Russia – Japan relations and Kuril islands dispute


Japan is “playing a tactical game” with regard to the territorial dispute over the Kuril islands because Tokyo wants to tacitly promote economic cooperation with Russia and reduce its dependence on the United States, Yuri Tavrovsky, professor at Peoples’ Friendship University of Russia, told Radio Sputnik.

Russia and Japan have been locked in a dispute over the islands that Moscow refers to as the Kurils and Tokyo calls the Northern Territories since the end of World War II. The latter has claimed the islands as its own for decades, leaving no room for a compromise. But Prime Minister Shinzo Abe has vowed to change Tokyo’s approach to the issue.

Experts say that Abe is interested in fostering economic relations with Russia even if the territorial issue remains unresolved. But there are other, external factors that have to be taken into account. “This is not simply an issue of relations between Russia (once the Soviet Union) and Japan. There is a third player involved, the United States. This issue surfaced in 1951 when the US occupation of Japan was over,” the analyst said. “At that time Japanese leadership taking its national interest into account tried to reach a mutually-acceptable solution with the Soviet Union, but Washington interfered.”

In fact, the Soviet Union and Japan were close to resolving the issue in the 1950s. In 1956, Soviet leader Nikita Khrushchev agreed to hand over Habomai and Shikotan under Article 9 of the Soviet–Japanese Joint Declaration of 1956. The transfer was expected to take place once both countries signed the peace treaty.

This is not what happened. “The Japanese eventually rejected Khrushchev’s ‘generous offer’ not because they did not want the two islands, but because the US did not let them” go through with the deal, the analyst noted.

In recent months, both Russia and Japan have indicated that they are genuinely ready to search for a mutually-beneficial solution to the issue. Russian President Vladimir Putin and Prime Minister Shinzo Abe have already met twice this year. In addition, Putin will visit Japan in December.

On Tuesday, Chief Cabinet Secretary Yoshihide Suga said that the Japanese government wanted to continue the talks “to resolve the ownership issue over four islands and sign the peace treaty.” Tavrovsky maintained that Suga’s comments were meant for the US, not Russia. This was a veiled attempt to reassure Washington that Tokyo does not want to improve ties with Moscow. “Meanwhile, I think that Abe is determined to drastically improve our economic relations since they see how our ties with China are progressing and they are concerned that they will be ‘late to this party.’ The economic cooperation that they have promised, Abe’s eight-point plan, is not really a gift to us but Japan’s wish to take part in our Siberian and far eastern projects,” the analyst explained.

For Tavrovsky, Tokyo is trying to reclaim its sovereignty by making overtures to Moscow.
“By promoting relations with us, by establishing a contact with Vladimir Putin, Abe is trying to reduce [Japan’s] dependence on the United States. But he is doing behind a screen that has the ‘issue of four islands’ painted all over it. This is what he is showing the US. But in reality Japan will foster economic cooperation and bypass sanctions because this is in Tokyo’s strategic interests,” the analyst explained.

Tavrovsky defined these interests as follows: Japan, as an influential country wants to turn into a genuinely sovereign state that does not have to listen to orders from Washington.

Car Review -UAZ Patriot 2017

People outside Russia probably have some ingrained misconceptions about Russian-made offroad-capable vehicles, imagining rickety 40-year-old jeeps that pay no mind to driver or passenger comfort. Make no mistake about it – those exist too, but the UAZ Patriot, a mid-size SUV produced by Ulyanovsk Automobile Plant, is definitely not one of them.

The Patriot, whose production first began in 2005, was nothing short of a revolution for the Russian automotive industry when it first rolled off the assembly line. Unlike the rest of the industry, UAZ’s design was unique, sleek, and instantly recognizable.

The Patriot featured a large carrying capacity, good off-road capability, cheap parts, and was priced affordably for use by villagers and urban SUV enthusiasts alike. The vehicle was leagues ahead of its predecessors – Soviet-designed military jeeps recognized worldwide among military enthusiasts. Since its creation, the Patriot itself has also been modified for military use, most recently for operations in Syria.

The mid-size SUV received a substantive facelift in 2014, including new head and tail lamps, grille, bumpers, 18-inch wheels, frameless wiper blades, a new pneumatic hood lift system and chassis improvements. Inside, the Patriot got two-tone seating, an improved audio system, and an optional multimedia system with built-in navigation and parktronic.

Last week, UAZ offered a sneak peak of its new Patriot for the 2017 model year, and according to the gearheads over at Avtovesti, the new model disappoint. In fact, having already climbed its way into the top five sport utility vehicles sold in Russia last year, the Patriot is now looking to compete with foreign SUV manufacturers in terms of quality and market share, while remaining affordable (with prices expected to range from $13,000-$16,500 US on the domestic market). In fact, UAZ’s marketing for the vehicle touts it as an “SUV at the price of a sedan.”

For starters, the new UAZ is expected to get two new 2 and 2.5 liter ZMZ engines, matching or exceeding the power and torque of the existing 2.7 134 horsepower gas engine. Moreover, the company has plans to introduce an automatic transmission, something city drivers have long called for, but which UAZ has put off in favor of reliability and preserving the vehicle’s off-road characteristics.
The exterior includes a few cosmetic changes, including a new grille with a larger logo, and larger sensors on the front bumper for the optional parktronic system. The dual fuel-tank design of previous models has been replaced with a contemporary 70 liter polymer, foil and/or steel-insulated tank, designed for operation in temperatures ranging between —45 and +45 degrees Celsius. The Patriot’s frame has been reinforced, and fuel lines relocated so that they do not overlap with exhaust.

But it’s with interior features and comfort improvements where the company expects to fill the seats with new buyers, both in Russia and abroad. For safety, the Patriot has been equipped with two front airbags from Japanese firm Takata, along with new front seatbelts with pretensioners and force limiters. Serious modifications have been made to the bodywork, frame, and steering column to improve crash dynamics in the event of an accident; improved body-frame supports are also said to have helped to reduce vibration.

As far as internal electronics go, the new Patriot will be equipped with Bosch electronic stability control, traction control, hydraulic brake assist, all-terrain mode ABS, and hill-start assist. The stabilization system can be turned on and off at speeds under 70 km/h, with the vehicle’s electronics mimicking cross-axle lock for assistance on icy road surfaces.
The interior features an updated instrument panel, a new cooled glove box, new transmission and parking brake levers with leather trim, and dual-stitching perforated and leatherette seat design for upper trims. All trim levels now feature tilt and telescopic steering. Higher levels include a new heated steering wheel by Takata with radio and cruise-control at the driver’s fingertips. The vehicle also has new light controls and paddles with user ease of use in mind. New duct systems designed to speed up defrosting and reduce fogging have been introduced. The rear-view camera for the optional parktronic system now also includes dynamic marking.
Other standard and optional bells and whistles include heated mirrors and LED running lights, heated front and rear seats, alloy wheels, fog lights, a multimedia system with touch-screen navigation, roof rails, rear armrest, a heated windscreen, and driver lumbar adjustment.

The company has ambitious plans not just for Russia and the former Soviet Union, but markets around the world as well. According to UAZ head Vadim Shevtsov, is looking to gain a foothold in Latin America, Vietnam, Africa, the Middle East, and China. Of the 100,000 UAZ Patriots expected to be produced, two thirds are expected to find foreign buyers.



The Great Physical Gold Supply And Demand Illusion

By Koos Jansen

Gold supply and demand data published by all primary consultancy firms is incomplete and misleading. The data falsely presents gold to be more of a commodity than a currency, having caused deep misconceptions with respect to the metal’s trading characteristics and price formation.

Numerous consultancy firms around the world, for example Thomson Reuters GFMS, Metals Focus, the World Gold Council and CPM Group, provide physical gold supply and demand statistics, accompanied by an analysis of these statistics in relation to the price of gold. As part of their analysis the firms present supply and demand balances that show how much gold is sold and bought globally, subdivided in several categories. It’s widely assumed these balances cover total physical supply and demand, which is incorrect as the most important category is excluded. The firms though, prefer not to share the subtle truth or their business models would be severely damaged.

The supply and demand balances by the firms portray gold to be more of a commodity than a currency, as the gist of the balances reflect how much metal is produced versus consumed – put differently, the firms mainly focus on how much gold is mined versus how much is sold in newly fabricated products. However, in reality gold is everlasting and cannot be consumed (used up), all that has ever been mined is still above ground carefully preserved in the form of bars, coins, jewelry, artifacts and industrial products. Partly because of this property the free market has chosen gold to be money thousands of years ago, and as money the majority of gold trade is conducted in above ground reserves. Indisputably, total gold supply and demand is far in excess of mine production and retail demand.

As most individual investors, fund managers, journalists, academics and precious metals analysts consider the balances by the firms to be complete, the global misconception regarding gold supply and demand is one of epic proportions. Physical gold is a profound anchor in our global financial system and thus it’s of utmost importance we understand the fine details of its trading characteristics. 

Supply & Demand Metrics By The Firms

The firms can argue that the difference between what they present as supply and demand (S&D), as opposed to what I deem to be a more unadulterated approach of S&D is due to contrasting metrics. Accordingly, we’ll discuss their metrics to reveal their infirmity. In a nutshell, the firms only count the physical gold S&D flows that are easy to measure, while leaving out the most important part: institutional supply and demand. 

Although the firms all have slightly different methodologies to measure S&D, from comparisons the numbers appear to be quite similar. For our further investigation we’ll spotlight the metrics and models by GFMS. The reason being, GFMS has been the only firm that was willing to share a full description of their methodology for publication – to be viewed here. Metals Focus (MF) provided a partial methodology, the World Gold Council and CPM Group declined to comment.

Let’s have a look at GFMS its S&D categories. On the supply side is included:

  • Mine supply (newly mined gold)
  • Scrap supply (gold sourced from old fabricated products)

On the demand side is include:

  • Jewelry demand (gold content used in newly manufactured jewelry products bought locally at retail level, adjusted by jewelry exported and imported).
  • Industrial demand (the volume of gold used in industrial applications, for example bonding wire, products used in semiconductors/electronics and dental alloys).
  • Retail bar investment (the net volume of bars that are purchased by individual investors through retail channels).
  • Coin investment (a combination of published data from mints and also a proprietary survey conducted by GFMS detailing where coins are sold).

The above four demand categories summed up are often referred to as “consumer demand” by the firms.

Furthermore GFMS includes:

  • Net hedging (change in physical market impact of mining companies’ gold loans, forwards, and options positions)
  • Net official sector (total central bank selling or buying)
  • ETF inventory build (change in ETF inventory)
  • Exchange inventory build (change in exchange inventory)

The last four categories can be either supply or demand. In example, when central banks (the official sector) in total are net sellers this will be listed as a negative demand figure, as is shown in the S&D balance by GFMS below from 2006 until 2009, when central banks in total are net buyers this will be listed as a positive demand figure, as is shown in the balance from 2010 until 2015. For a clear overview of the GFMS S&D balance please have a look at all line items below.

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West Pressure on Serbia Over Anti-Russia Sanctions Unacceptable – FM


Serbian Foreign Minister Ivica Dacic said that pressurizing Serbia into supporting sanctions against Russia is unacceptable

BELGRADE (Sputnik) — Pressurizing Serbia into supporting sanctions against Russia is unacceptable, Serbian Foreign Minister Ivica Dacic said.

“Serbia will never do something that contradicts our national interests. Many major Western states are present at international forums as the so-called ‘friends of Kosovo,’ and we are expected to introduce sanctions against Serbia’s friends. We want good relations with everyone but we cannot act against ourselves,” Dacic was quoted as saying by the Foreign Ministry. He added that “intimidating Serbia does not work anymore” and that Belgrade was open to cooperating with everyone but put the country’s national interests first. Russia supports Serbia’s position on Kosovo, which declared independence from Serbia in February 2008. It has since been recognized by over 100 UN member states, while Belgrade considers Kosovo part of Serbia. Dozens of countries, including Russia, do not recognize Kosovo’s sovereignty. Since 2014, relations between Russia and the West has gone downhill amid the crisis in Ukraine. Brussels, Washington and their allies have introduced several rounds of anti-Russia sanctions Crimea’s reunification with Russia and Moscow’s alleged involvement in the Ukrainian conflict. Russia has repeatedly denied the allegations, warning that the Western sanctions are counterproductive and undermine global stability.

Russia is one of Serbia’s main trading partners in the world with the bilateral trade turnover in 2015 standing at a hefty $1.5 billion and Russian investments of the past few years exceeding $3 billion.
Moreover, thanks to the free trade regime existing between the two countries, 99 percent of Serbian exports to Russia come here customs free.

Despite the current economic crisis, Serbian exports to Russia have gone up 9.5 percent since January, and a similar free trade deal with the Eurasian Economic Union would increase the number of potential buyers of Serbian goods to 200 million. However, Serbia’s entry into the EU would render this free trade agreement null and void simply because no such arrangement currently exists in the EU.

Alexander Chepurin proposed the creation of “a Russian-Serbian mechanism” to monitor potential problems Belgrade’s EU integration would entail.

The Russian ambassador’s proposal left the participants of the Belgrade summit divided with Serbia’s former envoy to the US, Ivan Vujacic, warning that for all its good intentions, this “mechanism” would complicate Belgrade’s already difficult integrations talks with Brussels, especially in view of the tense relations now existing between the EU and Russia. Former Spanish Foreign Minister Miguel Angel Moratinos said, for his part, that Alexander Chepurin’s proposal; made a lot of sense. “If you have shared interests, the best thing you should do is to discuss things. I believe that that the negotiations between Serbia and the EU are a two-way road. Serbia has good relations with Russia and any dialogue on this issue would benefit us all,” he emphasized. The European Union granted Serbia candidate status for membership in 2012, demanding from Belgrade to implement a number of reforms as well as effectively recognize Kosovo as an independent state. Serbia opened two of the 35 chapters needed for accession to the European Union in mid-December 2015, including one on normalizing ties with Kosovo.


Welcome to EUgoslavia

The new array of European Union subgroups is a sign of deeper malaise



BERLIN — Metternich, the godfather of pan-European statecraft, once famously quipped that the Balkans started just beyond Vienna’s ramparts.

In the emerging EU of 27, the Balkans are everywhere.

The European Union could always be neatly divided into regional blocs that, for the most part, pursued a common agenda, whether the northern group around Germany or the southern “Club Med” countries led by France.

That changed recently as the flurry of economic and political crises to befall the EU spawned an alphabet soup of subgroups, with like-minded capitals looking for strength in numbers.

Now, Brexit is accelerating the trend as countries seek allies ahead of the coming debates over the EU’s future.

Last month, Athens hosted the inaugural gathering of the “EUMed” (Greece, France, Italy, Portugal, Spain, Cyprus and Malta), replete with a custom logo and family photo. The group’s aim is to build a bulwark against the Berlin-led alliance of penny pinchers they blame for the south’s chronic economic stagnation.

Central Europe, meanwhile, has revived the long-dormant Visegrad group, banding together to resist Brussels’ attempts to force them to accept refugees. Austria, one of the countries most affected by the influx, has created an alliance of its own. That group, consisting of Germany, Greece and several candidate countries in the Balkans, is set to meet in Vienna this weekend. They’ve selected the perfect venue — Klemens von Metternich’s former chancellery.

Finding consensus in an EU of nearly 30 states was never going to be easy. In stable times, the divisions are just easier to ignore.

In this latest fracturing, however, the flaws in the EU’s institutional architecture have been magnified by a lack of credible leadership. Like a mutinous army, member countries simply ignore Brussels’ efforts to impose discipline in areas such as refugee policy.

“It’s really a symptom of the deeper malaise in the EU,” said Thorsten Benner, director of the Global Public Policy Institute in Berlin. “There are very few areas where you have broad-based agreement anymore. That’s obviously dangerous for the European project.”

The blocs themselves can be as fractious as the broader Union. While the Visegrad countries share a common loathing for Muslims, their views diverge when it comes to issues like Russia and regional security. Some groups, such as the much ballyhooed Weimar Triangle between France, Germany and Poland, disappear altogether as domestic political priorities and constellations change.

There’s also a constant shifting of the alliances, depending on the issue at hand. Germany, Italy and Greece may sing from the same hymnal on refugee policy, but when it comes to economics, they don’t even share the same religion.

If groups like Visegrad or the newly formed EUMed were to coordinate policy and support common initiatives across a range of economic, security and political areas, the impact on the EU could be profound. Yet they remain light years away from achieving such consensus.

Don’t mention the euro

While the groups that have emerged recently often profess high-minded political goals, their main impact is to stall action in key areas. Instead of fresh solutions, what emerges is often little more than a blocking minority and further stasis, as illustrated both by the refugee crisis and Europe’s tepid strategy to revive the economy.

The real question is where will Europe’s increasing fracturing lead.

Brexit has spurred countries to stake out positions ahead of what promises to become an important, perhaps even decisive debate over the future of the EU.

“We’re all looking at London, but the bigger question is what the rest of Europe will do because they’re deciding the future,” said Jan Techau, director of the Richard C. Holbrooke Forum at the American Academy in Berlin.

The danger is the growing factionalism will smother that debate before it starts.

That problem was apparent at last  summit in Bratislava. It took Germany’s Angela Merkel weeks of shuttle diplomacy to build consensus around a mostly humdrum list of initiatives, such as dispatching more border guards to Bulgaria. What was supposed be a nice photo-op to showcase Europe’s continued unity, despite Brexit, backfired in the end when Italian leader Matteo Renzi broke ranks and criticized the outcome.

What Europe must confront in the coming months is vastly more complicated than questions of refugee quotas and border controls. Though little discussed these days, the elephant in the room remains the euro.

Thanks to the European Central Bank, the euro crisis has gone into remission. But the underlying strains, the structural flaws in the eurozone’s architecture that led to the crisis, remain. The dislocution in Italy’s banking sector is just the latest reminder of the dangers that are lurking.

The only real way to fix the problem once and for all would be for members to relinquish more sovereignty, for example by accepting tougher fiscal oversight in return for common debt issuance.

A Balkanized Europe won’t succeed in meeting such a challenge.

“The euro is the big thing that could break everything up,” Techau said.

Nine of the 10 Biggest Power Plants in the World are Hydro-power

By Editors of Power Engineering

Nine out of the 10 biggest power-generating facilities in the world are based on hydroelectric power, the U.S. Energy Information Administration announced.

Additionally, four out of the group are based in China, with all four beginning operations in the last 13 years.

The world’s largest dam, Three Gorges, taps into the Yangtze River and has a capacity of 22.5 GW. Hydroelectric power is the second-largest source of electricity behind coal, with 20 percent of the country’s total generation in 2015.

Three of the biggest are based in South America, including the second-largest power plant in the world. Brazil’s Itaipu Dam on the Parana River has a capacity of 14GW. In 2015, it ranked first in the world in generation with 89.5 billion kWh, compared to Three Gorges’ output of 87 billion kWh.

The sole non-hydroelectric plant in the list is Japan’s Kashiwazaki-Kariwa, a nuclear plant and the sixth-largest in the world. However, it was shut down along with most Japanese nuclear plants after the Fukushima accident in 2011 and has yet to restart.

The Grand Coulee Dam on the Columbia River in Washington is the seventh-largest in the world with a capacity of 6.8 GW. It was also the largest power plant in the world from 1949 through 1960, and retook the title after an expansion from 1979 through 1986.