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Press review: What’s on Putin’s State of the Nation agenda and humanitarian pause fails

Top stories in the Russian press on Wednesday, February 28


Media: Vital social issues expected to dominate Putin’s State of Nation Address

With just one day left before Russian President Vladimir Putin makes his State of the Nation Address to the Federal Assembly, analysts and officials expect a wide range of topics to be covered, mostly key domestic social issues. Alexei Mukhin, General Director of Russia’s Political Information Center, told Izvestia’s web portal that the address is unlikely to have a large focus on foreign policy since "the international political course is more or less successful." The expert expects Putin to emphasize changes "in the political system, the state and prospects of economic development, and what is most important - on its improvement." "This concerns vulnerable social groups," he added.

Several federal officials interviewed by Vedomosti said that the speech would detail the key areas of Putin’s future policy - fostering education, healthcare and infrastructure, the digital economy, tax changes, judicial reform, efforts to reduce poverty. Some expect the president to speak about spending hikes on education, healthcare and infrastructure. One of the sources told the newspaper that Putin is unlikely to talk about spending cuts, or about tax changes. Two officials said he is likely to suggest that the parameters of the tax system should be defined and fixed for several years in order to spur manufacturing growth and replenish regional budgets.

Two federal officials think that the president will delve into the problem of poverty, and probably set a target say by reduce it by 50%, one of them added. Judicial reform will also be on the agenda, a source close to the Kremlin told Vedomosti. The foreign political agenda will not be neglected either, with tough statements possible, one of the sources told the paper, whereas domestic policy will not be in much focus. There are plans for political reforms, particularly concerning presidential plenipotentiary envoys. Here proposals are on the table to eliminate these positions and shift them towards empowering the regional economy, the source said.

The Presidential Address to the Federal Assembly, which provides an overview of the nation’s current state of affairs and sets major directions for domestic and foreign policy, is stipulated by the Russian Constitution. Russian leaders have delivered addresses to the parliament 22 times, including 12 such speeches by Vladimir Putin. Earlier, these addresses were held within a calendar year, and only in 2017 there was no address.


Kommersant: Humanitarian pause initiative in Syria fails

Militants have disrupted the first humanitarian pause in Eastern Ghouta, an anti-Assad controlled enclave in the suburbs of Damascus, meaning that the announcement of the humanitarian pause has failed to end the fighting both in Eastern Ghouta and on other Syrian fronts as demanded by UN resolution 2401, Kommersant says. Earlier this week Russian Defense Minister and General of the Army Sergey Shoigu stated that, following Russian President Vladimir Putin’s order, a daily humanitarian pause from 09:00 to 14:00 local time (from 10:00 to 15:00 Moscow time) had been launched in Eastern Ghouta starting February 27.

With support from the Russian Reconciliation Center for the Conflicting Sides in Syria, the country’s authorities created conditions for civilians to leave only through humanitarian corridor that links Damascus with Eastern Ghouta. Russian military police and Syria’s army are ready to provide a safe exit from the humanitarian corridor. However, the United Nations still has no idea how to implement Russia’s proposal on the humanitarian corridors, Kommersant writes. Diplomatic sources told the paper that one humanitarian convoy requires from 12 to 24 hours, and it is hardly possible to make it in five hours as envisioned by the humanitarian pause.

Head of the Islamic Research Center of the Institute of Innovative Development Kirill Semenov explained to RBC that there are two reasons for the recent shift of the Syrian army’s activity from the Idlib province to Eastern Ghouta. First, Turkey stopped the attack of the Syrian army in Idlib by deploying its own observation posts, and second, opposition groups in Eastern Ghouta have no outside support, which simplifies the task for Syrian President Bashar Assad and his allies.



Izvestia: Argentine ‘cocaine scandal’ won’t spark sudden probes in Russian embassies

The ‘cocaine scandal’ that rocked the Russian embassy in Argentina will not lead to urgent inspections of diplomatic missions abroad, Izvestia writes citing sources in several Russian embassies and two sources in Russia’s Foreign Ministry. Moreover, Moscow has systematically been tackling organized crime, including taking part with Latin American countries in the war on drugs, they said. According to the paper’s sources, accusations that diplomatic mail was used for trafficking drugs allegedly planned by the defendant in the ‘Argentinian case’ are absurd.

Earlier media reports accused the Rossiya Special Flight Unit, which is part of the Russian Presidential Property Department and provides transportation for the country’s top officials, of being involved in the cocaine smuggling case. Reportedly, a plane involved in the smuggling of cocaine from Argentina to Russia had the same tail number as the Ilyushin Il-96 aircraft from the Rossiya Special Flight Unit. "No reinforcements followed, we were not affected in any way," a source in one of Russia’s diplomatic missions in a South Asian country told Izvestia. A representative of the Russian embassy in Myanmar said that diplomats in Yangon are obliged to rule out any possibility of its employees being involved in drug trafficking, which means there is no need to carry out special probes.

A source in Russia’s Foreign Ministry confirmed to the publication that it is unnecessary to conduct some sudden inspections among Russian diplomats and technical staff in Latin America for having ties with drug dealers amid the ‘cocaine scandal’. "Tackling organized crime…is one of the important areas of Russia’s cooperation with the region. Efforts to ensure security for our diplomatic missions are systematic and take into consideration the particularities of those countries," he diplomat said, adding that the story has already been blown out of proportion with a great deal of disinformation."



Kommersant: Russian-Iraqi commission hash over Rosneft’s Kurdish contracts

A meeting of the Russian-Iraqi intergovernmental commission co-chaired by Russian Deputy Prime Minister Dmitry Rogozin and Iraq’s Foreign Minister Ibrahim al-Jaafari on Tuesday was followed by closed-door talks, which focused on supplies of advanced armament systems to Baghdad and settling the dispute around Rosneft, sources familiar with the negotiations told Kommersant. The top issue on the table for Rosneft and the Iraqi government is currently the future of the Russian oil producer’s contracts with the Kurdistan government on crude supplies reached last year. Initially Rosneft planned to purchase oil produced in the Iraqi region of Kirkuk, which is controlled by the Kurds. Though Rosneft made a prepayment of $1.3 bln, the contract was never fully implemented. Furthermore, the fields in Kirkuk were occupied by Iraq’s federal forces, and Baghdad negates separate agreements made by oil companies with Erbil.

A similar problem arose with production-sharing contracts between Rosneft and Erbil on five production blocks, which stipulate a $400 mln entry bonus. Geological exploration, which was previously planned for 2018, is up in the air now. The company also has ambitious plans to construct a gas pipeline with a capacity of 30 bln cubic meters from Kurdistan to Europe. Now the project is frozen, since it needs Turkey’s approval for gas transit.

Tuesday’s talks between the Russian and Iraqi parties focused on settling the issue with Rosneft’s contracts, a source told Kommersant. "The sides expressed their willingness to sort out the problems," he said, adding that the company’s Chief Executive Officer Igor Sechin may visit the country in the near future for talks with Prime Minister Haider al-Abadi. Another issue on the agenda was military-technical cooperation between Moscow and Baghdad, one of the participants of the meeting said. "We consider Iraq to be a promising market, despite pressure exerted by the US," he said, adding that Baghdad "highly values Russia-made arms used in Syria and Iraq itself against terrorists."


RBC: Norwegian sovereign fund pours $5 bln into Russian companies

Norway’s state pension fund, Government Pension Fund Global (GPFG), which is one of the world’s biggest foreign funds with assets exceeding $1 trillion, has reported a record yield for last year. GPFG owns shares of 9,000 companies, and 52 of them are Russian firms as of end 2017, RBC business daily writes. In 2017, the returns on its investment projects totaled 13.7% (equivalent to $131 bln), which is double that of 2016 (6.9%), the Fund said in its financials. The return on shares reached 19.4%, while debt investments came to 3.3%, and real estate projects hit 7.5%.

The cost of Russian shares’ portfolio in dollars went slightly up last year from $2.69 bln to $2.77 bln, the paper says. In terms of quantity, the portfolio only added one asset as GPFG pulled capital out of six Russian companies (Cherkizovo,, Unipro, Uralkali and the state-owned Rostelecom and Rosseti), but made seven new investments - in Bank Saint Petersburg, Rusagro, Globaltrans, developers Etalon and MirLand Development and retailers Obuv Rossii and Detsky Mir. However, Russia’s top lender Sberbank remains the biggest asset in the Fund’s Russian portfolio, followed by Surgutneftegas and Gazprom. The cost of all of GPFG investments in Russian assets, including company shares and state bonds surged from $4.9 bln to $5.02 bln.

"The fact that Norway’s Government Pension Fund holds shares in some Russian companies demonstrates that it sees sanctions-related risks regarding those issuers," Finam’s analyst Sergei Drozdov told RBC. “The Fund withdrew from old Russian assets and transferred to new ones because it no longer sees growth prospects and turned to others, which they considered more investment-worthy,” he added. The head of analytical department at the BK-Savings Sergei Suverov assumes that the Norwegian fund sees sanctions-related risks in state-owned companies, which has made it refocus on transparent private companies with growing business and a clear strategy.


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