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Russian Bakers Hurt as Food Prices Soar After VAT Hike

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An increase in Russia’s value-added tax (VAT) from the beginning of this year has hurt Russian bakeries, along with a poor harvest, rising oil prices (leading to higher transport costs) and sanctions-pressured devalued ruble, Realnoe Vremya reports.

The cost of key ingredients like sugar and eggs grew by around 28 and 26 percent respectively last year, while grains and flour rose by approximately 7 to 20 percent. In the first two weeks of 2019, inflation jumped beyond the Central Bank’s expectations, with the price of flour growing by 2.6 percent and prices overall increasing by nearly 1 percent, the business daily reported.

Maria Kudryashova, a consultant whose clients are primarily bakeries in Moscow, says the industry nationwide has been hit hard. “It’s an unpleasant moment,” she said. “Anytime prices rise, it’s painful.”

The VAT rise, from 18 to 20 percent starting January 1, was part of a controversial government plan announced last summer to replenish state coffers. When the State Duma passed the measure in July, critics worried that it would drive up gas prices and inflation.

“This year the increased VAT is the key shock,” said Tatiana Yevdokimova, chief economist for Russia at Nordea Bank. “It affects practically everything.”

The announcement last summer was overshadowed by unpopular pension reforms. But now that the new rate has come into effect, consumers are feeling the pinch.

“Prices at the supermarket have gone up across the board since New Year’s,” said Vitaly Fedotov, a 40-year-old cab driver, who had stopped in a bakery for a loaf of bread.

Among the products that will become more expensive are the usually cheap pirozhki — stuffed pastries which are a staple of the Russian diet. That is especially true for the country’s poor, says food historian Olga Syutkina, which she said makes up a significant chunk of the population. “And so it is namely them that rising prices will hit the hardest,” she said.

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Iran Blocks Nearly All Internet Access

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Iran imposed an almost complete nationwide internet blackout on Sunday one of its most draconian attempts to cut off Iranians from each other and the rest of the world as widespread anti-government unrest roiled the streets of Tehran and other cities for a third day, The New York Times reported.

The death toll for the three days of protests rose to at least 12; hundreds were injured; and more than 1,000 people have been arrested, according to semiofficial news agencies like Fars News.

Iranian Supreme Leader Ayatollah Ali Khamenei, who has the last word on all state matters, called the demonstrators “thugs” and endorsed the government’s decision to raise prices it sets for rationed gasoline by 50 percent as of Friday and by 300 percent for gasoline that exceeds ration limits. Even after the price hike, gasoline in Iran is still cheaper than in most of the rest of the world – now the equivalent of about 50 cents a gallon.

In a speech on Sunday, Khamenei said he would support rationing and increasing gas prices because heads of three branches of government had made the decision.

Khamenei also acknowledged that Iranians had taken to the streets to protest and that some had died – however, he blamed the protests on monarchists and opposition groups trying to destabilize Iran, the Times added.

The widespread discontent on display across the country marked yet another crisis for the country. Iran has been struggling with an economic crisis after the United States exited a nuclear deal and reimposed harsh sanctions that ban Iran’s oil sales.

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HASC Chairman Claims Legislation to Create a Space Force in 2020 ‘Still Possible’

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House Armed Services Committee Chairman Adam Smith said last week that negotiations on the 2020 National Defense Authorization Act are “proceeding reasonably well” but he expressed doubt that the NDAA will include language to authorize a Space Force as a separate military branch, SpaceNews reported.

“It’s still possible but by no means guaranteed,” Smith told reporters on Capitol Hill last week. When asked for specifics, Smith said, “I don’t think it would be helpful for me to make predictions.”

The biggest sticking point in the NDAA negotiations is language in the House version of the bill that restricts the use of military funds to pay for the wall that President Trump wants to build along the U.S.-Mexico border, SpaceNews adds.

There are other dealbreaker issues. The authorization of a Space Force as the sixth branch of the armed forces is one of them, Smith said. Other contentious matters include extending the “war powers” legislation that authorizes the president to use military force, and allowing transgender people to serve in the military.

Smith said the House and Senate NDAA conference in recent weeks worked on compromise language on hundreds of provisions and “reduced the stack significantly, and we’re down to a few really contentious issues.”

Smith characterized the Space Force as a “higher echelon” issue that is proving divisive. Both Republicans and Democrats in the House and Senate continue to have reservations about the administration’s Space Force proposal, said Smith. “There is bipartisan concern on the proposal and bicameral concern about the specifics of that proposal.”

The House version of the NDAA creates a Space Corps and is closer aligned with what the administration proposed. The Senate bill would rename the Air Force Space Command the U.S. Space Force and does not specifically authorize a sixth branch of the armed forces.

Smith noted that the House has been a proponent of a military space branch since 2017 while the Senate had adamantly opposed it. “In their bill they didn’t have the same language that we did. But the president has persuaded them to look at it differently.”

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Gunman Kills Four at California Backyard Party

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Police in the California city of Fresno were investigating a mass shooting at a football game party on Sunday in which at least 10 people were shot, killing four, with five others left in critical condition and another wounded, Reuters informs.

Three men died at the scene and another died at a hospital, Fresno Deputy Police Chief Michael Reed said in a late night news conference. Six more were hospitalized, he said.

“Our hearts go out to the families of the victims of this thing,” Reed said. “This was senseless violence. We’re going to do everything we can to find out who the perpetrators were and bring them to justice.”

A gunman walked into a backyard and started shooting at a south Fresno home, where a gathering of about 35 family and friends was watching a football game before 8 p.m., said Reed. Neighbors soon flooded 911 dispatchers with calls for help, Reuters adds.

The suspect fled the scene and police were combing the neighborhood for witnesses and possible security camera footage, police said. Police did not release further information about the shooting in the city about 200 miles (320 km) north of Los Angeles, except that the dead were men between the ages of 25 and 35.

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