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Press review: Nagorno-Karabakh map redrawn and Russian-US ties unlikely to improve in 2021

Top stories in the Russian press on Wednesday, December 30

Kommersant: Second Azerbaijani-Armenian war redraws map lines in South Caucasus

This outgoing year has shown that the post-Soviet space remains a volcano, which is belching out wars, revolutions and other shocks even 30 years after the breakup of the USSR. The key event for the post-Soviet states in 2020 was the second war between Armenia and Azerbaijan over Nagorno-Karabakh, which lasted for 44 days. Unlike the first war in the early 1990s, which resulted in Azerbaijan’s defeat, this time Baku clinched victory, regaining control over a significant part of territories adjacent to Nagorno-Karabakh and also a part of this mountainous region. A peace deal between Yerevan and Baku was reached due to Russia’s mediation. Moscow will not only monitor the compliance with the ceasefire but will also become a guarantor of a future long-term settlement to the Karabakh conflict, Kommersant writes.

The key point of the trilateral deal was an agreement to deploy Russian peacekeepers to the conflict zone in order to prevent the resumption of a military confrontation and create conditions for relaunching the diplomatic process, which has been stalled for a quarter of a century.

The second Karabakh war, which broke out on September 27, was predetermined by many factors. Among those, which ensured Azerbaijan’s victory, was its superiority in armaments, first of all, its total air domination thanks to unmanned aerial vehicles purchased from Israel and Turkey. Experts say Armenia was caught off-guard by advanced "kamikaze drones." Among other factors for Azerbaijan’s victory was the assistance of Turkish military advisers, and the direct participation of Turkey’s military on the battlefield, which included pilots and gunners, as well as mercenaries from the Middle East (although Azerbaijan strongly denies this).

When touching on the reasons for Armenia’s defeat, experts blame the short-sighted policy of Prime Minister Nikol Pashinyan, who allowed the war to break out even though the country was not ready for it, as well as strategic and tactical errors by Armenia’s military command. Azerbaijan’s triumph debased Pashinyan’s calls to grant Nagorno-Karabakh a special status. A huge majority of Armenians believe that the prime minister is to blame for the shameful defeat and the opposition is demanding his resignation. Even if the current wave of protests fails to topple the premier and his government, Pashinyan’s prospects in the next or early elections seem to be rather vague, according to the newspaper.


Vedomosti: Russian-US relations unlikely to get better in 2021

Most analysts concur that Russian-US relations are not expected to improve in 2021 and it is essential just to stabilize them and shift away from the chaotic collapse seen under Donald Trump. The incoming Biden administration is expected to harshly criticize Russia on human rights. This implies "directly addressing the Russian people" through supporting the opposition, which is actually foreign meddling, Vedomosti writes. Perhaps, Washington will delegate some efforts on countering Russia to the European Union as part of restoring trans-Atlantic ties damaged by Trump, but this will even further worsen Russian-EU relations. New sanctions are extremely likely, particularly over the alleged poisoning of Russian blogger Alexey Navalny, but it’s unclear how tough they will be.

The US is bound to step up efforts to counter Russia in the post-Soviet arena, including in Ukraine, as well as in the Middle East, namely in Syria.

Besides, the two countries have nothing to offer each other on such an important policy track as tackling climate change, which Biden has decided to revive. Cooperation in combating the coronavirus pandemic should not be expected either, even though this is clearly a priority issue for the US administration, according to the newspaper.

However, there are some factors in bilateral relations indicating that the confrontation is coming under control and won’t go beyond a certain framework, Director General of the Russian International Affairs Council Andrey Kortunov noted. This is first of all the issue of extending New START (Strategic Arms Reduction Treaty), which should be resolved by February 2021. Unless this is tackled, relations could further deteriorate in this rather perilous area.

Another important factor will be the US position on the Nord Stream 2 gas pipeline. The Democrats wanted to ruin it, but probably, they won’t do this since they seek to improve relations with Germany, the EU’s key power player. Probably, the Biden administration will try to normalize the work of Russian diplomatic missions in the US and American missions in Russia. However, no personal meeting between Putin and Biden is on the horizon in 2021. Anyway, bilateral relations are unlikely to improve until a change of the current elites in the US and Russia occurs, which is not expected until 2024.


Izvestia: Russia’s GDP is projected to grow by 2.7% next year

Russia’s gross domestic product (GDP) is expected to grow by 2.7% in 2021, according to a consensus forecast made by Izvestia based on interviews with analysts from leading financial organizations and institutions. They predict that the global economy will overcome the crisis quickly provided that COVID-19 is defeated by spring and oil prices rise. A less upbeat scenario is possible only if the success in combating the pandemic is partial, quarantine restrictions remain for a major part of the year and oil prices drop. However, there are also risks that geopolitical tensions will escalate, the newspaper says.

Under the most optimistic forecast, Russia’s GDP will grow 3.5%-3.7%, according to state banks VTB, Sberbank, the Russian Agricultural Bank and the ACRA rating agency. The major growth factors will be the restoration of the commercial services sector and transport, revived construction, retail and export-oriented sectors, VTB Capital’s Chief Economist for Russia and the CIS Alexander Isakov said. According to the Russian Agricultural Bank, other positive factors are fulfilling the national projects and structural changes, including the reform of development institutes.

Economic restoration in 2021 will largely depend on the success of combating COVID-19, but even a full victory is unlikely to bring about an absolute and quick return to a pre-crisis situation, Chief Economist at SberCIB Investment Research Anton Struchenevsky said. Even if harsh restrictions in the world and in Russia remain in place for a maximum of two months, a 3.5% growth rate is realistic, said Associate Director of ACRA’s Sovereign Ratings and Macroeconomic Analysis Group Dmitry Kulikov.

There is hope that mass vaccination will contribute to reviving global economies, attract investment and increase global consumption of hydrocarbons, which is important for Russia, a leading energy supplier, said a member of the board of directors at FinExpertiza Agvan Mikaelyan. The reason for the increased uncertainty could be also the policy of the new US administration and tougher sanctions, according to Kirill Sokolov, an economist at Sovcombank.


Kommersant: Long-time leader Lukashenko retains power but loses Belarus

In 2020, President Alexander Lukashenko of Belarus served as a vivid example of what happens to a leader who loses his connection to reality. The decision to rule the country for another five years "blew apart" Belarus and now mobs of protesters are being convinced by force that he is the president. Lukashenko has created problems not only for himself, but also for Russia, Kommersant writes.

Diplomats from Russia working in Belarus and Western embassies told the newspaper that some people close to Lukashenko had called for organizing the election with a different outcome, though also in his favor but not with 80% of the vote, and not with that wide of a margin between him and Svetlana Tikhanovskaya. But this idea failed to get support and some people tried to convince the leader that there was almost no protest sentiment in the country and the situation was under control. After the election, Belarus was engulfed by violence and the "machinery of power" helped Lukashenko retain his presidential seat. But the protests continue despite the cold season and they could recapture this past summer’s strength once spring rolls around.

Another thing is that Lukashenko has never been a comfortable partner and Russia does not trust him that much and now it is even hard to deal with him. After August 9, neither his word nor his signature mean anything. The next Belarusian leader could disavow any deal nodding to the predecessor’s illegitimacy. The Kremlin understands this. Sources in state structures said Moscow sought a quick transfer of power in Belarus. In their words, now this process can be under control and the threat that the West could hinder this transfer is not that great. It’s no coincidence that President Vladimir Putin and Foreign Minister Sergey Lavrov keep reminding Lukashenko about his pledge to carry out constitutional reform and a new presidential election.

However, some Russian politicians are calling for another approach. They believe that no reform is needed since the growing role of the parliament will bring to power those parties in favor of closer ties with the European Union. No matter what stance Russia chooses with regards to Lukashenko, he could ruin the game himself just as he did several times before. The only thing anyone could be sure about is that in 2021 Belarus will dominate headlines.


Izvestia: Russia’s online payments skyrocket in 2020

The coronavirus pandemic increased the number of online payments in Russia by 40%, according to the National Payment Card System. Russia’s major banks confirmed this trend to Izvestia, saying that the volume and number of online purchases had skyrocketed from 10% to 300%. Quarantine measures motivated Russians to buy via the Internet more often and for entrepreneurs these payments became more accessible during the spring lockdown.

In January 2020, Russians carried out 22.9 mln online payments and 40% more in November - 32 mln transactions, according to a survey by Mir Plat.form, an IT brand of the National Payment Card System. Nearly one in three respondents in Russia (27%) increased spending on online leisure activity. During the lockdown, the number of Russians purchasing goods over the Internet rose by almost one-third (28%), MasterCard said.

Alexander Bakhtin, an investment strategist at BCS, notes that online payments made the economy more transparent, which helped the state to carry out a more effective fiscal policy. Second, this reduced contact with cash to a minimum amid the pandemic. And third, banks gained more from commissions and can now predict the actual needs of clients, offering them products and services.

Non-cash payments reduce the expenses of businessmen, allowing them to expand their product portfolio and create an ecosystem offering a significant share of non-financial services, and also make business processes faster while fast-tracking their adaptation to the changing environment, analyst at Finam Alexey Korenev said.


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