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Press review: Will Russia, NATO make concessions and Kazakh leader pursues reforms

Top stories from the Russian press on Wednesday, January 12th
Kazakh President Kassym-Jomart Tokayev Alexei Nikolsky, Sputnik, Kremlin Pool Photo via AP
Kazakh President Kassym-Jomart Tokayev
© Alexei Nikolsky, Sputnik, Kremlin Pool Photo via AP

Izvestia: Will Russia and NATO make concessions

A dialogue on halting NATO’s expansion "is not impossible," although it will take a long time, experts told Izvestia. According to them, the US-led bloc will not agree to a permanent ban on admitting new members, but it will accept it for an extended period of time. Overall, political analysts believe that the conclusion of the negotiations on security guarantees, which will take place in NATO and the OSCE in the coming days, will be heavily influenced by Washington’s position. Meanwhile, Moscow is placing great hopes on the January 12 Russia-NATO Council meeting, the outcome of which will determine whether cooperation on Russia's measures to alleviate tensions will continue.

According to Deputy Foreign Minister Sergey Ryabkov, the Russia-NATO meeting will determine whether it is worth continuing work on security guarantees at all. The senior diplomat singled out three imperatives that Russia will pursue: halting NATO’s eastward expansion, a return of the bloc’s armed forces to its position of 1997, and the non-deployment of strike weapons at Russia’s borders.

Thomas Graham, a Yale University professor, and managing director at Kissinger Associates, told Izvestia that we can expect to see a reintroduction of the confidence-building measures that were achieved during the Cold War, in particular, the transparency of military operations, and limiting operations along the Russian-NATO border. According to the expert, agreeing on the non-expansion of NATO could be possible, although it could take a long time.

"Undoubtedly, the Russian-US track is key, also because, despite the emphasis of the current administration in Washington on taking into account the interests of its allies, the US remains most significant actor in the Euro-Atlantic area," Research Fellow at the Center for International Security at the Institute of World Economy and International Relations, Dmitry Stefanovich told Izvestia.


Kommersant: Kazakh president announces start of reforms

The transit of power in Kazakhstan, which was believed to have taken place in 2019, is actually taking place only now, after the failed violent insurrection that had engulfed Almaty and other cities of the country, Kommersant writes. President Kassym-Jomart Tokayev emerged from the shadow of his predecessor, Nursultan Nazarbayev to act without looking back at the leader of the nation. What will come of this still remains clear, the newspaper writes.

Tokayev has put forward an almost revolutionary slogan promising to build a "new Kazakhstan". This wording alone indicates an intention to do away with the previous Kazakhstan built by Nursultan Nazarbayev, Kommersant writes. The president, who earlier called the events in the country a terrorist attack from within and without, as well as an attempted coup d'etat, said that it was not only conspiracies. The authorities, he stated, were out of touch with reality and ignored real problems. In his speech, Tokayev only once mentioned his previously untouchable predecessor, and in an unambiguously negative context.

Political analyst Gaziz Abishev told the newspaper that the president is starting by putting the wealthy in the crosshairs. "I am sure that over time they will shake the dust off the idea of a progressive tax, which he talked about 2.5 years ago, but faced resistance," he said, adding, "The speech contains strategic tasks that have always been discussed. In particular, the task of re-industrialization and building up education. But these are tasks to develop over decades."

Experts interviewed by Kommersant agree that everything mentioned by Tokayev is not yet an integral program, but a set of good and even populist statements and aspirations. However, carrying them out remains up in the air.

"We are in the midst of a crisis. It’s been only a week, and I believe that the president and his speechwriters have done the impossible. They have formulated an almost ideal answer to all the needs of society," Director of the Center of Applied Research Talap Rakhim Oshakbayev told the newspaper.


Nezavisimaya Gazeta: Russia’s oil prices may climb amid global uncertainty

Russia’s oil revenues in 2022 may be 1.5 times or even double the figure required to balance the budget, according to the forecasts of experts who foresee the minimum level of oil prices in 2022 at $65 per barrel, and the maximum at $90, Nezavisimaya Gazeta writes. The budget is based on a level of roughly $44 per barrel. However, analysts warn against long-term conclusions about current events, for example, the Omicron variant with a still unknown destructive effect and Kazakhstan.

Deputy Director of Alpari center Natalya Milchakova believes that the situation in Kazakhstan will not be a long-term factor for the oil market. Analysts from Freedom Finance in Kazakhstan explained to the newspaper that the bulk of oil production is located in Western Kazakhstan, in fields far from the cities.

The experts interviewed by Nezavisimaya Gazeta listed factors that will determine the movement of oil prices this year: the pandemic and its impact on people’s health and global economy, as well as the decisions by OPEC+ nations. The delayed effect of the lack of investments in exploration and drilling in recent years, and the situation with fuel reserves in various regions will also affect prices.

"We are bracing to see Brent prices around $72-73 per barrel by the middle of the year," head of department at Univer Capital Dmitry Alexandrov said. "At the moment, we should expect that the price of Brent crude oil by mid-2022 to be within the $76-85 per barrel range. And by the end of the year, our baseline forecast assumes a range of $65-80 per barrel," Andrey Maslov, a Finam analyst noted.


Nezavisimaya Gazeta: Russia, China share responsibility for Kazakhstan

Beijing favors the stationing of CSTO forces in Kazakhstan, Chinese Foreign Minister Wang Yi said in a conversation with Russian Foreign Minister Sergey Lavrov. According to the Chinese press, Beijing is also ready to send intelligence officers to help its neighbor. Meanwhile, according to experts, China's support at the time of the violent insurrection was limited to words, yet Russia had proven itself to be a true ally and sent a military contingent, Nezavisimaya Gazeta writes.

China has poured tens of billions of dollars into Central Asia over the past decade, primarily in the oil-gas and minerals sectors, the newspaper writes. However, China, at least for the moment, is not in a position to help its allies in the region through military means. That being said, this poses new risks for China. Presently, Beijing understands that the fate of Chinese investments depends on the goodwill of the Russian army, American expert on China Dean Cheng believes.

"Western politicians are trying to prove that Russia and China will inevitably collide in Central Asia. Discussions on how to split Russia and China always include stories from this region," Deputy Director at the Institute of World Economy and International Relations Alexander Lomanov told the newspaper. "In reality, China’s involvement in Central Asia is purely from an economic and investment standpoint and not accompanied by the deployment of Chinese troops or the creation of a military bloc led by China," he added.

However, head of the Department of International Relations of the Higher School of Economics, Alexander Lukin told Nezavisimaya Gazeta that there is no complete agreement between the positions of Russia and China on Kazakhstan. "Russia is an ally for [Kazakhstan], while China is a partner," the expert noted.


Kommersant: Indonesia coal embargo bolstering prices in Russia

The embargo on the export of thermal coal from Indonesia, introduced at the end of last year, led to an increase in world prices by 15-20%. As a result, according to the expectations of Kommersant’s sources, prices for Russian grade D thermal coal may rise by 10% to $130 per tonne. At the same time, according to analysts and market sources, the effect will not be long-term, as the Indonesian authorities are already discussing lifting the embargo.

Indonesia, which accounts for over 40% of global thermal coal exports, has imposed a month-long export ban amid fears that a shortage of coal at local power plants could lead to power outages.

Meanwhile, coal exports continue to rise. According to Russian Railways, in 2021, the loading of coal to export ports increased by 9.3% to 182.3 mln tonnes.

Managing Director of NKR rating agency Dmitry Orekhov expects to see a short-term increase of 10-15% in steam coal prices in Q1 due to restrictions on exports from Indonesia. However, since the embargo may be lifted soon, prices are also likely to stop rising.

The analyst also spotlights the fact that thermal coal prices depend on gas prices, which have been declining in recent weeks in both Europe and Asia amid relatively warm weather. According to him, the global demand for thermal coal will be stable this year, as the declining consumption in Europe and the United States will be compensated by Asian countries, primarily China and India.

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