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Press review: Kim's ballistic hint to Trump and China's rebuff to US arms control approach

Top stories in the Russian press on Thursday, August 1

Kommersant: Kim trying to force Trump to return to the negotiating table

North Korea launched two missiles towards Japan early on Wednesday. This was the fourth missile test over the past three months. Media reports claimed that last week US and North Korean diplomats secretly met on the border between the two Koreas to discuss terms for a new round of talks between US President Donald Trump and his North Korean counterpart Kim Jong-un. The failed February summit between Trump and Kim in Hanoi jeopardized further stabilization on the Korean Peninsula and by these launches Pyongyang hinted to the US leader that it’s high time he returned to the negotiating table, Kommersant writes. Apparently, the July 31 missile test demonstrates that Washington and Pyongyang have not yet come to terms regarding the format of the talks, which would suit both sides.

Experts believe that North Korea fired KN-23 solid fuel short-range missiles, which have a range of up to 430 km and an altitude of around 50 km. These missiles are launched from mobile platforms and are branded as Pyongyang’s version of Russia’s Iskander-M. South Korean Defense Minister Jeong Kyeong-doo said these new missiles are capable of conducting maneuvering at the final stretch of the trajectory, thus allowing them to bypass the enemy's air defenses.

According to Go Myong-Hyn, an expert at South Korea’s ASAN Institute for Policy Studies, North Korea is using its missile tests as a hint to the US that its patience has limits and Washington should better get back to the negotiating table and put up with the fact that Pyongyang is not going to carry out full disarmament. "By its limited tests, Kim Jong-un is showing Donald Trump that if the talks do not resume, one of his key foreign policy achievements such as suspending North Korea’s missile and nuclear tests may be lost. This is vital for the US president during the election campaign."

Nezavisimaya Gazeta: China ‘buries’ key nuclear arms control treaty

Ahead of the upcoming US exit from the Intermediate-Range Nuclear Forces (INF) Treaty set for August 2, Beijing announced that it is vehemently rejecting Washington’s call to join dialogue between the US and Russia. China is not content with Japan’s offer to set up a new negotiating format involving five permanent members of the United Nations Security Council. The country claims that its nuclear potential is incompatible with that of the US and Russia and does not pose any threat. China is modernizing its nuclear arsenal but information on this is shrouded in secrecy, Nezavisimaya Gazeta writes citing experts.

Beijing and Washington are now locked in a media battle of who is to blame for undermining the arms control system established during the Cold War and shortly after it. China insists that the INF accord is merely a bilateral deal and when Washington puts forward an offer to engage Beijing in this dialogue, it seeks a pretext in order to justify its unilateral withdrawal.

According to Director of the Russian Institute for Strategic Studies and Professor at MGIMO University Sergei Oznobischev, Washington’s idea that Beijing should join the Russian-US dialogue is "unreal and even fantastic." Secrecy surrounding Beijing’s nuke program "is one of major obstacles for an agreement," he stressed.

China’s nuclear might is based on short-range missiles, said Alexander Lomanov, chief research fellow at the Institute of World Economy and International Relations at the Russian Academy of Sciences. "That’s why if China agreed to eliminate them, it would be back to square one. This is unlikely to make the modern world safer," the expert noted.

In its turn, Moscow emphasizes that it is ready for talks on a new nuclear arms control treaty, but if the US insists on involving China, it’s up to Washington to exert influence on Beijing.

Izvestia: US using hired guns to plunder Syrian oil

Russia’s Defense Ministry has accused American mercenaries of plundering Syria’s natural resources. According to Head of the Russian General Staff’s Main Operational Department, Colonel-General Sergei Rudskoi, US private military companies are involved in illegal oil production near Syrian regions not controlled by Damascus. Thus, a criminal scheme to produce and funnel out Syrian crude oil is being applied. In fact, Syria’s national wealth is being plundered, Rudskoi commented.

Syria has huge hydrocarbon reserves, which cannot be compared to any other regional states, namely in the Persian Gulf. Before the conflict, some 400,000 barrels of oil were produced in Syria per day, mostly for export to the European Union, to the tune of several billion euro annually. After the war broke out in 2011, Brussels slapped sanctions on Damascus targeting its oil sector and the level of hydrocarbon output started declining.

Thus, oil fields became a titbit for terrorists, who had seized large swathes of Syrian territory by 2015, Izvestia writes. By the end of 2017, when the Islamic State terror organization (outlawed in Russia) was forced out from the earlier occupied areas, a new standoff began. The Kurds, who declared the establishment of a federal region in Syria in March 2016, did not hand over the liberated territories to Damascus, opting for closer cooperation with the US instead.

Oil smuggling, sanctions, the war and the actions by the Kurds and their US allies were a major blow for the Syrian economy. During the conflict, Syria turned from a hydrocarbon exporter into an importer, the paper writes. Washington’s steps have created a serious shortage of gas and oil in the country.

It is evident that the prospects of stabilizing the situation in the Syrian oil and gas sector depend on whether the authorities in Damascus could regain control over the fields in the areas to the east of the Euphrates, which are controlled by the US and the Kurds. Given the current problems with meeting Syria’s oil demand, the US-backed Kurds could dictate their conditions for a ceasefire, namely federalization and autonomy, which could result in splitting Syria, according to the paper. Meanwhile, Washington will keep control over the oil wells in the areas to the east of the Euphrates in line with its well-tested schemes of profiteering off others' oil.

Kommersant: Moscow sees prospects with new administration in Kiev

Donbass may have finally seen the light at the end of the tunnel, since the Trilateral Contact Group for settling the crisis in eastern Ukraine has reported an unprecedented fulfillment of the ceasefire regime. Besides, the negotiators have agreed on restoring a ruined bridge in Stanitsa Luganskaya. Kommersant writes that Moscow, which used to only hurl accusations against the former leadership in Kiev, is now banking on the new Ukrainian president.

After the Contact Group’s meeting on July 31 in Minsk, OSCE Special Envoy Martin Sajdik announced that the July 21 ceasefire had yielded significant results and no civilians had been killed over the past 10 days. Sajdik has repeatedly described the truce as indefinite, not concealing hopes that the sides would not resume shellings, like several times before.

Russia’s envoy to the Minsk talks Boris Gryzlov confirmed that this has been the calmest period seen on the contact line over the past five years, noting that the forces and means of the conflicting sides in Stanitsa Luganskaya have been disengaged. At the Contact Group’s next meeting set for August 21, the parties will name exact dates for a new disengagement of forces in Petrovskoye and Zolotoye.

July was the most positive month for Donbass, which has been often the source of bad news of late, the paper says. Moscow is cautiously optimistic about the new Ukrainian leadership, but it’s unclear whether this approach would last long given the latest statement by Kiev’s envoy to the Contact Group’s political subgroup, Roman Bessmertny, that Donbass would not be granted any special status.

Vladislav Deinego, chief negotiator for the self-proclaimed Lugansk People’s Republic to the Contact Group, has described this position as Kiev’s attempt "to review its political commitments." According to him, Kiev has called in question its law on the special status passed in 2014 and is trying to challenge the so-called Steinmeier formula, coined by the then German Foreign Minister and incumbent President Frank-Walter Steinmeier. This formula stipulates that the special status law for Donbass should come into force after holding elections there, which should be recognized as fair by the OSCE.

Vedomosti: World faces dearth of diamonds and rising prices

In the next seven years, the global market will lose nearly 15 mln carats of diamonds or more than 10%, President of Russia’s top diamond producer Alrosa, Sergei Ivanov said in an interview with Vedomosti. According to him, the global supply of diamonds will decline over the next decade and even if the demand for jewelry in the world rises 1-2% per year, there will be still lack of natural diamonds, due to which their price is likely to soar. However, amid the US-China trade war the growth in jewelry sales may slow down, he noted.

Prices for colorless diamonds of more than 5 carats have been on the rise since 1978, Ivanov noted. The prices continue mounting while the global supply of gems is predicted to decline during the next ten years, the Alrosa president said, explaining the turn by the fact that the life cycle of current assets is shrinking while no new significant discoveries have been made. In the first quarter of this year, global diamond production fell 4%, year-on-year, he stated.

In 2019, Alrosa plans to produce 38 mln carats or even more by fulfilling projects to increase effectiveness. The company has been actively investing in prospecting works and its current reserves will last 30 years.

VTB Capital analyst Dmitry Glushakov expects that diamond supply will decrease 16% by 2023, mainly due to the closure of the Argyle mine owned by the Rio Tinto Group. Other producers will also cut supplies and there are almost no new projects. Meanwhile, demand will grow some 2-3% per year and the deficiency will be compensated by rising prices, he noted.

The United States will remain a major consumer market for diamonds, accounting for nearly 50%, but the major growth in sales will be observed at Asian markets such as China and India, where prosperity will be on the rise, the expert predicted.


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