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Press review: US corporate giants to attend EEF and Russian intel chief slams US’ INF exit

Top stories in the Russian press on Monday, September 2


Izvestia: Top US companies to attend Eastern Economic Forum 2019

The US business establishment plans to come to the Eastern Economic Forum (EEF-2019), despite Washington’s sanctions policy. Almost 20 American companies, including IBM, MasterCard and McDonalds, confirmed their participation in the event, the EEF’s press service told Izvestia. The American Chamber of Commerce confirmed to the newspaper that interest in direct investment in Russia among US businesses is growing.

Among the American delegates will be representatives from US corporate giants such as IBM, MasterCard, AECOM. Management of the Russian office of General Electric (GE Rus LLC) will be there as well. In addition, S&P Global Platts Inc., the leading provider of energy and commodities pricing has also confirmed its participation.

President and CEO of the American Chamber of Commerce in Russia Alexis Rodzianko told Izvestia that the US business community’s interest in Russia and investing in its economy is growing steadily. He noted that cooperation between Russian and US business circles is developing better than expected. The investment rate is growing slowly, and according to AmCham’s estimates, the total accumulated direct investment by American companies in Russia exceeds $85 bln. Rodzianko added that AmCham delegates will also join the EEF and even host their own business club.

InterPacific Aviation, a company that will attend the forum, told Izvestia it intends to arrive in Vladivostok to develop air transportation between Russia’s Far East and the West Coast of the United States. The company also said that they were not under pressure from the US government for their intention to participate in the EEF, on the contrary, the authorities strongly support the company's desire to boost travel between the two countries.


Izvestia: Russia’s intel chief blasts US for deliberately destroying collective security system

Washington’s deliberate and irresponsible policy to destroy the international security structure by withdrawing from the Intermediate-Range Nuclear Forces Treaty (INF Treaty) indicates that their global hegemony is being eroded, Director of the Russian Foreign Intelligence Service Sergey Naryshkin told Izvestia.

"The collective security system, which existed for almost half a century, today is not collapsing ‘under its own weight’. It is being dismantled on purpose, and this is done primarily by the United States, which ignores not only their responsibilities, but also all civility. The circumstances of the current situation are that Washington continues to act according to the ‘might makes right’ concept, though it is no longer the strongest de facto," Naryshkin said.

He added that currently, many regional powers, in viewing the irresponsible behavior of the former hegemon, "are beginning to aggressively defend their often narrow interests", which results in an "increased risk of unintentional incidents fraught with large-scale conflicts." According to Naryshkin, under the current conditions, it is very important to strengthen global and regional formats, the UN’s coordinating role, and uphold international law.

Naryshkin recalled that the New START deal expires in 2021, and therefore, in his opinion, "the deployment of new US strategic offensive arms, including those in space, cannot be ruled out."

Similarly, he said he hopes that a sense of self-preservation would prevail among the US elites, which would enable a return to a full-scale dialogue on arms control. Naryshkin noted, "Russia has enough common sense and experience to prevent itself from being drawn into another arms race and at the same time to ensure its own defense capability at the highest level."


Kommersant: Berlin talks on Ukraine could be step towards Normandy Quartet summit

On September 2, negotiations will be held in Berlin between the advisers of national leaders of the Normandy Four group (Germany, Russia, Ukraine, France). According to Kommersant’s sources, the meeting may clarify when the Quartet will gather for a full-fledged summit. Kiev wants to convene it as soon as possible, and Paris is ready to host it in September. However, Moscow insists that previous agreements on Donbass should be implemented before the summit, could settle for even the beginning of the implementation.

Vladislav Surkov, President Putin’s aide, is going to represent the Kremlin in Berlin, while Foreign Minister Vadim Prystayko and Andrei Ermak, assistant to the Ukrainian leader will represent Kiev. The agenda of this round of negotiations, like the previous one, which took place in Paris on July 12, was not made public. According to Kommersant, the parties will almost certainly discuss the possibility of holding a Normandy Quartet summit. A source close to the negotiations told Kommersant that after the Berlin conference there could be some certainty on this issue. "It will become clear what is moving where," the source said.

One of the Russian negotiators, who asked to remain anonymous, told the newspaper that an important factor that could accelerate the summit, would be an ‘all for all’ prisoner swap between Ukraine and the unrecognized [Donbass] republics. "It is very important. It might not be a sufficient condition for the Normandy format meeting, but necessary," the source told Kommersant, noting that such an exchange could be carried out in September.


Vedomosti: Russia’s defense enterprises feeling the weight of their debt

About a third of the debt of Russia’s defense industry enterprises is problematic and requires restructuring, Deputy Prime Minister Yury Borisov responsible for the development of that sector told Vedomosti. In an interview with the newspaper, Borisov also talked about the draft of the Russian lunar program, the Vostochny Cosmodrome.

"We have been very careful in analyzing all of the defense industry’s debts, and one-third is problematic. Some of the credit will never be returned, enterprises will only pay interest indefinitely. Everyone understands that something needs to be done here," Borisov said. "There is no mechanism that would suit everyone. Someone will be at a disadvantage. If we transfer everything to the banks through write-offs, we will put our main credit organizations, to put it mildly, in a difficult situation," he said, adding that the budget also may not withstand such a load.

Meanwhile, the Russian lunar program has not yet been adopted, Borisov said. According to him, the key element of this program will be a super-heavy class launch vehicle with a price tag of 1-1.7 trillion rubles ($14.98 bln - 25.46 bln). "This is a huge range, so you can’t plan it," he noted.

Talking about the pace of construction of the second stage of the Vostochny Cosmodrome, Borisov said that nobody is happy with the state of affairs on this score. "The situation does not suit anybody - neither with the construction of the first stage, nor with the construction of the second. The works on the first stage were practically disrupted, only the most necessary facilities were built, which allowed for several launches from Vostochny - vehicles Soyuz-2.1a and Soyuz-2.1b," he told the newspaper.

Meanwhile, the deputy minister has no comforting news for mobile operators regarding 5G networks, the newspaper wrote that allocating frequencies in the 3.4-3.8 GHz range would be possible only temporarily and in some large cities.


Kommersant: Russia sees decline in imports of smartphones, mobiles

The import of smartphones and cell phones to Russia decreased in the first half of the year by 3%, the GS Group analytical center wrote in a report. According to analysts, a particularly sharp drop in supplies - 44% in Q2 occurred in the budget price segment below 7,000 rubles ($104.8), including brands such as BQ, Texet, and Inoi. Market participants told Kommersant, that the situation was influenced by an overly optimistic assessment of the market’s potential.

In the first half of 2019, 20.7 mln mobile phones were imported to Russia, which is 3% less than a year earlier, according to the GS Group report. Shipments fell in Q2, when they decreased by 19%. From April to June, it was especially noticeable with a 44% drop for lower-budget gadgets, the newspaper wrote. In total, over the past six months, 7.7 mln such devices were imported (37% of the total).

"The importers’ gamble on falling household incomes turned out to be wrong. The consumer needs a modern smartphone, not a cell phone," Head of the GS Group analytical center Alexander Surkov said. At the same time, demand for smartphones under 5,000 rubles ($74.88) is also declining, which is the trend of the last few quarters, M.Video-Eldorado group told the newspaper. Customers often choose smartphones for over 10,000 rubles ($149.76).

Declining imports could affect sales in a few months, representatives of large chains explained to Kommersant. However, customers have already become less likely to purchase devices under 10,000 rubles ($149.76), MTS said.


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