Tag Archives: Russia

On ground in Syria, scant evidence of draw down trumpeted by Kremlin

Russian Navy Landing Ship

By Jack Stubbs and Maria Tsvetkova

MOSCOW (Reuters) – A month since Vladimir Putin announced the withdrawal of most Russian forces from Syria, his military contingent there is as strong as ever, with fewer jets but many more attack helicopters able to provide closer combat support to government troops.

A Reuters analysis of publicly available tracking data shows no letup in supply missions: the Russian military has maintained regular cargo flights to its Hmeimim airbase in western Syria since Putin’s declaration on March 14.

Supply runs have also continued via the “Syrian Express” shipping route, Russian engineering troops have been deployed to the ancient city of Palmyra and further information has surfaced about Russian special forces operating in Syria – suggesting the Kremlin is more deeply embroiled in the conflict than it previously acknowledged.

“There hasn’t been a drawdown in any meaningful way,” said Nick de Larrinaga, Europe Editor of IHS Jane’s Defence Weekly. “Russia’s military presence in Syria is just as powerful now as it was at the end of 2015.”

Announcing a drawdown gave Putin some breathing space from Western political pressure over the operation, and an opportunity to carry out maintenance on heavily-used jets.

But by keeping a strong military force in place, Putin is maintaining his power to influence the situation in Syria by shoring up President Bashar al-Assad, Moscow’s closest ally in the Middle East.

He will also want to secure Russia’s role in efforts to broker a resolution to the conflict – a process the Kremlin has used to reassert itself as a global political power after being ostracized by the West over the Ukraine crisis.

As recently as Thursday, photos and video footage taken by Turkish bloggers for their online project Bosphorus Naval News showed a Russian Navy landing ship – the Saratov – en route to Russia’s Tartous naval facility in the western Syrian province of Latakia loaded with at least ten military trucks.

The Saratov is a regular feature on Russia’s “Syrian Express” shipping route, which Moscow has used to transport increased supplies and equipment to Syria since the military draw down was announced.

The Russian Defence Ministry did not respond to written questions submitted by Reuters

“MORE FORMIDABLE FORCE”

Russian troops and equipment have also been deployed to Syria by air in recent weeks.

An Ilyushin Il-76 cargo plane operated by the Russian Air Force under registration number RA-78830 has flown two supply trips a month to Syria since December. Its last flight to Russia’s Latakia airbase was on April 9-10 according to tracking data on website FlightRadar24.com.

Able to carry up to 145 people or 50 tonnes of equipment, Il-76 planes have been used to transport heavy vehicles including helicopters to Syria, a Russian Air Force colonel told Reuters, bolstering the number of gunships in the country as Russia’s jet force deployment is wound down.

“We removed some planes and added helicopters. We don’t need mass bomb drops during a ceasefire,” the colonel said. “Helicopters fly lower and can observe the territory better.”

Russia now has more than 30 helicopters operating in Syria, including a fleet of around eight Mi-28N Night Hunter and Ka-52 Alligator gunships stationed at its Shayrat airbase southeast of Homs city, according to satellite images posted online by IHS Jane’s analysts.

Separate images show 22 jets and 14 helicopters stationed at the Hmeimim airbase, compared to 29 jets and 7 helicopters seen there in early February, said Justin Bronk, a research fellow at the Royal United Services Institute (RUSI).

“All that’s really gone is the fixed wing close air support attack jets,” he said. “On the rotary side it’s a substantially more formidable force than it was.”

SPECIAL FORCES

The Ka-52, known for its unusual double set of top-mounted rotor blades and no tail rotor, is the Russian military’s official special forces support helicopter and its appearance in Syria is testament to the growing number of Russian ground troops in direct combat roles, western officials say.

Russia acknowledged having special forces in Syria for the first time shortly after its military drawdown was announced, saying they were conducting high-risk reconnaissance missions and “other special tasks”.

Since the announcement, Western diplomats say Russia’s forces have increasingly targeted Islamic State militants and an offshoot of al Qaeda. Previously Russia focused its strikes on other Assad opponents, including some viewed by the West as moderate.

Swapping jets for helicopters illustrates Russia’s new military role in the Syrian conflict, engaging directly with fighting on the ground instead of dropping bombs from thousands of feet.

“Russia’s attack helicopters are getting much more into the thick of things than their fixed wing aircraft were previously,” said de Larrinaga. “We never really saw Russian strike aircraft operating at low level like this before.”

Both the Ka-52 and Mi-28N, which is broadly equivalent to the U.S. Apache gunship, were used to provide close air cover to the Syrian army when it secured a major victory by retaking Palmyra from Islamic State militants in March.

Bronk said the helicopter deployment was in response to the changing needs of the Syrian army.

“They are no longer bombarding besieged cities so much, trying to dislodge rebels,” he said. “Instead they are trying to assist a more mobile, maneuverable style of engagement.”

“Because that tactical role or focus of Assad’s forces has changed, then the Russian support methodology needs to change along with it.”

(Writing by Jack Stubbs; editing by Peter Graff)

Putin says shares Russians economic pain

Journalists watch a live broadcast on an electronic screen showing nationwide call-in attended by Russian President Putin in Moscow

By Andrew Osborn and Alexander Winning

MOSCOW (Reuters) – President Vladimir Putin assured ordinary Russians on Thursday that he was trying to relieve the hardships inflicted on them by the slowing economy and the financial knock-on effects of Russia’s stand-off with the West.

Putin used a televised phone-in, an annual event when he fields questions from ordinary citizens around the country, to strike a conciliatory tone on foreign policy, saying Russia wanted friendly relations with the rest of the world.

Wrapping up the event after three hours and 40 minutes, Putin said he had heard a lot of impassioned questions from worried citizens. Many of the questions were about issues such as high inflation, poor public services and wage arrears.

“I share your concerns in nearly 100 percent of cases,” Putin said. “We’ll work together so that your problems are relieved.”

Addressing public concerns over the economy is crucial for the Kremlin because Russians vote in a parliamentary election in September.

The phone-in did not feature criticism directed personally at Putin. Executives at state television, which is deferential to the Kremlin, controlled who had the chance to pose questions. His critics say the phone-in is a ritual designed to mask the lack of true democracy.

But the event provided an opportunity for Putin to show he has voters’ interests at heart, in part by hauling officials over the coals for failing to protect citizens.

Putin took questions via video link from two women, Tatiana and Yelena, who said they had not been paid for months of work at a fish processing plant on a Pacific island, and that officials ignored their complaints.

The issue is a widespread one since Russia’s economy slowed, with businesses that are struggling with falling sales often delaying wages.

The Russian president, live on air, instructed his prosecutor-general to think about firing the local prosecutor for failing to act on the women’s complaints.

“I want to extend my apologies and assure you we will do everything to resolve the situation,” Putin said, addressing the two women. A few minutes later, Russian news agencies reported a criminal investigation had been launched into the fish processing plant.

EQUAL PARTNER

On foreign policy, Putin did not deploy the kind of bellicose rhetoric against the United States and its allies that he has in the past few years.

He denied that Russia was surrounded by adversaries, said he favored a peaceful resolution of the conflict in Syria, and said Russia wanted good ties with Turkey and Ukraine, with which relations have soured.

In return, he said, he asked that foreign powers should treat Russia as an equal partner. “They should not act from a position of strength, dictate imperial ambitions,” Putin said.

He said he did not expect that Western countries would in the near future lift the sanctions imposed over Russia’s annexation of Crimea and its support for separatists in eastern Ukraine. But he said Russia’s economy would adapt.

Asked by one questioner whom he would save if Turkish President Tayyip Erdogan and Ukraine’s pro-Western leader Petro Poroshenko were both drowning in front of him, Putin was uncharacteristically diplomatic.

“If someone has decided to drown, then it’s already impossible to save them. But we are of course ready to extend a helping hand, a hand of friendship, to any partner of ours that itself wants that help,” Putin said.

POCKETBOOK ISSUES

Some of the messages submitted to the phone-in were fawning. “I’m proud of my president and of Russia,” read one message from a viewer which was flashed up on a screen behind Putin. One questioner wanted to know if Putin ate porridge for breakfast.

Most of those questions which were allowed on air focused on pocket-book issues preoccupying Russians at a time when inflation has eroded consumers’ spending power and forced the government to cut spending.

Putin was asked why more money was not being spent fixing potholes in the roads of Omsk, a city in Siberia; he was asked why medicines on sale in pharmacies were so expensive; and he reassured farmers worried they would not be able to pay off their bank loans.

He delivered a spirited defense of his friend Sergei Roldugin, who, according to reports based on the so-called “Panama Papers” leaks, has a business empire involved in offshore transactions that might be linked to Putin.

He said the leaks were an effort, backed by U.S. interests, to discredit people close to the Kremlin.

“But they must understand that the issue is not about specific people, individuals, no matter what position they hold in Russia. The issue is about the country, which cannot be manipulated, which cannot be forced to act as someone wants and dance to their tune,” Putin said.

(Additional reporting by Jack Stubbs, Lidia Kelly, Dmitry Solovyov, Maria Kiselyova, Gleb Stolyarov and Anastasia Lyrchikova; Writing by Christian Lowe; Editing by Jason Bush and Raissa Kasolowsky)

Iran, France concerned with Syria violence

Residents inspect damages after an airstrike on the rebel held al-Maysar neighborhood in Aleppo

By Tom Perry, John Irish and Bozorgmehr Sharafedin

BEIRUT/PARIS/DUBAI (Reuters) – France and Iran voiced concern over escalating violence in Syria on Tuesday, echoing warnings from the United States and Russia as fighting near the city of Aleppo put more pressure on a fragile truce agreement.

The already widely violated “cessation of hostilities” agreement brokered by Russia and the United States has been strained to breaking point by an upsurge in fighting between Syrian government forces and rebels near Aleppo.

The escalation underlines the already bleak outlook for peace talks set to reconvene this week in Geneva. The United Nations says the talks will resume on Wednesday. The government delegation has said it is ready to join the talks from Friday.

With President Bashar al-Assad buoyed by Russian and Iranian military support, the Damascus government is due to hold parliamentary elections on Wednesday, a vote seen by Assad’s opponents as illegitimate and provocative.

Iran said an increase in ceasefire violations could harm the political process a day after Russia said it had asked the United States to stop a mobilization of militants near Aleppo, Syria’s biggest city until the conflict erupted in 2011.

Iranian Deputy Foreign Minister Hossein Amir-Abdollahian, speaking after a meeting with U.N. Special Envoy Staffan de Mistura in Tehran, blamed the “increasing activities of armed groups” for the violations.

France, which backs the opposition, also expressed concern, but blamed the other side. “It warns that the impact of the regime and its allies’ offensives around Aleppo and Eastern Ghouta are a threat to the cessation of hostilities,” government spokesman Romain Nadal said. The Eastern Ghouta is an opposition-held area near Damascus.

Syria’s civil war has killed more than 250,000 people, created the world’s worst refugee crisis, allowed for the rise of Islamic State and drawn in regional and international powers. The intervention of Russia swung the war in Assad’s favor.

WASHINGTON “VERY, VERY CONCERNED”

The United States, which also backs rebels fighting Assad, on Monday said it was “very, very concerned” about increased violence and blamed the Syrian government for the vast majority of truce violations.

Both the government and a large number of rebel groups had pledged to respect the cessation of hostilities agreed in February with the aim of allowing a resumption of diplomacy towards ending the five-year-long war. Jihadist groups including the Nusra Front and Islamic State were not part of the deal.

A senior official close to the Syrian government said the truce had effectively collapsed.

“On the ground the truce does not exist,” said the official, who is not Syrian and declined to be named because he was giving a personal assessment. “The level of tension in Syria will increase in the coming months.”

The eruption of fighting on the front lines south of Aleppo marks the most serious challenge yet to the truce.

The Syrian Observatory for Human Rights, a British-based organization that tracks the war, said dozens of government fighters had been killed in a big offensive to take the town of Telat al-Eis near the Aleppo-Damascus highway on Tuesday.

A rebel fighting in the area said the assault launched at dawn was backed by Russian air strikes and Iranian militias, adding that the attackers had suffered heavy losses. The Syrian military could not be reached for comment.

Iranian Revolutionary Guards and Lebanon’s Hezbollah have both deployed in the southern Aleppo area in support of the government, while the Nusra Front is also fighting in close proximity to other rebels.

The Syrian prime minister was quoted on Sunday as saying government forces were preparing a major operation in the region with Russian support.

Further south in Homs province, Russia said one of its attack helicopters had crashed in the early hours of Tuesday, killing both pilots. It said the helicopter had not been shot down and the cause of the crash was being investigated.

“PROVOCATIVE” ELECTION

De Mistura, speaking in Tehran, said he and Amir-Abdollahian had agreed on the importance of the cessation continuing, that aid should reach every Syrian and that “a political process leading to a political transition is now crucially urgent”.

De Mistura, whose two predecessors quit, has said he wants the next round of Geneva talks to be “quite concrete” in leading towards a political transition.

Ahead of the first round of talks, Damascus had ruled out any discussion of the presidency, calling it a red line.

A senior Iranian official on Saturday rejected what he described as a U.S. request for Tehran’s help to make Assad leave power, saying he should serve out his term and be allowed to run in a presidential election “as any Syrian”.

Some members of the main Syrian opposition alliance, the High Negotiations Committee (HNC), arrived in Geneva on Tuesday, and U.N. spokesman in Geneva Ahmad Fawzi said the talks were expected to begin on Wednesday.

De Mistura is working according to a U.N. Security Council resolution approved in December that sets out a political process including elections after the establishment of “credible” governance and the approval of a new constitution.

The Syrian government says it is holding Wednesday’s elections in line with the existing timetable that requires a vote every four years. Russia has said the vote does not go against the peace talks and is in line with the constitution.

French President Francois Hollande last month, however, said the idea was provocative and “totally unrealistic”.

(Additional reporting by Tom Miles in Geneva, and Samia Nakhoul and Laila Bassam; Writing by Tom Perry; Editing by Peter Millership and Giles Elgood)

Russia delivers first of defense system to Iran

Russian military vehicles move along a central street during a rehearsal for a

DUBAI (Reuters) – Russia has delivered the first part of an advanced missile defense system to Iran, Iranian media reported on Monday, starting to equip Tehran with technology that was blocked before it signed a deal with world powers on its nuclear program.

The S-300 surface-to-air system was first deployed at the height of the Cold War in 1979.

In its updated form it is one of the most advanced systems of its kind and, according to British security think tank RUSI, can engage multiple aircraft and ballistic missiles around 150 km (90 miles) away.

Russia’s agreement to provide Iran with S-300 has sparked concern in Israel, whose government Iran has said it aims to destroy.

In a recorded transmission, state television showed Foreign Ministry spokesman Hossein Jaber Ansari telling a news conference on Monday: “I announce today that the first phase of this (delayed) contract has been implemented.”

Ansari was replying to reporters’ questions about videos on social media showing what appeared to be parts of an S-300 missile system on trucks in northern Iran.

Russia says it canceled a contract to deliver S-300s to Iran in 2010 under pressure from the West. President Vladimir Putin lifted that self-imposed ban in April 2015, after an interim agreement that paved the way for July’s full nuclear deal.

The U.S. military has said it has accounted for the possible delivery of the S-300 to Iran in its contingency planning.

(Reporting by Bozorgmehr Sharafedin, Editing by William Maclean and John Stonestreet)

Syria’s Assad shows no willingness to compromise

Syria's President Bashar al-Assad speaks during an interview with Russia's RIA news agency

By Samia Nakhoul

CAIRO (Reuters)- – As the Syria peace talks resume next week, President Bashar al-Assad, backed militarily by Iran and Russia, shows no willingness to compromise, much less step aside to allow a transition Western powers claim is the solution to the conflict.

Threatened by rebel advances last year, Assad is now pumped up with confidence after Russian air strikes reversed the tide and enabled his army to recover lost ground from Sunni insurgents as well as the jihadis of Islamic State.

While Syria experts doubt he can recapture the whole country without an unlikely full-scale ground intervention by Russia and Iran, they also doubt President Vladimir Putin will force him out – unless there is a clear path to stability, which could take years.

Instead, Russia’s dramatic military intervention last September — after five years of inconclusive fighting between Assad and fragmented rebel groups mostly from Syria’s Sunni majority — has tilted the balance of power in his favour and given him the upper hand at the talks in Geneva.

The main target of the Russian air force bombardment was mainstream and Islamist forces that launched an offensive last summer. Only recently have Russia and Syrian forces taken the fight to Islamic State, notably by recapturing Palmyra, the Graeco-Roman city the jihadis overran last year.

The Russian campaign, backed by Iran’s Revolutionary Guards and Shi’ite militia such as Lebanon’s Hezbollah, has for now outmatched the rebels, including the al Qaeda-linked Nusra Front and units supported by Saudi Arabia, Qatar, Turkey, and the United States.

REBELS LOSE MOMENTUM

Dealing with those groups rather than Islamic State seemed the main aim of Moscow’s intervention, analysts say.

“The Russian intervention fundamentally reshaped the Syrian conflict,” says Kheder Khaddour from the Carnegie Middle East Center. “The momentum of the rebels does not exist any more.”

Putin, diplomats say, weakened the opposition to coax it into accepting a settlement on Russian and Syrian terms. That does not mean the “transitional authority” sought by the U.S. and its allies, but a government expanded to include elements of the opposition, with Assad at its head for the immediate future.

Russia still wants Assad to lead the transition to the elections, while the opposition and its regional allies, including the United States and Europe, insist he should step down. So far no compromises are in sight.

“We need things to advance in the coming weeks. If the political process is just about putting a few opposition people in nominal cabinet posts then this isn’t going to go very far,” said a European diplomat close to the talks..

“If there isn’t a political transition the civil war will continue and Islamic State will benefit from it,” he said.

Fawaz Gerges, author of ISIS: A History, said: “At this point the Russians have the upper hand in dictating a solution. The Americans are playing on Russia’s playing field.”

UNCERTAINTY

His judgment is underlined by Sergei Lavrov, Russia’s foreign minister, who boasted in a recent interview that “the Americans understand they can do nothing without Russia. They can no longer solve serious problems on their own”.

Yet uncertainty surrounds Moscow’s intentions, after Putin suddenly withdrew part of his forces from Syria last month. That led to speculation among Assad’s enemies that Russia was contemplating whether to ditch Assad – an outcome many Syria watchers find highly improbable.

“The key issue remains when and if the Russians will act to facilitate this transition. It’s unclear, and we get the feeling that the recent talks didn’t change much in the Russian position,” the European diplomat said.

“I don’t think the upcoming round will reach any real decisions on the political process, he added.

Gerges says the partial pull-back sent a message to the Americans that Russia is a rational and credible force that is interested in a diplomatic settlement.

It was also intended as a jolt to Assad, by then so emboldened at the way Russia and Iran had transformed his weak position that he was announcing plans to recapture all of Syria.

“The message to the Assad regime was that Russia doesn’t play by Assad’s playbook, it doesn’t want to get down in Syria’s quagmire (but) wants to cut its losses,” Gerges believes.

But it is far from clear that Assad interprets these messages the same way.

Last month, he dismissed any notion of a transition from the current structure, as agreed by international powers, calling instead for “national unity” solution with some elements of the opposition joining the present government.

“The transition period must be under the current constitution, and we will move on to the new constitution after the Syrian people vote for it,” Assad told Russia’s Sputnik news agency.

ASSAD “WILL NOT GO QUIETLY”

Faisal al-Yafai, a leading commentator from the United Arab Emirates, says Russia “played its cards in Syria very cleverly, but miscalculated in one aspect”.

“They assumed that once the (Assad) regime felt secure, it would be more willing to negotiate. In fact, the opposite has happened”.

“There’s a limit to the pressure that Russia can exert on Assad. Assad absolutely will not go quietly — and certainly not when there is no real alternative to him, even within the regime,” says al-Yafai.

Robert Ford, the former U.S. ambassador to Syria and now a senior fellow at the Middle East Institute in Washington, agrees that Russia may not be able to compel Assad to go.

The secret police backbone of Assad’s rule remains intact, he says, and “Assad seems confident again, after his much more sober tone last summer. The Russians may have helped him too much, such that Assad can maintain control of key cities and roads for a long time”.

Ford also drew attention to the competition over Syria between Russia and Iran, Assad’s two main allies. Moscow’s emphasis is on its traditional relations with the Syrian military establishment, while Tehran focusses on the militia network it built with Hezbollah to shore up the regime.

“Assad is plenty smart to know how to play one country off against the other. I am not even sure Russia would test its heavy pressure capacity against that of Iran in Damascus. The Russians know they might lose”, Ford said.

Russia’s involvement in Syria has given it greater insight into the structure of the Assad rule, constructed to intermesh the Assad family and allies from its minority Alawite community with the security services and military command.

ASSAD BUOYANT

Khaddour from Carnegie says Russia now realises the circumstances for a transition do not yet exist, because removing Assad might unravel the whole power structure.

“There is a problem within the regime. It is not capable of producing an alternative to itself internally,” says Khaddour, adding the only concession it has made – simply to turn up in Geneva – was the result of Russian pressure.

With limits to Russian and Iranian influence on a newly buoyant Assad, few believe the Geneva talks will bring peace.

“If the Russians felt it was time for a solution they would have reached an understanding with the Americans to give up on Assad without giving up on the Alawites. The circumstances are not ripe yet for a solution,” says Sarkis Naoum, a leading commentator on Syria.

The diplomat added: “The fundamental question is still whether the Russians are serious and want this to happen.”

“Nobody knows what’s in their mind and I’m not sure they even know.”

(Additional reporting by John Irish; Editing by Giles Elgood)

Islamic State Profiting From Antiquities

Arranged antiquities are pictured in Damascus, Syria

By Louis Charbonneau

UNITED NATIONS (Reuters) – Islamic State militants in Syria and Iraq are netting between $150 million and $200 million per year from illicit trade in plundered antiquities, Russia’s ambassador to the United Nations said in a letter released on Wednesday.

“Around 100,000 cultural objects of global importance, including 4,500 archaeological sites, nine of which are included in the World Heritage List of … UNESCO, are under the control of the Islamic State … in Syria and Iraq,” Ambassador Vitaly Churkin wrote in a letter to the U.N. Security Council.

“The profit derived by the Islamists from the illicit trade in antiquities and archaeological treasures is estimated at U.S. $150-200 million per year,” he said.

The smuggling of artifacts, Churkin wrote, is organized by Islamic State’s antiquities division in the group’s equivalent of a ministry for natural resources. Only those who have a permit with a stamp from this division are permitted to excavate, remove and transport antiquities.

Some details of the group’s war spoils department were previously revealed by Reuters, which reviewed some of the documents seized by U.S. Special Operations Forces in a May 2015 raid in Syria.

But many details in Churkin’s letter appeared new.

The envoy from Russia, which has repeatedly accused Turkey of supporting Islamic State by purchasing oil from the group, said plundered antiquities were largely smuggled through Turkish territory.

“The main center for the smuggling of cultural heritage items is the Turkish city of Gaziantep, where the stolen goods are sold at illegal auctions and then through a network of antique shops and at the local market,” Churkin wrote.

Turkish officials were not immediately available for comment on the Russian allegations. Russian-Turkish relations have been strained ever since Turkey shot down a Russian plane near the Syrian border last November.

Churkin said jewelry, coins and other looted items are brought to the Turkish cities of Izmir, Mersin and Antalya, where criminal groups produce fake documents on their origin.

“The antiquities are then offered to collectors from various countries, generally through Internet auction sites such as eBay and specialized online stores,” he said. Churkin named several other Internet auction sites that he said sold antiquities plundered by Islamic State.

EBay did not respond immediately to a request for comment.

“Recently ISIL has been exploiting the potential of social media more and more frequently so as to cut out the middleman and sell artifacts directly to buyers,” he said.

(Additional reporting by Humeyra Pamuk in Istanbul; Editing by Steve Orlofsky)

World Bank says Russia crisis to send poverty to highest in decade

Russian Money in Register

By Alexander Winning

MOSCOW (Reuters) – Russian poverty rates will return to 2007 levels this year as the economy continues to contract and inflation reduces people’s purchasing power, the World Bank said on Wednesday.

The international lender’s comments add to the view that it is ordinary Russians who have borne the brunt of the country’s economic crisis, as the blow for many firms has been cushioned by the weaker rouble and state aid.

The number of poor people in Russia will rise to more than 20 million out of a population of over 140 million, the World Bank said, the largest increase in poverty since the 1998-99 crisis that included a sovereign debt default.

Birgit Hansl, lead Russia economist for the World Bank, said the government would find it difficult to combat rising poverty because of a sharp fall in budget revenues stemming from the oil price collapse. Global prices for oil, Russia’s main export, have fallen to under $40 per barrel from over $115 in June 2014, while the economy has also been hit by Western sanctions imposed over Moscow’s role in the Ukraine crisis.

“It’s clear the fiscal space is very small to continue with social expenditure increases,” Hansl told a news conference.

Among ways to help ease poverty, she said social expenditure could be better targeted, including by means testing.

Mikhail Matytsin, a World Bank poverty economist, said the crisis had also driven a dramatic shift in consumption patterns.

The World Bank sees private consumption falling by 3 percent in 2016 in Russia after a decline of over 9 percent in 2015, a far sharper slump than during the 2008-09 global financial crisis.

“This is a new adjustment to the (economic) shock,” Matytsin said, saying households had cut back most on durable goods such as cars and domestic appliances.

The World Bank now sees private consumption recovering only very modestly and stabilizing at growth levels of around 2 percent from 2018. Before the latest economic downturn, private consumption in Russia had been rising at around 6 percent each year, Hansl said.

In its latest Russia economic report, the World Bank downgraded its growth forecasts to a contraction in gross domestic product of 1.9 percent this year and tepid growth of 1.1 percent in 2017.

It previously saw a contraction of 0.7 percent in 2016 and growth of 1.3 percent in 2017. It said its weaker forecasts reflected its new assumption that the oil price would average $37 a barrel in 2016, rather than the $49 forecast previously.

The World Bank said serious structural reforms, which it has long said are needed to ensure sustainable economic growth in Russia, were not likely before the 2018 presidential election.

(Editing by Jason Bush and Catherine Evans)

Iran Says Missiles Are Key To Future

Iran missile is launched in desert location

By Bozorgmehr Sharafedin

DUBAI (Reuters) – Iran’s top leader on Wednesday said missiles were key to the Islamic Republic’s future, offering support to the hardline Revolutionary Guards that have drawn criticism from the West for testing ballistic missiles.

Supreme Leader Ayatollah Ali Khamenei supported last year’s nuclear deal with world powers but has since called for Iran to avoid further rapprochement with the United States and its allies, and maintain its economic and military strength.

“Those who say the future is in negotiations, not in missiles, are either ignorant or traitors,” Khamenei, who has the final say on all matters of state, was quoted as saying by his website.

“If the Islamic Republic seeks negotiations but has no defensive power, it would have to back down against threats from any weak country.”

His comments may have been directed at former president Akbar Hashemi Rafsanjani, the de facto leader of a more moderate political alliance, who last week tweeted “the future is in dialogue, not missiles”.

Iran’s Revolutionary Guards conducted ballistic missile tests earlier this month, in what they said was a demonstration of Iran’s non-nuclear deterrent power.

AMBIGUOUS RESOLUTION

The United States and several European powers said the tests defied a U.N. Security Council Resolution that calls on Iran not to test nuclear-capable missiles, in a joint letter seen by Reuters on Tuesday.

However, Washington has said that a fresh missile test would not violate a July 2015 accord under which Iran has restricted its disputed nuclear program and won relief from U.N. and Western financial sanctions in return. That agreement between Iran and six world powers was endorsed in Resolution 2231.

U.N. Secretary-General Ban Ki-moon said that Iran’s ballistic missile had caused “alarm” and it would be up to the major powers in Security Council to decide whether fresh sanctions should be applied.

But Russia, a veto-wielding permanent member of the Security Council, said the tests did not violate Resolution 2231.

“You may like it or not that Iran launches ballistic missiles – but that is a different story. The truth is that in the 2231 resolution there are no such bans,” Interfax cited Mikhail Ulyanov, head of the ministry’s department for non-proliferation and arms control, as saying.

Iran has consistently denied its missiles are designed to carry nuclear weapons.

(Reporting by Bozorgmehr Sharafedin, additional reporting by Lidia Kelly in Moscow and Stephanie Nebehay in Geneva; Writing by Sam Wilkin; Editing by Richard Balmforth)

Chinese, Czech presidents forge strategic partnership on Prague visit

By Jason Hovet and Jan Lopatka

PRAGUE (Reuters) – China’s President Xi Jinping and his Czech counterpart Milos Zeman signed an agreement on a strategic partnership on Tuesday, meant to step up business ties and investments.

Zeman has been keen to forge stronger ties with China and Russia since his election in 2013, rather than with the ex-communist country’s partners in NATO and the European Union, although the Czech government not the president is chiefly responsible for foreign policy.

EU relations with both Beijing and Moscow are tainted by disputes over human rights.

The partnership agreement puts the Czechs among about 15 other European countries that have similar ties.

Xi was given a special welcome to mark the first ever visit of a Chinese leader, including a dinner at the presidential residence and 21 artillery salvos in a ceremony at the historic Prague Castle, courtesies not extended to other visitors.

But it drew protests from opposition parties and human rights activists.

Police on Monday detained more than a dozen people who replaced Chinese flags on the main road from Prague airport to the city center with those of Chinese-ruled Tibet. There was a scuffle between pro-Tibet activists and groups of Chinese supporters.

Two demonstrations by activists were called on Tuesday outside Prague’s Lichtenstein Palace, where Xi is to meet Prime Minister Bohuslav Sobotka, and at the Prague Castle.

Czech government officials told Reuters the agreement does not deviate from standard EU language on human rights, diplomatic or economic relations, and reflected Czech interests in continued business relations with Taiwan, which China sees as a wayward province.

The Czechs are hoping to become a financial and air travel hub in central Europe for China, where Czech firms such as financial group PPF and Volkswagen’s Skoda Auto have been active.

Chinese investments in the Czech republic have so far included several acquisitions of financial, airline and brewery companies by a company called CEFC China Energy, whose ownership has not been disclosed.

“I wish that Czech Republic becomes … an entry gate for the People’s Republic of China to the European Union,” he said.

While the Czechs maintain the EU line on China, Zeman has made gestures others have not. Zeman attended a military parade in Beijing last September marking the end of World War Two, the only Western leader to do so.

(Editing by David Holmes)

Syrian forces pursue campaign against Islamic State after retaking Palmyra

Mideast Crisis Syria

BEIRUT (Reuters) – Syrian government forces backed by Russian air strikes battled Islamic State insurgents around Palmyra on Monday, trying to extend their gains after taking back control of a city whose ancient temples were dynamited by the ultra-radical militants.

The loss of Palmyra on Sunday is one of the biggest setbacks for the jihadist group since it declared a caliphate in 2014 across large parts of Syria and Iraq. It is also a major victory for President Bashar al-Assad and ally Russia, casting them as critical to the international fight against Islamic State.

The Syrian army said the city, home to some of the most extensive ruins of the Roman Empire, would become a “launchpad” for operations against Islamic State strongholds in Raqqa and Deir al-Zor, further east across a vast expanse of desert.

Syrian state media said on Monday Palmyra’s military airport was now open to air traffic after the army cleared the surrounding area of Islamic State fighters.

“Now there is a convergence of interests worldwide about the fact that ISIS (Islamic State) really needs to be confronted. It is a strategic defeat for ISIS and by default a strategic victory for Assad and Putin,” said Fawaz Gerges, a Middle East expert at the London School of Economics. “It feeds into Assad’s narrative about Syria being a bulwark against Islamic State.”

Clashes continued northeast of Palmyra between Islamic State and forces allied to the government, supported by Syrian and Russian air strikes, according to the Syrian Observatory for Human Rights, a Britain-based body which monitors the war.

Air strikes, believed to be Russian, also targeted the road running east out of Palmyra towards Deir al-Zor, and there was fighting around the Islamic State-held town of Qaryatain on Monday, 100 km (60 miles) west of Palmyra, the Observatory said. The Syrian government has been trying to retake Qaryatain since Islamic State seized it last August.

U.N. Secretary-General Ban Ki-moon, speaking in Amman, said he was “encouraged” that Syrian government forces had been able to drive Islamic State out of Palmyra and that the city’s ancient heritage could now be preserved.

But the Syrian opposition said it feared Assad’s forces were using a fragile cessation of hostilities in the wider conflict to make territorial gains.

“I fear one thing: that the period of the truce will allow the Assad regime to gobble up what remains of Syria by liberating areas that are controlled by Daesh (Islamic State) and Nusra,” Riad Nassan Agha, a member of the opposition High Negotiations Committee, told Reuters by telephone.

The truce, accepted by Assad’s government and most of his foes, is the first of its kind since the war began five years ago and has been accompanied by the first peace talks attended by the warring sides. It does not apply to areas held by Islamic State or the Nusra Front, the Syrian branch of al Qaeda.

NEGOTIATING POSITION

The Syrian government is likely to use its success in Palmyra to bolster its negotiating position at the peace talks in Geneva, underlining that it is a necessary partner in the fight against Islamic State.

The United States is leading an international campaign of air strikes against Islamic State in both Syria and Iraq. It says it does not cooperate with Assad’s government, but reported carrying out air strikes around Palmyra at least once last week while Damascus was making its advance.

Bashar Ja’afari, the Syrian envoy to the Geneva talks, said in an interview with Lebanon-based al-Mayadeen TV that it was time for powers including Washington to join Moscow in working with Damascus.

“We are for the creation of an international coalition against terrorism, but in coordination with the Syrian government,” he said. “We have no objection to working with America as long as it is done in coordination with Syria.”

Russia’s intervention in September turned the tide of Syria’s five-year conflict in Assad’s favor. Despite Moscow’s declared withdrawal of most military forces two weeks ago, Russian jets and helicopters carried out dozens of strikes daily over Palmyra as the army thrust into the city.

Russia said it would assist with securing and removing landmines in Palmyra following the campaign, and the Kremlin said on Monday that the Russian air force would continue to help Syrian government forces.

But Russian forces are still showing signs of their partial withdrawal. Three heavy attack helicopters have left Moscow’s Hmeimim air base in Syria for Russia, Russian state TV channel Rossiya-24 reported on Monday.

ISLAMIC STATE DEFEATS

Although most of the Islamic State force fled Palmyra on Sunday, there were still some militants in the city, the Observatory said. Its director Rami Abdulrahman said most residents had fled before the government offensive and the observatory had not heard about any civilian deaths.

He said 417 Islamic State fighters were so far known to have died in the campaign to retake Palmyra, while 194 people were killed on the Syrian government side. The figures could not be independently verified.

Islamic State militants dynamited several monuments last year, and Syrian television broadcast footage from inside Palmyra museum on Sunday showing toppled and damaged statues, as well as several smashed display cases.

Syria’s antiquities chief said other ancient landmarks were still standing and pledged to restore the damaged monuments.

“Palmyra has been liberated. This is the end of the destruction in Palmyra,” Mamoun Abdelkarim told Reuters on Sunday. “How many times did we cry for Palmyra? How many times did we feel despair? But we did not lose hope.”

Islamic State’s ejection from Palmyra came three months after it was driven from Ramadi, a provincial capital in neighboring Iraq. Islamic State has also lost ground elsewhere, including the Iraqi city of Tikrit last year and the Syrian town of al-Shadadi in February, as its enemies try to cut links between its two main power centers, Mosul in Iraq and Raqqa in Syria.

On Friday the United States said it believed it had killed several senior Islamic State militants, including Abd ar-Rahman al-Qaduli, described as the group’s top finance official and aide to leader Abu Bakr al-Baghdadi.

(Additional reporting by Dmitry Solovyov in Moscow; Editing by Nick Tattersall, Mark Heinrich and Peter Graff)