MOSCOW, September 3. /TASS/. Russian President Vladimir Putin is on a visit to Mongolia; Berlin highlights Kiev’s right to use German-donated weapons for strikes inside Russia; and Moscow invites Vietnam to attend the Russia-hosted BRICS summit. These stories topped Tuesday’s newspaper headlines across Russia.
Nezavisimaya Gazeta: Why Putin’s visit to Mongolia matters
Russian President Vladimir Putin is on a visit to Mongolia, invited by the country’s president, Ukhnaagiin Khurelsukh, who proposed that Putin join in celebrating the 85th anniversary of Russian-Mongolian forces defeating the Japanese in battles preceding World War II, an event that had profound geopolitical consequences. Having felt the strength of the Red Army, Tokyo did not dare to join the war against the Soviet Union even in light of Hitler’s initial successes in the early stages of the Great Patriotic War, Nezavisimaya Gazeta writes.
Vasily Kashin, senior researcher at the Higher School of Economics, points out that "Mongolia is not the biggest country, but it requires attention given the long border it shares with Russia." "Moscow needs to maintain contact with Mongolia’s leadership, as well as a certain level of cooperation," the expert said.
Mongolia has two very important neighbors, Russia and China, and their leaders are no strangers to the country, with Chinese President Xi Jinping notably making a trip to Mongolia just a few years ago. Since then, however, Ulaanbaatar has diversified its foreign policy. The country has become more independent, seeking to make it clear that it’s not in anyone’s sphere of influence.
Alexander Lomanov, deputy director of the Russian Academy of Sciences’ Institute of World Economy and International Relations, notes that "the reason behind Putin’s visit has a lot of historical significance for China." "The Chinese believe that their country played the leading role in defeating the Japanese aggressor. After all, the war actually started in the early 1930s with Japan's annexation of Manchuria, where Tokyo had established a satellite state. This is why memories of imperialist Japan’s defeat and China’s role in that process are an important page of history for the Chinese," the analyst stressed.
Today, Mongolia’s economic ties with Russia do not run as deep as with China. But defense cooperation with Russia is crucial, as the two countries hold annual joint drills, Moscow assists Mongolia in mastering weapons provided from Russia and Mongolian service members receive training at Russian military universities. The Russian president’s visit may contribute to boosting overall relations between the two nations.
Izvestia: Berlin says Kiev has every right to use German-donated weapons against Russia
Once Kiev receives weapons from Berlin, it can do with them as it pleases, an official at the Germany embassy in Russia told Izvestia. The embassy worker clarified that Germany puts no restrictions on Ukraine using these weapons for strikes inside Russia either. Thus, they have aligned themselves with the United Kingdom and France, who previously also said that they did not oppose Kiev striking targets in Russia.
Meanwhile, German politicians have been hot and cold about the Ukrainian army’s operations amid Kiev’s aggression against Russia’s borderline Kursk Region, said Artyom Sokolov, a researcher with the European Studies Institute at Moscow State Institute of International Relations. "If you look at the overall tone of the German leadership’s statements about what is going on in the Kursk Region, it suggests that they are distancing themselves from these developments," the expert said. He pointed out that both German Chancellor Olaf Scholz and Foreign Minister Annalena Baerbock had limited themselves to token statements reiterating general support for Kiev.
In the meantime, discussions continue about providing Kiev with German-made Taurus long-range missiles. Talks on the matter have been ongoing almost since the start of the conflict but there is still no progress to speak of. "The situation on the frontline isn't looking good for the Ukrainian armed forces so the Kiev authorities are hoping to largely shift the attention of the Western public and their own people to some symbolic successes such as strikes against Russian targets with Western-made long-range weapons," Sokolov noted.
"One by one, EU countries have come out in support of the Ukrainian army attacking targets inside Russia. Now, this seems to be the united position of NATO. The bloc’s member states have crossed all red lines in this regard and things are heading towards an escalation of violence. [Ukrainian President Vladimir] Zelensky is somehow managing to drag NATO into a confrontation with Russia, step by step," German political scientist Alexander Rahr told the newspaper. However, members of the collective West still don’t have a common vision. Washington is not yet ready to give an unequivocal answer to the Kiev administration’s requests, largely due to the upcoming US presidential election. And Europe also remains divided on the issue.
Izvestia: Russia invites Vietnam to attend BRICS summit
Moscow has sent an official invitation to Vietnam to take part in the BRICS group’s summit in the Russian city of Kazan and expects the country to send a high-level delegation, an official at the Russian embassy in Hanoi told Izvestia. Vietnam has long been eyeing BRICS membership but has as yet not filed an official application to join. Hanoi already has close ties with Moscow and Beijing, and joining BRICS would send an unwanted message to Washington, with which Vietnam has been working to boost ties, experts say.
Vietnam has been mulling the possibility of joining BRICS for quite a while. Becoming a full-fledged member is currently the only possible option, but soon, a new partner state category is going to be established. Russia is working on introducing the status, which will closely resemble membership, due to the large number of countries wishing to join the group. The category will be launched at the Kazan summit.
The countries of the Global South have recently started to express a clear interest in BRICS. Azerbaijan, Malaysia and Thailand have already put in for membership. Bloomberg reported on September 2 that Turkey had done the same.
"Hanoi is famous for knowing how to balance between the interests of major powers. BRICS is known as an alternative to organizations dominated by the West, namely the US, which is the main market for Vietnamese exports. In 2023, trade between the US and Vietnam stood at $111 bln, with Vietnamese exports accounting for $97 bln. In late 2023, Hanoi and Washington raised their relations to the highest level of comprehensive strategic partnership. Vietnam keeps boosting relations with the US in all areas, so its membership in a group that includes the two main rivals of the US - China and Russia - is bound to ruffle some feathers in Washington," Yelena Nikulina, a researcher with the Center of Vietnamese and ASEAN Studies at the Russian Academy of Sciences’ Institute Institute of China and Modern Asia, pointed out.
However, experts believe that given that other Southeast Asian nations such as Malaysia and Thailand have put in membership bids for BRICS, this could make Vietnam’s decision a little easier.
Vedomosti: EU reduces LNG imports while beefing up pipeline gas purchases
Liquefied natural gas (LNG) to European Union countries fell by 27% in August 2024 compared to the same month last year, Vedomosti writes, citing data from the Gas Infrastructure Europe (GIE) association of infrastructure operators. Meanwhile, according to the Gas Exporting Countries Forum (GECF), EU nations raised pipeline gas purchases by 5% between January and July.
Russian gas supplies were the main driver behind the rise in pipeline gas purchases by EU nations. According to GECF data, Russian gas supplies via Ukraine increased by 24% between January and July, and gas exports via the TurkStream pipeline skyrocketed by 44%.
Ivan Timonin, project manager at the Implementa company, points out that overall gas consumption in the European Union is declining due to stagnating economic activity, the rising role of renewable energy and overall good weather that is causing consumers to use less gas. Decreasing demand is having a clearer impact on LNG supplies because they don’t depend on pipeline infrastructure, the expert explained.
Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, expects LNG exports to Europe to drop further in September and October. European consumers currently have no need to compete for more expensive gas with Asia.
Russian pipeline gas supplies to the EU have reached their maximums for existing infrastructure facilities, while the Yamal LNG project is providing more than half of its liquefied gas to Europe, Finam analyst Sergey Kaufman emphasized. He expects the situation to remain the same until the end of 2024. Yushkov does not rule out that Russia’s Novatek company may slightly reduce LNG supplies to the EU in the coming months in order to increase exports to Asia due to the favorable ice situation along the Northern Sea Route.
The thing to remember is that Russian gas giant Gazprom’s contract for gas transit via Ukraine will expire in late December 2024. The Ukrainian authorities have stated they have no plans to extend the current agreement. However, Gazprom will be able to maintain transit by booking gas transmission capacities at auctions. Otherwise, the TurkStream pipeline will be the only route for the company to export gas to the EU.
Kommersant: Analysts anticipate Russian stock market to rebound
The Moscow Stock Exchange's (MOEX) index has dropped below 2,600 points for the first time since May 2023. The downward trend has persisted for the fourth consecutive month. Experts interviewed by Kommersant say that the growing tax burden on Russian companies, a decline in business activity in China and falling commodity prices are affecting investor moods. Still, market participants are optimistic that this downward trend will end.
The current downturn is largely due to an increase in the tax burden on companies and the negative impact of sanctions, especially discounts on Russian commodity exports, as well as a rise in other export costs related to sanctions and geopolitics, Dmitry Babin, a stock market expert at BCS World of Investment, said.
The August data on business activity in China, which was released earlier in the week and turned out to be negative for the markets, is another reason for the index’s decrease, Capital Lab partner Yevgeny Shatov noted. Furthermore, oil prices are also falling due to a general business lull and expectations of a rise in OPEC+ supplies. Besides, in Shatov’s words, investors are redirecting their funds from the market amid rising interest rates. According to Russia’s Central Bank, major banks have raised the maximum rate on deposits to 17.5%.
In the meantime, the medium-term negative trend is on its way out, so if inflation rate data points to a slowdown in the rise of prices and no additional tensions emerge in politics and the global economy, the market will stabilize and then start to grow, Natalya Malykh, head of stock analysis at Finam, said.
As long as market conditions and the geopolitical situation do not change much, the Moscow Exchange’s index is most likely to stand at the 2,400-2,600 level at the end of the year, Babin estimates. In a more optimistic scenario, both Malykh and Shatov expect the index to grow by the end of the year.
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