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Press review: Who will Erdogan face at snap election and Bank of Russia to go blockchain

Top stories in the Russian press on Friday


Kommersant: Turkish opposition to battle Erdogan, ruling party at June’s snap elections

Turkey will hold early presidential and parliamentary elections on June 24. Turkey’s ruling Justice and Development Party (AKP) has nominated the country’s President Recep Tayyip Erdogan as its candidate for the presidential race. No one doubts that the incumbent leader will win, while a candidate from the opposition can hardly expect anything more than making it to the run-off, Kommersant writes.

Although the opposition is unable to prevent the current president from being re-elected, it is determined to succeed in the parliamentary election.

The pro-Kurdish People’s Democratic Party, for its part, promised to nominate its former co-chair Selahattin Demirtas, who is currently in jail on suspicion of having ties with the Kurdistan Workers’ Party labeled as a terrorist organization by Ankara.

"Demirtas’ nomination is legally possible. Some amendments, due to which an individual’s criminal conviction cannot prevent him from running for president, were earlier introduced to the Constitution," Yuri Mavashev, Head of the Political Division at the Center for the Study of Modern Turkey, explained to Kommersant.

Meanwhile, Guney Yildiz, an expert of the Valdai International Discussion Club and a Visiting Fellow at the European Council on Foreign Relations (ECFR), did not rule out that Erdogan could fail to secure the required 50% of votes to win the first round.

He stressed that even if the opposition gets the majority, it may have little opportunity to challenge Erdogan.

However, Mavashev was certain that "even in the presidential republic, the parliament can make things difficult for the authorities." "There are many dissatisfied members in the ruling party itself, primarily the Islamist intellectuals. While they backed Erdogan at the beginning, that is not the case now," he stressed.


Izvestia: Russia’s Central Bank to move to blockchain in 2019

The Central Bank of Russia will switch its system to transmit financial messages (SPFS), a Russian analogue to SWIFT, over to blockchain next year, a source close to the bank informed Izvestia. Two bankers familiar with the situation have confirmed this information. It is unclear so far, whether the regulator will use its own blockchain system or the existing Etherium platform, the source noted.

The Central Bank told the paper that it is eyeing various options for the use of the distributed ledger technology, which includes financial messaging.

According to Petr Pushkarev, Chief Analyst at TeleTrade, if the distributed ledger technology is used, the SPFS can be even more reliable than SWIFT.

Blockchain technology is a modern solution, it will help improve the SPFS’s security and transparency, said Tamara Kasyanova, Managing Partner at 2K audit company. Fully protected transactions are important for both banks and their clients, she added. According to the expert, the use of blockchain will make SWIFT’s Russian counterpart more popular. As a result, new participants will join it more actively.

"The use of blockchain technology will undoubtedly raise the level of SPFS protection against cyber attacks," the paper quotes Maxim Osadchy, head of the Analytical Department at BKF Bank, as saying. "This is particularly relevant, considering that some banks, including Russia’s Globex, have become targets for cyber attacks through the SWIFT system."


Kommersant: China steps up activities on disputed islands despite court ruling

Beijing has deployed anti-ship cruise missiles to the disputed islands in the South China Sea. According to CNBC TV citing US intelligence officials, China’s YJ-12B missiles are capable of striking vessels within 295 nautical miles. The deployment was an expected move, with satellites registering the construction of missile bunkers on the disputed islands, Kommersant writes.

Territorial disputes in the South China Sea between China, Vietnam, the Philippines, Malaysia, Indonesia and Brunei, which own hundreds of chaotically scattered islets exacerbated in 2010. Beijing seeks recognition of its rights to 90% of the sea and almost all the islands and reefs.

In the summer of 2016, The Hague-based Permanent Court of Arbitration ruled that China’s actions were illegal, since the three reefs are located in the Philippines’ exclusive economic zone and cannot be Chinese possessions.

This verdict seen by many as the first step to curb Beijing’s ambitions, did not yield the expected results, according to Pavel Gudev, Senior Research Fellow at the Russian Academy of Sciences’ Center for North American Studies. "Since the court ruling, the stance of Vietnam and other countries on the territorial dispute has become more moderate, while the Philippines has considerably changed its course seeking rapprochement with Beijing and Moscow," the expert noted. "Everyone is now trying to resolve the disagreements through bilateral meetings and negotiations, and that’s what Beijing was trying to achieve at the Court of Arbitration."

For his part, Anton Tsvetov, an expert at the Center for Strategic Research, told the paper that Vietnam, for one, discontinued hydrocarbon extraction projects involving foreign partners in its exclusive economic zone twice over the past due to pressure from China.


Vedomosti: Gazprom expects to set another gas export record

Russia’s energy giant, Gazprom, is certain that gas supplies to non-CIS countries in 2018 will increase compared to last year, Alexander Medvedev, Deputy Chairman of Gazprom’s Management Committee, informed Vedomosti.

"It’s difficult to say for sure right now how much we will supply this year compared to 2017, but that will be a record. All the prerequisites are in place for that," he noted.

As of late April, the company supplied about 550-580 mln cubic meters of gas per day to Europe, Medvedev pointed out. "Until recently, those were normal volumes for the winter season. Currently, in April we’ve been exporting just as much," he stressed.

In 2017, Gazprom delivered a record amount of gas to Europe (including Turkey) - 194.4 bln cubic meters.

According to Medvedev, Europe’s need to replenish gas reserves in underground storage facilities will facilitate the demand. Besides, in 2018, Gazprom plans to again form increased gas reserves in its own underground storage facilities, he added.

All that may pave the way for another export record, according to Dmitry Marinchenko, Director at Fitch Ratings. He warned though that the growth of LNG production could thwart another Gazprom record. "Currently, additional volumes are mainly absorbed by China and other Asian countries, but by the end of the year there can be a small surplus. A portion of the liquefied gas share could eventually end up in Europe, even though those might be relatively small volumes, from 10 bln to 20 bln cubic meters," he explained.


Kommersant: Russia-Ukraine Antonov aircraft dispute goes global

Ukraine’s Civil Aviation Administration has sent a complaint to the International Civil Aviation Organization (ICAO) against Russia’s Federal Air Transport Agency, claiming it had authorized the operation of the Antonov aircraft violating the established procedures.

According to Kommersant’s sources, Kiev’s dissatisfaction was caused by the fact that Russia’s authorities issued permits for the operation of the Antonov planes without the conglomerate’s involvement. According to Kiev, Russian aviation authorities "have set a dangerous precedent posing a hazard to (peoples’) lives, health, as well as to the environment and infrastructure" in the countries where the Antonov planes are operating.

A source in the Russian Federal Air Transport Agency informed the paper that its head Alexander Neradko had sent a letter to Antonov’s President Alexander Krivokon in early April, saying that Russia had to make such a decision.

Oleg Panteleyev, AviaPort Executive Director, believes that the position of the Russian aviation authorities, which guarantees the airworthiness of the Antonov aircraft in Russia’s air carriers, will be convincing for both air transportation customers and for regulators in third countries "due to its authority." The expert added, however, that it is impossible to fully abandon cooperation with Ukraine at the moment, because some issues are yet to be resolved. All that will prompt the parties, which are still heavily involved in technological cooperation, to look for new avenues for interaction, he added.


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