Russia: G-7 Mulls New Sanctions

The G-7 has again begun to mull tougher sanctions on Russia. The catalyst for the discussions is an alleged outbreak of Russia-fueled violence in eastern Ukraine. There has been increasing amounts of coverage of certain areas of eastern Ukraine in which a perceived buildup of Russian military equipment has been able to reach separatists in the region by way of a Russian supply line originating near the border. The epicenter of the violence appears to be in the eastern Ukrainian cities of Maryinka and Krasnohorivka, both of which are located in relative proximity to the rebel stronghold of Donestsk. The fighting appears now to have devolved into a stalemate, although media reports of the fighting depict contradictory messages. Ukrainian media, perhaps predictably, insist that Ukrainian military forces have been able to curtail rebel advanced, while Western media indicates that the fighting has raged on with rebels making measured advanced.

The weighing of sanctions is unexpected irrespective of which side currently holds an advantage in the latest bout of violence. The nature of the sanctions has not been announced, although the impact on Russia thus far has been minimal, suggesting that more comprehensive sanctions may be tabled. The European Union showed itself to be less bullish on the imposition of further sanctions, perhaps due to its relationship with the Russian consumer market, although German Prime Minister Merkel insisted that sanctions would be considered should they come to be necessary. As of now, the message intended for Vladimir Putin appears to be of a threatening nature, although new sanctions legislation has seemingly not been drafted in the US or the EU.

News Briefs:

  • The first large-scale solar project in Kazakhstan has received a significant boost by way of the European Union. The project, a solar farm called Burnoye located in southern Kazakhstan, will receive approximately $83.8 million in funding from the European Bank for Reconstruction and Development and a coalition of development banks by way of the Clean Technology Fund. The total output of the farm will be 50 megawatts, making it the first “commercial level” solar park to be constructed in the country.
  • China’s restive province of Xinjiang is expected to produce more than 30 billion cubic meters of natural gas this year. The estimation is a slight increase on the 29.6 bcm from 2014 and a significant increase from the 10.6 bcm produced in 2005. The 30.5 bcm will account for approximately 24% of China’s total natural gas production in 2015.
  • Russia will not sign off on the IAEA’s annual report because it lists a nuclear reactor located near the city of Sevastopol in the Crimea as a part of Ukraine. Russia annexed Crimea last year although a large majority of countries still view the region as a part of Ukraine. Russia’s rejection of the report is unlikely to lead the report being blocked, but the rejection seems to reflect the reality of the situation. The Ukrainian state-run nuclear energy agency EnergoAtom informed the IAEA that it cannot guarantee the security of the reactor in Sevastopol because it no longer has access to it.
  • An estimated 400 Tajiks are fighting in Syria, according to the Tajik attorney general. Those that have abandoned Tajikistan to fight in conflict zones include 40 Tajik families, and an additional 60 Tajiks have already been killed during the fighting in the Middle East. The Tajik government has taken measures to restrict the flow of fighters from within the country to Syria, and has blocked social media networks such as Facebook in an effort to restrict movement. A new piece published by the International Crisis Group elaborates further on the threat posed by ISIL in Central Asia.
  • Iran and Russia will inaugurate a new oil-for-goods program this week. Russia and Iran have long been in talks surrounding the arrangement, which appears to now be moving forward. Russia will import Iranian oil in exchange for cash which Iran will subsequently use to purchase Russian goods such as steel, wheat and oil. Iran’s total oil exports have fallen precipitously (upwards of 50%) since 2012, making the new deal particularly welcome to Iran’s state-run oil and gas firm and the Iranian petroleum ministry.
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