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Press review: Putin postpones vote on amendments and G20 to look into lifting sanctions

Top stories in the Russian press on Thursday, March 26

Kommersant: Putin postpones nationwide vote on constitutional amendments

Russian President Vladimir Putin addressed the nation on Wednesday to comment on the coronavirus situation in the country and outline measures to support the economy, Kommersant writes. He also proposed to postpone the nationwide vote on the amendments to Russia’s Constitution, stressing that people’s health and safety remained the top priorities.

Although the president made no mention of the new date for the vote, the paper’s source close to the Kremlin stated that it had been put off until late May or early June, but the final decision will depend on the epidemiological situation.

According to Kommersant’s source close to the presidential administration, the COVID-19 epidemic and the panic-driven sentiment associated with it are unlikely to affect the authorities’ approval ratings. On the contrary, all that "can contribute to the nation’s unity," he said. However, the economic fallout from the pandemic could impact these ratings.

For his part, Director of the Institute of Socio-Economic and Political Research Dmitry Badovsky believes that the measures proposed by Putin, "can counter the pressure on the authorities’ approval ratings and any potential intensification of the protest vote." According to the expert, the fact that the decision to put off the vote was announced during the address to the nation indicates that the authorities wanted to quell public sentiment. "On the other hand, the administration has been given a clear priority, that is, to focus primarily on the fight against the epidemic."

Meanwhile, Konstantin Kostin, Chairman of the Civil Society Development Foundation, pointed out to the paper that the steps proposed by Putin were important both for dealing with the immediate aftermath of the coronavirus and for "cushioning future risks and creating the conditions for effective actions in the economy and social sphere at the next stage." A few months down the road, once the epidemic is over, the entire world and Russia in particular will find themselves in a new reality, which will affect people’s social well-being and, possibly, political ratings, the expert added.


Izvestia: Russia’s economy may be headed downhill in 2020

The Russian economy could decline by 1.3% in 2020, Izvestia writes citing data provided by the Institute of International Finance in Washington, DC. However, the economic downturn in Russia will not be as substantial as in the United States, the EU and most developing countries, where the plunge is expected to reach 4.7%. The fluctuating ruble exchange rate, the stability of the banking sector and a sizeable amount of resources will help Russia weather the crisis, the institute’s experts believe.

However, they do not rule out that the crisis caused by the coronavirus pandemic will worsen.

Russia’s economy will not be able to avoid a recession and a slowdown, the paper quotes Chief Analyst at BCS Premier Anton Pokatovich as saying. The driver of GDP growth, that is, consumer demand, will be under tremendous pressure, since quarantine measures and a decrease in production can push down Russians’ real disposable incomes by 2-4%. If that is the case, the country’s GDP will drop 2.8% by the end of the year, he noted.

Theoretically, the Russian economy can reach positive growth rates by the end of this year, because the government has all the necessary tools and reserves, Director of the Financial Policy Center at the Russian government’s Financial University Vadim Ponkratov explained. Now it is essential to focus on the situational measures, which will require minimum costs and will be the most effective. Once the pandemic situation clears up, more systemic anti-crisis levers can be used. Much will depend on the pace of an economic recovery in developed countries and China. The faster they recover, the sooner Russia will overcome the crisis, he concluded.


Nezavisimaya Gazeta: G20 to discuss possibility of lifting sanctions hindering fight against COVID-19

The G20 will hold an emergency summit initiated by Saudi Arabia on March 26 to discuss the novel coronavirus pandemic. UN Secretary-General Antonio Guterres earlier urged G20 leaders to push for removing sanctions that impede the battle against the virus, Nezavisimaya Gazeta writes. According to the UN chief, that would demonstrate solidarity with the peoples that are the most vulnerable to the pandemic.

Russia is likewise expected to speak in favor of easing sanctions at the summit.

The video conference will enable leaders who are currently in quarantine, including German Chancellor Angela Merkel, to take part in it.

Senior Researcher at the Russian Academy of Sciences’ Institute of Oriental Studies Vladimir Sazhin suggested in an interview with Nezavisimaya Gazeta that, regardless of the G20’s stance, the Trump administration will not take any drastic steps on the sanctions. "I believe that the United States will not lift the freeze on Iran’s bank accounts. [US President Donald] Trump is conducting his election campaign and, naturally, he will not resort to any drastic steps, which could embarrass his voters. Besides, the removal of sanctions is out of sync with his notion of how Iran should be dealt with," the expert said.

If Washington does not get on board with the initiative to ease sanctions, no changes whatsoever in this area will be significant, since of all the international sanctions, the ones imposed by the US are usually the most painful.


Izvestia: COVID-19’s impact on major armed conflicts across the globe

The UN has called on countries to cease hostilities around the globe, lift sanctions and focus on the fight against today’s common enemy, the coronavirus pandemic. Izvestia interviewed experts, who commented on the potential impact of the outbreak on efforts to resolve some major armed conflicts, in particular, in Ukraine, Libya and Syria.

News about the COVID-19 epidemic came at the beginning of this year, but that did not prevent the escalation in Syria or ceasefire violations in Libya, Director General of the Russian International Affairs Council Andrey Kortunov noted. "We can see now that the virus divides the world," he said.

So far, there has been no substantial reduction in the number of shelling attacks in Donbass, so, the epidemic has had no significant effect on the course of the conflict, Mikhail Pogrebinsky, Director of the Kiev Center for Political Studies and Conflictology, said referring to the hostilities in eastern Ukraine. He noted though that people in Ukraine did not trust statistics about the number of infected people. "Testing systems are expected to begin working soon, and then the influence of the virus on politics will be clear," he noted.

Due to their domestic problems, external players are ready to pay less attention to the conflict in Libya than before the pandemic, so their participation in both proxy wars and the peace process is declining, Head of the Center for Arab and Islamic Studies of the Institute of Oriental Studies Vasily Kuznetsov explained to Izvestia. "Another important factor is the reduction of international trade. The parties have less resources to continue the conflict. However, one cannot say that this will result in a full-scale ceasefire," he said.

According to political commentators, the pandemic has had no effect on the state of affairs in Syria’s Idlib province, which has been the chief hotbed of tension in recent months. "The players — Turkey, Russia and Syria — will probably shift part of their attention to the situation inside their countries. However, Ankara’s armed forces remain in the part of Idlib controlled by pro-Turkish groups and terrorists," Head of the Center for the Near and Middle East at the Russian Institute for Strategic Studies Vladimir Fitin said, adding that the pandemic is unlikely to result in long-term stabilization in the region.


Kommersant: Russian retailers purchasing warehouse space

The growing market for online trade and sales of essential goods stemming from excessive demand has compelled some market participants to look for warehouse premises, Kommersant writes. Against this backdrop, their absorption rate in the Moscow Region grew by 60% in the first quarter of this year.

Konstantin Fomichenko, director of the Industrial and Warehouse Department at Knight Frank, explains that the growing demand for warehouses is ensured by retailers who are actively searching for premises or logistics operators. "Networks are trying to build up stocks of goods and simultaneously lock in the current procurement prices ahead of the expected surge in producer prices," he explained.

According to Egor Dorofeev of Cushman & Wakefield, many supplies are transporting slow-selling goods to external warehouses, freeing up storage space for high-demand items. "Demand by other groups of tenants, in particular, logistics and manufacturing companies, will grow as well," the paper quotes Vladislav Fadeev of JLL as saying.

In turn, Anton Alyabyev, Director of the Warehouse and Industrial Department at CBRE in Russia, pointed out that this trend was going to be short-term. He expects a slowdown in market activity by the end of the year. A similar forecast has been made by Svetlana Pronina, the Regional Operations Director at Colliers International, who assumed that the total transaction volume will reach 1.3 mln square meters.


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