MOSCOW, March 9. /TASS/. Protests in Georgia are unlikely to sway government policy, Russia’s ambassador to the US believes that sanctions have failed as a tool of foreign policy coercion, and US tariffs on Russian aluminum may negatively affect the global market. These stories topped Thursday’s newspaper headlines across Russia.
Media: Georgian protests unlikely to sway government policy
Protests against foreign agent bills continue in Georgia. The country’s Western partners have condemned the legislative initiative, saying that it conflicted with Tbilisi’s desire to join the European Union, Vedomosti writes.
The two bills in question were put forward by representatives of the parliamentary majority. The first one, passed on March 7, resembles Russia’s foreign agent law and assumes that non-profit entities and media outlets will be deemed agents of foreign influence if they receive over 20% of their income from overseas. Those who refuse to register may be fined or face investigation from the Justice Ministry. The second bill, closely modeled on a similar US law, introduces foreign agent status for individuals and entities, as well as criminal liability. The opposition also presented a third bill, suggesting that only those receiving funding from Russia will be designated as foreign agents.
Political scientist Archil Sikharulidze points to domestic political causes for the current developments, which highlight another round of struggle between the opposition and the government. The protesters’ allegations that the cabinet acts in Russia’s interests and alienates the country from the EU reflect certain public sentiment, which was what triggered the crisis. On the whole, there is a consensus in Georgian society that condemns non-democratic ways of changing the government, as well as radical protest activities such as the storming of buildings, riots and the use of petrol bombs, the expert pointed out.
The situation in Georgia is charged with emotion but the events in Tbilisi are unlikely to lead to serious consequences like the government’s dissolution, political scientist Azhdar Kurtov told Izvestia. Meanwhile, First Deputy Chairman of the Russian State Duma Committee on CIS Affairs Konstantin Zatulin believes that "attempts are being made to force Georgia, which has pursued a rather moderate course on sanctions against Russia, to adopt a more active sanctions policy, or to remove a government which is too soft on Russia."
US sanctions turned out to be a nice wake-up call for the Russian economy, Russia’s Ambassador to Washington Anatoly Antonov pointed out in an op-ed for Kommersant.
"We can only thank those who promote sanctions for artificially creating the opportunity for us to really engage in advanced import substitution activities. This primarily concerns new technologies, which is what our detractors seek to cut us off from," the diplomat noted tongue-in-cheek. "Restrictions turned out to be a kind of wake-up call for Russian businesses. They helped us (in fact, not only us) realize the harmful risks of supply chains’ excessive dependence on foreign partners," he added.
Antonov emphasized that the Russian economy was firmly standing on its own two feet, successfully adapting to the new conditions. "The market did not collapse after all. According to the latest estimates, Russia’s GDP fell by only 2.1% in 2022. This doesn’t look like a collapse at all," the envoy said. "Moreover, we are making accelerated preparations to achieve new goals. There are boundless prospects for the development of infrastructure, manufacturing industries and domestic tourism. Serious attention is being paid to the establishment of new logistics corridors and the modernization of ports. This will make it possible to significantly expand economic ties with the countries that are truly interested in mutually beneficial cooperation. Another important goal is to create conditions for the foreign businesses that have decided - despite the political situation and the insinuations of Western capitals and experts - to maintain their presence on our market," the diplomat stressed.
According to him, the United States also underestimated Russia’s ability to promptly redirect logistics routes to rapidly developing and promising regions, preventing goods shortages on the domestic market. "The energy with which we are rebuilding our economy on a new technology foundation in order to gain full economic sovereignty was also a surprise. The same goes for our efforts to work together with like-minded countries to increase the share of national currencies in international transactions and develop more reliable payment mechanisms," Antonov added.
The United States will impose a 200-percent tariff on Russian aluminum on March 10. In addition, 200-percent tariffs on products manufactured using aluminum cast or smelted in Russia will take effect on April 10, Rossiyskaya Gazeta notes.
The newspaper points out that Russia has so far accounted for ten percent of US aluminum imports. Europe is the main aluminum importer for Russia (40%), followed by members of the Commonwealth of Independent States (29%) and Asia (23%).
US tariffs will cripple the global aluminum market, said Alexander Ilyinsky from the Russian Government's Financial University. "Unilateral actions by the United States will lead to a major decline on the global aluminum market, and effectively stop Russian aluminum from entering the US market," the expert pointed out.
However, Russia’s move to redirect its aluminum from the US market to the East will benefit Asian customers as it will create an oversupply of primary aluminum in the region, while Western consumers will be charged higher premiums. The introduction of protective tariffs in the US is having an indirect negative impact on the London Metal Exchange (LME), which decided last November not to ban Russian metal supplies until governments in the collective West imposed sanctions on Russian producers, Ilyinsky added.
"The amount of Russian aluminum at LME warehouses in South Korea dramatically increased after over 100,000 metric tons of aluminum arrived there in early February amid rumors of a possible ban on Russian supplies to the US market," the expert said. "The question is how the overstocking of LME warehouses will affect prices on the global market," Ilyinsky concluded.
The likelihood that the United States and China will engage in a direct confrontation is quite high, political scientist Vladimir Kireyev told Izvestia.
According to him, some predicted back in the early 2000s that as China’s economic and hence political influence in the world increased, the country would "inevitably start collapsing the US-centric system" by the simple fact of its existence.
"These forecasts were made in the US political, expert and military communities. In the mid-2010s, this understanding drove [44th US President Barack] Obama and then [45th US President Donald] Trump to adopt a policy to contain China, which reflects real US interests aimed at preserving its global dominance," the political scientist pointed out.
Kireyev went on to say that economic tensions were invariably pushing political elites in both countries towards a confrontation, in one form or another.
According to the analyst, Washington has started to realize that it "wasted too much time," because the best moment to contain China was ten years ago. However, the Americans’ focus was on Russia back then, Kireyev stressed.
"Now, the probability that the US and China will come to a direct conflict is quite high. It is the US that is provoking the situation as the window of opportunities to cause serious damage to China is closing. China is trying to postpone the conflict as much as possible and even avoid it altogether. The reason is that taking into consideration economic development, in 10 to 15 years, China will be much stronger than the US and the Chinese won’t need to engage in a conflict to protect their interests," the expert concluded.
Federal budget revenues from Russian oil and gas rose to 521 bln rubles ($6.9 bln) in February, which is almost 96 bln rubles ($1.3 bln) higher than in January, but they were still almost 148.6 bln rubles ($1.9 bln) below expectations, Rossiyskaya Gazeta writes, citing data from the Finance Ministry.
According to the Energy Development Center, Russia’s oil production (the main source of tax revenues) was close to all-time highs in December and January, reaching 10.9 mln barrels and 10.92 mln barrels per day respectively. According to the International Energy Agency, the export of oil and gas products stood at 8.2 mln barrels per day in January, also close to historical highs. That said, the low price of Russia’s Urals crude, which is used for tax calculation, is the only apparent reason why revenues failed to meet expectations.
Head of the Energy Development Center Kirill Melnikov points out that budget revenues may grow based on additional income tax payments. However, if the price of Russian oil is lower than last year and the level budgeted for in the future, these payments may be less than planned, Melnikov said. Still, the weakening of the ruble may smooth out most of this effect, provided that Russia’s oil output remains at the March level and is not reduced further (a reduction of 500,000 barrels per day is planned for March), the expert elaborated.
Commodity market analyst at Otkritie Investment Oksana Lukicheva says that if the government’s idea of capping oil discounts proves effective, companies will seek to maximize sales profits by reducing discounts and consequently, their financial performance will improve. However, if oil production declines and prices fail to rise, revenues will also fall, the expert stressed.
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