©Russian Foreign Ministry Press Service/TASS
Sneak peek at agendas of top Russian, US diplomats’ talks in Jakarta with ASEAN countries; Washington says no deployments of nuclear weapons to new storage sites in Europe; and the potential collapse of the Black Sea grain deal looms as Monday’s expiration date approaches. These stories topped Friday’s newspaper headlines across Russia.
Kommersant: Sneak peek at agendas for top Russian, US diplomats’ talks with ASEAN partners
The top diplomats of Russia and the United States, Sergey Lavrov and Antony Blinken, are both in Jakarta, Indonesia, at the same time, attending events under the aegis of the Association of Southeast Asian Nations (ASEAN).
However, it seems that there will be no opportunity for a tete-a-tete, allowing Lavrov and Blinken to discuss the accumulated differences of opinion in person as each of them has his own program, agenda and goals. For example, on Thursday, Lavrov tried to persuade his ASEAN colleagues to resist in every way NATO plans for relocating "some of its military infrastructure" to the Asia-Pacific region, whereas Blinken’s focus was on discussing "Russia’s war against Ukraine," among other things. One of his goals is to convey to neutral countries the idea that they could be subject to the imposition of secondary sanctions.
According to Dmitry Mosyakov, head of the Center for the Study of Southeast Asia, Australia and Oceania at the Russian Academy of Sciences’ Institute for Eastern Studies, the main issue is precisely the threat of secondary sanctions.
"ASEAN countries are under enormous pressure to join the sanctions and change their policy with regard to Russia," the expert told Kommersant. He added that the countries in the region cannot ignore this fact because they are highly dependent on the US, which is ASEAN’s largest investment partner and its second-largest trading partner after China.
The share of the US in investment flows to the region amounts to about 22.5%. US-ASEAN trade as at the end of 2021 had increased by 17.9%, to $441.7 bln, which is 20 times higher than the regional group’s trade turnover with Russia.
However, Russia also enjoys a certain competitive edge in some areas, said Yekaterina Koldunova, head of the ASEAN Center and associate professor in the Department of Eastern Studies at the Moscow State Institute of International Relations (MGIMO University). According to her, Russia’s economic interaction with the region is oriented toward "unique points of growth," such as energy, military and technical cooperation, information and communications technologies, medicine, food products and agriculture.
"All of these fields are critically important for the further development of the ASEAN countries," she stressed. Additionally, she noted that, in contrast to the region’s relations with Japan, the US and certain European countries, ASEAN-Russia relations "are not burdened by negative historical memories."
Overall, this is a landmark year for Moscow and ASEAN, marking 30 years of the dialogue partnership and five years of the strategic partnership between Moscow and the alliance. "Thanks to the properly formulated policy since our return to Southeast Asia, we have managed to become an important partner for ASEAN," Mosyakov insisted. "Now, the most important thing for us is to provide support and clarifications, and to preserve trust-based relations," he added.
Izvestia: US says no plans to deploy nuclear bombs to new storage sites in Europe
Washington is not currently planning to deploy any nuclear weapons outside of existing storage sites in European member states of NATO, the US embassy in Moscow told Izvestia amid Warsaw’s calls to include Poland in NATO’s nuclear weapons sharing program. Right now, US B61 bombs are being stored at sites in five NATO countries: Belgium, Germany, Italy, the Netherlands and Turkey.
That said, if Washington were to deploy elements of its nuclear arsenal in any country bordering on Russia, it would be viewed by Moscow as an act of incitement, experts cautioned. Such a move could escalate tensions between Russia and the US and even lead to a direct military confrontation.
Poland’s chances of being accepted into the nuclear sharing program are rather slim, says Saeed Khan of Wayne State University in Detroit, Michigan. Although nuclear bombs are stored on Turkish soil, the critical factor here is that Turkey does not border on Russia, whereas Poland shares a border with Russia’s westernmost Kaliningrad Region.
He told Izvestia that deploying nuclear weapons in Poland may be perceived by Moscow as an unjustified act and would escalate tensions between NATO and Russia. In his opinion, the US deploying nuclear bombs in Poland is unlikely because it would fundamentally alter the geopolitical equation.
Khan stressed that such a move would only increase tensions to an unacceptable level, even potentially bringing them to a direct military confrontation between Russia and NATO.
According to Jeremy Kuzmarov, editor-in-chief of Covert Action magazine, if the US ends up deploying its nuclear weapons on Polish soil after all, this would be yet another step toward exacerbating the already highly tense Moscow-Washington relationship and could serve as a tripwire for a potential world war.
He told Izvestia that the situation was reminiscent of the 1962 Cuban missile crisis, when the world was on the brink of nuclear war. Back then, the US deployed missiles targeting the USSR in Turkey, which triggered Moscow to deploy its missiles on Cuba in response. The expert added that a similar situation is unfolding currently, but with the critical difference now that Poland is that much closer to Russian borders than Turkey was to the borders of the Soviet Union in the 1960s.
Nezavisimaya Gazeta: Chances rising of grain deal collapsing upon Monday’s expiry deadline
The Turkish navy will escort dry-cargo vessels to Ukrainian ports to ensure agricultural exports if Russia exits what is known as the Black Sea Initiative grain deal, the Turkish media reports. Ankara remains a key player with a vested interest in seeing the formal terms for ensuring grain exports from Black Sea ports extended. Experts predict that Turkey may potentially get off the fence and go fully over to the side of Russia’s adversaries in the Ukrainian conflict.
Western news agencies report that the EU is purportedly discussing the possibility of reconnecting the Russian Agricultural Bank, or its subsidiary, to the SWIFT system. Soon, Moscow will have to make a very difficult decision on its further involvement in, or withdrawal from, the Black Sea Initiative (the formal name of the grain deal).
Turkey is urging Russia to adhere to its obligations under the grain deal "in its own unique style," Yevgeny Kogan, professor at the Higher School of Economics (HSE University), writes on his bitkogan Telegram channel.
The reconnection of the Russian Agricultural Bank to SWIFT, as Russia is demanding, would simplify the financial component of the deal, but it seems that global markets do not believe that the deal could fail. Grain futures traders are not exhibiting any jitters and clearly do not anticipate any catastrophe, while market sentiment overall believes that the grain exports will keep flowing and a supply deficit can be avoided, he wrote.
Analysts at the Macro Markets Inside (MMI) Telegram channel, founded by Kirill Tremasov, director of the Central Bank of Russia’s Monetary Policy Department, reported that global food prices are dropping while their growth in ruble equivalent has only been triggered by exchange rate fluctuations.
The price index issued by the UN Food and Agriculture Organization (FAO) in dollar equivalent dropped by 1.4% in June 2023 versus the previous month and by almost 21% in annual terms. The ruble index had grown by 3.7% by May and by almost 10% annually due to a cheapening national currency, they noted.
The grain deal did not benefit Russia. Its Ukrainian component was implemented while the Russian one was not. The export of mineral fertilizers and grain from Russia was virtually blocked in spite of the terms of the deal and the efforts of the UN, while Western sanctions continued to be in effect, said independent industry and energy expert Leonid Khazanov. "Despite counteractions, it was still possible to facilitate the deliveries of agricultural chemicals and grain from Russia thanks to enormous efforts by domestic companies and the government’s support," Khazanov notes.
Moreover, the grain deal has not been profitable for European agribusinesses either as they have taken a hit in financial losses stemming from the flood of food imports from Ukraine into the EU, the expert concluded.
Izvestia: What Biden hoped to see in Suomi
On July 13, US President Joe Biden arrived in Helsinki where he participated in the US-Nordic Leaders’ Summit, thus concluding his European tour, which had kicked off with a visit to the UK and continued in Lithuania at the two-day NATO summit in Vilnius. The meetings resulted in promises of continued support for Ukraine and beefed-up trans-Atlantic ties. Experts contended that Biden’s visit to Finland was largely of a symbolic nature, while pointing out the US does harbor long-term plans for bolstering its influence in northern Europe. Magnus Oberg, director of the Uppsala University Conflict Data Program (UCDP), said that Biden’s visit was an important but not particularly necessary gesture to demonstrate ties with Scandinavian countries. He told Izvestia that these countries already have good relations with the US and nothing would have changed had Biden opted not to visit Finland. In his opinion, his visit was mostly symbolic and served as a confirmation of sorts of Finland’s recent accession to NATO.
In comments to Izvestia, Alexey Fenenko, professor at Moscow State University’s Faculty of World Politics, noted that Sweden and Finland’s NATO membership increases the North Atlantic Alliance’s options for potentially mounting a blockade of Russia’s westernmost outpost, the exclave of Kaliningrad Region.
"Let’s imagine a scenario wherein Lithuania, under the pretext of track maintenance, blocks [mainland] Russia’s rail connection to Kaliningrad while Sweden, Finland and Estonia simultaneously block [Russian navigation in] the waters of the Gulf of Finland," the expert conjectured.
Additionally, Fenenko said that NATO and US leaders see Scandinavia as a new anti-Russian front, so it is profitable for them to ignite nationalist and anti-Russian attitudes in the region. "Whom will the Americans set off against Russia after the Ukrainian conflict is resolved? The answer is obvious, it is either Finland or Sweden, given these countries’ historical traditions. We are used to Finland and Sweden being countries that were friendly toward us during the Cold War. But let’s recall how many times in history Russia was at war with Sweden, and the openly hostile policy line that Finland took prior to 1948," the political scientist elaborated.
The US views control over Scandinavian countries as the key to controlling the Arctic region, Vladimir Vasilyev, senior research fellow at the Russian Academy of Sciences’ Institute for US and Canadian Studies, told Izvestia.
"Nowadays, the Americans think that the Arctic is the future. It has become one of the central elements of US strategy, which complements the European one. [The region offers] resources and strategic control over our most powerful [naval force], the Northern Fleet. It is for good reason that ex-US President Donald Trump once brought up the idea of purchasing Greenland. By the way, that’s when plans to deploy medium-range missiles in Greenland and Europe emerged," the expert explained.
Vedomosti: Russia-China trade turnover grows by 40% in first half of 2023
Trade turnover between China and Russia rose by 40.6% over the first six months of 2023 versus the same period in 2022, amounting to $114.54 bln, according to July 13 data from China’s General Administration of Customs. According to the customs authority, China’s exports to Russia surged by 78.1% to $52.284 bln, while Russian exports to China rose by a more modest 19.4% to $62.263 bln.
"The increased trade turnover between Russia and China is not surprising because China has become Russia’s main trading partner. Now the trade balance has begun to even out; Russia has begun to import more from China. Last year, trade was growing mostly thanks to energy products supplies from Russia," said Sergey Lukonin, head of the Chinese economy and politics sector at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS).
The Chinese government is seeking ways out of negative trends because exports remain very important despite talk of building an economy oriented toward domestic demand, the expert added. In particular, the government is trying to support China’s exports by lowering taxes, increasing tax refunds, and reducing certain payments to the regional and central budgets.
The China-Russia trade turnover has also expanded because, currently, many Chinese companies are actively filling the niches left by exiting Western businesses, noted Andrey Karneyev, head of the Higher School of Economics’ (HSE University) School of Asian Studies. This is seen even in the higher number of Chinese automobile makes and models for sale in Russia, he added.
According to the expert, despite the trade war and mutual restrictions, the trade turnover between China and the US remains quite robust. Lately, China’s exports have been encountering some problems since a number of Western countries, the US in particular, began limiting investments in China. Yet, the main problem is related to the increased cost of Chinese labor as businesses now prefer to seek out new, "frontier" markets with even cheaper labor resources, Karneyev added. Currently, China is rapidly moving away from its status as a manufacturer of added-value, cheap and medium-priced goods to the production of more high-tech products and, as such, is seeking a new development model, the expert concluded.
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