."

Alexandra Suslina of the Economic Expert Group said, "If the current situation does not result in falling oil prices and does not lead to restrictions on the volume of exported goods, oil and gas revenues will increase."

However, if the foreign currency rate grows more, it will hit the budget, the economy and the citizens’ welfare, she warned. The current tensions on the markets are a threat to stable development and a decrease in the broad taxation bases, the expert said.

Under the current climate, investors may lose interest in Russia over high risks, Nadorshin cautioned. "Then, all plans for economic development - boosting growth, increasing efficiency and industry 4.0 - will go unfulfilled," he stressed.

The falling ruble rate will mostly affect companies that import goods, Oleg Shibanov, professor of finance at the New Economic School, told the paper.

Izvestia: Russia gears up to greet new diplomats after expulsions

Russia is ready to welcome new diplomats in exchange for those expelled in retaliation for the Western diplomatic demarche in the wake of the poisoning episode of former Russian military intelligence (GRU) Colonel-turned-British spy Sergei Skripal and his daughter Yulia in Salisbury, UK. According to a high-ranking diplomatic source, Moscow did not cut the overall number of staff members in diplomatic missions of foreign states, Izvestia writes. The United Kingdom is the only country, which cannot fully restore its pre-crisis number of diplomats.

"In the UK’s case, we equaled the number of their staff members with those working in our diplomatic missions. So, instead of 73 expelled staff members London will be able to replace just 23 people. In turn, we also plan to replenish our diplomatic personnel," the source said.

The Foreign Ministry of the Czech Republic and the US Embassy in Russia confirmed their plans to the paper to send their diplomats to Russia.

Spokesperson for the US Embassy in Moscow told Izvestia that all requests on diplomatic accreditation would be considered on an individual basis. Russia has not notified the embassy of its plans to cut the number of staff members in the US diplomatic mission in Russia, she said.

The Czech Republic’s Foreign Ministry noted that when a country decides to expel diplomats, this does not mean that their positions are "frozen" and new people cannot fill these posts.

"All countries face a similar situation, not only between Russia and the Czech Republic. That’s why Russia may fill 60 positions with new diplomats in the US, for example, or vacant diplomatic posts in the Czech Republic. Prague will also seek to fill vacancies in Russia as in general we have few people there," Spokesperson for the Czech Republic’s Foreign Ministry Michaela Lagronova said.

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