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RA’s Daily Russia News Blast – October 7, 2020

Today in Russia: “Russia’s neighborhood in flames”; Kamchatka’s ecological catastrophe; Merkel “shying away” from actions that could really hurt Putin; Putin says Nagorno-Karabakh fighting is a “catastrophe”; Kremlin says no need for stimulus measures to support business; US and Russia agree to extend restrictions on Russian uranium imports; Pussy Riot hangs LGBTQ flags on government buildings; The state becomes Russia’s biggest wheat exporter; Ruble slump halts any rate cuts; Emerging markets face capital exodus; How Navalny’s aides got poisoning evidence out of Russia

Russia’s neighborhood is “in flames,” the Financial Times wrote. With Kyrgyzstan the latest country in Russia’s near-abroad to succumb to unrest, it is only the latest in a string of countries – from Belarus to the conflict between Armenia and Azerbaijan. “Russia has so far sought to avoid any direct intervention in the three crises, but cannot afford to allow events to spiral out of control.” Furthermore, these events are linked, as one analyst told the FT: “The Kyrgyz protests are therefore likely to make Mr Lukashenko [in Belarus] dig in further and reject demands for political rights by the Belarusian people. Equally, they will inspire Belarusian protesters to persist.”

Kamchatka, the remote peninsula in Russia’s far east, is suffering from an unexplained ecological catastrophe. “Nearly all seafloor-dwelling life in pollution-hit waters off Russia’s Pacific coast in the Kamchatka region has been wiped out in an unexplained mass death of marine animals,” with some 95 percent of marine life being wiped out. “Kamchatka governor Vladimir Solodov said that authorities were considering manmade pollution, natural phenomena or a volcano-related earthquake as possible causes of the mass deaths.”

Officials have opened a criminal investigation into the ecological disaster in Kamchatka. Meduza wrote, “Russia’s Investigative Committee reported on Wednesday that initial samples collected in Kamchatka’s coastal waters contained “a pollutant similar in consistency to industrial oil or some other substance containing oily components.” Officials say they are investigating all possible sources of the pollution, including landfills bordering Avacha Bay and coastal areas where pesticide supplies are buried.”

Bloomberg wrote that German Chancellor Angela Merkel is shying away from action that would really hurt Putin.” The add that “[a]lthough countermeasures are all but inevitable, the European Union action may consist of asset freezes and travel bans for Russian officials, according to officials familiar with the discussions. The almost-completed Nord Stream 2 gas pipeline between Russia and Germany, Putin’s real weak point, is likely to be spared, officials said.”

Russian President Vladimir Putin said that the rapidly escalating fighting in Nagorno-Karabakh is a “catastrophe,” [in Russian] adding “Azerbaijan, Armenia and Nagorno-Karabakh are all territories where people who are not strangers to us live. Suffice it to say that about 2 million Azerbaijanis and over 2 million Armenians live in Russia. A huge number of Russian citizens maintain close friendly and even family relations with both republics.”

The Kremlin maintained [in Russian] that there is no need for additional measures to support businesses in Russia despite a new wave of coronavirus cases. Spokesman Dmitry Peskov said “At the moment, the economy is functioning, all industries are working, so the situation is different.”

The U.S. Commerce Department and the Russian government have agreed to extend for 20 years limits on imports of Russian uranium, the Trump administration announced Tuesday in a move it said would benefit American miners and others in the domestic nuclear industry. The agreement with Rosatom extends an existing agreement through 2040. Without an extension, the US Commerce Department said in a statement that it “would have resulted in unchecked imports of Russian uranium.”

Pussy Riot hung the rainbow LGBTQ flag on numerous government buildings to mark Vladimir Putin’s 68th birthday. Happy birthday, Mr President.

For the first time ever, the Russian state became the largest exporter of wheat in the country. “The government has played a bigger role in the market after state-controlled VTB Group entered the business in 2018, spending more than $2 billion on assets including trader Mirogroup Resources, port terminals and a rail-freight operator. The move to create a domestic grain champion has increased competition with private exporters and international merchants like Cargill Inc.”

The falling ruble has dented hopes of further interest rate cuts. The ruble has fallen 8 percent over the past 3 months against the dollar, and traders are expecting a rate hold at the central bank’s next meeting. “Forward-rate agreements, which have been predicting more monetary easing for most of this year, are now indicating that rates will stay at 4.25% for the rest of the quarter even as inflation remained below the central bank’s target for a 12th month.”

The Financial Times wrote that emerging markets the world over – except, perhaps, Asian economies such as Vietnam which have very successfully handled the coronavirus pandemic – are facing a potential reckoning as foreign investors pull their money out of emerging markets. Russia and Brazil have traditionally had high interest rates, but at the moment they are at an all time low in both countries. “Several governments that previously sold longer-dated bonds have borrowed much more cheaply during the pandemic by issuing short-term bonds, a risky strategy because they must be repaid quickly. If interest rates remain low and economies bounce back quickly, the gamble will pay off, analysts said. But if interest rates rise and economies fail to regain economic ground, this could lead to serious trouble.”

The Washington Post wrote of Alexei Navalny’s aides and their valiant effort to get poisoning evidence out of Russia:

Vladlen Los sat in a chair outside Room 239 of the Xander Hotel. It was midmorning on Aug. 20 in the Siberian city of Tomsk. The lawyer Los was determined that no one get inside the room that his colleague, Russian opposition leader Alexei Navalny, had left hours before.

All that was known at that point was that Navalny was gravely ill — stricken on a plane returning to Moscow. But Los and a handful of other members of Navalny’s inner circle immediately suspected a deliberate poisoning.

So began a pivotal, high-pressure gambit with four of Navalny’s associates becoming forensic evidence hunters — recovering a hotel water bottle on which a German military laboratory later found traces of a Novichok group nerve agent. Novichok-linked poisons have been used in previous attacks that Western officials and others assert were carried out by Russia.

The effort to gain access to Room 239, described to The Washington Post by members of Navalny’s team, has been largely overshadowed by Navalny’s slow recovery in a Berlin hospital and widespread suspicion of Russian state involvement in the attack.

But the actions of Navalny’s colleagues at the Xander Hotel were critical in attempts to piece together what happened that morning.

PHOTO: Russia faces a series of crises in its near-abroad, with events in Kyrgyzstan being the latest threat. The Kremlin has managed to avoid direct involvement – thus far (Vyacheslav Oseledko/AFP/Getty)