IS RUSSIA'S MID-EAST POLICY ONLY ECONOMIC?

With the US bogged down in a costly war in Iraq, Russia has been busy rekindling old friendships in the Islamic world and establishing important economic links with some of America’s allies in the Middle East, including Israel and Saudi Arabia.
In January 2008, confirmation that a Russian company was awarded close to $1 billion for constructing a railway across Saudi Arabia did not grab the headlines yet it was further evidence of how Moscow had successfully wooed the Saudis. Behind the scenes, there was even talk of bigger deals involving the Saudis and major Russian arms exporters. Under Vladimir Putin’s presidency, Russia has cleverly restructured its outreach to the Islamic world and the Middle East in particular. Putin and his senior advisers in Moscow decided years ago that Russia had to move away from the old Cold War stance of shaping a foreign policy around political gains and a few Mid-east nations like Egypt and Syria. Instead, it had instead to build strong economic ties to former Cold war allies in the region like Syria and Egypt, and form energy ties with Israel and some of America’s foremost Arab supporters.
When Putin visited Saudi Arabia for the first time in 2007 he articulated what had already become a new Russian real politik based on economic strategy. He pointed out that Russia and Saudi Arabia were the world’s largest energy producers that that made them partners rather than rivals. He stressed that it was easy for the two countries to find what he called “common ground” and he pointed to the fact that as far back as 2004 economic cooperation had become the cornerstone of their relationship. In that year, the giant Russian oil company, LUKoil, won a 40-year contract to develop a massive gas field in the Rub el-Hali desert. He told Saudi leaders LUKoil’s investment plan amounted to $2billion but it was possible to forge cooperation on many other fronts, including nuclear energy.
Putin’s visit encouraged Saudi companies to invest in Russia and that led to a proposal for a Saudi-Russian bank. For close observers of the Middle East the Russian strategy of establishing economic links was at the heart of a policy that was aimed at not just competing with US economic dominance in the region but overtaking it at a time when America’s image across the Islamic world was at an all time low. Suddenly Russia was seen as having no political agenda in relation to Islam and that perception was helped by Russia’s determined efforts to avoid conflict with most Muslim nations. Putin’s advisers constantly stressed that Russia was respectful of Islamic traditions. On issues like Iraq Russia appealed to religious leaders on both sides to end the killing so as not to be accused of taking sides.
Meanwhile, Russia’s arms exporters and its nuclear energy companies continued to seek new clients. Recently, Moscow, much to the anger of US companies, not only agreed to sell Egypt new air defense systems but to help it build nuclear power plants. And if the big US and British oil giants thought they had managed to keep Russian competitors out of Iraq they were sadly mistaken because LUKoil, as well as a major Russian engineering, may soon sign contracts with the Iraqi government to drill for oil and re-build a pipeline from Iraq into Syria.
Russia’s most startling economic realignment from its Cold War period has been its growing economic relationship with Israel and while that has been happening Moscow has been careful to call for a peaceful solution to the Palestinian issue without siding only with the Palestinians as it did in the past. Under Vladimir Putin’s leadership which officially ends next month, Russian trade with Israel has doubled, amounting to over $3 billion, and much of that has been due to the fact that major deals have been done in the fields of medicine, engineering, energy, aviation and weapons.
On a visit to Israel in 2005, Putin was quick to point out that there was everything in place for the two nations to construct a major partnership. At that time, he was aware that Russian-born Jews, who had been allowed to leave Russia after the end of Communism, made up 20 to 25% of the Israeli population. Many of those Jews still had links to Russia and held joint Russian-Israeli passports. What Putin did not mention was that some of Israel’s richest men were of Russian origin and had used their Israeli passports to flee Russia to avoid corruption charges.
Irrespective of outstanding warrants for some billionaires, Putin accepted, as did his Israeli hosts, that the two countries had much to gain, especially in terms of energy. By then, it was clear Israel’s dependence on Russian oil and gas had grown annually. Israel appealed successfully to Moscow to persuade Turkey, which received Russian oil and gas supplies to consider a joint venture with Israel to build a two, or four-tier pipeline that could also carry water and electricity from Turkey to Israel. In 2007, an agreement in principle was reached with Turkey for the construction of an undersea pipeline from Turkey into the port of Eilat in the Gulf of Aquba. The US was happy about that proposed arrangement, believing the involvement of Turkey created a buffer between Israel and Russian energy giants whereby it would not easy for Moscow to shut off oil or gas to Israel in the event of a political crisis. Nevertheless, Israel’s ties to Russia are bound to remain strong given the annual trade between the two.
Washington has had to watch while Russia under Putin has used its considerable oil wealth and energy resources to establish an economic foothold in the Middle East at a time when the White House has been preoccupied with a costly and seemingly endless Iraq conflict. And, even when it comes to Russia’s relationship with another energy giant, Iran, Washington has been powerless. It could be said Moscow has thumbed its nose at Washington when President Bush has called for tougher sanctions against the Iranians. All the signs are that Russia, like China, has taken advantage of a weakened America by using vast wealth to create new partnerships across the globe. It could be argued that many of those partnerships are aimed at generating wealth but, on the other hand, historically a successful economic strategy is essential to a strong foreign policy.