MOSCOW, July 13. /TASS/. G7 pledges fresh security guarantees for Kiev as NATO summit wraps up; Turkey's release of Azov commanders may spell doom for Black Sea grain deal; and Russian non-resource businesses saw first revenue rise in year. These stories topped Thursday’s newspaper headlines across Russia.
Izvestia: G7 countries pledge new security guarantees for Kiev on Day 2 of NATO summit
Military support for Kiev from Western countries translates into propping up a terrorist regime, Russian Foreign Ministry Spokeswoman Maria Zakharova told Izvestia. Following the outcome of the second day of the NATO summit in Vilnius, the G7 countries announced plans to roll out security assurances for Kiev, including transferring long-range weapons, delivering new weaponry, and conducting further training for the Ukrainian military. The summit also resulted in the establishment of the Ukraine-NATO Council. Experts believe that the West has gained another tool with which to exert control over Kiev.
The creation of the new council was dubbed a "historical moment" by NATO Secretary General Jens Stoltenberg, who voiced hope that Ukraine would eventually join the alliance. At the same time, however, this eventuality was prefaced by a caveat often heard in the West: Kiev’s accession to the bloc would be possible only upon a "good" conclusion to the current conflict with Russia.
According to Sergey Ermakov, researcher at the Russian Institute for Strategic Studies, the creation of the Ukraine-NATO Council benefits Brussels more than Kiev because, in his view, the new body will make it easier for the West to maintain its influence in Ukraine and continue efforts to overhaul the country's governmental and military structures. "This mechanism will be used to compel Kiev to do something while exercising total control [by the West over Ukraine]," the analyst told Izvestia.
Western countries also announced fresh arms supplies for Kiev. London has committed to sending a new package with more than 70 combat and support vehicles, thousands of rounds for Challenger 2 tanks, and ·50 mln ($65 mln) earmarked for the repair of damaged vehicles. In turn, the White House is considering sending long-range ATACMS missiles to Ukraine, capable of targeting targets up to 300 km away.
Russian Foreign Ministry Spokeswoman Maria Zakharova told Izvestia that the West is a sponsor of terrorism. "Everyone who provides [the Kiev regime] with weapons, or supports it financially and intellectually, must understand what they are doing. This constitutes support for a terrorist regime," Zakharova said.
Nezavisimaya Gazeta: Turkey’s surprise release of Azov commanders may doom grain deal
Despite an agreement between Moscow, Ankara and Kiev that the hard-core nationalist commanders of Ukraine’s Azov battalion (banned in Russia as a designated terrorist organization), who were captured upon Russia’s liberation of Mariupol, were to remain in Turkey until the end of the conflict, five Azov militants were released by Turkey to the custody of Ukrainian President Vladimir Zelensky and flew together with him to Lvov on July 8. According to Ukrainian political figures, by this gesture Erdogan was seeking to show that Russia cannot dominate the Black Sea. However, according to experts interviewed by Nezavisimaya Gazeta, any conflict between the countries would trigger a direct war between Russia and NATO, which would bring a complete stop to all economic activities in the Black Sea. According to them, by deciding to release the Azov commanders, Ankara seems to have ruled out the possibility of Moscow agreeing to extend the grain deal upon its expiration on July 17.
The circumstances surrounding the grain deal have certainly deteriorated, with the Russian Foreign Ministry noting in a report in early July that the UN leadership was mute on two "inconvenient" but highly relevant issues for extending the deal: the free-of-charge supply of Russian mineral fertilizers to the poorest countries and the bombing of the Togliatti-Odessa ammonia pipeline. Now, Turkey's surprise release of the Azov battalion commanders seems to have thrown an even bigger monkey wrench into the delicate issue of extending the grain deal further, the newspaper writes.
Nikolay Silaev, senior research fellow at the Center for Caucasus and Regional Security Issues at the Institute of International Studies at the Moscow State Institute of International Relations (MGIMO University), told Nezavisimaya Gazeta that it is difficult to see how Russia will be able to extend the grain deal under the current circumstances. At the same time, however, he thinks that the predictions of Ukrainian politicians that the Turkish fleet would help clear the sea passage are unfounded. Kiev must realize that a large-scale conflict will not help to keep Ukrainian exports flowing, he added. "If someone attacks Russian targets in the Black Sea, insurers would refuse to provide coverage for merchant ships leaving Ukrainian ports," the expert said.
Viktor Nadein-Raevsky, senior researcher at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS), told the newspaper that, in his view, hopes that the Turkish fleet would purportedly unblock someone's grain corridors are simply "surreal."
Vedomosti: India may purchase $13 bln in naval armaments from France
On July 13-14, Indian Prime Minister Narendra Modi will visit Paris to discuss the purchase of 26 Dassault Rafale M carrier-based multi-purpose fighter jets for the Indian aircraft carriers Vikramaditya (formerly the Russian Navy’s Admiral Gorshkov) and Vikrant, as well as three Scorpene-class non-nuclear submarines from the French Naval Group for a total price tag of over $13.3 bln. However, according to experts interviewed by Vedomosti, any such deal would not result in Russia losing its dominant position in the current Indian arms market.
By the end of 2022, India will still be the world's largest arms importer. At the same time, Russia will remain its largest supplier (45%), according to the Stockholm International Peace Research Institute. Russian Federal Service for Military-Technical Cooperation Director Dmitry Shugaev said in February 2023 that Russia's arms exports to India will total $13 bln over five years, and the order book at the start of the year was worth more than $10 bln.
According to Gleb Makarevich, researcher at the Center for the Indian Ocean Region at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS), India is engaged in diversifying the range of its military suppliers so that it will not become dependent on a single supplier in the event of a conflict. According to the expert, the emphasis on submarines and carrier-based aircraft underscores New Delhi's fears of a collision with Beijing in the Indian Ocean. However, the expert noted that Russia is not yet worried about losing a large chunk of the Indian market.
"Russia's market share in India remains dominant and will remain so, even if it decreases somewhat. Only when the situation in Ukraine is over, will we be able to discuss specific prospects. However, it is obvious that Russia's main rival in the categories of aircraft and submarines in India would be Paris, not Washington," military expert Ilya Kramnik told the newspaper.
Kommersant: EU carbon tax may take bite out of Russia's GDP
The implementation of the EU’s border carbon tax may lead to an annual decrease in Russia's GDP of 0.17%, according to projections by the Center for Macroeconomic Research (CMR). If the scope of the tax is expanded, the losses may grow to 0.47%, Kommersant writes. At the same time, third countries, including China, may not only have the ability to impose a similar tax, but are also likely to take into account the consequences of European regulations on the export to the EU of goods produced using Russian intermediates.
"The introduction of a carbon border tax on EU imports may have an impact on the increase of export prices and, consequently, on the volume of exports. Due to cross-industry effects, a decrease in exports in one sector will lead to a decrease in gross production in another sector," Sergey Sudakov, head of the CMR’s Trade Policy Department, told the newspaper. According to the expert, the introduction of a tax on ferrous metallurgical products would result in a decrease in exports to the EU and, thus, a decrease in the gross output of the coal and mining industries.
At the same time, other countries, especially China, may introduce similar measures. If China introduces a tax with the same parameters as the EU levy in its current form, the measure would affect 2.8% of Russian exports, according to the CMR's experts. If the border tax is extended to all goods produced in industries with a high risk of carbon leakage, this figure would then rise to 87.2%. Even if Beijing does not impose such a tax of its own, Chinese importers and those from other countries could well factor in European regulations when exporting finished products to the EU and require that any Russian intermediate products purchased also be "clean," thereby reducing the amount of tax paid on deliveries to the EU, the newspaper writes.
Izvestia: Russian companies in non-resource sectors see first revenue increase in year
The revenues of Russian companies in non-resource sectors rose for the first time in a year, with the aggregate turnover of such businesses climbing by 7.4% in April compared to April 2022, FinExpertiza told Izvestia. From January to April, the profit of large and medium-sized companies not tied to the oil-and-gas industry climbed by 0.4% year on year to 52.8 trillion rubles ($580.1 bln). Transportation and warehousing, electricity, construction, scientific research, and the hospitality industry (hotels and restaurants) saw the greatest revenue growth.
Analysts noted that this trend is being driven by increased domestic investment and the import substitution program. According to experts, the decline in the ruble exchange rate also has had an impact on the growth of nominal corporate profits.
"The increase in non-oil and gas revenues shows a positive trend in the development of the Russian economy and is related to the growth of domestic investment, as well as the policy of import substitution," economist and director of communications at BitRiver Andrey Loboda told Izvestia. This trend shows the expansion of domestic-oriented sectors of the Russian economy, such as manufacturing, power generation, services and mining, he believes.
According to Vladimir Chernov, analyst at Freedom Finance Global, the defense industry, metallurgy and agriculture will be among the most promising sectors in Russia next year.
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