"How The World Sees Russia" Issue #12: 16/06/2018 From the Publisher: Is Russia making more inroads into Africa? Is the 2018 World Cup likely to lead to real economic growth for Russia? Is oil peaking? These are just some of the questions that we will be taking a look in this week’s issue. Russia is making more inroads in Africa. They have traditionally held considerable amount of influence in Northern Africa, particularly as a military supplier to countries like Algeria, or as a political ally of fellow petro-states. Russia is now looking south though and is establishing itself in the Great Lakes region of Africa. In Issue #10, we looked at how they had successfully penetrated the quagmire that is currently the Central African Republic. This week, we discuss Russian involvement in Rwanda and gage the effectiveness of it. The 2018 World Cup has officially started, and Russia is doing its best to harness good publicity as the host. Sports tournaments of this size rarely result in long term economic gain, so we take a gander at what Russia is gaining politically from it. Finally, we take a quick look at Russia’s playbook regarding North Korea, the G7 and the price of oil. -Rossiya Scan Rwanda…New African Outpost? On Issue #10 of Rossiya Scan we touched upon Russia’s growing presence in the warn-torn Central African Republic (CAF). A presence that is being felt positively by the weak Bangui-based government that has yet to gain full control of its landlocked country. However, the CAF is not the only country that Russia appears to be courting or operating in with a certain degree of influence. This past week Paul Kagame, the president of the also landlocked country of Rwanda, met with Russian President Vladimir Putin on a visit to Moscow. During this quiet visit, both leaders stated the intention of strengthening defense, tourism, agricultural and education. This meeting was a culmination of sorts, as Russian Foreign Minister Sergey Lavrov had already visited Rwanda two weeks ago to lay the groundwork for this meeting. “We are looking forward to having the private sector work in Rwanda,” said Kagame in a public exchange with Putin in Moscow, according to the Kremlin. “I look forward to hosting some of them from Russia to see the areas in which we could do investment and business.” Among the most obvious of business deals between both countries are those relating to defense. For example, Russia is currently supplying the Rwandan military with various types of military equipment. Including, small arms, land-based vehicles and helicopters. They are also currently in talks about Rwanda potentially being supplied with a Russian-made air defense system. Rwanda is a very different country from CAF. For starters, Kagame has complete control over his country’s territory, where he has effectively led since obtaining power after commanding the rebels that ended the genocide against Rwandan Tutsis. Kagame is a powerful figure in Rwanda, and has been accused of being a dictator. However, Kagame remains popular due to the Rwanda’s constant economic growth, as well as political stability. Traits that have made it somewhat of a bright spot in Africa. That being said, Rwanda is still a developing country, and in order for continued growth it needs private investment from abroad. It is through this that Russia has penetrated this small African country. Recently, the Kagame government been increasingly looking towards Russia for foreign investment opportunities, as well as trade. Mostly because Rwanda's relationship with the United States has become somewhat icy. In March, U.S President Donald Trump’s administration told Rwanda that it was going to lose some of the benefits it had under the African Growth and Opportunity Act (AGO). The latter is an agreement that allows a select group of African countries to export several products to the United States without duty fees. Rwanda’s decision to impose tariffs on second hand clothes, in an effort to support its domestic garment industry, was the reason for this loss of privileges. The U.S is a major supplier of these second-hand clothes. Kagame, like an increasing number of African leaders, appears to be distancing himself from a “demanding West”. Russia is playing the role of being the more accommodating partner. This is again pushing the West away from Africa, specifically in the Great Lakes Region. An area, that had traditionally been considered a sphere of influence of the U.S. Now it’s a place where the U.S and its allies are losing power, as they are increasingly deemed to be an un-flexible partner. Read more: "Rwanda courts Russia and China as ties with America deteriorate," by Edmund Kagire and Fred Olouch for The East African. "Kagame, Putin meet in Russia," by Athan Tashobya for The New Times. "Trump versus Rwanda in trade battle over used clothes," by Clement Uwiringiyimana and Joe Bavier for Reuters. The Meeting with North Korea... Russian President Vladimir Putin is taking credit for calling it right. What exactly did he call? That a meeting with North Korea and the United States would deescalate tensions. “Such meetings help ease tensions and move us away from the critical point reached several months ago,” said Dmitry Peskov, spokesperson for the Kremlin. Russia had long been insisting for a joint plan for deescalation between the warring parties. One that would that would require Pyongyang to adjourn its ballistic missile program, in conjunction with the conclusion of all U.S and South Korean missile drills. This past week, Kim Yong Nam, the President of the Supreme People’s Korean Assembly, who is commonly referred to as the “nominal head of state”, visited Russia. This is probably a sign that Russia does not want to be caught in the sidelines when it comes to such a high-profile affair, but also when it relates to a country that it shares a border with. As far as our own analysis, we agree that talking is the best approach to lessen tensions. Lack of communication between two opposing countries with nuclear weapons is not a good idea. That being said, this past week’s meeting between U.S. President Donald Trump and North Korean leader Jim Jong-Un in Singapore has yet to yield any results other than a lot of chatter, and slightly ridiculous photo ops. Read more: "Russia Welcomes Trump-Kim Summit; North Korean Official To Meet Putin," by Radio Free Europe. " Kremlin: Putin was right to advocate for dialogue with North Korea" by Reuters. The World Cup: Economics < Politics How much can the World Cup boost the Russian economy? The answer is not much. “Russia will only experience a short-lived economic benefit from hosting the 2018 FIFA World Cup tournament," wrote Moody's Investor Service in a recent report. "Much of the economic impact has already been felt through infrastructure spending, and even there the impact has been limited. World Cup-related investments in 2013-17 accounted for only 1 percent of total investments." From a tourism perspective, businesses of hosting cities can expect a nice jump in their monthly earnings. But long-term growth is unlikely, as this is simply an anomaly, that could be described as a once lifetime seasonal boost. However, from a politics standpoint this could be a real bonanza for Russia. For most governments, international sporting events are a great opportunity to better the image of their country. Russia has an image problem in the Western world, and a well-run tournament might yield some positive results. The International Olympic Committee (IOC) and Federation Internationale de Football (FIFA) are considered, in principle, vehicles of diversity and peace. Hosting one can in theory place your country as a momentary leader in the world of fair play. Even if your history, and actions dictate a different narrative. However, games also possess something that every politician can take advantage of. They are a great distraction, and a chance to carryout things while people are not paying attention. As Saudi Arabia and Russia prepared for the opening game, Russian legislators passed several controversial bills under the cover of the happy festivities. On June 14 th , legislators passed a bill that would increase retirement age in Russia. The retirement age for men would increase from 60 to 65 by 2028, and the retirement age for women from 55 to 63, by 2034. The official reason for this change is to reduce the burden on the state budget. To free up funds for infrastructure, healthcare, education and to make the labor market more flexible. Retractors of said reform have stated that with the current demographic trend, 40% of men and nearly 20% of women would not live until the age of 65. This sad reality eliminates the retirement of a vast group of people, and merely creates a transfer of wealth to the state. The value-added tax (VAT) was also increased by legislators to 20%. Talk about being blindsided… Report: "Russia Rises Retirement Age to Boost Budget," by the Financial Times. "How Russia has used sports to boost its global image and mask its human rights record," by Michal Romanowski for Scroll.in. "The World Cup will give Russia's economy a boost — just don't expect it to last," by Holly Ellyatt for CNBC. G6 vs.Trumplandia Before the G7 summit, U.S. President Donald Trump announced that he believed Russia should be brought back into the club, and recreate the G8. This message was somewhat of a bombshell for attendees. People even warily joked about the possibility that the Kremlin has some ‘Kompromat’ on the American president. However, Trump’s stance showed some logic, by stating that despite all conflicts and differences, this ‘club’ still has a world to run. This position was also met with approval from Italian Prime Minister Giuseppe Conte. The Kremlin, however, reacted quite skeptically via their spokesperson Dmitry Peskov, who said that the G7 was not necessarily