Putin meets with BRICS officials to talk new security architecture; Europe seeks to jump-start economy with interest rate cuts; and Ukrainian missile strikes on Russian territory loom. These stories topped Friday's newspaper headlines on Friday, according to TASS News Agency.
Izvestia: Putin, BRICS high officials talk tackling security threats amid escalating Ukraine crisis
A council on combating the financing of terrorism and money laundering will be created in BRICS, Russian President Vladimir Putin said at a meeting with high-ranking security officials representing the group’s states. According to him, the association already has good experience in responding to challenges in this area, including the fight against cybercrime and terrorism. Experts interviewed by Izvestia agree that BRICS would be well-served to boost joint efforts in the security sphere. Doing so is particularly important amid the escalation of the Ukrainian crisis and the possible authorization by Washington and London to allow Kiev to attack Russian territory with high-precision Western weapons. Speaking to reporters in St. Petersburg, Vladimir Putin stressed that such a decision would mean NATO’s direct involvement in the conflict with Russia.
Officials from Brazil, Egypt, Ethiopia, the United Arab Emirates, South Africa, as well as India, China, and Iran attended the meeting. The Russian President later held some one-on-one talks, in particular with Chinese Foreign Minister Wang Yi, National Security Advisor of the Republic of India Ajit Kumar Doval, and Secretary of the Supreme National Security Council of Iran Ali Akbar Ahmadian. The President expects to see the leaders of these countries in Kazan on October 22-24 for further bilateral talks.
While the BRICS security meeting was crucial, especially amid the deteriorating international situation, the association wants to make it clear that it does not see itself as an anti-Western alliance. Still, experts believe that the BRICS countries are an important counterweight to the West. The group prides itself on being about equality and sovereignty, which clearly rubs some countries the wrong way: therefore, BRICS challenges current perceptions of what global security means, political scientist Dmitry Elovsky told Izvestia.
BRICS is capable of intensifying cooperation in the security sphere, especially against the backdrop of the West’s attempts to maintain its central position in the international arena, believes member of the State Duma Committee on International Affairs Dmitry Belik.
"Although BRICS is not a military organization, its countries have a huge combined military potential. For example, the BRICS countries are developing mutually beneficial bilateral relations in the defense sphere. Now, when the United States is losing its dominance in the world, it is thanks to BRICS that a new world order can be established and a new security architecture can be formed based on the balance of power of the states that are part of this association," he told the newspaper.
Russia’s State Duma Deputy Natalia Poluyanova believes that the situation in Ukraine is serving as an impetus for a larger BRICS dialogue about security issues. "By declaring Russia’s rapprochement with Iran and China in the defense sphere, we are openly telling the West that we are building a very strong coalition," he told Izvestia.
Izvestia: European Central Bank cuts interest rates to revive Europe’s faltering economy
At its September meeting, the European Central Bank (ECB) confirmed its intention to jump-start the economy at the expense of inflation control. The Governing Council decided to cut the interest rate from 4.25% to 3.65%, and the deposit and lending rates to 3.5% and 3.9%, respectively. This comes at a time when major European automakers are considering the possibility of closing their plants due to a slowdown in consumer spending and the ongoing transition to electric vehicles. Experts told Izvestia they believe that Europe’s economic problems stem not so much from high interest rates, but from a jump in energy prices after they decided to refuse Russian gas.
Last year inflation exceeded 10%, but now it has fallen to 2.2%, paving the way for lowering interest rates to stimulate the economy, Associate Professor of the Department of Sustainable Development Finance at the Plekhanov Russian University of Economics Mikhail Gordienko told Izvestia. The idea is that cheaper loans will allow companies to invest more actively in expanding production.
"However, high inflation was not related to domestic demand factors, but to a sharp increase in costs mainly due to rising energy prices caused by geopolitical events. Now that the price growth has slowed, but the economy is stagnating, lowering interest rates seems like a justified step to stimulate business activity and alleviate problems in industry," the expert noted.
The threat of a prolonged recession, especially in Germany, is very real, and the ongoing rate cuts are seen as one of the main ways to stimulate business lending and preserve industry, Mikhail Gordienko added.
Europe is currently experiencing full-blown deindustrialization, a trend that is affecting other developed countries as well, analyst at Finam Alexander Potavin believes. The European Union does not have its own mineral base or powerful extractive industries, but their place is now being taken by think tanks, and new and promising technologies are being developed and tested, he added.
The crisis in Europe’s industry can be explained by a number of problems - a jump in energy prices after the refusal of Russian gas, increased competition from China, the outflow of capital from the EU to the US, and the cost of meeting environmental commitments to decarbonization, Mikhail Gordienko said.
As the Ukrainian armed forces continue to lose ground on the eastern front and in Russia’s Kursk Region, Kiev and the West are increasingly discussing the possibility of strikes on Russian territory with long-range missiles. Russian presidential spokesman Dmitry Peskov called this discussion a smokescreen - the Kremlin believes that the West made the decision a long time ago to allow such attacks. According to Nezavisimaya Gazeta, the threat of long-range missile attacks by the Ukrainian armed forces on important military and strategic targets deep in the Russian territory seems to be real, and the Russian military is preparing to repel such attacks.
Meanwhile, for the first time since the beginning of Ukraine’s invasion of the Kursk region, the Russian Defense Ministry reported that offensive operations by units of the North battlegroup had yielded some major wins, noting that ten settlements have been liberated in the past two days.
Experts believe that the combat capabilities of the Ukrainian armed forces on the Kursk front are melting away, and the Russian military is increasing its attacks in order to push the enemy out of its territory. Against this background, Ukraine, with the support of the United States and other NATO countries, is discussing long-range strikes against Russia - the Ukrainian armed forces apparently intend to attack strategic facilities in order to disrupt military logistics and prevent reserves from the Russian armed forces from entering battle.
"The Russian Army has experience in destroying high-precision Western weapons used by the Ukrainian armed forces in the zone of the special military operation and in Russia’s new territories," military expert retired Lieutenant General Yuri Netkachev told the newspaper. "However, the decision of the United States and its allies to allow Ukraine to attack targets deep inside Russian territory creates new conditions for armed conflict. I do not rule out that the list of Russian facilities from the West, which the Ukrainian armed forces intend to strike, will primarily include military airfields, naval bases, arsenals and weapons depots, as well as energy supply and defense industry facilities," he added.
According to the expert, it is important for the Russian army to continue destroying HIMARS launchers, used to launch ATACMS missiles, as well as depots where these weapons can be located.
Vedomosti: US pushes for greater African representation in UN
US ambassador to the United Nations under President Joe Biden Linda Thomas-Greenfield recently told Reuters that pushing the issue of Security Council expansion could become part of Joe Biden’s political legacy. However, she could not give an exact timeframe as to how long it would take the UN General Assembly to approve these changes. According to the diplomat’s speech at the Council on Foreign Relations, the US proposal is aimed at increasing the role of African countries in the international arena, Vedomosti writes.
At the same time, Thomas-Greenfield stressed that the United States does not support granting new permanent members of the Security Council the same veto power as the current five: the UK, China, Russia, the US, and France. Thomas-Greenfield did not specify which African countries the United States believes should be granted permanent membership in the Security Council.
The most likely candidates are South Africa, Egypt, and Nigeria, Associate professor at the Department of World Politics at Moscow State University Natalia Piskunova told Vedomosti. The expert believes that South Africa is important for the United States as a strategic partner in Africa as a whole, Egypt is valuable as a direct participant in Middle East policy, especially due to the ongoing war in Gaza, and Nigeria looks attractive because of its membership in OPEC. "We can expect several combinations with these countries: Egypt and South Africa, Egypt and Nigeria, or South Africa and Nigeria," the expert said, adding that the lack of veto power could turn these countries off from accepting a seat as a permanent Security Council member.
Expanding the Security Council is a complex process, Piskunova added. The General Assembly may simply not support the decision. "That is why the possible American proposal seems more like just talk at the moment," she said.
"Many countries, including Russia and China, have proposed giving permanent seats to African countries, so the US does not want to lag behind," expert at the Russian International Affairs Council Alexey Naumov told Vedomosti. The main reason is that the continent is becoming more attractive to international companies because of its cheap labor compared to China, where labor is becoming more expensive, Naumov said.
Vedomosti: OPEC+ oil production continues to miss targets, impacting global markets
Oil production for OPEC+ countries in August 2024 amounted to 34.56 mln barrels per day (bpd), which is 850,000 bpd higher than planned, the International Energy Agency (IEA) said in its monthly report. The production volume of the agreement participants was 140,000 bpd lower in August than in July. According to experts interviewed by Vedomosti, the effectiveness of the OPEC+ deal in terms of maintaining high oil prices might have decreased.
The largest overproducers were Iraq at 470,000 bpd and the United Arab Emirates at 390,000 bpd. Russia, Saudi Arabia, Kuwait, Kazakhstan and some other participants in the deal also failed to meet their production cut commitments.
Senior analyst at BCS World of Investments Ronald Smith believes that the intentions of OPEC+ to bring real production in line with planned production are realistic. However, the discipline of OPEC members has always been weak, the expert believes. If Iraq and the United Arab Emirates continue to produce oil above the agreed levels, this could lead to other members increasing their production as well, he added.
Sergey Suverov, investment strategist at Aricapital Management Company, explained the decline in oil prices by market participants' concerns about the slowdown in economic growth and oil demand in the world, especially in China. Finam analyst Nikolay Dudchenko added that geopolitics no longer has such a strong influence on prices. "The conflict in the Middle East continues, but the geopolitical premium has disappeared from the oil price," he told Vedomosti.
According to Suverov, the effectiveness of the OPEC+ agreement in keeping the price of oil high has diminished and, in the context of slowing demand growth, "no longer has the desired effect." In turn, Smith believes that without the actions of OPEC+, including additional voluntary cuts by individual countries, oil prices "would be much lower."
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