Weekly media roundup: This week the Russian media paid particular attention to Vladimir Putin’s speech at the Russia Calling investment forum, the implications of a drop in oil prices and the closure of the FLEX educational exchange program.

Russia's high-profile officials at the 6th Annual VTB Capital Investment Forum "Russia Calling!" at the International Trade Center. Photo: RIA Novosti

Over the past week, the Russian economy became the primary focus of the Russian media, with particular attention paid to Vladimir Putin's speech at the Russia Calling investment forum. Some hinted that Putin’s speech potentially signaled a new willingness to engage Western investors, especially amidst the growing prospects for a continued drop in world oil prices.

Finally, against the backdrop of deteriorating U.S.-Russian relations, a range of different columnists weighed in on the potential meaning of Russia shutting down the popular FLEX high school exchange program.

Drop in oil prices and its implications

Is there still economic life in Russia after the fall of oil prices? This is the question being asked by many in the Russian media. And while the pro-government Rossiyskaya Gazeta makes attempts to find positive effects in the drop in oil prices, the response of the business (Kommersant and Vedomosti) and opposition (Novaya Gazeta) media is clear: The low price of oil threatens Russia with severe economic difficulties.

In one Rossiyskaya Gazeta article, economist Sergey Pukhov offers his opinion, stating that soon, “It will perfectly rational to talk about numbers that are close to the 2008 crisis, and a severe devaluation of the ruble.” However, the article’s authors, Taras Fomchenkov and Alexandra Vozdvizhenskaya, speak about a reverse trend.

“We are waiting for the OPEC meeting to take place on Nov. 27, which may result in a reduction in production quotas, given that for the budgets of Saudi Arabia, Nigeria, Iran and Venezuela, a price above $96 per barrel of oil is essential for the balance of the treasury,” they wrote. 

At the same time, Kommersant published its forecast for economic development in October, stressing that it will be determined by falling oil prices and the depreciation of the ruble. However, as Sergey Minaev, the author of the article, explained, there is nothing unusual in this: Recently the currencies of emerging economies are depreciating, and the oil market is changing due to the impact of events in the Middle East and speculation about the lifting of sanctions against Iran. Either way, the author notes the “record fall of the ruble in September” and predicts the possibility of variable predictions about the future development of prices on the oil market.

Meanwhile, Vedomosti's Marie Mesrolyan notes the fact that oil prices are falling: “Brent became cheaper over the last three months. The last case regards measures taken by Saudi authorities that significantly lowered the selling prices to its customers in all regions in November. In some cases, the price dropped to values during the ​​crisis of 2008-2009.”

The journalist also quoted an expert from Commerzbank: “Such actions cast doubt on the long-term strategy of OPEC, which sets price stability above all else.”

The author of a Novaya Gazeta article on the topic, Alexei Polukhin, suggests thinking about how the fall in oil prices will affect the economy of Russia. The answer is obvious: The consequences will be extremely negative.

“So, some experts believe that oil can drop down around 80 dollars per barrel. Then the dollar will cost 48-50 rubles. But that’s not what’s scary. If the economy loses a devastating 10 percent, we are talking about a real, bitter crisis,” says the author.

Russia Calling investment forum

Some Russian journalists agree that the speech of President Vladimir Putin at the Russia Calling forum was not unremarkable. The pro-government media (Channel One, Izvestia) insists that the speech is the next message of Russia to the world, emphasizing the constructive approach of the Russian Federation to bilateral and multilateral relations. Opposition (Nezavisimaya Gazeta) and the business press (Vedomosti, Kommersant) view this as a desire to reassure investors.

Vedomosti interviewed several businessmen in response to Putin's speech at the forum and puts forth their general opinion: “If we compare this forum with the St. Petersburg forum, today’s speech was more interesting to investors than SPIEF [May 23], said a top manager of a European company. Putin focused on the problems that actually exist in the Russian economy, there was less politics, and he avoided the question about Ukraine, giving it little attention. His speech in St. Petersburg was brighter and more political, which was more than a good signal for investors, said the Vedomosti source. It is important now that the president outlines a commitment to macroeconomic stability and follows budgetary regulations, at least on paper.”

At the same time, Dmitry Butrin of Kommersant points out in his article moments in Putin's speech that weren’t surprising, as well as the lack of market reaction to these statements. The markets almost didn’t even react at the time of the speech or during the Q&A session.”

Meanwhile, Channel One correspondent Pavel Krasnov paints an idyllic picture and says, referring to Putin, that “the course of building a Russia that is strong, free, and open to the world will continue,” that “economic stability will not be affected by some external and internal complexities,” and that the interest in cooperation with Russia “confirms Russia’s business ties to the West, despite the sanctions issued by their governments.”

The author of an article in pro-government Izvestia entitled “The President Reassured Western and Russian Investors”, Egor Sozaev-Guriev, clarifies the basic approach of his reasoning. In general, it assesses the president's speech positively, claiming it was even well-received by foreign partners.

“The president has repeatedly said that Russia, if desired, can find an alternative economic partner,” he said. "These statements are probably reflected by the businessmen who were sitting side by side and with the Russian leader at the “Development of Russia: In Search of New Opportunities” session. “Of the five representatives of large foreign businesses, three were Asian (including India and China) and two were European (Italy and France).”

One article from the opposition paper Nezavisimaya Gazeta spoke about Putin's speech and the forum itself with mild sarcasm, focusing on the absence of a constructive dialogue in the framework of the forum.

“The format of the Investment Forum, as you know, is not intended to scare investors with scary stories about Russian realities. However, discussions of threats and ways to overcome the crisis yesterday were what lacked the most,” writes the author, Anastasia Bashkatova.

The closure of the FLEX educational exchange program

The FLEX educational program has been canceled in Russia. Pictured: the founder of the program, former Democratic Sen. Bill Bradley from New Jersey Photo: Irina Kalashnikova

Finally, Russian media reacted to the controversial decision by the Russian side to cancel the participation of high school students in the FLEX program. Publications such as Snob, Moskovsky Komsomolets, and Vedomosti view this as further proof of the Russian leadership’s attempt to limit channels of communication between Russian citizens and foreign countries.

However, in pro-government publications there is a clear tendency to demonstrate the ineffectiveness of the program and its negative consequences.

Ilya Klishin, the editor of the Dozhd TV channel website, who himself visited the United States precisely thanks to FLEX, speaks about the closing of the program with obvious regret and disapproval in his column for Snob magazine.

“I guess, in terms of today's propaganda, it was impossible not to close FLEX,” he writes. “Why’s that? It’s because young immature minds are going to be seduced by the beauty of the bourgeois States and come back here, not wanting to see Americans as their enemies. And even worse, they might tell others about it.

"And then it still remains to be seen whether maybe they were secretly recruited by the CIA during their time in the States, and their families are only their covers. Then they’ll return here and organize their own Maidan. Let's just go ahead and not let anyone out of the country. We have textbooks recommended by government ministries. We have Channel One. What else do we need?” he added sarcastically.  

A sharply negative assessment of the situation comes from Echo of Moscow host and columnist Matvei Ganapolsky in Moskovsky Komsomolets.

“I'm trying to comprehend why Russia is completely denying our children this useful program. There is no rational answer, but there is a patriotic one: We have to give the Americans another black eye,” he writes. “But this isn’t just a black eye for the U.S. but also for Russian students who could see the world for free, to see others, and be seen.”

Meanwhile, an editorial in Vedomosti criticized the actions of the Russian side.

“Moscow's reaction turned into another ‘asymmetrical response’ by not punishing the guilty Americans but instead thousands of Russian students who were planning on taking an internship in the United States,” said the editorial. “A private conflict has escalated into a political one, as was the case with the “Dima Yakovlev law” that banned the adoption of Russian orphans by Americans. The exploitation of an enemy’s image is very popular now in Russia; concern for the fate of the children who were subjected to the pernicious influence of the West while studying there sells well. However, for some reason, the State Duma refused to ban study abroad for children of officials.”

Meanwhile, Rossiyskaya Gazeta interviewed the Commissioner for Children's Rights Pavel Astakhov, who explained that no one opposes cooperation programs. However, he pointed out, the numerous cases of illegal guardianship of Russian children who originally went to the U.S. as tourists or for educational purposes cannot escape the attention of the authorities. He cites as an example the case of a Russian teen participating in the FLEX program who was allegedly adopted by an American couple, although his family was waiting for him in Russia.

“I support the development of such [exchange] programs rather than discontinuing them,” said Astakhov in the interview. “But, of course, we cannot leave such egregious cases unanswered, as with the example I just gave.”