Top stories from the Russian press on Friday, August 20th, prepared by TASS
Izvestia: When EAEU will restore its trade relations and how Afghanistan can affect it
The recovery of the mutual trade volume in the EAEU back to the figures seen in 2019 is expected by the end of this year, the press service of the Ministry of Economic Development told Izvestia. According to the preliminary forecast, the level of trade between the member states of the Union will increase by 19% to $65.3 bln. At a meeting of the EAEU intergovernmental council in Kyrgyzstan, Prime Minister Mikhail Mishustin discussed with his colleagues not only economic recovery but also possible problems, for example, a change of power in Afghanistan. Politicians and experts believe that instability in the region could push countries towards even more active cooperation.
So far, Russia-Kazakhstan trade turnover for six months increased by 34%, which means that Russia and Kazakhstan were able to exceed the pre-pandemic level. There are indeed positive trade dynamics this year with Kazakhstan and Kyrgyzstan, not only in relation to the crisis year of 2020 but also to the period before the global pandemic, the Economic Development Ministry’s press service told the newspaper.
In general, economic recovery in the Eurasian space is still ongoing. According to the Eurasian Economic Commission, the volume of mutual trade between the EAEU member states in 2020 amounted to $54.9 bln, down 11% year-on-year. The Economic Development Ministry noted that trade could be restored to 2019 levels only by the end of 2021 - the trade between the EAEU member states will increase by 19% and reach $65.3 bln.
As for the instability in Afghanistan, it may have a positive effect on the association’s activities, chairman of the State Duma Committee on CIS affairs, Eurasian integration, and relations with compatriots Leonid Kalashnikov told Izvestia. If tensions rise in the region, all the Central Asian countries will be forced to cooperate more closely not only on military and political issues but also to develop economic projects more actively.
Kommersant: Merkel set to visit Moscow to talk bilateral relations
A month before the parliamentary elections in Germany, German Chancellor Angela Merkel continues a series of farewell trips abroad. On Friday, she will hold talks in Moscow with Russian President Vladimir Putin. Merkel's meeting with the Russian leader draws a line under their many years of interaction, which at times has been quite fruitful. However, according to experts interviewed by Kommersant, its results, especially in the area of bilateral relations, were disappointing.
The agenda of the Chancellor's talks with Vladimir Putin is very extensive: the Kremlin noted that bilateral cooperation and "a number of pressing international and regional issues" will be discussed. The topic of bilateral cooperation is perhaps especially important, as Merkel leaves Russian-German relations in an unenviable state, the newspaper writes.
"It is unlikely that the conversation between the two leaders will result in an immediate resumption of the dialogue format, but even an exchange of views on this issue may be useful to clarify the situation", researcher at the MGIMO Center for European Studies Artyom Sokolov told Kommersant.
"It is difficult for Angela Merkel to discuss international issues with Vladimir Putin since Germany itself is not the most important player in major international crises," expert at the Berlin Science and Politics Foundation Janis Kluge explained to Kommersant. The expert sees the Russian-German agenda as more important in the upcoming talks, although bilateral relations between Moscow and Berlin are in a deep crisis.
Nezavisimaya Gazeta: Afghanistan's new authorities try to integrate into legitimate economy
The Taliban (outlawed in Russia) announced the desire to improve diplomatic and trade relations with all countries. Afghanistan has $1 trillion in minerals and a geographic location that links Central and South Asia - it is attractive to investors, but only with a stable political situation. According to Nezavisimaya Gazeta, problems may arise with this, especially if the country is completely cut off from external financing. The International Monetary Fund (IMF) has warned of blocking aid for Kabul.
"Afghanistan is a very poor country: GDP is about $19 bln, and GDP per capita is about $600, which is close to 200th place in the list of countries for this indicator," department head at Finam Olga Belenkaya told the newspaper. "The Taliban has shown a complete inability to manage the economy in the past. If it is the same now, the economy will collapse. If they have learned something, the poverty will stabilize," General Director of the Institute of Regional Problems Dmitry Zhuravlev added.
The Taliban will not be able to access the IMF resources allocated to Afghanistan due to problems with the recognition of its authority, the fund said on Wednesday. However, support can be provided by other countries of the region, Belenkaya noted: UAE, Pakistan, India, China; perhaps Iran and Russia will have economic interests.
Russia, according to department director at Univer Capital Andrey Vernikov, is unlikely to become a major investor in Afghanistan. But Moscow has the right to expect lucrative contracts in the construction of infrastructure facilities on account of Afghanistan’s debt to Russia. According to the Central Bank of Afghanistan, in 2020, the country's external public debt was about $2.3 bln, and more than a third - 35% - was debt to Russia.
Meanwhile, according to First Vice-President of Opora Russia Pavel Sigal, there can be no talks of any economic interests right now. "At the moment, Russia, like the international community, does not recognize the new government as legitimate. Our country calls for a national dialogue that will help stabilize the situation in Afghanistan, this is a paramount issue," he explained.
Vedomosti: Gazprom supplies through Nord Stream 2 will start before early November
By the end of this year, Gazprom will supply 5.6 bln cubic meters of gas via the Nord Stream 2 gas pipeline. The company also revised its forecast of the average price for gas supplies to the European non-CIS countries in 2021 under long-term contracts to 269.6 per 1,000 cubic meters of gas - 30% up on the previous forecast. According to Vedomosti, at this price, by the end of the year supplies via Nord Stream 2 would have brought Gazprom $1.5 bln.
Senior analyst at Alfa-Bank Nikita Blokhin stressed that the news came as a surprise to the market, since the start of supplies via Nord Stream 2 was earlier scheduled for late this year or early 2022. But the gas deficit in Europe will continue to grow, the expert believes. At the same time, despite significant volumes, these supplies are unlikely to significantly change the balance - during the heating season, most of the gas is consumed without lingering in the gas transportation system, the analyst noted.
Senior Director, Head of EMEA Natural Resources & Commodities at Fitch Dmitry Marinchenko believes that Gazprom will begin deliveries via Nord Stream 2 in October. According to him, if Gazprom transports only the minimum 40 bln cubic meters through Ukraine stipulated by the contract, the arrival of new volumes on the market should somewhat reduce gas prices. But, the expert emphasized that 5.6 bln cubic meters is a large enough volume to radically affect the balance of supply and demand. The expert noted that a more significant decrease in prices may occur in 2023-2024 against the background of commissioning new capacities for gas liquefaction.
Vedomosti: Tesla shareholders warn of environmental risks of buying from Nornickel
Due to the large amount of damage to the environment, the purchase of metals from Nornickel carries risks for electric car manufacturer Tesla, the company’s investors believe. According to documents discussed at the shareholders’ meeting, published on the website of the US Securities and Exchange Commission (SEC) - activists from Russia’s indigenous peoples urged Tesla not to use Nornickel products until the company eliminates the environmental and economic damage from a major oil spill. At the same time, according to Vedomosti, Tesla said that the company has never entered into any agreements with Nornickel.
Nickel is used in the manufacture of batteries. A representative of Nornickel told Vedomosti that the company does not disclose information on contracts. "As for interaction with the indigenous peoples of Taimyr, Nornickel has already taken and will take a number of practical steps to support them," the company representative said. Since August 2020, Nornickel has been implementing a program of their support for 2 bln rubles (about $27 mln). Chairman of the Association of Indigenous Minorities of Taimyr Grigory Dyukarev confirmed it to the newspaper.
Tesla is not a major buyer of Nornickel products, says Aton analyst Andrey Lobazov. Europe is the key supply market for Nornickel at the moment, accounting for about half of the revenue, while another 30% is supplied to Asia. The absence of sales to Tesla will not have a significant impact on the financial results of Nornickel, Lobazov added. However, "Tesla’s purchases of nickel will one way or another affect the global supply and demand balance and so the world prices for this metal," he explained.
Purchases from Nornickel are not a priority for Tesla, the company is ready to conclude contracts only in the case of environmentally friendly production, head of Art De Lex judicial practice group Anastasia Vasilenko noted. Eliminating oil spill damage by paying a fine is unlikely to be a sufficient reason for concluding contracts with Nornickel, she said.
