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Press review: African delegation presents peace plan and Putin unveils new economic model

Top stories from the Russian press on Monday, June 19th

MOSCOW, June 19. /TASS/. Seven African nations send high-level peace mission to Ukraine and Russia; Putin unveils new model for Russia’s economic development; and Blinken goes to China. These stories topped Monday’s newspaper headlines across Russia.


Vedomosti: African mission presents Ukraine peace initiative in Kiev, St. Petersburg

On June 17 in St. Petersburg, Russian President Vladimir Putin hosted a mission by seven African countries to present a peace initiative for settling the Russian-Ukrainian conflict. The delegation was led by South African President Cyril Ramaphosa. A day earlier, Ramaphosa, Zambian President Hakainde Hichilema, Comorian President Azali Assoumani (current chairman of the African Union), Senegalese President Macky Sall and Egyptian Prime Minister Mostafa Madbouly, as well as special presidential envoys Florent Ntsiba (Republic of the Congo) and Ruhakana Rugunda (Uganda), met with Ukrainian President Vladimir Zelensky in Kiev.

Commenting on the meeting’s results on June 17, Kremlin Spokesman Dmitry Peskov said that, although the African initiative could prove difficult to implement, Putin displayed an interest in hearing it out.

The African peace plan consists of ten points, which were unveiled by Ramaphosa in Kiev. They include the necessity of achieving peace through talks and diplomatic means; a cessation of military operations "as soon as possible"; a bilateral de-escalation of hostilities; respect for the sovereignty of countries and peoples in accordance with the UN Charter; security guarantees for all countries involved; Russia and Ukraine ensuring the export of grain and fertilizers under the grain deal for African countries in need; humanitarian assistance for those suffering from the conflict; prisoner swaps and repatriation of displaced persons, including children; a process for rebuilding Ukraine; and deeper involvement for Africa in the peace process.

Fyodor Lukyanov, editor-in-chief of the Russia in Global Affairs magazine, has doubts that the African peace plan by itself could bring any specific results; however, it is indicative of the ambition of countries on the continent to play a role in resolving global issues.

The African peace initiative ideally could lead to dialogue and potentially a de-escalation, says Natalia Piskunova, associate professor at Moscow State University's Department of World Politics. "The call for abandoning the armed conflict suggested by the African group also reflects the long-standing universal approach to settling conflicts under UN auspices," she says. So far, the African peace initiative appears to be the most well-thought-through and balanced as compared to those plans previously proposed, the expert thinks.

Since the Ukrainian crisis is a logical development of worsening relations between Russia and the West, beginning back in 2011, however, any peace plan, even the most thought-out, is doomed to fail, says Dmitry Ofitserov-Belsky, a researcher at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS). The fighting will end only when Western countries, and the US in particular, are disabused of the idea that their political goals can be attained by further stoking the conflict.


Vedomosti: Putin unveils new model for Russia’s development

An economy oriented toward supply, high salaries and technologies lies at the core of President Vladimir Putin’s vision of a new model for Russia’s development, which he outlined in detail at the 2023 St. Petersburg International Economic Forum (SPIEF). Experts found his speech reminiscent of non-traditional economic theories, noting as well that pursuing so-called supply-side economics is not feasible without a stable currency.

In his almost 1.5-hour-long speech, Putin outlined a new concept for the country’s development based on a sovereign economy. In his speeches at previous years’ forums, Putin traditionally talked about economic achievements and changes in economic policy; this time, however, the president not so much highlighted key points and singled out priorities but rather established a theoretical and methodological foundation for the model he unveiled. He answered a fundamental question: how and by what means will Russia build its new economy - a supply-side economy?

The elements of economic policy announced by the president dovetail with the ideas of the Modern Monetary Theory (MMT), notes economist Viktor Tunev. Above all, this means managing inflation not so much and not only through lowered demand, but also through supply levers, he explains. Despite wagering on the development of entrepreneurship, judging from Putin’s presentation, the main investors will be the state, using budget funds, and banks backed up by guarantees from state development corporation VEB, the expert thinks. According to him, the most complex issue is the ruble exchange rate. The economist says that it would be difficult to do something both about inflation and domestic demand until the ruble is stabilized and the endless capital outflow, unseen in other countries, is halted.

Elements of the MMT are apparent in the new economic model, says Alexander Isakov, chief economist on Russia at Bloomberg Economics. However, he notes that its foundation is formed by classical principles, tested by previous crises: a conservative budget, an independent monetary policy, the preservation of an open financial system and an industrial policy with an emphasis on import substitution. That said, if in 2014 the focus of import substitution was on goods, such as those produced by the agricultural sector and processing industry, today the focus is shifting to services, above all tourism, but also medicine and education, the expert points out.

Re-orienting the economy toward domestic demand is an expected and necessary measure, given the phase of disintegration that the global economic system is undergoing, says Alexander Kubyshkin, managing director of Enfilade Capital. That said, the entire system is tied to the global banking sector and dollar liquidity. The disintegration process may trigger a large number of unpredictable side effects due to a large number of variables affecting such processes, he predicts. However, because the current dynamics cannot be stopped, directing resources toward internal development is the only possible correct step to take, he asserts.


Media: Blinken in Beijing seeking to halt downward slide in US-China ties

On June 18, US Secretary of State Antony Blinken held talks lasting 5.5 hours with Chinese Foreign Minister Qin Gang, according to Reuters, after which they had a working dinner, declining to make any comments for the press. According to the Associated Press, on June 19 they will hold another meeting and Blinken will potentially meet with Wang Yi, director of the Chinese Communist Party Central Committee Foreign Affairs Commission Office. Moreover, Reuters says that Chinese President Xi Jinping, who met with US entrepreneur Bill Gates on June 16, may also meet with Blinken.

The two parties’ agendas for the discussions are diametrically opposed, says Nezavisimaya Gazeta. The sides prepared a list of reciprocal grievances and disputed issues. The Americans say that their priority is establishing communication channels to rule out hostilities in the event of a crisis, for example, clashes between warships and aircraft in the Taiwan Strait. However, Beijing says that the Taiwan issue involves its vital interests and accuses the US of supporting separatists on the island.

The Americans do not want to slide into a confrontation with China, or would like to at least slow this process down in order not to find themselves in a standoff with China and Russia simultaneously, Russian International Affairs Council expert Alexey Naumov told Vedomosti. In order to do so, it is necessary to develop "non-enmity rules," he adds. Additionally, the US presidential race, which is now starting to gain momentum, is also an important factor because all candidates will by default take a critical stance toward Beijing. So, now is probably the last convenient moment for Biden to discuss important issues with the Chinese. The expert thinks that Blinken will duly reiterate Washington’s positions on Ukraine and the Uyghurs but without any pressure.

Until the early 2020s, China had treated any interaction with US officials with reverence since it kept expecting long-term agreements and expanded cooperation, Alexander Lomanov, head of the Center for Asia-Pacific Studies at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS), told Vedomosti. Now this illusion has completely vanished. These days, China frequently reiterates that the US "behaves insincerely" by not fulfilling agreements reached. The election campaign is kicking off in the US with absolutely all presidential candidates criticizing China and only discussing the purported need to contain it, the expert adds. There is no way out of this spiral of general toughening toward China in the US to be seen and, therefore, Beijing can no longer pretend that nothing is happening. The remnants of mutual trust between the two countries are being destroyed right before our eyes and the only thing that the two sides can achieve is to suspend this slide toward confrontation in order to begin rebuilding relations after several political cycles in the US in the best-case scenario, the expert concludes.


Nezavisimaya Gazeta: Uzbekistan to fill its reserves with Russian gas

Uzbekistan will begin to receive Russian gas in October 2023. The contract for fuel deliveries was signed between Uzbek Energy Minister Jurabek Mirzamakhmudov and Gazprom CEO Alexey Miller on the sidelines of the 2023 St. Petersburg International Economic Forum (SPIEF). Thus, Russia will become Uzbekistan’s second-largest supplier of hydrocarbons after Turkmenistan.

Alexander Knyazev, leading researcher at the Institute for International Research at Moscow State Institute of International Relations (MGIMO University), thinks that it is too early to talk about a full-fledged gas alliance between Russia, Kazakhstan and Uzbekistan. "Despite Russian gas deliveries to Kazakhstan’s north and the participation of Russian companies in developing the local gas network, future gas deliveries to Uzbekistan via Kazakhstan are not a strategic solution but rather a temporary one, to resolve issues in Central Asia’s energy sector," he told Nezavisimaya Gazeta. According to him, Russian supplies only cover Uzbekistan and Kazakhstan’s immediate needs. In order to create an alliance, an international legal basis and long-term contracts are needed.

Central Asia researcher Serdar Aytakov told the newspaper that Turkmenistan’s cooperation with its immediate CIS neighbors on gas may be a reasonable approach as it would supplement all other plans on gas sales with a component of regional cooperation and, accordingly, become a source of income. "With the coming to power of [Turkmen President] Serdar Berdimuhamedov, the orientation toward regional energy cooperation with neighbors began to strengthen with the beginning of gas sales to Kazakhstan and Uzbekistan and electric energy to Kyrgyzstan. However, the absence of proactive policy by the Turkmen leadership and the infatuation with transcontinental projects such as TAPI or gas deliveries to Europe have led to Russia potentially taking the place of the main gas supplier to Kazakhstan and Uzbekistan," the expert thinks.


Izvestia: New ‘Made in Russia’ branding concept rolled out at SPIEF

The "Made in Russia" label should become a voluntary club of sorts with its participants clearly distinguishing their products from the rest, for example, indicating that the goods are patented, eco-friendly or created under energy-efficient conditions. This is how the "Made in Russia" brand concept was seen by the participants of a roundtable session held at the 2023 St. Petersburg International Economic Forum (SPIEF). This topic is becoming increasingly pertinent with Russia opening new markets for its goods in the Global South where ideally exports of new products would surpass the traditional staples of grain, oil, gas and Kalashnikovs.

"Nowadays, while helping companies enter new foreign markets, we encounter two systemic problems," Russian Export Center CEO Veronika Nikishina said during the session. "The first one is the lack of recognition of Russian companies: foreigners do not realize that Russia produces many other goods besides grain and metals. The second issue is the archaic view of the country and its products," she explained.

In order to overcome such obstacles, companies need constant marketing support when working abroad and currently only large enterprises can afford that, the expert noted. This is why the government is actively developing the "Made in Russia" brand.

High product standards and requirements can and should become a competitive edge for Russian goods, asserts Sergey Ivanov, executive director of EFCO Group (fat-and-oil industry).

"We should see which country has the highest and toughest requirements, for example, for food products and implement them in our country. This is precisely what will become our best competitive advantage worldwide," he said at the forum. "In this situation, we won’t need any additional marketing, high standards will be associated with Russia. To buy Russian will mean to buy the best," Ivanov explained.

Especially since Russians are capable of achieving this, says Chairman of the Delovaya Rossiya (Business Russia) Association Alexey Repik. According to him, Russia has voluntarily ceded its domestic market to foreign companies. "This happened because we could not compete with foreign brands," he added. However, he noted that many of these brands are manufacturing goods in Russia, which means that Russian enterprises can produce quality products after all.

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