Kommersant: SCO may face huge consensus dilemma following entry of India, Pakistan

The Shanghai Cooperation Organization (SCO) summit that is about to kick off in Astana on Thursday, will induct new member-states into the group for the first time in 16 years. The newcomers will gain an opportunity to coordinate efforts in the war on terror, separatism and extremism with the six founding states - China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan. However, experts interviewed by Kommersant business daily do not expect the new members to settle easily into the SCO agenda, and say it will be challenging to build a consensus.

According to this year’s draft declaration planned to be adopted on June 9, the SCO state leaders support the agreement on nuclear non-proliferation and the Chinese One Belt and One Road project. Once Delhi and Islamabad have a say, it may become next to impossible to adopt such an agreement, the newspaper writes. Delegations from both countries have already said they plan no bilateral contacts at the summit.

Even more issues may arise in the area of practical cooperation. According to Vice President of Observer Research Foundation Samir Saran, intelligence sharing between India and Pakistan may be a problem since New Delhi considers Islamabad to be a source of international terrorism, and will be reluctant to share confidential data with its neighbor. Meanwhile, the draft of the Astana declaration obtained by Kommersant says the member-states plan to "deepen dialogue and cooperation to ensure security, primarily in tackling terrorism." Also, the documents says, it is necessary to continue efforts to draw up a total list of terrorist organizations, and to block "all sources and channels of financial as well as material and technical support provided to terrorism," and to continue "regular joint anti-terror training." Experts doubt the two newcomers will easily put aside all existing rivalries regarding the problem.

Experts in Pakistan told Kommersant that the Shanghai Cooperation Organization is likely to undertake peacekeeping functions since both India and Pakistan expect other member-states to shield them from military and terror attacks from the neighboring country. Also, since the China-India-Pakistan area is full of mutual claims and territorial disputes, they are likely to top the SCO’s agenda.

Finally, another important issue may be added to the agenda as this year’s summit, the induction of Iran, which applied for membership back in 2008. Russia would welcome Iran into the organization, however, the position of Tajikistan hinders the move as the latter is actively building ties with Saudi Arabia, which has long been a thorn in Iran’s side, the newspaper writes.

 

Izvestia: EU sets first fact-finding contacts with Eurasian Economic Union

The two biggest Eurasian unions - the European Union (EU) and the Eurasian Economic Union (EAEU) - have set up their first work contacts, Russian Permanent Representative to the EU Vladimir Chizhov said in an interview with Izvestia.

"The European Union has made notable headway from total denying the sheer fact of the EAEU’s existence to signaling interest in establishing contacts at the working level," he said, adding though that "the official recognition of the EAEU as a partner, the recognition of its international legal standing still lies ahead, but the first working contacts are already in place." "I think that gradually Europe will realize the necessity of such contacts," Chizhov added.

According to the diplomat, “much has been copied from the EU’s integration experience when the EAEU was founded, and both its positive and negative experience was considered.” “For example, the European Union ‘explosively’ expanded, starting in 2004, to the detriment of any further EU growth, while holding back all of its (the EU) potential, which eventually resulted in the erosion of the EU’s structure. Of course, we keep this in mind when going along the Eurasian course. At least, at this stage no country is willing to leave the Eurasian Economic Union,” Chizhov said.

When asked about the position of the European Union towards Ukrainian crisis, he said the EU leaders see Ukraine as increasingly becoming a nuisance. "There is rising frustration over Kiev’s policy not only regarding Donbass, but about reforms that were promised to the west, including the European Union, and for which funds were allocated. Despite the money being spent, there have been no reforms whatsoever. Probably, this will push the west - the EU and the United States - to turn the heat up on Kiev," the envoy said.

 

Nezavisimaya Gazeta: Ukrainian MP Timoshenko may face treason charge

Leader of Ukraine’s parliamentary faction Batkivshchina (Fatherland) and former Prime Minister Yulia Timoshenko may be hit with a treason charge over her 2009 gas deal she struck between Russia and Ukraine, Nezavisimaya Gazeta writes. Previously Timoshenko was accused of official misconduct for signing the contract eight years ago.

Pyotr Poroshenko’s team is ready to put together the claim as a felony treason charge.

Kiev says the recent decision of the Stockholm Arbitration Court in the dispute between Russia’s Gazprom and Naftogaz of Ukraine satisfied Kiev’s claim. The issue is about take-or-pay principle the contract is based on, which obliges Naftogaz to make payments regardless of gas purchases.

Another issue is the removal of restrictions on Naftogaz to re-export Russian gas, and, finally, the recommendation to revise the price formula.

Head of the Pyotr Poroshenko Bloc faction, Artur Gerasimov, said that the contract signed when Yulia Timoshenko was prime minister was “a crime against the Ukrainian people, and a betrayal of national interests.” He has requested that an investigation be launched against the leader of Batkivshchina. Vitaly Bala, the director of the Situation Modelling Agency, told Nezavisimaya that “if any probe is launched against Timoshenko many opposition forces will take it as a general and real threat and may line up against the ruling party.” The new legal lawsuit against the politician for the gas deal may boomerang, Bala emphasized. “How will common people view the situation? The country is at war, meanwhile politicians are embroiled in internal feuds, which seem to them more important than a real war where people are dying. It is clear that the political culture is crass, it’s no-holds barred, but now they are going over the line,” the expert highlighted.  

 

Izvestia: Deferring state assets privatization no big deal for Russia

Chairman of the Board of Directors of Banca Intesa, the Russian subsidiary of Italy’s biggest banking structure Intesa Sanpaolo, Antonio Fallico considers the postponement of Russia’s privatization program of state-owned assets to be the right move. He said that he does not like it when family jewels are sold even in difficult times. You could sell them, when you don’t need money, but then you should sell them at a profit, Fallico said.

According to the businessman, he has a feeling that what is going on in Russia is only an ideological discussion, though the state of Russian sovereign funds and other reserves are an unconvincing reason that such a large-scale privatization is needed. It is necessary to privatize when there is an understanding that there are partners able to ensure added value, and the transaction may boost the budget to the market’s level, he told the newspaper.

When asked whether Banca Intesa would like to organize any new privatization deals in Russia in the future, he said that the financial institution would gladly accept such a proposal. Fallico said that the company could attract important investors in privatization transactions, and also added that it would be able to participate in other deals as well. He also considers Russian assets to be "absolutely undervalued in absolute terms."

"Look at the capitalization of such key companies as Gazprom and Rosneft, which have huge headroom for growth, and foreign investors are obviously interested in it," he said in an interview with Izvestia. When asked about the cooperation between Russian and Italian companies, the chairman said that the latter not only stayed in the country after sanctions were imposed, but had even expanded their presence here. The issue is no longer about simply exporting Italian products to Russia, but about cooperation between Russian and Italian small and mid-sized businesses in various sectors, he added

 

RBC: Shell CEO says company’s plans in Russia are ambitious

Shell, the oil and gas multinational giant and one of Russia’s key partners in the gas sector, has quite ambitious plans in Russia, the company’s Chief Executive Officer Ben Van Beurden told RBC business daily.

Though much depends on Shell’s partners and the decisions of the Russian government, the issue is about huge funds, he said, adding that the Sakhalin-2 project alone has transferred almost $21 bln worth of taxes, royalties, dividends and other payments to the Russian budget, at all levels.

When asked whether Shell has any plans to diversify in Russia, Beurden said that refining is less interesting for the company. Speaking about shale oil production, he acknowledged that it is an important component of its global business portfolio, though not in Russia yet. According to the CEO, the company’s investment in shale oil exploration comes to $2.5 bln per year, though production costs are falling.

Shell has rather conservative expectations for oil prices for this year, around $50 per barrel and lower, the oil giant’s CEO told RBC, though taking into consideration fundamental factors oil prices may even rise, he noted. Much will depend on moves by OPEC and market sentiment here, which makes it difficult to furnish particular forecasts, Beurden stressed.

 

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