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U.S. Sanctions Bring Kremlin, Russian Oligarchs Closer Together

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Beleaguered by Western sanctions, Russian President Vladimir Putin is turning the national economy inward, enlisting local tycoons for the biggest infrastructure-investment program since Soviet times, Wall Street Journal writes.

The government plans to spend the equivalent of $100 billion during the next five years on dozens of bridges, ports and transportation links, including the Northern Latitude Way railway, a revived train route through the frozen Arctic steppe first dug decades ago by gulag laborers.

The initiative is Russia’s most ambitious attempt yet to overcome the loss of Western capital and technology, which followed Moscow’s annexation of Crimea from Ukraine in 2014. The government expects these megaprojects to swamp Russian industry with orders for everything from cement to railcars, boost exports and create tens of thousands of new skilled jobs, thereby doubling the current GDP growth rate to 3.1% by 2021.

“We have to depend on our own resources” to boost the economy, Russian Finance Minister Anton Siluanov told a conference of investors Wednesday. “To achieve growth targets, we have to boost investment.”

Russia faces an array of economic challenges ranging from labor shortages to sanctions, and it has set ambitious investment targets before and fallen short of achieving them. Analysts also warn the economic benefits of the fiscal stimulus risk being swallowed by corruption if the government doesn’t improve transparency and competition.

By handpicking the new projects’ suppliers and builders, Putin is compensating loyal oligarchs who have been blacklisted by the U.S. Treasury or who may be hit by a new round of Western sanctions expected before the end of the year, the Journal notes.

The holding company chosen to build and charge tolls for the Northern Latitude Way is run by former and current managers of sanctioned billionaire Gennady Timchenko, whose gas company Novatek will be among the biggest beneficiaries of the new rail line.

“It is a way for the Kremlin to support their favorites, to instill loyalty,” said Alexandra Suslina, fiscal policy expert at Moscow think tank Economic Expert Group.

High commodity prices and the falling ruble have allowed the country’s energy, mining and grain companies to rack up record cash holdings in the past year. Instead of pocketing these earnings through dividends, the Kremlin wants the industry magnates to bridge the funding gap caused by tight budget rules and the loss of Western investment, the Journal adds.

Half of the infrastructure-investment program will be financed by nonbudgetary sources, according to the government’s plan approved in late September. Officials and Russia’s big business have so far shortlisted a thousand joint investment projects, according to Siluanov.

Western sanctions were intended to fracture Russia’s elite. Instead, the siege mentality has brought the oligarchs and the Kremlin closer together by increasing their mutual dependence, said Alexey Makarkin, analyst at Center of Political Technologies, another Moscow think tank.

U.S. policy makers “tried a textbook tactic to sow division, but it didn’t work in Russia,” he said. “The Russian elite remains united.”

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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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