Putin’s Eastern promises

Much has been made about Russian President Vladimir Putin’s visit to Cairo. There has been speculation since the coup in 2013 that Egypt’s ruler Abdel Fattah al-Sisi has been contemplating a shift in alliances toward Russia. This has been in response to the popular belief in Egypt, propagated by the regime and its media supporters, that the United States had backed the Muslim Brotherhood and continuous speculation that Washington is conspiring with the now banned organization in its efforts to destabilize the new Egyptian government.

The Egyptian government has gone out of its way to play up the significance of Putin’s visit. Streets in Cairo were lined with posters of the Russian president’s face, welcoming him in English, Arabic and Russian. The flagship state newspaper ran a massive spread the day before Putin’s arrival declaring him a “hero of this era” in its headline, while covering the front page with photos of Putin, including one of the Russian president bare-chested.

In the end, however, the theatrics of a presidential visit cannot replace the strategic limitations of relations between Moscow and Cairo. Ironically, the United States is far from the most important barrier to more robust ties between the two governments. It is in fact Sisi’s backers in the Arabian Gulf who pose the most significant challenge to deepening the strategic relationship between the two strongmen.

Putin’s policies in the Middle East stand diametrically opposed to the priorities of the Gulf monarchies who finance Sisi and his regime. While the Gulf has been adamant that the government of Bashar al-Assad in Syria must fall (arguably even more so than the Americans), Putin has provided Assad with large shipments of arms helping to fuel his brutal repression of the uprising against him. Russia’s strategic ties to Damascus stretch back decades and its naval base in Tartus is an important strategic asset to the Russian navy.

The Gulf has been leery of Iran’s suspected nuclear ambitions and has supported robust pressure on the Islamic Republic to prevent it from being able to produce nuclear weapons. The Russians, however, have advocated a softer and more forgiving approach to dealing with the Iranian nuclear program.

In terms of economics, the Gulf, through OPEC and led by Saudi Arabia, has kept oil supplies in the global market high, affecting a dramatic collapse in the price of oil in an effort to price out new high cost producers and reserve greater market share for low cost producers. Russia, however, needs the price of oil to hover around US$100 a barrel in order for the state’s budget to break even. The current price per barrel is around half that.

Moreover, due to an array of economic problems currently plaguing Moscow, Putin is not currently in the position to deliver any largesse in an effort to buy favors or support in Cairo. The Russian economy is expected to contract by 4 percent this year, largely due to the drop in energy prices coupled with the impact of Western sanctions on Russian banks.

There has been talk of an agreement to conduct bilateral trade in domestic currencies rather than the international standard of trading in US dollars. Again, this is more symbolic than it is significant. Trade between the two countries is fairly limited and the potential new agreement through which Egypt will purchase gas from Russia will only increase the trade imbalance in Russia’s favor than is already the case. Ironically, this new bilateral currency agreement will thus penalize Russia more than Egypt, as Russian businesses will be saddled with a disproportionately large stock of Egyptian pounds, which cannot be traded or used outside of Egypt. Moreover, neither currency is terribly reliable, which is why international trade often depends on the dollar. The Egypt pound is in the middle of a deliberate devaluation while the Russian ruble has been highly unstable in the last few months, losing nearly half its value. While both governments would like to loosen their dependence on the dollar, there are a number of practical reasons why both Egyptian and Russian businesses may not be thrilled with this currency deal.

Putin’s visit offered both leaders an opportunity to exaggerate their importance. For Sisi, it offered the new Egyptian president an opportunity to play host to a prominent world leader and allowed Sisi and his supporters to suggest that the current regime is bringing Egypt to a more prominent place in world politics. It also allowed Sisi to further fuel speculation that he was contemplating and prepared for a shift toward Russia, which is widely understood in Egypt to imply greater independence for the Egyptian government.

Putin was given the opportunity to rub his nose at Washington by securing a warmer welcome by America’s longtime ally than any American officials have seen in quite some time. At the moment, Putin believes the United States and Western Europe are interfering in his sphere of influence in Eastern Europe and so this was an opportunity for him to return the favor, in a sense.

In all likelihood, however, Washington will dismiss this publicity stunt in much the same way it has learned to ignore the series of media spectacles emanating from Cairo over the past couple of years. In the end, America’s strategic interests in Egypt are not seriously affected by the media manufactured turmoil between the two countries. Military and intelligence cooperation are largely intact and, despite Washington’s public statements criticizing repression in Egypt, it’s doubtful that such cooperation will change.

Both Washington and Cairo have media messaging designed to appease their respective publics and so, while the United States continues its decades-long charade of expressing concern over human rights violations, its policy of ignoring such violations in practice will also continue. While it may be regrettable, democracy and human rights have virtually never figured prominently in US foreign policy priorities.

One thing Egypt and Russia do have in common is that their economic problems severely limit their strategic options vis a vis one another. In the end, Egypt cannot afford to go without Gulf funding and Russia cannot afford to replace it.

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Timothy E. Kaldas