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Press review: EU, US stricken with ‘hacker’ mania and Indian market seeks Russian capital

Top stories in the Russian press on Friday

Media: Russian hackers everywhere

Tensions between Russia and the West have escalated once again, this time over the Netherlands’ allegations about a cyber attack on the Hague office of the Organization for the Prohibition of Chemical Weapons (OPCW). The blame for the attempted hacking attack through the local Wi-Fi network was pinned on Russian intelligence agencies. This sensation instantly went global. NATO and the European Union vowed to beef up their cyber defense capabilities. British authorities accused Moscow of attacking the country’s Foreign Office and announced new sanctions. The US, in turn, charged seven "hackers from Russia" with cyber attacks, Kommersant noted.

"Russia is an OPCW member state so it has the right to officially receive documents from the organization. I don’t understand what is the point of hordes buzzing around its headquarters. That seems kind of strange, intelligence services just do not operate like that," foreign intelligence veteran Pyotr Suslov told Kommersant.

A former Interior Ministry employee told Vedomosti that the equipment the Dutch had demonstrated resembled devices that Vladimir Anikeyev, convicted in the Shaltay Boltay (Humpty Dumpty) hacking group’s case, had used to get access to the correspondence of prominent businessmen and officials in Moscow cafes. Although this equipment cannot be described as professional, it could assist in hacking smartphones if their owners are not careful enough, he said.

Allegations of Russia’s involvement in cyber attacks on the World Anti-Doping Agency and the OPCW are part of the West’s plan to keep the "Russian threat" theme going, Federation Council Foreign Affairs Committee Chairman Konstantin Kosachev told Izvestia. "It is hard to understand the logic behind all this, but I guess that there is a coordinated plan to keep running the ‘Russian threat.' The plan has gaps that need to be filled with information. So some stories from the past are used to that end - stories not based on facts, where Russia did not have a chance to respond," the senator said.


Nezavisimaya Gazeta: India's market offers Russia great investment prospects

Russian President Vladimir Putin’s visit to India kicked off on Thursday. With that in mind, Russian-Indian ties are not just limited to the arms trade, the goal is to find ways of cooperation attuned to the realities of the 21st century. The Indians point out that they have a population of 1.3 bln and the average age is below 30. That being said, the consumer market there is huge and New Delhi expects investments from Russia, Nezavisimaya Gazeta writes.

Sources in Invest India - New Delhi's National Investment Promotion and Facilitation Agency told the newspaper that the Indian economy’s growth rate was above eight percent, along with country’s middle class standing at 350 mln. Given the huge size of the consumer market, foreign companies seek to grab a place under the Indian sun. Thanks to that, direct foreign investment exceeded $200 bln in 2017.

The focus is on attracting Russian private capital and boosting cooperation between mid-sized and small companies, particularly innovation startups. In this connection, the Russia Plus unit was established at the Invest India agency at Prime Minister Narendra Modi’s initiative, which builds contacts between Indian and Russian regions. According to India's sources, cooperation in the field of pharmaceutics offers the most prospects. Ajit Singh, one of the top officials at the Pharmaceuticals Export Promotion Council of India, says that 15 Indian companies operate in Russia and 17% of Indian drugs are exported to the country.

However, economic cooperation between India and Russia depends to some extent on the current global situation. Washington's policy of pressuring India is not only aimed at driving Russia out of the Indian arms market but it also targets the nuclear energy sector. It is no secret that the United States and some other Western countries sponsored Indian activists who demanded that cooperation with Russia in the peaceful use of nuclear energy be discontinued.

However, diplomatic sources in New Delhi told Nezavisimaya Gazeta that India did not recognize sanctions not approved by the United Nations Security Council. If India boosts relations with the US, that would not mean the country would roll back cooperation with Russia.


Kommersant: Will US sanctions hinder Indonesia’s purchase of Su-35s?

Washington’s push to introduce new restrictions under the Countering America's Adversaries Through Sanctions Act (CAATSA) has affected the delivery time of the Russian Sukhoi Su-35 fighters to Indonesia. Jakarta expected to get its first of 11 anticipated planes in October but the United States has failed to provide Indonesia with guarantees that its sanctions would not be put into effect. Russia has also been facing difficulties, as there were plans to implement a credit scheme involving a commercial bank. However, in case the bank provides money for this loan, it may have to face bitter consequences, because the US is bound to view the loan as cooperation with Rosoboronexpert and slap sanctions on the bank.

Two top managers from Russian defense companies and a source close to the government told Kommersant about the obstacles to implementing the contract with Indonesia. According to them, the deal on the delivery of 11 Su-35 fighters is still legally valid but its implementation will be delayed due to the restrictions that Indonesia and the counterparts of Rosoboronexport are potentially facing over their cooperation with the Russian arms exporter. "The situation is unfortunate but not critical. We are in constant contact with our Indonesian partners, trying to find a way out," one of the sources said.

Indonesia signed the Su-35 purchase contract in February, becoming the second foreign buyer of these planes (the first export agreement involving 24 aircraft, worth over $2 bln, was signed with China in November 2015).

According to Kommersant’s source related to defense cooperation, though Jakarta decided to buy the Su-35 aircraft long before CAATSA came along, Washington has not yet clarified its position on Indonesia. A number of media outlets reported that Secretary of Defense James Mattis tried to persuade Congress to ease sanctions on countries that had had deep-rooted relations with Russia but now gravitated towards the US and planned to purchase US-made defense systems. This was about Indonesia, India and Vietnam. However, none of the three countries has any solid guarantees from the US yet, the source said with confidence.

Meanwhile, one of the defense industry’s top managers confirmed on Thursday that the contract would come into effect once all financial issues were agreed on "but it requires time and silence."


Rossiyskaya Gazeta: Will US dollar hegemony fall from global grace?

Bloomberg Businessweek foresees the global dominance of the US dollar ending. Russian experts say it may indeed happen but no sooner than in about three years, Rossiyskaya Gazeta wrote.

European leaders seek to counter the US Treasury Department’s pressure and plan to develop a payment system that will allow EU companies to cooperate with countries the US dislikes (particularly with Iran). An idea under consideration is to create an organization to exchange European food products for Iranian oil, which will be funded by governments and will not have to work with banks.

Experts have concluded that the greenback is unlikely to lose its dominance in the short term but it may happen in the future.

According to BCS Capital’s Senior Analyst Sergei Suverov, what currently supports the dollar is the lack of a direct rival for the global currency title. The yuan is in no position to compete with the greenback since it is not fully convertible and faces high devaluation risks. "The euro has its own issues. Europe is a non-homogeneous economic union torn by internal contradictions. This is why I think the dollar’s share will decrease but its dominance on the currency market will remain for the next two to three years," the expert concluded.

Does the dollar have a chance to strengthen its positions? University of California Professor Barry Eichengreen believes that it does have such a chance, provided that diplomatic unions are maintained, along with ensuring unfettered access to the US currency for its trading partners and Washington renouncing its use of dollar hegemony against its allies.


Kommersant: Chinese brands grow stronger on Russian market

The share of Chinese brands on the Russian smartphone market has reached a record of 40% in retail sales in the January to September period of 2018. The launch of the newest iPhone in late September has not yet significantly influenced the market but given Apple’s current pricing policy, the company is likely to lose its retail share, Kommersant wrote, citing analysts.

In the first three quarters of 2018, the Russian smartphone market grew by three percent in retail terms and by 22% in monetary terms, reaching 315 bln rubles ($4.7 bln) as 21 mln phones were sold, the M.Video-Eldorado group of companies reported. Since the beginning of the year, Chinese brands have strengthened their positions the most, and achieved the highest level of trust, the group added.

In June to September, every third smartphone purchased in Russia was a Huawei or Honor device. The two companies have shared first place in retail sales during this period. The top three also includes Apple and Samsung, while China’s Xiaomi ranks fourth.

The market has been growing largely thanks to Huawei/Honor, which provide discounts by carrying out promotion campaigns in cooperation with retailers, Leading Analyst with Mobile Research Group Eldar Murtazin noted. "With the current pricing policy, Apple’s sales are bound to decline unless they launch cheaper models, so the company’s share may drop from 15% to 10% in the near future," he added.

Chinese companies have proved that it is possible to become a significant player using technologies that do not make a smartphone expensive, Head of M.Video-Eldorado’s Mobile Devices Department Vladimir Chaika said. The experience of Chinese vendors may partly ease other players’ way to the Russian market, including Russian brand Vertex, he concluded.



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