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Press review: New Taliban government raises concerns and Salvador bets on Bitcoin

Top stories from the Russian press on Wednesday, September 8th

Izvestia: New Afghan authorities fail to form inclusive government

The Taliban (outlawed in Russia) have formed Afghanistan’s interim government. Most of its members led the country in the first Taliban rule in 1996-2001 and are on the United Nations’ blacklist. The new cabinet is not inclusive as it does not involve other political forces. Experts interviewed by Izvestia believe that the international community will be in no rush to recognize the new government.

Director of the Center for Eurasian Studies at Moscow State Institute of International Relations Ivan Safranchuk explained that most countries would prefer to cooperate with the new Afghan government selectively, refraining from fully recognizing it. "I think that most members of the international community will adopt a wait-and-see attitude. They will be willing to discuss humanitarian and security issues with the Taliban but there will be no political recognition. However, some countries certainly will maintain full-fledged relations with them," the expert noted. "Russia is inclined to join the second group of nations. Many countries won’t bring their embassies back to Afghanistan any time soon but Russia’s embassy continues to operate," Safranchuk added.

Expert on Central Asia Arkady Dubnov says that the Taliban will prove their government to be inclusive by appointing members of ethnic and religious minorities as deputy ministers. At the same time, the expert did not rule out that if the international community showed a negative reaction, the new Kabul authorities might offer a ministerial position to someone from another ethnic group, but still, most ministries would be headed by Pashtuns.

According to Safranchuk, the country’s new authorities have their own view of inclusiveness: they are ready to work for the good of the entire society but it doesn’t mean they are willing to establish an inclusive government.


Izvestia: Tehran inclined to resume nuclear deal talks

Tehran is inclined to resume the Vienna nuclear deal talks, Iranian Ambassador to Russia Kazem Jalali told Izvestia. He pointed out that Iran’s priority is to ensure the lifting of all US sanctions. Experts say that Iran will continue to boost its nuclear capabilities until the nuclear deal is restored in order to return to dialogue in a better position.

For Iran, while the talks aren’t an end in themselves, the dialogue is a way to ensure the country’s interests and so undue delays in the negotiation process are unacceptable. Tehran expects that talks will be aimed at achieving results and the results of the lifting of sanctions should be tangible, Iran needs to benefit from the removal of restrictions, Jalali pointed out.

Russia’s Permanent Envoy to International Organizations in Vienna Mikhail Ulyanov, in turn, told the newspaper that there was no date for the resumption of talks on restoring the Joint Comprehensive Plan of Action (JCPOA) and it was hard to say when a date could be set. According to the diplomat, the change of government in Iran is the reason for the delay. "Another important aspect for other JCPOA participants is that Iran continues to develop its nuclear program, while the Americans seek to maintain and even expand sanctions. We don’t see it as a drama but call for stepping up the negotiations. It is in everyone’s interests, Iran included," Ulyanov emphasized.

According to Director General of the Center for the Study of Contemporary Iran Radzhab Safarov, the Vienna process was interrupted because the previous Iranian government was in a hurry to ensure the lifting of all sanctions on Tehran by the end of its term but the United States’ narrow approach did not make it possible. At the same time, in the expert’s words, time is on Tehran’s side. Iran is headed towards further nuclear research and an increase in uranium enrichment. According to the analyst, the West realizes that any delay may lead to a situation where Iran won’t be interested in the nuclear deal.


Vedomosti: Key rate increase to help Russian Central Bank fight inflation

Russia’s Central Bank will make a decision concerning the key interest rate at its Board of Directors meeting on September 10. The Central Bank will not leave the rate as it is, Vedomosti writes, citing analysts from leading financial institutions. More than half of the experts interviewed expect the regulator to raise the key rate by 0.5 percentage points to seven percent. The move is possible due to the need to rein in rising prices, analysts point out.

"Under the current situation, the regulator will most likely continue to restrict money supply by raising the key rate," Home Credit bank analyst Stanislav Duzhinsky noted. A key rate increase would help curb potential inflation and move to a softer monetary policy in the future, when the growth in prices slows down, the expert stressed.

Sovcombank Chief Analyst Mikhail Vasilyev believes that inflation pressure will remain high in the short term. Apart from high food and commodity prices on international exchanges, other factors will also play a role, including the catch-up demand amid easing coronavirus restrictions, interruptions in supply chains due to the pandemic, global chip shortages, high container shipping rates and the activities of developing countries’ central banks that increase the global money supply.

The prospects for a global economic recovery are another strong factor stoking inflation, investment chief at MTS Bank Gleb Sorokin said. According to him, given the situation, the Central Bank will probably seek to prevent inflation pressure from rising by tightening its monetary policy.

Experts believe that the move to tighten monetary policy will make it possible to cool down consumer and investment demand, and, as a result, it will lead to a decline in inflation pressure on the economy.


Izvestia: New cities in Siberia may give big boost to Russian economy

The implementation of Russian Defense Minister Sergey Shoigu’s initiative to build three to five new cities in Siberia with a population between 300,000 to one million may give a big boost to regional development and the entire Russian economy, said experts interviewed by Izvestia.

Siberia is a vast but almost unchartered and sparsely populated territory, Strategic Development Director at the Stroikom company Dmitry Lesnyak pointed out. At the same time, the region has huge reserves of oil, gas and other natural resources. If the project to build new cities is implemented and they prove to be true centers of science and industry, then Siberia will turn into a well-developed region, Lesnyak said.

The move will help solve the economic development problem because today, Siberia mostly hosts extractive industries that operate on a rotation system. "People come and go, which means that there is no need for local personnel, universities to train engineers and permanent homes," the analyst explained. "As a result, locals prefer to move to more developed regions of the country. The construction of cities will probably stop population outflow," Lesnyak insists.

Experts note that comfortable living conditions need to be created in order to attract people. In this regard, the government will have to establish social and transport infrastructure in the new industrial centers, said Mikhail Khachaturyan, Associate Professor with the Management and Innovation Department at the Financial University under the Russian Government.

According to President of the Russian-Asian Union of Industrialists and Entrepreneurs Vitaly Mankevich, the construction of new plants in Siberia will contribute to export growth, making it possible to increase Gross Regional Product (GRP) and the tax base. It will help cities to resolve beautification, education and healthcare issues.


Vedomosti: Countries may accept bitcoin as legal tender following Salvador’s example

Salvador has become the first country to accept bitcoin as legal tender. Salvador’s president said earlier that it would help the country’s citizens save about $400 mln they spend on commission fees annually, Vedomosti notes, citing foreign media.

About 2.5 mln Salvadorans live and work in the United States. The country moved to declare bitcoin as legal tender in a bid to ensure a rise in monetary inflows from migrants many of whom don’t have bank accounts because they work in the informal sector, Head of Financial Services Advisory at KPMG in the CIS Natalia Rakova pointed out.

Bitcoin is an instrument for savings, Director of the EY technology center Yuri Gelgafov noted. It is difficult to use it as a day-to-day payment method because its rate is unpredictable. Since a few hundred addresses, which are partially anonymous, hold most of the existing bitcoins, many believe that the bitcoin rate is not only volatile but also easily manipulated. Concerns about manipulation, the possible use of bitcoin for money laundering purposes, and, as a result, of tightened regulations, increase the cryptocurrency’s volatility, Gelgafov explained.

However, other countries may also move to recognize cryptocurrencies in order to make it easier for migrants to send money home, Rakova noted. She believes that Latin American and African nations are most likely to take such a step. As far as the former Soviet countries are concerned, even those of their citizens who are engaged in the informal sector use traditional money transfer tools one way or another or have managed to find another solution to the problem.

TASS is not responsible for the material quoted in these press reviews.