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Press review: Why Putin’s dialogue offer is key and investment in Russia hits new highs

Top stories in the Russian press on Monday, March 22


Izvestia: Open dialogue between Putin and Biden required to improve bilateral relations

Dialogue between the Russian and US presidents in any format would be useful for bilateral relations that are seriously strained right now, politicians and experts quizzed by Izvestia note. A Russian senator told the paper that Vladimir Putin’s livestream discussion challenge to Joe Biden may inspire more substantive talks in traditional modes. So far, the US president has not responded to Putin’s offer to hold open talks, however, he assured that he would contact the Russian leader in the future. Meanwhile, Russian Ambassador to the US Anatoly Antonov was called back to Moscow from Washington to discuss the prospects in relations between the two global nuclear powers.

Given the state of bilateral relations, Moscow and Washington need to hold top-level talks, First Deputy Chairman of the Russian Federation Council’s (upper house of parliament) Committee on Foreign Affairs Vladimir Dzhabarov told Izvestia. According to the senator, in no way should the world’s two leading nuclear powers cease all communication. The Russian leader proposed holding open and live talks because it is high time the leaders had an honest conversation, the lawmaker pointed out.

"Biden will never repeat what he says behind Putin’s back to his face, because then he would have to find something to support his stance. And there’s nothing backing it up, it’s just words. Unfortunately, Biden is not ready for an open and direct dialogue. But what is the goal of his statements then? Direct confrontation? If you want peace, you shouldn’t be afraid to resolve controversial issues publicly," Dzhabarov explained.

Richard Weitz, a senior fellow at the Hudson Institute, told Izvestia that so far that Washington has no interest in bilateral talks between the Russian and US leaders. It is not about the current confrontation, it is due to the fact that the countries have no urgent matters that require the leaders to talk, the expert explained.

The New Strategic Arms Reduction Treaty (New START) has already been prolonged, and other major issues, such as Iran or North Korea, involve more sides than just Russia and the US, the analyst said. Nevertheless, the US has expressed considerable interest in dialogue with Russia at the expert and working level in bilateral and multilateral formats on certain challenges, for example, during the recent talks on the Afghanistan peace process that were held in Moscow, Weitz noted.


Kommersant: Zelensky keeps hyping ‘new’ Donbass summit but nothing’s on the horizon

Another Normandy Four (Germany, Russia, Ukraine, France) on Donbass is not planned to be held in the foreseeable future, despite Ukrainian President Vladimir Zelensky’s statements to the contrary, Kommersant sources among the Donbass negotiators inform. This issue was not discussed during the recent talks between the Normandy Four political advisors, and it was not even brought up by Ukrainian Presidential Chief of Staff Andrei Yermak.

Since early March, Kiev has suggested that a new Normandy Four summit is in the works. The most recent summit was held in December 2019 in Paris. Putin and Zelensky met face-for-face for the first time during the talks, and have not had contacts since then, not even via phone.

On March 18, Deputy Chief of Staff of the Presidential Executive Office Dmitry Kozak, Advisor to the German Chancellor Jan Hecker, Diplomatic Advisor to the French President Emmanuel Bonne, and Ukrainian Presidential Chief of Staff Andrei Yermak held a video conference call to discuss the Donbass peace process. The parties focused on the permanent ceasefire on the line of contact and the measures, stages and order of steps that should lead to a peaceful regulation of the region, Kommersant sources suggest. The sides failed to come to an agreement.

The full ceasefire is an issue that precedes other steps, including the humanitarian, political and economic ones, required for a total settlement in Donbass. Participants of the March 18 talks failed to make progress in this area as well. The negotiators are trying to approve steps towards peace outlined in the Minsk Agreements, offering their options, sources told the newspaper.

A negotiator from the Russian side told Kommersant that a new summit can only be discussed after the sides manage to put an end to the attacks in Donbass and after they achieve a common understanding of what should be done next to fully regulate the conflict. None of these conditions have been met so far.


Nezavisimaya Gazeta: Turkish economy may face problems as Erdogan appoints new central bank chief

Turkish President Recep Tayyip Erdogan’s decision to oust Naci Agbal, the now former central bank chief, coincided with the period when the Turkish lira slightly strengthened, Nezavisimaya Gazeta reports. Western observers saw the president’s move as unexpected, as Agbal is the third head of the regulator who was removed in just less than two years. Experts in the Turkish parliament say that this unstable policy is a result of in-fighting between the country’s various influential groups, and that this will not improve the position of the national currency.

Sahap Kavcioglu, professor at the Marmara University in Istanbul, was appointed the new central bank head. Two days before his predecessor, who assumed his duties back in November, was sacked, the regulator decided to raise the key rate to 19%. Kavcioglu is known to oppose such measures. His appointment coincided with a slight strengthening of the lira, however, according to the London-based consulting firm Capital Economics, Agbal’s removal is likely to cause a sharp drop in the Turkish lira exchange rate in the future.

Senior Director of the Turkish Program at the Foundation for Defense of Democracies (FDD) Aykan Erdemir, who used to be a Turkish MP, told Nezavisimaya Gazeta that Kavcioglu shares Erdogan’s opinion that inflation is caused by key rates, so he is expected to lower the key rate. This will inevitably lead to another round of the Turkish lira’s devaluation, and another wave of outflow of capital from Turkey can be expected.

According to the expert, Erdogan’s chaotic actions cannot be explained by any rational economic policy. Instead, they reflect the in-fighting for areas of influence between different factions within the Islamist and ultra-nationalistic alliance of Turkey. Such ill-conceived decisions will inevitably deepen the economic crisis in Turkey, which in turn is likely to undermine the support of Erdogan’s government, Erdemir suggests.


Kommersant: Russia reaches four-month high of weekly foreign investment

In the past week, Russia pulled in the highest volume of weekly investment in the past four months. According to the Emerging Portfolio Fund Research (EPFR), non-residents have poured some $122 mln into Russia’s assets. Global investors are buying Russian bonds due to high oil prices and dividends.

According to Kommersant, which analyzed the report of Bank of America (based on the EPFR’s data), the overall inflow of foreign investment into Russian assets reached $122 mln in the week that ended on March 17. This is the highest weekly figure since November 2020 ($127 mln) and three times higher than last week’s foreign investment figures.

High oil prices encouraged the recovery of demand for Russian assets. According to Bloomberg, last Monday, Brent oil prices reached $70 per barrel. Even considering the subsequent 5% drop and stabilization at about $64.5 per barrel, oil prices are still nearly 25% higher than late 2020 figures, the newspaper notes. Eduard Harin, Portfolio Manager at Alfa-Capital, told Kommersant that Russia’s oil and gas assets are lagging behind oil prices and their foreign competitors, and the recent rise can be viewed as some sort of catching up. "Investors are interested in the Russian market due to high dividend yields and the fact that two-thirds of it are represented by the assets of exporting companies, which makes our assets attractive to investors at the start of the commodity super-cycle," Sputnik Asset Management Director General Alexander Losev said.

Nevertheless, the majority of financial gurus note that so far, it is too early to discuss the long-term recovery of Russian assets. Chief Strategist at BCS Global Markets Vyacheslav Smolyaninov told the paper that the main volume of rising investment was due to the influx of investment into the Pictet Russian Equities and VanEck Vectors Russia ETF funds. The sanctions rhetoric in the US might lower the inflow of foreign investment that are affected by such news, he said. "We do not expect a serious decline, if the sanctions do not cover the national debt, however, it is likely that [Russia] will get stuck in a lateral trend, expecting further action of the US administration and the development of the global economic situation," Harin predicted.


Izvestia: Russian COVID-19 expert talks repeat cases and mass vaccination

Repeat cases of COVID-19 are more likely to be recorded among the elderly, as their immune system becomes weaker with age, Pavel Volchkov, who heads the genome engineering lab at the Moscow Institute of Physics and Technology, said in an interview with Izvestia, advising the elderly to get vaccinated against the disease. The expert noted that so far, pregnant women are not recommended to get inoculated against COVID-19, along with those who recovered from COVID-19. The rest of citizens should get inoculated as soon as possible, he stressed, as the COVID-19 lethality rate is slow to drop, and elderly citizens who wore masks or stayed home all year are in particular danger.

"According to the preliminary data in my possession, repeat cases do not happen often. If the infection takes place, then the symptoms are much milder than the first time around. However, repeat cases still happen, and more often, they happen among the elderly. This is due to the same factor that affects the high lethality rate among seniors - the immune system ages along with the entire body," the expert said.

It is reported that over 7 mln people had been inoculated against COVID-19 in Russia, Izvestia notes.

When asked to provide his opinion on the vaccination campaign, the expert said:

"There are many inoculated people in our country at this point, but we would like there to be more right now. Currently, 7 mln doses are ready and waiting for consumers. There are many deterrents. There is a large amount of people who are skeptical about everything, including vaccines. There are passive opponents along with active ones. They were waiting for the vaccine first, then they waited for it to get better, then for it to get even better. It seems that they are ready to wait until the pandemic ends, failing to understand that the vaccine is a means of mass safety. This is how the pandemic can be beaten," he stressed.



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