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    Russian Press - Behind the Headlines, August 31

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    Vladislav Surkov to Chair Commission on Religious Associations \ Moody’s Downgrades G20 Growth Forecast for 2012


    Vladislav Surkov to Chair Commission on Religious Associations

    Chief of Russia’s government staff Vladislav Surkov has replaced Olga Golodets as head of the Commission on Religious Associations. Kommersant sources in the government said the commission will focus on the fight against extremism. Surkov’s first task is to ensure that the State Duma approves the law on liability for “offending the religious feelings of believers.”

    Deputy Minister of Culture Ivan Demidov was put on the commission in July 2011. From 2010 to 2012, he was accountable to Surkov, then chief of the Kremlin staff, and was responsible for religious associations.

    Other members of the commission include state secretaries of related ministries and agencies. The commission will work under the 2006 regulations but its priorities will be reviewed. “One of its key goals will be to prevent the use of religion for extremist purposes,” the newspaper’s source said, adding that commission members may only issue recommendations, not orders, to religious associations.

    Another government source said that Surkov’s main goal is to ease the tensions around the Russian Orthodox Church that have accumulated over the past few months. This is a logical step, as in 1999-2011 Surkov oversaw relations with religious organizations.

    “Surkov has no concrete powers as yet, and [his appointment] has not created any conflict of interests with the administration,” a Kremlin source said.

    Yevgeny Minchenko, president of Minchenko Consulting, said that Surkov has not regained his influence on domestic policy despite regaining part of his former powers. “Surkov has a busy agenda as chief of the government staff and will also be involved in the creation of a department for the Open Government project,” Minchenko said. “It is important that Surkov has considerable knowledge of Islam and [Russia’s] Muslim regions,” where radical forces are staging provocations against traditional Islam.

    Boris Falikov, assistant professor at the Center for the Study of Religion at the Russian State University for the Humanities, said Surkov “has a deep understanding of Islam and many Muslims see him as one of them. But he has always kept a distance from the Russian Orthodox Church.” However, when Surkov was put in charge of relations with religious organizations, Vsevolod Chaplin, chairman of the Moscow Patriarchy’s Department on Relations with Society, told Interfax that they were pleased with the appointment. Sultan Haji Mirzayev, Chairman of the Muslim Board of Chechnya, expressed hope that Surkov’s appointment would benefit the commission.

    Surkov’s appointment coincided with the State Duma debates on the blasphemy law.

    It is rumored that the law is being drafted in the Kremlin administration. Yaroslav Nilov (LDPR), chairman of the State Duma Committee on Public and Religious Associations, told Kommersant that the committee will discuss ways of combating anti-church actions at its first meeting. They plan to meet with representatives of different faiths on September 13 to discuss the issue. Nilov said that punishment for vandalism could be reviewed but a harsher punishment alone would not resolve the issue.


    Moody’s Downgrades G20 Growth Forecast for 2012

    Russia will show weak growth this year, amid plummeting oil prices, if Europe continues to be plagued by recession, Moody’s Investors’ Service warns.

    The ratings agency says that it now expects real growth in the G20 economies of around 2.8% in 2012 and 3.4% in 2013, down from its April forecasts of 3.2% and 4.6%.

    The main risks to the global outlook include “a deeper than expected recession in the euro zone” – largely due to tighter availability of credit, and “a hard landing in major emerging markets including China, India and Brazil.”

    “We are revising our forecast downward for these large emerging market economies, where the weaker external environment and decelerating domestic demand are causing a slowdown in the rate of growth,” said Elena Duggar, credit officer for sovereign risk at Moody's. “We expect that the slowdown in advanced economies and volatile capital flows will suppress growth in emerging markets.”

    Other risks include “an oil-price supply-side shock resulting from resurfacing geopolitical risks,” and “a sudden and sharp fiscal tightening in the U.S. in 2013.”

    Real growth in the G20 economies in 2012 will be significantly lower than the 3.2% growth experienced in 2011 and the 4.6% growth in 2010, says Moody's.

    “Financial markets volatility, fiscal consolidation efforts, weak consumer and business confidence, persistently high unemployment levels, and real estate market weaknesses will continue to constrain growth in the developed economies,” Duggar added.

    “Global economic trends depend strongly on political factors, which are far more difficult to predict than economic ones. The two main political questions are whether European leaders will be able to agree on the euro zone’s future and what action the leading Central Banks are going to take. The scenario suggested by Moody’s is highly probable,” said Vladimir Tikhomirov, chief economist at Otkritie financial group.

    Most analysts agree that a further downturn in Europe will hit Russia’s economy. According to Moody’s July forecast, in the worst case scenario Russia’s economy will contract by 5% in 10-12 months and the ruble will slump by 30%.

    “We already wrote in June that Russia is in for a hard landing due to the recession in the euro zone and an oil price slump caused by weakened demand,” said Maxim Oreshkin, chief economist at VTB Capital. The bank’s estimates for Brent crude are $97 per barrel in late 2012 and $95 in 2013; while GDP growth is expected to slow down to 2% in 2013 from 3.5% in 2012.

    “Russia’s economy is bound to slide downward if the recession grows any deeper in Europe. The EU is Russia’s largest trading partner. Russia’s commodity-dominated exports will shrink both in terms of volume and value, and investment will be cut too because major exporters are also the biggest investors,” Tikhomirov said.

    Official forecasts are more optimistic. According to the Economic Development Ministry, Russia’s GDP will grow by 3.5% in 2012 and 3.7% in 2013.

    RIA Novosti is not responsible for the content of outside sources.

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