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Press review: Republicans take aim at Moscow and is Russia’s gas export kingship in danger

Top stories in the Russian press on Thursday, June 11


Kommersant: Republicans drawing up plans to crack down on Russia

The Republican Study Committee (RSC) in the United States Congress has proposed a foreign policy vision and strategy to counter its US opponents. According to Kommersant, another blacklist is in the making and the honors of second place (after China) on this list goes to Russia. The newspaper reported that this document would allow the Republican party to have a clear agenda ready for the fall elections.

This conservative congressional caucus is the largest association within the Republican faction of the House of Representatives, which includes about 150 members of Congress. They had hammered out the strategy published on Wednesday for about a year and a half.

According to their document, Russia is stepping on US interests around the world - from Syria and Libya to Venezuela and Montenegro. And if the threat from China is considered by the authors of the strategy more as a long-term, then the United States is already feeling the damage from Russia’s actions, Kommersant wrote. Under the current conditions, they do not believe in the possibility of mutually beneficial cooperation between Russia and the United States.

To counter Russia, a number of specific measures are proposed. Among them would be to recognize Russia as a state sponsor of terrorism, introduce secondary sanctions against companies supporting special Russian oil and gas projects, slap sanctions on new Russian public debt, put Vnesheconombank on the sanctions list, impose restrictive measures against "leaders of Russian propaganda", and continue assistance to Ukraine and Georgia, and others.

However, the proposed document is just a list of recommendations, not a bill. By the November elections, when not only the president is up for election, but so are one-third of the Senate and the entire House of Representatives, the Republican Party will be able to come up with a clearly formulated foreign policy agenda, Kommersant wrote.

According to Ivan Timofeev, program director of the Russian Council on Foreign Affairs, the published report "broke many records by its offensiveness." "Real US diplomacy is built on a more realistic basis. However, you need to understand that Congress is an institution of public policy. More populism is inevitable, and radical ideas are not uncommon," he explained to Kommersant. "It's not about Russia. Both Congress and the administration are united in their assessment of Russia as a key opponent of the United States. However, the executive authorities are well aware that radical sanctions, for example, disconnecting Russia from SWIFT, blocking large banks, banning transactions with energy companies or secondary sanctions against Russia's partners, can hurt the United States itself, its allies, as well as world markets," the expert added.


Nezavisimaya Gazeta: Russia might cede superiority in gas exports to US, says IEA

The International Energy Agency (IEA) expects the largest drop in global gas demand in history by the end of the year. This demand will experience a 4-percent plunge or 150 bln cubic meters. Part of the lost demand will be recovered in 2021, and China will become the main driver of this recovery. However, in the coming years, Russia will cede its gas exporting leadership to the United States, according to the IEA. Nevertheless, experts interviewed by the newspaper believe that the real situation could be worse due to a possible second wave of the pandemic.

In particular, the IEA report mentioned Gazprom’s plans for the development of its largest fields, its deliveries to China through the Power of Siberia, which should reach the projected level of 38 bln cubic meters by 2025 annually, and the launch of the Arctic LNG 2 by Novatek and its foreign partners. Russia, despite being in second place after the United States, will remain one of the world’s largest gas suppliers. It will account for slightly more than 20% of global gas production growth until 2025.

Experts interviewed by Nezavisimaya Gazeta believe that the rather optimistic IEA scenario is quite feasible, but, a second COVID-19 wave may create difficulties. "Restoring demand during the second half of 2020 and 2021 is quite possible if there is no second wave of restrictions across the globe due to the novel coronavirus," expert at the Financial University and the National Energy Security Fund Stanislav Mitrakhovich told the newspaper.

Meanwhile, cheap gas production and pipeline transportation will work to maintain Russia’s status as the largest source of imported gas for Europe, Mitrakhovich added. "China is already clearly showing that, given the coronavirus pandemic, it does not consider itself obligated to fulfill its commitments made to Trump in early 2020 to purchase US hydrocarbons to the tune of $52 bln over two years," he said.

President of the Russian-Asian Union of Industrialists and Entrepreneurs Vitaly Mankevich told the newspaper that despite Beijing's efforts to increase domestic production, the market share of imports there will be steadily growing.


Izvestia: Kiev dealt major financial blow during coronavirus recession due to plunging exports to Russia

Since 2014, Ukrainian exports to Russia have plunged by 80%. Last year’s forfeited revenue that Ukraine suffered is estimated at $13 bln, according to a report on the potential for restoring trade between countries, which was put together specially for Izvestia by analysts of the Black Sea Trade and Development Bank. Recently, the Verkhovna Rada of Ukraine had demanded to restore exports to Russia, without which it is impossible to stimulate the economy in the era of the coronavirus pandemic. According to experts, hypothetically, within five years, Kiev could have increased it several times.

Russia now ranks third on Ukraine’s exporting list after China and Poland. Russian exports to Ukraine in 2019 come to almost $7 bln. At the same time, calculations show that the reduction in supplies from Russia to the neighboring state was significantly less than the loss of Ukrainian exports. According to the estimates of the report prepared for the newspaper, both countries received less than $26 bln last year from breaking export-import chains.

Head of the Center for Post-Soviet Studies, Institute of Economics at RAS Leonid Vardomsky told the newspaper that he believed that the volume of trade in peak values in 2011, when it approached the benchmark of $50 bln, is now out of the question. "If there is some kind of recovery, it will not be very significant," the expert believes. "For example, Ukraine hypothetically could increase exports to Russia several times over five years - up to about $ 5 bln. This could include light industry, building materials, chemical products, and metallurgy. Obviously, under favorable conditions, the neighboring state could count on the restoration of tourist flows from our country," he added.

And yet, despite the continued decline in trade, Russia and Ukraine remain significant trading partners, preserving the potential for the development of cooperation, President of the Black Sea Trade and Development Bank Dmitry Pankin told Izvestia. "The growth of mutual trade is possible in the current conditions between the private sector enterprises of the two countries in traditional areas, including railway, metallurgical machinery, boilers and equipment. The basic principle is that contracts should not depend on political decisions or lifting restrictions," the expert said.


Kommersant: Russia’s economic recovery plan to include IT sector

Following an online meeting with Russian President Vladimir Putin, the IT and communications industries will be included in the nationwide economic recovery plan. The Internet business, software developers and the telecom industry, contrary to the usual rhetoric of other businesses, refused to acknowledge that they were affected by the pandemic, Kommersant wrote. But they can compensate for the 20% fall in demand this year through state orders, simplifying access for providers to apartment blocks and allowing data centers into the wholesale electricity market. In the future, companies should be assisted by special legal arrangements for testing new technologies and a revised federal project for the development of artificial intelligence.

A comprehensive plan to support the IT and communications industries will be included in the nationwide economic development plan, prepared by June 19, Russian President Vladimir Putin said following a June 10 meeting with government and market participants. It was attended by 11 company representatives from renowned Russian corporations such as Yandex, Group, 1C, InfoWatch, Rostelecom, MTS, MegaFon, Vimpelcom and others.

The telecommunications sector can in no way be considered a victim of the pandemic, President of Rostelecom Mikhail Oseevsky said. At the same time, he also asked the head of state about regulatory measures to accelerate simplifying access for providers to multiple residential housing units. He urged the state to work out legislation on teleworking, and to allow data centers into the wholesale electricity market. Minister of Communications Maksut Shadaev, recalled that after the president’s order in 2018, state-owned companies prepared import substitution plans, the total cost of which until 2021 is about 80 bln rubles ($1.16 bln). According to him, this level is necessary for the IT industry to compensate for lost revenue.

As part of the package of measures, the federal AI development project is also noteworthy, Head of Technology Consulting at KPMG in Russia and the CIS Nikolai Legkodimov told the newspaper.


Kommersant: Russia still waiting for Turkey to resume flights

Turkey resumed international flights on Wednesday and now expects a sharp influx of tourists. Kazakhstan, Kyrgyzstan, Azerbaijan and the Baltic states are among the first countries whose residents will be able to visit Turkey’s popular resorts in June, but not Russia, Kommersant wrote. The authorities hope to restore air communication with Turkey in July, but the exact date is still unknown. Meanwhile, there are practically no more quarantine restrictions in Turkey, yet social distancing is in effect, and you can visit restaurants, beaches, and museums.

Russian officials have provided any specific dates, the newspaper wrote. "The competent Russian and Turkish authorities and departments are in perpetual contact, on the possibility of resuming cooperation in tourism and ensuring the safety and health of Russian tourists in Turkey, among other topics," the Russian Embassy in Ankara told Kommersant. "Specific dates for restoring air communications will apparently be clear a little later, as well as those specific measures that the parties can resort to in order to make flights as safe as possible from the point of view of sanitary and epidemiological standards," the diplomatic mission added.

So far, the measures announced by Turkey’s Minister of Tourism and Culture Mehmet Ersoy, look rather soft, the newspaper wrote. A certificate indicating the absence of COVID-19 at the entrance to Turkey will not be required. Instead, a traveler’s temperature will be checked and only if it exceeds 38 degrees, will they be asked to take an analysis right on the spot at the airport. The results, according to the Turkish minister, should not take more than an hour. Tourists might not have to face tangible quarantine restrictions within the country either. The authorities opened almost everything necessary for recreation, for example, beaches, pools, restaurants, museums, markets and parks, on June 1, obliging visitors only to observe social distancing.



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