Russia and Egypt Rekindle Relations

Summary

Russian and Egyptian relations are improving as both countries respond to changes in the Middle East and look for alternative partners to work with on multiple fronts. The countries' foreign and defense ministers met Nov. 13-14, the highest-level meeting Moscow and Cairo have held in years. The conference is in preparation for a possible visit to Cairo by Russian President Vladimir Putin later this month, Putin's first such visit to Egypt. However, despite their common interests at the moment, both countries realize that a permanent alignment is not sustainable.

Analysis

Russia and Egypt have a long and tumultuous history. Egypt was a staunch supporter of communist regimes around the world in the early part of the Cold War, and the Soviet Union supported Egyptian leader Gamal Abdel Nasser as he modernized the Arab nation. At the time, Egypt and the West were experiencing spats over Egypt's nationalizing the Suez Canal and expelling Western diplomats. However, when Anwar Sadat assumed the presidency in Cairo in 1970, the country began to turn toward the West and relations cooled with Moscow after Sadat expelled thousands of Soviet military advisers.

Today, changes in the Middle East are undermining the positions of Egypt and Russia. The United States and Iran could be headed toward a compromise, which would alter the reality of the region. If such a deal takes place, Russia would lose its last significant bit of leverage in the Middle East, since the Syria issue has already been played out. Russia is now seeking a new advantage in the Middle East, both to anchor itself in the region and to counter the United States. This also comes as Russia is attempting to propel itself onto the international stage as an alternative power to the United States.

U.S.-Egyptian relations have dropped off substantially since the July 3 coup, and in light of Washington's decision to cut military aid to Cairo in October, there are no signs of improvement. With the United States now tilting toward Iran, Arab nations are scrambling.

Egypt's Crisis Threatens Foreign Aid

Already Egypt is in serious economic distress due to falling energy production and skyrocketing inflation. The Egyptians have turned to their Gulf Arab allies for help, thus far receiving $7 billion of the $12 billion promised from states such as the United Arab Emirates, Saudi Arabia and Kuwait. But the Gulf Arab aid is not enough to keep Egypt stable, and the country is seeking a supplementary patron not only for aid but also to try to shape U.S. behavior.

There are three main areas in which Russia and Egypt can begin to develop stronger relations. The first is financial -- Egypt's foreign reserves are dwindling and foreign aid has been insufficient, while Russia has excess cash in its reserves and growing oil-supported wealth funds.

The second potential area of cooperation is military. Reports have emerged that Russia and Egypt are negotiating a considerable military deal, certainly the largest and most important between the countries since the 1970s. Price estimates for the deal, which reportedly centers primarily on MiG-29 fighter aircraft, air defense missile systems and anti-tank guided missiles, range from $1.5 billion to $4 billion.

Finally, Russia can support Egypt with larger grain exports. In the 2012-13 grain season, Russia made up a third of Egypt's grain imports, approximately 2.7 million tons. Russia is currently having a healthy year for grain production at home, with a rise in exports for 2013-14 expected. The problem in recent months between Egypt and Russia has been the price -- Cairo has been unable to afford Russian grain, which is more expensive than grain from countries such as Ukraine. An agreement for discounted grain is a possibility going forward.

Even with so many important potential deals, there are limits on the Russo-Egyptian relationship -- and on Russia ever replacing the United States in relations with Egypt. Egypt will always have some sort of relationship with the United States, and Russian support so far from home is typically piecemeal as Moscow deals with domestic problems. Moreover, Egypt's Gulf Arab allies would not be welcoming of Cairo's attempts to swap Washington for Moscow. But at this time, Egypt and Russia are seeking any advantage they can from rekindling the relationship while the region realigns. Egypt has specific needs that Russia can fill, and Russia needs to continue shaping the Middle East in order to keep U.S. focus far from its immediate region.

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