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Press review: Russia to cut ties with NATO and Afghan jam drives Dushanbe closer to Turkey

Top stories from the Russian press on Tuesday, October 19th
United Nations organization headquarters Drop of Light/Shutterstock/FOTODOM
United Nations organization headquarters
© Drop of Light/Shutterstock/FOTODOM

Media: Moscow moves to cut ties with NATO

Russia has decided to actually cut ties with the North Atlantic Treaty Organization. On Monday, the Russian Foreign Ministry announced that the country's permanent mission to NATO would be suspended indefinitely. In addition, the activities of NATO's military liaison mission and information bureau in Moscow will also be suspended. Russia says that NATO has failed to show willingness to build an equal dialogue and the alliance's move to expel eight members of the Russian mission was just more proof of that, Kommersant writes.

Russian International Affairs Council Director General Andrey Kortunov points out that "the current severing of ties was instigated by Brussels as NATO is working on a new strategy to be adopted at the alliance's next summit, and the previous partnership with Russia does not fit into its concept."

Deputy Director of the Center for Comprehensive European and International Studies at the Higher School of Economics Vasily Kashin believes that this is "an important symbolic step" on Moscow's part. "Russia's ties with the alliance have been devolving for years, so the Russia-NATO communication channel has been of no importance lately." According to the expert, Moscow does maintain a communication channel between Chief of the Russian General Staff Army General Valery Gerasimov and US Chairman of the Joint Chiefs of Staff General Mark Milley, which proved effective among the crises of the recent years.

Russian Institute for Strategic Studies expert Sergey Yermakov, in turn, told Izvestia that "there is a downward trend in relations between Russia and NATO, as well as rising tensions." "The alliance seeks to goad Moscow based on its plans because it [NATO] is interested in worsening relations," the analyst explained. According to him, NATO's identity crisis is the reason since the organization is only capable of overcoming it by encouraging its allies to confront a simulated enemy.

"NATO's existence and expansion after the end of the Cold War was the main reason for the collapse of the entire system of relations between Russia and the West. Today, Russia is particularly trying to draw red lines regarding further steps on NATO’s integration of Ukraine," Kashin emphasized, pointing to Moscow’s warnings that it is determined to take "active steps" to respond to NATO's activities related to Ukraine in order to ensure Russia's security. "In such a situation, maintaining the mission to NATO would erode Russia's position and call into question Moscow's resolve to defend those red lines," the expert concluded.


Nezavisimaya Gazeta: Developments in Afghanistan drive Tajikistan towards defense cooperation with Turkey

The Collective Security Treaty Organization (CSTO) is holding its Combat Brotherhood 2021 military drills in Tajikistan on October 18-23. Troops involved in the exercise will practice joint operations during border conflicts, which stem from tense developments in Afghanistan. In a bid to make new allies in a complicated situation, Tajikistan is also working on a visa waiver and a defense cooperation agreement with Turkey, Nezavisimaya Gazeta notes.

According to Director of the Agency for Ethno-National Strategies Alexander Kobrinsky, Dushanbe would like to have an ally on the other bank of the Panj River. Russia will not enter Afghanistan, so Tajikistan expects Turkey to play the role. "However, Ankara is not free to make choices, there is the Anglo-Saxon world behind it, which has entrusted the operational control of Central Asia to Turkey that will pursue its neo-Ottoman ambitions there," Korbinsky pointed out.

Stanislav Pritchin, an expert at the Russian Academy of Sciences' Institute of World Economy and International Relations, believes however that rapprochement between Tajikistan and Turkey should not be overestimated because it won't be of a strategic nature. "It's common practice for Turkey to search for room for maneuver and document its presence through agreements and steps to strengthen economic cooperation and mutual assistance in certain areas, including defense," Pritchin emphasized. In the current complicated situation, packed with high risks, Tajikistan may view Turkey, which has established dialogue with the Taliban (outlawed in Russia), as a power capable of restraining the Taliban in case the situation unfolds negatively for Dushanbe, the expert noted.

As for the growing activities of Turkish business circles, Pritchin stressed that top-level political support was necessary for them to achieve success, like it was in Turkmenistan under President Saparmurat Niyazov. The same is unlikely to happen in Tajikistan where the economic structure and people's mentality are different. This is why there will be more talk than action.


Kommersant: Outgoing Indian ambassador lauds relations with Russia

Indian Ambassador to Russia Bala Venkatesh Varma, who is completing his three-year tenure in Moscow, has taken stock of his activities in an interview with Kommersant, pointing to new trends in relationship between the two countries.

According to the envoy, a revolution is taking place in bilateral relations in the strategic, political, economic, trade and high-tech fields, and that includes interaction among people. Although the coronavirus pandemic has complicated cooperation over the past year and a half, the two countries managed to maintain a high level of relations.

Bala Venkatesh Varma pointed out that New Delhi had announced a concessional credit line of $1 bln in order to boost Indian businesses' participation in Russia's development. India also seeks to contribute to the development of the Chennai-Vladivostok Maritime Corridor that will complement the North-South Transport Corridor via Iran, and take part in efforts to promote the Northern Sea Route and the Vostok Oil project. According to the ambassador, in the past three years, Russia regained its top position in the list of India's defense partners with the countries signing an important contract for India's procurement of Russia's S-400 air defense systems. In addition, the production of Russia's Sputnik V vaccine in India proved to be crucial in terms of bilateral cooperation amid the coronavirus pandemic. Wagers are also placed on new areas of cooperation in the pharmaceutical and chemical industries, robotics and online banking.

The Indian envoy noted that the pandemic had prevented both countries from holding a bilateral summit in 2020 and the parties were actively discussing the possibility of Russian President Vladimir Putin's visit to India before the end of the year. Besides, New Delhi also expects Russian Defense Minister Sergey Shoigu to pay a visit to India.

Indian-Russian relations have a unique strength that has repeatedly made it clear that it follows its own logic and is impervious to pressure from third countries, the envoy added, stressing that New Delhi and Moscow pursued similar strategies aimed at boosting a multipolar world order.


Rossiyskaya Gazeta: Who’s really going to benefit from high gas prices the most

The first string of the Nord Stream 2 gas pipeline has been filled with technical gas and is ready to transport gas, and the second string is getting ready to be launched, the project's operator announced. However, Europe seems to be in no hurry to begin exporting gas via the new route, even though an energy crisis is mounting and gas prices aren't falling below $1,000 per cubic meter, Rossiyskaya Gazeta writes.

Some are criticizing the European Union's authorities for their hasty decision to abandon fossil fuels, while others are putting the blame on Russia as the main gas supplier. However, Gazprom continues to implement all of its export obligations and it's not Russia that is benefiting from high commodity-exchange gas prices the most, but suppliers from other countries.

According to Gazprom's latest estimates, the export price of Russia's pipeline gas stands at $295-330 per cubic meter, this is the price at which Russia is currently selling gas to Europe based on long-term contracts. On the other hand, it is spot contracts implying prompt payment and gas supplies that are tied to commodity-exchange prices. This is the way European gas producers work, first and foremost Norwegian ones, as well as companies exporting liquefied natural gas (LNG) from the United States, Australia and Middle East countries.

However, a very small amount of LNG has reached Europe this year because producers can make more money by selling it on the Asian market. Meanwhile, Russia will also gain a lot, Deputy Director of the National Energy Security Fund Alexei Grivach said. This year, pipeline gas prices went up by 50-60%. Given the planned supply volumes, Russia may earn additional $5.5-6.5 bln only from fees, the expert specified.

Meanwhile, spot gas prices skyrocketed by 600% this year, and Norway's share in European gas import is about 20% (compared to Russia's approximate 33%). Even given Russian export volumes, Norwegian companies will benefit more from the current crisis. The main gripe put forward against Russia’s Gazprom is that it is a state company that pursues a political goal of expanding Moscow's influence in Europe. However, that doesn't work here because the Norwegian government holds the controlling interest in the Scandinavian country's major oil and gas company Equinor.


Izvestia: Russian ruble may strengthen further in coming weeks

The Russian currency may strengthen in the coming weeks. Experts interviewed by Izvestia don't rule out that the dollar will drop below 70 rubles and the euro will fall to 80 rubles. Since the beginning of the year, Russia’s national currency rose 4.4% against the greenback and climbed 9.6% against the euro. According to experts, the ruble will be trading at 70-74 to the dollar by the end of 2021, while the euro's exchange rate will be 82-84 rubles.

Rising oil, gas, coal and ore prices are the key driver behind the ruble's growth, Head of BCS information and analytical content Vasily Karpunin said. Sovcombank Chief Analyst Mikhail Vasilyev agrees that the dollar and the euro dropped to lows in 2021 thanks to price spikes for Russia's major commodities. At the same time, the ruble was also supported by an improvement in international investors' demand for risk assets, expectations of monetary tightening by the Central Bank and the fiscal period, Vasilyev emphasized.

Analysts share the opinion that the ruble may strengthen even more in the coming weeks. Finam's Andrei Maslov believes that the dollar may fall below 70 rubles and the euro may drop to 80 rubles. However, the strengthening of Russia's national currency will be temporary, experts noted. Russia and the European Union are likely to strike an agreement on gas supplies as the cold season sets in, which will bring gas prices down, as well as the price of oil and petroleum products that have been on the rise as substitutes for energy generation, Maslov pointed out.

Making sure that the dollar falls below 70 rubles requires a significant inflow of foreign capital into Russian bonds, but it won't happen this quarter given the high inflation rates, Vasilyev said. In addition, the Russian Finance Ministry's currency purchases based on the budget rule will also keep the ruble from growing, the expert added.

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