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Press review: Moscow-led bloc may act if Afghan border unravels and who gains from EU gas

Top stories from the Russian press on Friday, September 3rd

Vedomosti: US to help Ukraine but with caution

The September 1 talks between US President Joe Biden and his Ukrainian counterpart Vladimir Zelensky in Washington took two hours instead of the planned 45 minutes and were finalized by signing a declaration that enumerated memorandums and agreements made during the visit, including a new package of US military aid to Ukraine to the tune of $60 mln.

The United States supports Ukraine joining NATO although does not indicate specific deadlines, while with regards to the Donbass situation, Washington supports holding Russia responsible and using the Normandy Four to settle it albeit without joining it despite Ukraine’s wishes (the format involves Ukraine, Russia, Germany, and France). With regards to Nord Stream 2, the US intends to preserve Ukraine’s transit role without mentioning new sanctions. The sides also concluded several deals on defense and security.

Coordinator of the European Dialogue Expert Group in Ukraine Georgy Chizhov thinks that the US visit was important for Zelensky from the point of view of domestic policy since it was important to him to show his compatriots that he was being taken seriously and the US remains Ukraine’s friend. According to Director General of the Russian International Affairs Council Andrei Kortunov, the US visit did not contain any unexpected events. The US was not included in the "Normandy format," and it also didn’t get involved in the Crimea Platform that a number of Ukrainian politicians were hoping for. "The visit reflects that with all its significance for Biden, Ukraine is not his main headache," the expert noted. Biden, like Trump before him, is confident that France and Germany should be preoccupied with Ukraine, while the role of the US is symbolic. However, Washington confirmed its position on Donbass and Crimea which gives Zelensky the right to claim another major foreign policy victory.

Head of the Center for Applied Research at the Institute of US and Canadian Studies at the Russian Academy of Sciences Pavel Sharikov noted that the two leaders did not come to a complete mutual understanding, since, despite Ukraine being the first line of defense against Russia from the American point of view, Biden is not going to make any military decisions given that Zelensky came to Washington during the Afghanistan fiasco. Senior Research Fellow at the Russian Academy of Sciences’ Institute of US and Canadian Studies Pavel Koshkin seconds the opinion that Ukraine is a weak spot for Biden’s reputation, since during his electoral campaign, the Republicans accused his son of corruption in Ukraine where he served on the board of directors of the Burisma gas company, and points out that Ukraine will take a back seat in US foreign policy.


Kommersant: Former CSTO chief reveals how Afghanistan crisis will impact Russia and Central Asia

From 2003 to 2016, Nikolay Bordyuzha was Secretary General of the Collective Security Treaty Organization (CSTO) and in this capacity, he was involved in curbing the threats from Afghanistan. In an interview with the newspaper, he talked about how the Taliban (outlawed in Russia) takeover of Afghanistan poses a threat to Russia and when the CSTO may potentially get involved.

He noted that the situation in Central Asia is cardinally changing since a hotspot of instability emerged in the immediate proximity of our allies’ borders. It is not clear how the situation will unfold in the wake of the American pullout, but the Taliban does not control the entire country and is facing resistance in Panjshir in addition to being opposed by rival terrorist groups. A lot will depend on the group’s policy which is now hard to predict.

Bordyuzha noted that the post-Soviet security bloc may get involved in the event of intervention or a direct threat of armed conflict with a member state of the CSTO, since it has all the necessary instruments to protect its members from any aggression. He believes that Russia should not hurry to recognize the Taliban as the legitimate government and should see how the situation develops. He also does not think that Russia should accept any refugees from Afghanistan since it has no obligations to them and the consequences of their arrival in the country are unpredictable. A surge in drug trafficking from Afghanistan is also a likely consequence of the current crisis, since the country needs to sustain its economy by any possible means.


Nezavisimaya Gazeta: What Europe’s soaring gas prices mean for Russia

Record-high prices for natural gas in Europe not only give suppliers huge profits but also boost potential competition among them. At a price tag of $650 per 1000 cubic meters, one can expect a new revolution of sorts which would completely change the global energy market. Even today the deliveries of liquefied natural gas have become more competitive in comparison to the pipeline gas.

The cold winter of 2020-2021 emptied gas reservoirs in Russia and Europe, so the deficit can only grow. The rates of gas being pumped into Europe’s underground storage facilities are lagging behind last year’s figures. According to Gas Infrastructure Europe, as of August 30, the supplies there are at a multiyear low. Today, the storage facilities are 67-percent full, while a year earlier they were 91-percent full.

According to Associate Professor Oleg Cherednichenko of the Plekhanov Russian University of Economics, surging gas prices are a highly beneficial scenario for Russian exporters and the federal budget in general. Alfa Capital analyst Denis Badyanov thinks that demand for natural gas, both pipeline and liquefied, will only grow worldwide by approximately 3-5% per year. Currently, the dramatic price hike is lucrative for all producers, but it is necessary to keep in mind that the liquefied gas for specific spot prices is usually significantly more expensive than the pipeline gas supplied by Gazprom on long-term contracts. "So, with high market prices, the cost of raw materials from a Russian producer is usually lower while now it is significantly more so," the analyst pointed out.


Vedomosti: Ministry for Development of Russia's Far East divulges details of offshore zone on Kuril Islands

Russian Prime Minister Mikhail Mishustin instructed appropriate agencies to prepare coordinated proposals on the creation of a special economic zone on the Kuril Islands by September 1. Deputy Minister for the development of Russia’s Far East Pavel Volkov told the newspaper about this initiative at the Eastern Economic Forum (EEF). He said that the initiatives for support and business protection have already been formed and preferences may be obtained by foreign investors as well without restrictions, particularly, Japanese businessmen.

On July 23, Russian President Vladimir Putin said that the government had "unprecedented proposals" on Japan’s participation in business on the Kuril Islands without divulging the essence of those proposals.

New preferential tax arrangements are always interesting for business, Co-Chairman of the Delovaya Rossiya (Business Russia) Association Anton Danilov-Danilyan said "There are always active people who would go for it. Particularly, in those spheres where one can use the effects of logistics or the industry’s specifics - for example, in the area of tourism." In his opinion, the development of a special economic zone would depend on the efficiency and skill of an entrepreneur - whether he can find the right partners, establish efficient production and create the necessary infrastructure. "At the same time, it is not always possible to use specific markets efficiently. The percentage of failure for businesses may be high due to small market size and strong efficient neighbors with similar privileges," the expert pointed out.


Rossiyskaya Gazeta: Experts lay out possible scenarios two weeks before State Duma election

The electoral campaign is coming to a close and just two weeks are left before the State Duma election. Questions still loom as to which political force will come in third and whether non-parliamentary parties will be able to receive mandates. The participants of a roundtable discussion organized by the Social Research Expert Institute (EISI) evaluated the pre-election situation.

According to the daily polls by the Russian Public Opinion Research Center, the results of four parliamentary parties are stable, chief of the Center’s political analysis department Mikhail Mamonov says. Over the last three days, the responses supporting United Russia were in the range of 28-30%, while the Communist Party had 16-18% with a small decrease registered lately. Third place is still contested since the figures for the Liberal Democratic Party of Russia (LDPR) and of Just Russia - Patriots - For Truth are rather close (8% and 7%, respectively). Another three parties may approach the 5% threshold or even cross it. These include the Party of Pensioners (2.7%), New People (2.8%) and Yabloko (2.2%).

United Russia may count on ballots from many undecided voters, Director of the Russian Center for Current Policy Alexey Chesnakov says. He thinks that a lot depends on the remaining two weeks.

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