Top stories from the Russian press on Monday, February 8th, prepared by TASS

Kommersant: Tokyo plans to build dialogue with Moscow despite Western pressure

Japan plans to resume work on reaching a peace treaty with Russia and discussing joint projects after a pause caused by the pandemic and the change in government last fall, Japanese Prime Minister Yoshihide Suga and Foreign Minister Toshimitsu Motegi said on Northern Territories Day on February 7. Their statements indicated Tokyo’s determination to activate cooperation with Moscow after the resignation of former Japanese Prime Minister Shinzo Abe, Kommersant reports. Japan is distancing itself from the policy of sanctions led by the West, which provides an opportunity for activating dialogue and finding mutually acceptable solutions.

Russian diplomats and experts quizzed by Kommersant think that these recent statements show Tokyo’s commitment to unfreezing political dialogue and trade-economic cooperation with Moscow.

"PM Suga makes it clear that he plans to follow Shinzo Abe’s ‘two-track’ policy in relations with Moscow, which implies talks on the territorial issue and signing a peace treaty with Moscow along with the development of trade ties," former Russian Ambassador to Japan and head of the Department for Diplomatic Studies at MGIMO University Alexander Panov told the paper.

According to Panov, given the confrontation between Russia and the West, which has become more acute after the change in the US administration and the arrest of Alexey Navalny, Japan is distancing itself from the war of sanctions, limiting itself to political declarations in support of its Western allies. "The paradox is that despite the lack of a peace treaty with Moscow, Japan has not introduced its own sanctions against Russia: neither individual nor sectoral ones, and it is not considering introducing them. Thus, the relationship between Moscow and Tokyo does not seem as openly hostile as Russia’s ties with the US and the EU. This provides a new opportunity to activate contacts in 2021 and turn Tokyo in a potential mediator between its Western allies and Moscow," the diplomat concluded.

Head of the Department of Oriental Studies at MGIMO University Dmitry Streltsov shares the same opinion. "The situation goes in circles. What is happening today reminds me of an acute crisis during the Barack Obama presidency. Back then, in the midst of the Ukrainian conflict, Japan took on a more reserved position on Moscow than its Western allies and tried to act as a bridge between Russia and the West. Something similar may happen now," he told Kommersant.

Izvestia: Washington shooting itself in the foot, as US sanctions undermine dollar

The US leadership is so carried away with its “sanctions game” that it has failed to notice how these restrictions have chipped away at the position of the dollar, economic experts from the US Congress pointed out. The countries hit by these sanctions are looking for alternatives to the dollar, which undermines the leading position of the greenback, Izvestia reports.

The endless sanctions are causing economic losses for America itself, since they restrict business that could involve US companies or individuals, the report by the Congressional Research Service (CRS) informs. Besides, they trigger tit-for-tat reactions from those on the receiving end, for example, Russia’s ban on agricultural import.

Experts point to national currencies as the easiest and most logical alternative to the dollar. "If exports and imports between them are more or less the same, it does not matter that much which currency is used. The countries must agree that both their national currencies are equal, or find a common currency, like the euro," Director of Operations at the Ural Bank for Reconstruction and Development Vladimir Zotov told Izvestia, highlighting relations between Russia and China as an example.

In 2020, for the first time ever, dollar operations amounted to less than 50% of trade between Russia and China, reaching 46%. Meanwhile, China’s dealings in the national currency and in the euro have reached a historic high - 24% and 30% accordingly. Such a shift points to the "de-dollarization" of the Russian economy and the rise in its resilience in the face of new US sanctions, Izvestia notes.

Nezavisimaya Gazeta: US ambassador shrugs off Lukashenko by staging meetings with opposition

The United States has warned the Belarusian government that its policy of suppressing the opposition would not go unpunished. To reaffirm Washington’s intent, newly appointed US Ambassador to Belarus Julie Fisher started her diplomatic mission by organizing meetings with Lukashenko’s political opponents, namely, opposition figurehead Svetlana Tikhanovskaya. Experts quizzed by Nezavisimaya Gazeta do not rule out a rise in tensions between Minsk and Washington.

"Technically, Fisher is doing everything rather well. Before arriving in Belarus, she met with opposition leaders. Then, as far as I understand, she plans to visit several European capitals to agree on a policy. Then she will arrive in Minsk.

This is a psychologically unpleasant situation for Minsk, because it’s all done in a demonstrative manner," political analyst Valery Karbalevich told Nezavisimaya Gazeta.

"Washington has demonstrated in practice that it does not recognize [Alexander] Lukashenko as the legitimate president," the expert said. He did not offer a certain prediction of how the situation would unfold. Namely, it is unclear whether Fisher will present her credentials to Lukashenko, or whether "they will think of some cunning diplomatic move to avoid this." Karbalevich said that the Belarusian government might pressure the US diplomatically: for example, the foreign minister may postpone meeting the new ambassador for the presentation of credentials.

Meanwhile, the US has many opportunities to influence Minsk, the commentator pointed out. "The US has more indirect opportunities to influence Lukashenko than direct ones. The US does not have a big turnover with Belarus directly. Even if the presidential administration bans companies from doing business with Belarus, it won’t do much damage," he stated, adding however that the Americans have a lot of opportunities to block serious financial deals operated by American banks. The US can also influence Belarus through other companies working with Belarus, including Russian ones.

However, Karbalevich stated that the Biden administration would not necessarily use these opportunities. "It is not very clear so far whether the new US ambassador is on a mission of the old administration or the new one… the new administration is only starting its work, and Belarus is clearly not the priority for it. "I think that with its actions, Minsk can provoke an accelerated approval of a strategy on Belarus," he concluded.

Vedomosti: Protest activity in Russia may rise by the summer

The general level of protest activity among the Russian public in late 2020 and in January 2021 remains rather low despite the recent events, research conducted by the Financial University under the Government of the Russian Federation reveals. Moreover, in the last quarter of 2020, the level of protest activity dropped to a two-year low, Vedomosti reports.

The so-called index of protest sentiment serves as a way to measure that mood. This index shows the segment of the population who are aware of possible protest rallies in their cities, are actively involved in the protest movement and are ready to take part in it. This figure is calculated each quarter based on the poll held among residents of large cities or towns with a population of over 250,000. The figure for the first quarter of 2019 was recorded at 100. In the fourth quarter of 2020, the index dropped to 66 points (the year before, it reached 76).

The reasons for a decline in protest activity are the following: the normal functioning of the economy is on the rebound, and the rates of production and public consumption as quarantine restrictions are being lifted are on the rise. All this has led to a surge in public confidence: in June 2020, only 49% of residents of major Russian cities were confident about their future, and in December, this figure rose to 63%.

An important indicator of growing public unrest and possible protests is the proportion of citizens who believe their standard of living is unacceptably low, especially among socially active citizens aged 20 to 50. As of January, the percentage of people satisfied with their standard of living dropped to 77% compared to 86% in December. The share of those confident about the future dropped to 50% compared to 63% in December 2020.

If these indicators continue to drop, there may be a rise in protest activity in Russia in the summer, the newspaper notes. The potential demonstrations may be led by anyone. However, their basis will remain the same: people will be dissatisfied with poverty levels and a lack of opportunities. The government needs to show the population that there are real prospects of their standard of living improving to avoid this wave of social unrest, Vedomosti says.

Nezavisimaya Gazeta: Russia’s inflation may reach target rate only by end of 2021

Russia’s inflation rate may only reach the target level of 4% annually by the end of 2021 at best, officials of the Bank of Russia predict. The rise in prices is expected to slow down in March, while polls held among regional enterprises show a high level of inflation expectations, the Central Bank notes, quoted by Nezavisimaya Gazeta.

The price expectations of Russian enterprises will remain high for the upcoming three months, the Bank of Russia’s analytical report on regional economy informs. The highest increase in prices is expected in the sphere of construction, transportation and storage, as well as trade, including retail. Territorial departments of the Bank of Russia polled representatives of 13,000 enterprises. When asked about the main factors behind the rising prices, the respondents cited an increase in costs caused by the weakening ruble and the rise in global and domestic prices for raw materials and components.

In January, the overall inflation rate in Russia continued to grow, reaching 5.2% annually according to the Federal State Statistics Service. The prices of foodstuffs rose by 7%, the cost of fruits and vegetables went up 16.3%, bread prices increased by 7.5%, and the cost of grains and beans soared by 20.7%.

Sergei Khestanov, an expert with the Russian Presidential Academy of National Economy and Public Administration, told Nezavisimaya Gazeta that there are two reasons behind this rise in inflation rate: the increase in prices on the global market and the weakening of the ruble (the so-called transfer effect). "Usually, the transfer effect weakens by itself in about a quarter. The dynamics of global prices are harder to predict. So, the price increase rate is likely to go down, but it’s hard to say whether the prices will drop as well," he said.

The expert noted that the Bank of Russia’s expectations to return to the 3.5-4% inflation rate by the end of 2021 is correct within the base scenario, however, in his opinion, the increase will be slightly higher and the growth will slow down a bit later.