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Press review: Russia to sell gas globally in rubles and is targeted for G20 ouster by US

Top stories from the Russian press on Thursday, March 24th

Izvestia: Russia to sell gas to unfriendly country in rubles

Russia will promptly start charging unfriendly countries in rubles for gas supplies, President Vladimir Putin announced. There are over 45 unfriendly countries on the list, including the United States and European Union members, as well as Australia, Canada, Singapore, Montenegro and Switzerland. Experts interviewed by Izvestia are confident that it is in fact the only way to overcome the dominant role of the dollar.

The idea of charging unfriendly countries in rubles for Russian gas supplies can be viewed as timely and coherent, said Professor with the Department of World Economy and International Economic Relations at the State University of Management Yevgeny Smirnov. "It clearly stems from the need to strengthen the weakened national currency but it is more of an extraordinary measure and a political rather than an economic one. The pressure of sanctions imposed by the United States and European Union countries require unusual responses. Moreover, Russia needs to step up the use of national currencies in trade with friendly countries, too, and the trend has already emerged," the expert pointed out.

In many ways, it was Western countries that pushed Russia to take such a step because European companies’ suspension of trade with Russia led to a sharp decline in imports, and when there are no imports of goods and services, there is no need for the euro as a means of payment, Director of BCS World of Investment’s regional network for high-end clients Grigory Sosnovsky emphasized.

"Perhaps the move is a message or the first step on the long but inevitable road to Russia’s departure from dollar and euro payments. One thing is clear: the freezing of Russia’s assets cannot go unnoticed and Moscow will keep reacting to it," the analyst concluded.

 

Vedomosti: US mulling excluding Russia from G20, while options remain unclear

The United States and its partners are not ruling out that Russia will be excluded from the G20 Group, White House National Security Advisor Jake Sullivan said. A number of US allies support the idea. According to media reports, Poland has come up with a corresponding initiative. However, China has opposed Russia’s potential suspension, Vedomosti writes.

The possibility of Russia being excluded from the G20 is very vague because there is no exclusion procedure, Russian International Affairs Council Director General Andrey Kortunov noted. The move would require a consensus but it is more difficult to achieve it within the G20 than within the G8, which turned into the G7 after Russia had been suspended.

According to Kortunov, it would be strange to expect China or Saudi Arabia to support a step like that. As for the G20 itself, it is an important association that plays a significant role in stabilizing the global economic and financial system. That said, if Russia is left out of the institution, its ability to influence the functioning of the global financial system will decrease. However, such developments are unlikely.

There is no need to hype about the US idea of excluding Russia from the G20 group, Editor-in-Chief of the Russia in Global Affairs magazine Fyodor Lukyanov stressed. The G20 is an informal organization and it is technically impossible to exclude anyone. A boycott of Russia by all other member states would be some kind of an exclusion but countries such as China, India and Turkey will hardly join this kind of a boycott. According to Lukyanov, they will object to the United States’ initiative not because of their ties with Russia but because they strongly believe that no one should be excluded from the club where global issues are discussed and whose decisions are declarative.

 

Nezavisimaya Gazeta: Russian-Ukrainian talks depend on Brussels-hosted summits

Russian and Ukrainian negotiators are about to see a wave of statements coming from Brussels where NATO, EU and G7 summits will take place on Thursday. However, experts interviewed by Nezavisimaya Gazeta are hopeful that no radical steps will be announced in Brussels.

"I think that these events will be aimed at further consolidating Western countries. US President Joe Biden, in turn, will use this opportunity to strengthen the United States’ position in the world and impose the US agenda on others. The main goal will be to increase pressure on Russia," Chairman of the Board of the Valdai Discussion Club’s Development and Support Foundation Andrey Bystritsky emphasized.

However, given the circumstances, the most unexpected decisions are possible, the expert said, adding that Western leaders would apparently refrain from announcing dangerous military steps such as deploying NATO peacekeepers to Ukraine or sending anti-missile systems to the country. Meanwhile, the negotiation process will continue, albeit after a certain pause, which will probably be needed to consider the decisions that will be announced in Brussels, Bystritsky noted.

Director of the Center for Sanctions Policy Expertise at Moscow State Institute of International Relations’ Institute for International Studies Ekaterina Arapova believes that the US and the EU will limit themselves to fine-tuning the already imposed sanctions in order to ramp up their negative impact on the Russian economy. In particular, it may be about regulating the field of cybercurrency and ensuring a port ban on ships whose routes include Russian ports. Anyway, the US and the EU don’t currently plan to significantly raise the pressure of sanctions and intend to hold back some leverages over Russia, Arapova noted.

 

Vedomosti: More sanctions on Russian energy imports may lead to global downturn

If the bulk of Russian energy exports is off the market for the remainder of 2022, a global economic downturn seems unavoidable. The slowdown could be more protracted than that in 1991, Vedomosti writes, citing Federal Reserve Bank of Dallas economists Lutz Kilian and Michael Plante.

The sanctions against Russia have sent global commodity, energy, metal and food prices up, disrupting supply chains and accelerating inflation in Western countries. The possible ban on the bulk of Russian energy imports may push prices even higher, eventually triggering a global downturn, the experts said.

In their view, the consequences that the global economy will see depend on how quickly Western countries will be able to offset the supply shortfall. The analysts recalled that in 1991, when Iraq’s invasion of Kuwait had sparked an oil supply shock, Saudi Arabia increased oil production so the recession in the US lasted less than a year. The 2022 downturn may prove to be longer. Only Saudi Arabia and the United Arab Emirates are capable of replacing Russian oil supplies but they "have already signaled that they will not provide relief this time," the experts noted. Meanwhile, OPEC+ is sticking to its plan to refrain from significantly increasing output.

It is impossible to abandon the bulk of Russian energy supplies because major importers such as India and China will continue their purchases, AriCapital Investment Strategist Sergey Suverov pointed out. A global recession depends on the amount of supplies affected by the embargo, the duration of sanctions and a rise in oil prices. The sanctions have already caused a sharp increase in global commodity prices, production costs and consumer prices in the United States and the European Union. "The risk of a downturn is growing but it depends on numerous factors. What can be said at the moment is that the restrictions on Russian oil supplies will speed up inflation and reduce people’s real disposable incomes," Suverov added.

 

Rossiyskaya Gazeta: Most Russians ready to move to domestic social media platforms

Almost all Russian social media users (80%) are ready to use domestic networks instead of the banned services of Meta Corporation (outlawed in Russia as an extremist organization together with its platforms Instagram and Facebook) and Twitter, Rossiyskaya Gazeta writes, citing a poll conducted by Calltouch.

According to analysts, users are actively moving to domestic platforms, primarily to VKontakte. When asked if they planned to use VPN services to browse social media, the majority of those surveyed said no: nearly 60% of respondents either have no such intentions or don’t know what a VPN is.

User redistribution will radically change the situation on the advertising market, said public relations experts interviewed by the newspaper. "Everyone is reconsidering their communication strategies because much will depend on companies’ overall future position on the Russian market," said Managing Partner at the Fresh Russian Communications agency Ksenia Alexeyeva. According to her, the companies that are considering the most positive development scenarios have registered accounts on VKontakte and Telegram, and although they continue to announce important news on Facebook and Instagram, they aren’t running any advertising campaigns there any longer.

Managing Partner at the B&C Agency Ivan Saomilenko, in turn, noted that judging by polls among advertising and marketing companies active in Russia, 69% of content makers plan to increase their presence on Russian platforms.

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