This guest commentary was written by Rich Blake of Wikistrat
While Russia has carved itself a permanent spot in the American news cycle, the context is almost always with respect to United States election meddling, or, alternatively, the conflict in Syria. In recent weeks, Vladimir Putin’s alleged penchant for having dissidents poisoned has gotten a little attention too.
Still, it could be argued that myriad other more complicated but no less important storylines concerning Russia deserve more play. One example: renewed relations between Russia and Egypt.
What started a few years ago as a bolt-from-the-blue bear hug has quietly morphed into a tender slow dance – joint military exercises in the Med, arms deals, tourism partnerships – oh and did we mention Russia plans to build a nuclear plant in Egypt?
Something to Watch Very Closely
What this burgeoning alliance mean for the region, and for the rest of the world, remains to be seen. To assess the relationship's ramifications, Wikistrat, the world's first crowdsourced geopolitical intelligence consultancy, held a short online engagement exercise hotwiring the brains of a dozen experts on Egyptian and Russian politics/security/economies via a series of questions and cross-analysis.
One key question tackled by the working group: Can Russia replace Saudi Arabia as the main financial backer of Egypt? The answer seems more likely to be NO.
But it's still a situation on which to keep a close eye, especially with America's current foreign policy in a disrupted state not unlike a brand new chemistry set that's been opened on Christmas morning: jostled around and emptied out on to floor.
During the 1950s and '60s, the Soviet Union and Egypt were sort of kindred spirits with a shared disdain for dominant Western powers. But then came the early 1970s and the rise of Anwar Sadat who embraced the U.S. After a long sour patch, this pair of geopolitical misfits is giving it another go.
It's as if the drummer and bass player from a classic rock band decided to record some new material together following a long hiatus – even as their lead guitarist and singer soldier on together playing the old stuff – in other words, Russia and Egypt may find it complicated, if not impossible, to rekindle what may never have been there to begin with.
Or to take the analogy further, and in a more twisted direction – think two ex-lovers, one of whom is crafty and manipulative, the other, emotionally unstable, who move into a fixer-upper together, although the project is overwhelming and both of them are broke and off their meds. What could go wrong?
What's Behind the Russia-Egypt Bromance
Russia saw an opening to revive relations with Egypt after the latter country alienated Gulf state sponsors i.e. Saudi Arabia by supporting Assad's crackdown on Sunni Islamists. Saudi Arabia surely expected its ties with Egypt's president, Abdel Fattah al-Sisi, were bound in iron cement after the Kingdom supported the 2013 Egyptian military coup that put Sisi's government in power – and chilled relations between Egypt and the U.S.
That Sisi turned his back on the Kingdom's proxy wars (in Syria, Yemen and Iraq) with Iran, while expressing an all-options-open foreign policy not in lockstep with Riyadh's, was an even more monumental development than a U.S.-Egypt rift and cleared the stage for Russia to swoop in with candy and flowers in the form of an offer to help Egypt with its nuclear program.
Just when you thought the region couldn't be any more fragile you find new tensions, and new rivals; a gas leak inside a gunpowder making facility housed in the windowless basement of a firetrap. Or put in even scarier terms – a Russian-built nuclear reactor in the heart of the Middle East.
Egypt and Russia began to strengthen their cooperation in the aftermath the 2013 coup (paid for by Saudi Arabia) but this saga, while not new, has been underfollowed.
Increasingly aligned regional interests and a sense of mutual respect between Sisi and Putin has led to increased military cooperation, Egyptian purchases of Russian arms and an increase in economic cooperation, mainly in the energy sector. Last September, Egypt went as far as to back a Russian proposal on the Syrian crisis in the UNSC, full-well knowing it would lead to tensions with Saudi Arabia, its most crucial regional ally; or at least it was.
What's the smart money say...
The Wikistrat exercise – experts trading views, contributing answers and analysis to several key questions in a sort of pop-up think tank – had at least one key finding and it should come as (seemingly) good news for those followers of geopolitical tinder boxes and/or Lifetime network movies: Russia can never take the place of Egypt’s main strategic allies.
Wikistrat analysts believe that despite a genuine desire by both leaders to enhance bilateral relations, Russia will not be able, or willing, to replace Saudi Arabia and the Gulf States as Egypt’s main financial backer; nor will it be able to substitute the U.S as its main strategic partner. Said one contributor following the thought exercise: “Egypt's relationship with Russia is quite shallow and lacks serious depth."
The more recent upturn in relations with Russia is primarily a function of the deterioration of bilateral relations with the U.S. and the beginning of hedging behavior during a period of turbulence and isolation, the analyst added.
"Russia cannot and will not replace the financial support provided to Egypt by the United State and the Gulf.”
More reasons to not panic: Military cooperation seems likely to be limited to arms purchases of Egypt from Russia, military drills, and perhaps some (again, limited) cooperation in areas of common strategic interest. This could include Libya - where Egypt and Russia both support Khalifa Haftar’s Libyan National Army. The majority of Wikistrat's analysts believe that the plan to set up a Russian military base on Egyptian soil will not materialize, and that Russia will not directly intervene to help the Egyptian regime confront its own security threats.
However, and this could be categorized as worrisome, there is significant potential avenue for continued cooperation: Egypt badly needs foreign investment in its awakening energy sector.
Russia could benefit from Egypt’s energy resources and in the long term could finally lock-in Southern Europe to Russian suppliers of natural gas. In December 2016, the Russian energy firm Rosneft bought 30% of the stake in Egypt’s major gas field, Zohr, from Italy’s Eni. Additionally, Russia plans to build Egypt’s first nuclear plant in Dabaa.
How likely is that Dabaa plant (gulp), you might be asking? Of 12 Wikistrat analysts, 11 agreed; YES it is likely to materialize.
This is a Hedgeye Guest Contributor piece written by Rich Blake a veteran financial journalist and the former head of content at the Investor Intelligence Network. Blake is now a contributing analyst at Wikistrat, the world's first crowdsourced geopolitical intelligence consultancy with over 3,000 subject-matter experts.