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Russia and Italy: No Breakthroughs

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The official visit of Russian President Vladimir Putin to Italy on July 4, 2019, the first in the past four years, became yet another confirmation of the “special relationship” between Rome and Moscow, but did not, however, signal a breakthrough. For Italy, the meeting came as another attempt to restore its role of a “protagonist” on the international scene, a role the country has been dreaming of playing for over two decades. It was not by chance that Guiseppe Conte, during his recent visit to Moscow, “rebuked” Vladimir Putin for not paying sufficient attention to the Italian people. In Italy, this lack of attention is seen as a sign that the country is not coping well with its role of a “protagonist” and a “bridge” between the West and the East. For Russia, a dialogue with Italy is more than just a conversation with a partner who is willing to listen and establish relations based on mutual trust — it is an opportunity to convey Russian opinions on key issues related to cooperation between Russia and countries of the Euro-Atlantic bloc.

The visit of Guiseppe Conte to Moscow in October 2018, and now Vladimir Putin’s visit to Rome, the “friendly” meetings of Guiseppe Conte and Donald Trump in July 2018 during a period of acute tension in the Euro-Atlantic bloc, Deputy Prime Minister Matteo Salvini’s visit to Washington in June 2019, and the signing of a memorandum of cooperation under the Belt and Road Initiative reached with Xi Jinping all testify to Rome’s ambitions for a more independent and autonomous foreign policy. Italy, under the leadership of the new “government of change,” is trying to play its own foreign policy game, guided by the principles of national sovereignty and national interests. However, at the moment, the hands of the yellow-green coalition are tied by the threat of sanctions from the European Commission for non-compliance with financial discipline. Naturally, this imposes significant restrictions on the potential of Italian foreign policy. In addition, the elections to the European Parliament in May 2019 and the subsequent distribution of top posts in the EU testify to Italy losing a significant share of its say in relations between Russia and the EU. In this context, the visit served as a confirmation of the two parties’ intentions but did not produce any practical solutions to problems of mutual concern.

Bilateral political dialogue: dreams and reality

Improving relations with Russia is a separate clause of the “government contract” concluded between the two parties that form the governing coalition in Italy. This is the first time that such an agenda is set at such a high level. Generally speaking, this is evidence of the consistency of Italian foreign policy which was formed in the post-war years,the purpose of which is to fulfill the role of a “bridge” between the North and the South, the West and the East. Perhaps, the historical peak of this strategy occurred when Italy carried out active mediation to establish the Russia-NATO Council in 2002. Nevertheless, the Italian foreign policy is still following this strategy.

According to experts, the status of “privileged partnership”, which was repeatedly voiced at the level of heads of state and by official representatives of Russia and Italy, does not match the real level of relations. A more realistic description of relations between Russia and Italy is “the best among the worst” compared to other partners in the EU, or a pragmatic cooperation that is still a problem to implement at the European level. This time, the leaders of the two states, speaking of existing relations, used such epithets as “excellent”, “constructive” and “businesslike”, and several times addressed each other using the word “friends”.

Meanwhile, we can be confident that a political dialogue between Russia and Italy is gradually regaining strength after the crisis of 2014–2015, particularly following the arrival of the yellow-green coalition in Italy. In October 2018, the Italian Prime Minister Giuseppe Conte visited Moscow. On the eve of his visit, Deputy Prime Minister and leader of the League Party, Matteo Salvini, arrived in Moscow too to meet with representatives of Italian businesses working in Russia. In 2019, Vladimir Putin and Giuseppe Conte met at the “One Belt – One Road” forum, and also at the G20 summit in Osaka. Bilateral contacts are gradually being restored between the defense and interior ministries, consultations are under way on international information security, and an inter-parliamentary dialogue is back on track too.

Even though Moscow highly values Russian-Italian relations, Russian leaders regularly emphasize that Italy could do more in the EU to improve relations with Russia. In a report on Russian-Italian relations, which was recently released by the Russian International Affairs Committee of the Federation Council, Italy is systematically criticized for following the general course of the Euro-Atlantic partnership, be it NATO’s bombings in Yugoslavia in 1999, the U.S. operation and coalition in Iraq in 2003, the bombing of Libya in 2011, or the adoption of anti-Russian resolutions on Crimea. In all these cases, the report says, Italy, even though it is not completely in agreement with the United States and other European leaders, did not come out actively against them. Similarly, in 2015, Italy did not protest against the lowering of the status of Russia-EU relations, which had previously been known as a “strategic partnership”. In addition, Italy, whose political leaders often publicly speak in favor of the lifting of sanctions, has never used its right of veto when voting in the EU to extend sanctions.

In particular, Russia points out that, having burned its fingers on the situation in Libya in 2011 and still paying for hasty decisions back then, Italy has been acting more carefully in Middle Eastern conflicts. It refused to participate in ground operations in Syria. Instead, it opted for providing humanitarian and logistical support. In Libya, Rome is actively trying to establish a dialogue between key warring parties, including with the help of Russia. In November 2018, Italy invited Russia to a conference on Libya in Naples, hoping to win the support of the Russian leadership, who at that time had better negotiating positions with Marshal Haftar than their Italian counterparts. On the issue of refugees, the Italian leadership took a number of independent measures and decisions to restrict migrants’ access to the territory of Italy (“porti chiusi”, or closed ports), and adopted a security law changing the rules for granting refugee status. This triggered criticism not only in Brussels, but also in the UN. Italy refused to recognize self-proclaimed Juan Guaido as the new president of Venezuela, thereby making it difficult for the EU to strike a common approach on this issue. On March 23, 2019, during Xi Jinping’s visit, Italy and the People’s Republic of China signed a memorandum of cooperation within the One Belt One Road Initiative, despite the numerous warnings against the move from Brussels. Such “independence” of the Italian leadership in foreign policy shows that Italy is at the epicenter of the conflict of national and supranational sovereignty in the EU, articulating this conflict as clearly and consistently as possible.

Italy-EU-Russia: not a love triangle

Such independence on the part of Italian leadership and their desire to assume some of the decision-making has triggered controversy domestically in Italy. On the one hand, these moves contribute to the status of Italy, both within the EU and on the international scene. On the other hand, some Italian experts say there is the risk of the country becoming isolated within the EU. Brussels, Paris and Berlin tend to view Rome’s moves in a negative way – as detrimental to European solidarity and hindering the development of further supranational integration.

The EU systematically criticizes Russia for prioritizing bilateral relations above dialogue with Brussels. As for Italy, the situation is aggravated by the fact that, from the point of view of Brussels, the “anti-system” forces have developed a special liking for the Russian leader, while Russia, in turn, uses them as agents of influence in the EU. In February 2019 the leader of the “League” Matteo Salvini was reported to have received 3 million euros from the Kremlin for running the election campaign in the European Parliament. Therefore, on the eve of his visit, Vladimir Putin said in an interview with Italian news agency Corriere della Sera that Russia is ready for dialogue with any political forces that come to power by legitimate means, “regardless of their political affiliations.” However, after Vladimir Putin’s interview with The Financial Times, one cannot but notice that the Russian president’s criticism of liberalism, being addressed, above all, to U.S. president Donald Trump, echoes the rhetoric of the Italian “government of change”. Both in matters of migration management and in terms of governments’ ability to respond to people’s needs, the views of the Russian and Italian leadership are fairly close. In this context, Vladimir Putin’s visit to Italy should certainly be considered not only as a bilateral dialogue, but also as an attempt to get across to leaders of the Western world the need to establish a dialogue with those political forces that express a different point of view on further socio-political and economic development in Europe and the United States.

The recent developments in the EU show, however, that the political mainstream is not prepared to heed alternative political groups. After the May 26, 2019 elections, Matteo Salvini, together with representatives of the “sovereignists” of Poland, France and a number of other countries, succeeded in building the largest coalition of “populists” in the entire history of the European Parliament – 73 deputies. This, however, did not provide them with enough say to affect the choice of candidates for key posts in the EU. The results of the EU summit on July 2, 2019, in which appointments to senior positions were made, testifies to Rome losing its influence in the EU. Unlike before, when representatives of Italy had occupied three key posts in the EU (Antonio Tajani – President of the European Parliament, Mario Draghi – Chairman of the ECB, Federica Mogherini – High Representative of the European Union for Foreign Affairs and Security Policy), now only one Italian – a representative of the opposition Democratic Party Divid Sassol – is part of the EU top management, having been given the position of President of the European Parliament. This yet again demonstrates that Paris, Berlin and Brussels are not ready for a serious dialogue with representatives of the yellow-green coalition of “sovereignists” and continue to rely on center-leftists.

In addition, the appointment of Ursula von der Leyen, German Minister of Defense with extensive experience in foreign policy and defense, as President of the European Commission is likely to lead to attempts at greater EU integration in the sphere of foreign policy, which may narrow the window of opportunity for more independent foreign policy initiatives of EU countries, including Italy.

What also restricts Italy in its efforts is the looming threat of EU sanctions for breaching fiscal discipline and exceeding the budget deficit. After the EU summit on June 2, Giuseppe Conte said that he had reached an agreement that sanctions would not be applied if Italy cut down the previously planned budget expenditures. However, the threat of sanctions is still there, and this is likely to be one of the most effective instruments of influence from Brussels on the country’s position on many issues, including relations with Russia. Any harsh statements during the visit of Vladimir Putin or any so-called “big deals” would certainly cause even more irritation in Brussels, which means they could lead to a tougher policy towards Italy. Therefore, Vladimir Putin’s visit was, of course, an important confirmation of Italy’s proactive foreign policy but was not a breakthrough, since Italy is connected with the EU not only by the historical bonds of Euro-Atlantic solidarity, but also by tangible economic mechanisms that allow the EU to impose sanctions against the Italian economy.

The economy depends on politics

The economic dialogue between Russia and Italy does not correspond to the declared high level of bilateral relations. In 2017, after a three-year decline (from 2014 to 2016), bilateral trade regained momentum but is still far from the pre-crisis level ($ 27 billion in 2018 against 54 billion in 2013). Russia maintains a clear lead in Italian exports, being the fifth among top importers. The Italian presence is felt in almost all sectors of the Russian economy. About 500 Italian companies operate in Russia, which, however, holds no candle to Germany (4.7 thousand). Even though about 100 Russian-Italian joint ventures were set up during the period of sanctions as part of a program to move Italian production to Russia (“made with Italy”), this figure does not yet correspond to the existing potential. As for an economic dialogue, Italy is considerably behind Germany and France. While in Germany and France there have been functioning “Petersburg Dialogue” and “Trianon Dialogue” respectively, and the Sochi Dialogue has recently been launched with Austria, the Russian-Italian economic dialogue has yet to acquire an appropriate status. The Council for Economic, Industrial, Monetary and Financial Cooperation, which last gathered in Rome in December 2018, is still little known to both countries’ general public. The “Russian-Italian Forum-Dialogue on Civil Society”, which Vladimir Putin and Guiseppe Conte attended in course of the visit, has not received support from the Italian authorities since 2014. Only now is it approaching a new level of development. In addition, during the visit, the two parties agreed that the Russian Export Center and Vnesheconombank (VEB) would set up a bureau to support Russian exporters in Italy. Thus, the economic dialogue, which for a long time needed a new impetus, has finally received it following Vladimir Putin’s visit to Rome. It is worth noting that the Italian leadership is acutely concerned about competition with Germany and France in two vast markets – Russia and China.

Russia, however, is waiting for more decisive steps from Italy to secure the lifting of the sanctions. However, according to Pasquale Terraciano, Ambassador Extraordinary and Plenipotentiary of the Italian Republic to Russia, “Italy has never considered sanctions a smart decision, but Italy is part of the Western bloc and cannot stand against it alone.”[1]. Italy’s agenda, he said, is to change the EU’s opinion through the use of consistent steps. At the same time, as a practical measure aimed at expanding economic cooperation, Italy proposes to unfreeze the funding of small and medium-sized enterprises at the level of the EBRD and the European Investment Bank. As he addressed a press conference after the meeting, Giuseppe Conte pointed out that Italy is ready to assume the role of a consistent promoter of the idea of ​​lifting the sanctions but the conditions for this lifting had to be “ripe”.

Energy is a major area of ​​cooperation between Italy and Russia. Russia is the fourth most important supplier of oil and the first of natural gas to Italy. Supplies from Moscow account for more than 40% of the total gas consumption. However, as Italian experts remark, Italy expects an increase in prices in connection with the construction of the Nordstream 2 gas pipeline, which will make Germany the number one transit country for Russian gas in Europe, bypassing Ukraine. Therefore, negotiations on the development of southern transportation routes are more than relevant for Italy. The meeting, however, yielded no breakthroughs on this issue either.

Regional cooperation: identifying problems, lack of solutions

Italy, just like Russia, sees a great potential for dialogue not only on issues related to bilateral cooperation, but also on those of the regional and global agenda. The priority for Italy is the Mediterranean, which produces the greatest number of challenges and threats to the country’s national security. Simultaneously, Italy is fully aware of the fact that the country will not be able to cope with these challenges alone, although it is taking independent measures, in particular, in matters of migration. Quite recently, Matteo Salvini held talks with the Libyan leadership in Tripoli to curtail illegal migration. However, Rome knows only too well that the solution to the problem lies not so much in reaching agreements with specific countries as in assisting the development of countries the migrants come from and in settling regional conflicts. Italy greatly appreciates the role of Russia as a non-regional player whose influence has increased significantly in recent years. During a press conference following the elections, Vladimir Putin, however, said that Russia is not ready to plunge head-on into resolving the Libyan crisis, and that forces that destroyed Libya’s statehood during the armed operation in 2011 should be involved;that is, NATO and the EU coalition. In solidarity with the Russian president, the Italian Prime Minister emphasized that Italy had warned from the very beginning that a military solution would not lead to peace. Under current conditions, the parties have indicated their readiness to participate in fostering a dialogue between all political forces in Libya.

As for Ukraine, Italy’s official position should be in line with the EU policy providing for no new opportunities to change the situation. In an interview before Vladimir Putin’s visit to Italy, Giuseppe Conte directly linked the issue of lifting of the sanctions with the observance of the Minsk agreements, implicitly suggesting that Russia is a party to the conflict and urging both sides to demonstrate more understanding. In an interview with Corriere della Sera, and during a press conference following the meeting, President Putin reiterated that the new leadership of Ukraine should fulfill its election promises and enter a direct dialogue with representatives of the Donetsk People’s Republic and Lugansk People’s Republic. Guiseppe Conte repeatedly pointed out that, although Italy is not part of the Normandy format (a negotiation apparatus designed to resolve the Ukrainian conflict), it is nevertheless ready to play a role in resolving the conflict if necessary, which once again confirms the country’s willingness to play a greater role on the international scene.

The Russian president and the Italian prime minister also hold similar views on the situation in Venezuela, expressing concerns over foreign interference, which in their opinions will only aggravate the situation inside the country.

On the whole, it is essential to emphasize that Vladimir Putin’s visit to Italy did not bring any breakthroughs, either in bilateral relations or in formulating common positions on issues of regional and global concern. Although the parties demonstrated identical views on the causes and nature of some of the issues on the international agenda, they proved unprepared to suggest concrete practical solutions. For Italy, the meeting provided yet another opportunity to identify its own national interests in promoting relations with Russia and to demonstrate its readiness to act as a “bridge” in the development of a dialogue between Russia and the Euro-Atlantic bloc. At the same time, it has revealed limitations in Italian foreign policy, linked to the economic situation in the country and the weak positions of the current leadership in the renewed European institutions.

1. Speech by the Ambassador Extraordinary and Plenipotentiary of the Italian Republic to the Russian Federation Pasquale Terracciano at the conference, at the Institute of Europe RAS, June 19, 2019

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PhD in Political Science, RIAC Program Manager, Research Fellow at Centre for Global Problems Studies, MGIMO-University

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Russia and Japan: Inseparable Partners

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By all accounts, Japan with its strong economy and many high-quality manufactured brands is practically searching to expand into foreign markets. Japan, with an estimated population of 126 million, has a small territory. According to UN’s assessment report on global population in 2019, Japan was the world’s tenth-most populous country. That compared with Russia, its vast territory and approximately 145 million, Japan’s investment is fast growing in the Russian Federation.

Despite its large investment and admirable brands from automobiles through mega-shops to healthcare and beauty, and to social service sector, Japan is consistently looking to expand its business tentacles. Without doubt, at the St. Petersburg International Economic Forum held under the theme: “Together Again – Economy of New Reality” early June, Russia-Japan business session attracted unprecedented large number of participants.

While noting the fact that the coronavirus pandemic did not and will not hinder economic cooperation between Russia and Japan, Minister of Economic Development of the Russian Federation Maxim Reshetnikov, noted in his speech at the session, further reviewed some significant aspects of the Russia-Japanese economic cooperation, and finally painted the broad outlook for the future.

“Despite a difficult year, we managed not only to continue existing projects but were even able to launch new ones. An express test for coronavirus was created, and a container train with Japanese goods was launched for the first time on the Trans-Siberian Railway. Construction began on a centre for preventive medicine in Khabarovsk. The Japanese company Fanuc opened an engineering centre in Skolkovo,” he told the gathering.

According to Maxim Reshetnikov, the plans for cooperation with Japan include the creation of liquefied natural gas trans-shipment complexes in Kamchatka and Murmansk region and the construction of an ion therapy centre for cancer treatment in Obninsk. Both countries are preparing to enter new and promising tracks in hydrogen energy, climate change, the creative economy, and e-commerce.

That however, Russia has encouraged potential foreign investors to venture into the regions. For example, Kaluga, which is provincial city and stands on the famous Oka river about 150 kilometers southwest of Moscow, has adopted few favourable measures, among others, and as a result has attracted five foreign automobile manufacturing companies including Japanese Nissan.

Governor of the Kaluga Region Vladislav Shapshа took part in the discussion. “Japan has been and remains our most reliable partner, a partner in a variety of areas. In terms of investments, this of course includes, the development of projects with Mitsubishi and Toyota Tsusho. Mitsubishi has placed its headquarters in Kaluga this year, and together with Peugeot Citroën has been working with us since 2009. Along with Volkswagen and Volvo, it makes up the core of the automotive cluster, which accounts for 12% of the automobiles produced in the country today,” Governor Shapshа said, giving a full business profile in his region.

The Autonomous Republic of Tatarstan also attracts foreign investors and business people. As part of the Volga federal district, its capital and largest city is Kazan, one of the most important cultural cities in the Russian Federation. “We operate a wonderful plant built in Tatarstan by Mitsubishi and Sojitz. I must say that Japanese equipment has proved its reliability. We are very pleased with this plant. Its capacity is 720 thousand tonnes of ammonia and methanol. We are grateful for this contribution,” Founder and Chairman of the Board of Directors of the AEON Corporation, Roman Trotsenko.

Japanese manufacturing stories are exceptionally useful and needed to be shared among business leaders. In his contribution, General Director of Sollers Group Vadim Shvetsov told the attentive gathering: “We launched a machine shop for Mazda engine parts. It was a very difficult at first, given that cooperation was interrupted, and we could not communicate directly. On the other hand, however, we have introduced a lot of interesting digital communication methods. Thanks to such mobile cooperation and even VR technologies, we still managed to launch production.”

The new environment has pushed the countries to seek new resolutions to overcome challenges. “The coronavirus pandemic has forced us into many challenges. At the same time, it has highlighted, illuminated in a new way some of the problems that we had seen and been aware of even before the epidemic. These are the problems of healthcare, energy, and digitalization. It seems to me that now is the moment for us to start new cooperation in these areas, especially in healthcare,” emphasized the Minister of Economy, Trade and Industry of Japan Hiroshi Kajiyama.

“Our trade and economic work together probably suffered a little from that period of forced isolation. Nevertheless, I certainly believe that the crisis is pushing us to search for new ways to create benefits for our consumers,” remarked Chairman of Delovaya Rossiya (Business Russia) and Chairman of the Board of the Group R-Pharm Alexey Repik.

The speakers have acknowledged that Russia and Japan face similar environmental challenges while developing economic cooperation. “Amid the growing trend of decarbonization, in October of last year, Japanese Prime Minister Yoshihide Suga announced a goal aimed at achieving carbon neutrality by 2050. Moreover, the goal is to reduce 2013 levels of greenhouse gas emissions by 46% by 2030. Achieving these targets will require that Japanese industry be heavily involved and adaptable,” according to President of the Japan Association for Trade with Russia, and Special Advisor of Kawasaki Heavy Industries, Ltd. Shigeru Murayama.

Chairman of Delovaya Rossiya (Business Russia) and Chairman of the Board of the Group R-Pharm, Alexey Repik, reminded that it is of great significance that President Vladimir Putin in his address to the Federal Assembly set the task of significantly limiting the accumulated volume of carbon emissions in our country just as similar goals were set by the Prime Minister of Japan, Yoshihide Suga, for the Japanese economy.

For the Minister of Economy, Trade and Industry of Japan Hiroshi Kajiyama, natural gas, which can reduce carbon emissions, is a very important resource, and Russia is a leader. Thus the unification of these Russian resources and the Asian market could be highly promising area for cooperation.

Russian business needs to attract investment. “The demand for equipment and the demand for capital both remain in Russia. Russia’s capitalism, in the positive sense of the word, is young and there is little national capital in the country. Interest rates on loans remain very high, and the requirements of the national bank, the Central Bank of the Russian Federation, to credit policy remain stringent,” observes Founder and Chairman of the Board of Directors of the AEON Corporation Roman Trotsenko.

“There are forecasts that the Russian economy will resume growth this year and ultimately grow by more than 3%. Japan also aims to recover as soon as possible from pandemic-related failure. For this, of course, the primary and first step to build a healthy and sustainable post-covid society across the globe, will be to work together with Russian partners on the basis of the eight-point plan,” Director of Mitsui and Co. Ltd., Masami Iijima, informed the gathering.

Avoiding sanction-related restrictions is a key for business. “The challenge is to move the financing relationship between Japan and Russia outside of these sanctions. For example, financing in euros or in yen. This would be very positive and would allow us to take advantage of the cheap rates on loans in Japan and in Russia,” Founder and Chairman of the Board of Directors of the AEON Corporation Roman Trotsenko.

Healthcare and energy partnership also remain significant for both and, need not be overlooked. “New areas are emerging. For us it is hydrogen and ammonia; it is the capture and storage of carbon, carbon dioxide, and its use as a resource. Here, it seems to me, we must increase our work together,” according the Minister of Economy, Trade and Industry of Japan Hiroshi Kajiyama.

“The health sector is the first item in the eight-point economic cooperation plan. I think that our countries should increase cooperation in this area,” added the President of the Japan Association for Trade with Russia and Special Advisor of Kawasaki Heavy Industries, Ltd. Shigeru Murayama.

“We believe that Japan can help achieve the goal of increasing healthy life expectancy set by the government of the Russian Federation,” suggested Chairman of the Japan-Russian Committee for Economic Cooperation and the Federation of Economic Organisations Keidanren and Chairman of the Board of Directors of the Marubeni Corporation Fumiya Kokubu.

Ahead of St Petersburg forum, Japanese Ambassador in the Russian Federation, Toyohisa Kozuki gave an interview to Interfax News Agency, listed a wide-range of concrete and significant projects as part of efforts toward strengthening Russian-Japanese economic cooperation. According to the ambassador, widening economic cooperation between Japan and Russia is primarily part of the current eight-point strategic cooperation plan.

Within this plan, the Okura Hotel project in Vladivostok is an example of progress in urban development in 2020. This will be the first Japanese hotel in Russia. The Okura Hotel’s refined services will make Vladivostok more comfortable and accessible not only to its residents but also businessmen and tourists visiting this international city. Vladivostok catches the attention of the Japanese as the nearest ‘European’ city, it can be reached from Tokyo by air in 2.5 hours. That is why the opening of the Hotel Okura Vladivostok will definitely make the city more attractive to Japanese tourists.

As part of cooperation, Japan is also making an effort to develop postal services in Russia, and some results in this sphere have already been reached, the efficiency of postal deliveries was increased thanks to the use of Japanese-made sorting machines at international postal exchange centers in Moscow. Cooperation between postal services of both countries is growing stronger also through the exploration of e-commerce opportunities on both sides. In the future, it is anticipated that a system will be in place, thanks to which Japanese consumers can order Russian goods online and the EMS postal service will deliver them to Japan.

In December 2020, Japanese entertainment center Round One, which brings together arcade games, bowling and other amusements, opened at the Yevropeisky shopping mall in Moscow. Round One is the most popular closed amusement parks chain in Japan. The new venue is a unique leisure venue for Moscow residents, in the sense, that they can get acquainted with Japanese culture without leaving their native city.

There is progress in promoting the use of the Trans-Siberian Railway as far as cooperation in the Far East, primarily in transport and infrastructure, is concerned. In particular, the Ministry of Land, Infrastructure, Transport and Tourism of Japan in cooperation with the Russian Railways is implementing a pilot project to promote the use of the Trans-Siberian Railway.

The first container train carrying cargo from Japan to Europe was dispatched in 2020. And those were not individual containers as before but a whole container train. This was done in the expectation that it will make it possible to ship freight more cost effectively compared to container transportation, and many Japanese companies showed an interest and took part in the pilot project.

The companies that participated in the pilot project said that against the backdrop of destabilized logistics between Japan and Europe amid the coronavirus pandemic, the use of the Trans-Siberian Railway can be seen as a third option in addition to sea and air transport.

As an example of such expectations, Ambassador Toyohisa Kozuki informed that Japan’s logistics company Toyo Trans started regular container shipping services with consolidated freight to Europe, to the Polish city of Poznan, along the Trans-Siberian Railway in February. This service provides for regular shipments every Thursday from a Japanese port. The cargo reaches Poznan in 22 days. Transit time decreases by about half compared to sea routes. We hope that the transit along the Trans-Siberian Railway will give a boost to logistics between Japan, Russia and Europe and lead to the further development of economic cooperation.

Next, regarding agriculture, forestry and fisheries, the relevant agencies of Japan and Russia in January 2020 signed a memorandum of cooperation on a joint Japanese-Russian project to increase the efficiency of agriculture and fish production in Russia’s Far East. Current projects are now getting support, and the search is on for new projects in three areas that provide for the use of technologies and know-how of Japanese private companies.

These include, firstly, increasing the productivity and export potential of soya, corn and other crops; secondly, expanding production of vegetables through expanding vegetable greenhouses in Yakutsk and other cities; and thirdly, increasing production and deliveries of fish and seafood inside and outside Russia. Greenhouse vegetable growing in Yakutsk is a particularly large project in this sphere. Greenhouses allowing fresh vegetables to be grown all year long in severe climates and permafrost have been built in the framework of this project. Construction began in 2016, it continued in 2020, and should be completed this year, 2021.

Due to the coronavirus pandemic, the forum this year was held, a combination of off-line and online format, with all epidemiological precautions observed. The Saint Petersburg International Economic Forum (SPIEF), often dubbed the Russian Davos, is the country’s main showcase for investors, attracting political and business leaders from around the world. The SPIEF is held annually, and since 2006 it has been held under the patronage and with the participation of the President of the Russian Federation.

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Putin and Biden meeting – a chance for a better world

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The whole world is looking forward to the meeting of the new US President Joe Biden with his Russian counterpart, Vladimir Putin. Although the Kremlin and the White House urge people not to expect too much from the June 16 summit, one still wants to believe that a personal meeting by the leaders of the two rival powers will lead to a thaw in bilateral relations and help defuse global tensions. At the same time, statements coming from the White House about negotiation plans sound rather vague. The bottom line is about “understanding Russia’s position and its aspirations.” The impression is that hundreds of Russologists working for the State Department, NSA, CIA and other agencies are unable to provide a definitive answer to this question, and the not very young 46th President of the United States has been forced to personally go for information. Moscow makes it clear that negotiations are a good thing, but the initiative comes from the United States, so the agenda will largely be agreed right on the spot.

At the same time, there are a number of key topics that the leaders of the two countries simply can’t ignore. Of course, there will be questions about human rights that Biden wants to ask Putin so badly, but the Russian leader too may want to ask about certain “inconvenient” things. First of all, about the United States participation in conflicts in the Middle East, where the “liberation movements,” indirectly supported by  Washington continue to attack Russian and Syrian government forces. In fact, the parts of Syria and Iraq controlled by the Americans and their allies have become areas where there is no effective conflict against terrorists. The militants from that area are killing people in Germany and France, and spreading the ideas of extremism and radical Islam throughout Europe.

The United States has every right to defend its interests in the oil-producing regions, but such methods are hardly acceptable. The Kremlin apparently has obtained enough evidence of the “dirty methods” of warfare practiced by the United States in the Middle East. The spare parts for the numerous drones shot down over the Khmeimim airbase alone prove beyond any doubt the American involvement in organizing aerial attacks on the Russian military. However, a dialogue between Russia and the United States could quickly extinguish the flames of war in Syria and, more importantly, help ensure Europe’s security against terrorist attacks. So, Putin has a very important trump card up his sleeve, which he can’t fail to play. The only question is how Biden will react to this win-win move by Moscow.

As to the question about human rights, it may prove rather unpleasant for Biden. During preparations for the summit, the Swiss government pointedly indicated (apparently at the suggestion of the White House) that the vaccine race continues. Geneva is ready to accredit, without PCR tests, journalists who have been vaccinated with Western vaccines, but not with Sputnik, which has already proven its effectiveness. Needless to say, the Russian negotiators also used their own country’s vaccine. However, such a move, designed to show once again who is the “boss” in the upcoming meeting, only reflects a complete disregard for the European`s right to vaccination, and this is only the beginning. And the demonstrative support and financing of the Russian opposition – hardly gives Biden any reason for accusing Russia of human rights violations.

Even the case of the Belarusian oppositionist Protasevich, who was taken from  the plane which grounded in Minsk due to a terrorist threat immediately brings to mind the “arrest“ of the plane of Bolivian leader Morales, or the US-approved extrajudicial detention of Russian sociologist Shugalei in Libya. In addition, the long history of the Guantanamo detention center hardly gives US officials any moral grounds to lecture anyone about human rights.

If, during the Geneva summit the United States and Russia can heal the festering wound of the Middle East conflict, this would be a giant step forward in the war on terror. The question is whether Biden will try to turn the dialogue with Putin into a series of accusations to increase his approval rating back home. A similar incident has already taken place and made the 46th President of the United States to look not so good. That being said, we can hope that in Geneva Joe Biden will lean back on his many years of experience and good knowledge of Russia, and emotions will not prevent him from achieving a breakthrough in relations with Moscow and mending bilateral ties, thus easing tensions in Europe and allaying peoples fear of a new global conflict.

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Russia, Europe Discuss Prospects for Cooperation at SPIEF’21

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Despite the deep-seated disagreements between Russia and the European Union, Kremlin is indiscriminately courting European business leaders. Ahead of the 24th St. Petersburg International Economic Forum [SPIEF’21] on June 2-5, President Vladimir Putin, in an official message, emphasized Moscow would forge a closer economic cooperation with its foreign partners and ready to share experience in various areas and further called for building constructive partnerships between members of the global community and expand business ties to effectively tackle the current critical global challenges and achieve sustainable development.

“We are ready to share our experience in areas such as healthcare and digitalization, and to work with partners to build better telecommunications, energy, and transport infrastructure. We also recognize the importance of addressing key issues facing the environment and climate,” according to the president’s message released on the official website.

Later at the plenary session held under the theme A Collective Reckoning of the New Global Economic Reality, Putin said, particularly about energy connectivity between Russia and Europe – “that Gazprom is ready to fill Nord Stream 2 with gas. This route will create direct links between the Russian and German systems and will ensure energy security and reliable gas supplies for the Europeans, like Nord Stream 1” and, in addition, emphasized readiness to implement similar high-tech projects with European and other partners in the future, despite all sorts of artificial barriers in the current political environment.

That, however, during the business discussion exclusively devoted to Russia-Europe, leaders of European business noted that strategies are needed for the improvement of relations between Russia and the European Union, and the necessity to develop a consolidated response to global challenges.

“In 2020, Russia faced four challenges. First, the pandemic, second, the collapse of oil prices, third, the devaluation of the Russian local currency the rouble, and the fourth, which is an ongoing challenge, the geopolitical context that does not make things easier. At the same time, Russia demonstrated good economic indicators. The global challenges are so disruptive that we need to come up with a joint approach and cooperate in fighting the pandemic,” according to objective views of Johan Vanderplaetse, Chairman of the Association of European Businesses (AEB) and President for Russia and the CIS, Schneider Electric.

Taking his turn during the discussions, Maksim Reshetnikov, Minister of Economic Development of the Russian Federation explained that the ultimate goal is to combat greenhouse gas emissions. In this context, technological neutrality, mutual recognition, and implementation of projects aimed to reduce carbon dioxide emissions are crucial. Building these mechanisms is a subject for strong international discussion, and there are high hopes for the climate conference in Glasgow this November.

Development of 5G networks can become a new touch point for Russia and Europe. But, no country, and no government can cope with all the tasks on their own. For example, 5G requires joint efforts, so European Union and Russia must work together to deploy this technology. Now both need to work together on 5G technologies in Russia and in Europe, suggested Arun Bansal, Executive Vice-president, Head of Market Area Europe and Latin America, Ericsson.

“Russia has amazing technological capabilities, and there are great companies. If we compare them with Western companies, if we join forces [connecting to 5G], we will all benefit from this,” added Johan Vanderplaetse, Chairman, Association of European Businesses.

During the discussions, the participants acknowledged that existing problems, especially the need to achieve international agreements. “We are now probably at the most difficult point in the development of our relations since the end of the Cold War. I think both sides value our relationship. Why are we at this negative point in our development? Of course, there are territorial and geopolitical issues, issues of human rights violations. I believe that all these problems contributed to the suspension of our political dialogue, which is now affected by uncertainty. In this atmosphere it is difficult to go back to the normalization of these relations,” according to Markus Ederer, Ambassador of the European Union to the Russian Federation.

Vladimir Chizhov, Ambassador Extraordinary and Plenipotentiary, Permanent Representative of the Russian Federation to the European Union (EU) explained that most of the effective formats available for the members of the European Union and the Russian Federation for interaction are currently on hold. On the other hand, Russia has not closed a single door neither has it imposed restrictions for Europe. All suspensions were initiated by the European Union.

Some believe that there should be solutions, suggested expanding the list of green projects and finding a compromise between government and business. “We categorized nuclear energy as a green project, and this was a crucial decision. We believe that, based on the criterion of greenhouse gas emissions, based on the principles of technological neutrality, nuclear power should be seen as clean energy. And secondly, we have developed a number of transitional projects that may not meet some highest standards, but for many industries in our country this is a big step forward,” says Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.

For Markus Ederer, Ambassador of the European Union to the Russian Federation, it is necessary to use the opportunity to strengthen relationship in the context of green transformation and creation of green economy, as it will be a new field for cooperation that is of high interest for representatives of European business community. The more policy becomes oriented towards the development of a green economy, the more seriously moving towards stabilizing relations between Russia and Europe.

Regional experiments that allow to introduce a system of emission quotas in the regions. “We are working on a soft regulatory framework that will allow us to implement climate projects, take into account the carbon footprint of products that will make our entire system more transparent, while at the same time we are launching a system of more stringent regulation based on regional experiments. Many countries have followed this path. We are currently in the final stage of the Sakhalin experiment, which will enable individual regions, at their will and in agreement with the business, to declare the goal of carbon neutrality and introduce a system of emission quotas with the trading system, and so on,” stressed Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.

“We need to focus on reducing carbon emissions and strengthening other areas. The Sakhalin project is also a great example of enhancing our cooperation, including in the future. These are efforts that we should focus on, excluding the political context. We must work on issues of compliance with the obligations of WTO member countries. The obligations of all WTO members must correspond,” concluded Markus Ederer, Ambassador of the European Union to the Russian Federation.

The St. Petersburg International Economic Forum, popularly referred to as SPIEF, brings together international business leaders, government officials and representatives of expert and media communities to discuss various topics and jointly search for effective solutions to the most pressing challenges in Russian and global economies. The SPIEF is held annually, and since 2006 it has been held under the patronage and with the participation of the President of the Russian Federation.

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