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Press review: What first Putin-Biden call focused on and Iran boosts clout in Caucasus

Top stories in the Russian press on Wednesday, January 27

Izvestia: New START extension unlikely to improve Russia-US relations

The extension of the 2010 New Strategic Arms Reduction Treaty (New START) will help Russia and the US make further arms control agreements but won’t actually improve relations between the two countries, experts interviewed by Izvestia said, commenting on the first telephone call between Presidents Vladimir Putin and Joe Biden, which took place on January 26.

According to political scientists, although the Putin-Biden call covered a rather wide range of issues, it is too early to say that the new US administration has defined its approach to Russia. "They [the Americans] still have to hammer out an agenda, engaging think tanks and the like. It will take time," President of the Washington-based Center for Global Interests Nikolai Zlobin explained. "The fact that Biden has asked current US Ambassador to Russia John Sullivan to remain in his position shows that the Americans aren’t ready to come up with a new policy towards Moscow. New approaches are unlikely to emerge before late spring," he added.

Extending the New START deal was one of the key focuses of the phone call. According to the Kremlin, the parties will complete the necessary procedures in the coming days.

During his election campaign, Biden expressed his willingness to extend the treaty. He did it particularly to differentiate himself from Donald Trump, who tended to withdraw from international agreements, said President of the American University in Moscow Edward Lozansky. "Most European allies, including the NATO secretary general, called for preserving the treaty, and Biden is now trying to restore ties that had been weakened over the past four years," the expert pointed out.

However, according to analysts, prolonging the New START deal won’t stimulate any improvement in Russia-US relations because the Biden team views it as an issue related to US military security and part of the global strategic stability system, and not as an aspect of the bilateral agenda.


Kommersant: Iran seeks to build bridges in South Caucasus

Iranian Foreign Minister Mohammad Javad Zarif has visited Moscow as part of his South Caucasus trip. It is crucial for Tehran to be part of that area of regional development in order to strengthen economic ties and its geopolitical positions. The Iran nuclear deal issue and its prospects following the recent change of power in the US were also touched upon during Zarif’s visit to Russia, Kommersant writes.

News broke just before the top diplomat’s visit that Washington was considering the possibility of creating additional military bases in Saudi Arabia, Tehran’s main regional rival. "Iran has stopped knocking on the West’s door, focusing on regional security," Russian International Affairs Council expert Polina Vasilenko pointed out.

The approach doesn’t concern only the situation in the Persian Gulf region. Zarif visited Azerbaijian’s capital of Baku before heading to Moscow and is scheduled to make trips to Armenia, Georgia and Turkey after Russia. The tour’s goal is to discuss regional cooperation projects in the wake of the Nagorno-Karabakh ceasefire agreements. "Once the military activities had ended, Iran was forced to face Turkey’s military buildup along its borders, a surge in Turkey’s influence, growing pan-Turkic sentiment and competition on the gas market as the Turkish and Azerbaijani energy ministers had signed a memorandum of understanding on Turkish gas supplies to Azerbaijan’s Nakhchivan Autonomous Republic. All these factors can affect Iranian-Azerbaijani relations, Vasilenko noted.

Zarif said during his visit to Baku that Iranian companies were willing to take part in the reconstruction of facilities in Nagorno-Karabakh. "Before the war, Baku singled out visits by Iranian businessmen to Karabakh and was irritated by that, though Iran has always officially supported Azerbaijan’s territorial integrity," Valdai International Discussion Club expert Farhad Mammadov emphasized, adding: "Now, we are shaping relations anew."

According to him, as for the said reconstruction activities, "the green light is on for Iran" and even Western sanctions against Tehran won’t be an obstacle. "We have already dealt with such difficulties before and learned to find ways to resolve them," the expert explained.


Nezavisimaya Gazeta: Russian authorities may use incentives to quell protests

Growing protest sentiment across Russia has prompted the authorities to increase budget spending and social welfare payments in the run-up to the 2021 parliamentary election, Nezavisimaya Gazeta notes.

Protests on the streets of Russian cities look surprising particularly because pollsters haven’t recorded a rise in public discontent recently. According to a poll conducted by the Public Opinion Foundation, which was published the day before Saturday’s rallies, 38% of respondents said they had been dissatisfied with the authorities’ activities in the past month, down from 43% last month.

"Although the demonstrations don’t stem directly from the country’s social and economic situation, it did deteriorate significantly in 2020. People’s real disposable income, which has plummeted since 2013, dropped by another 4.3%, [in addition] unemployment grew, and small businesses’ losses are estimated at 2.8 trillion rubles ($37.3 bln). The ruble has weakened against the US dollar by nearly 20% and rising inflation rates are taking a toll on consumer sentiment," Chief of Macroeconomic Analysis at Finam Olga Belenkaya emphasized.

That said, the authorities may offer a carrot to voters ahead of the parliamentary election. "There is an opportunity to do it. According to [Finance Minister Anton] Siluanov, the government’s reserve fund is expected to receive 400 bln-450 bln rubles ($5.3 bln-6 bln) in 2021, while the National Wealth Fund was estimated at 13.5 trillion rubles ($180 bln) at the start of the year," Belenkaya specified.

However, the authorities don’t have an actual reason to provide additional economic stimulus to the public, Chief Investment Strategist at Otkritie Brokerage Konstantin Bushuev noted. "In fact, the Russian authorities are in a rather comfortable position politically and the level of protests is low. The number of coronavirus cases is declining and entertainment and cultural activities are resuming," the expert pointed out.


Nezavisimaya Gazeta: Vaccines may turn out to be more profitable than weapons

Russia’s Sputnik V coronavirus vaccine is expected to be registered in more than 25 countries within the next two weeks, Head of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev said, addressing the World Economic Forum. Over 50 countries are willing to inoculate 1.2 bln people with the Russian vaccine. Given its international price announced by the RDIF, Russia could earn about $24 bln from vaccine exports, which is nearly twice as much as arms exports bring in.

An RDIF spokesperson told the newspaper that "international supplies will come from manufacturers in China, South Korea, India and other countries." According to the fund, "the RDIF’s existing agreements with its international partners will make it possible to produce 500 mln doses of the Sputnik V vaccine outside Russia every year."

However, Freedom Finance analyst Yevgeny Mironyuk pointed out that "net profit will be limited due to significant logistics costs, the need to expand production and the humanitarian nature of vaccine supplies, which makes it impossible to apply high charges."

Besides, it’s impossible to say with 100-percent certainty that every year there will be massive demand for vaccines, experts added. "At the moment, no one expects vaccine demand to persist," Senior Lecturer at Plekhanov Russian University of Economics Olga Lebedinskaya pointed out.

And the main thing is that the RDIF has not revealed the terms of its contracts with foreign producers. This is why it's unclear how much of the potential benefit Russia will actually get.


Rossiyskaya Gazeta: What February has in store for Russia’s ruble

The Russian ruble has been weakening against the US dollar for no serious reason. The ruble’s position in February will depend on the rhetoric of sanctions against Russia, said analysts interviewed by Rossiyskaya Gazeta.

Global markets have been unstable recently due to disruptions in vaccine supplies in the European Union and the issues the US Senate is facing over a new stimulus package. All this is pushing the ruble down, said stock market expert at BCS Dmitry Babin. Complicated geopolitical situation is another reason behind the pressure on the ruble as anti-Russian rhetoric gained momentum in the past weeks, increasing the risk of new sanctions, the expert added.

If the US imposes sectoral sanctions on Russia, the ruble may drop back to its lowest level in five years (82 rubles per dollar), Babin noted. However, it seems at the moment that even if there are new sanctions, they will more likely target individuals, the analyst stressed. "If oil prices remain at the current level, about 55 dollars per barrel of Brent, the ruble may return to monthly levels ranging between 73-76 rubles per dollar," the expert specified.

Sovcombank Chief Analyst Mikhail Vasilyev shares that opinion. "The first quarter of the year is the best time for the ruble because of high oil prices and low import demand. This year, the ruble is also supported by the pandemic-related restrictions on outbound tourism, which reduce foreign currency demand. Expectations of a major budget spending package in the US also benefit developing countries’ assets and the ruble," he emphasized.


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