Russia-Ukraine War; the View from Egypt!

Despite being geographically distant, Egypt is one of the many countries that is expected to be directly affected by the ongoing war between Russia and Ukraine. There are several economic, and thus political risks that Egypt has to maneuver while waiting for the current tragedy in Ukraine to settle down.

That is particularly true given the fact that this war is not expected to settle soon. However, on the bright side, there are several opportunities, within the greater scope of diplomatic and economic conflict between Russia and the west that Egypt should hunt. However, this is not going to be an easy mission, given the historical tendency of the Egyptian state to keep balance between its relations with the western and eastern powers of our world.

The “military operation” which the Russian President, Vladimir Putin, launched on February 24th, with the hope to accomplish over one night, is now stretching to days. The exemplary resistance of the brave Ukrainian people forced the entire world powers from the west and the east (e.g., Japan) to stand by their side, after initially turning their faces the other way. The war which started with Ukraine standing alone in the face of the giant Russia is quickly becoming a situation where Russia has stuck alone in face of the international community.

In Egypt, while the state is very careful to remain neutral and not to take the side of any of the conflicting parties, the Egyptian public are following the developments in Ukraine with a sense of gloating and fear. For some reason, they are looking at the issue as if Russia is taking revenge for the Arabs who suffered on the hands of the west. They resemble the Russian invasion of Ukraine with NATO’s intervention in Libya or the United States intervention in Iraq. Unfortunately, this twisted perception of the truth is widely outspoken, not only on social media platforms, but also on popular televised talk shows.

Since the beginning of the war, I have been, personally, noticing an increase in the number of the social media trolls, who make tweets or Facebook posts in Arabic to encourage Egyptians and Arabs to applaud Russia “for taking revenge for the Arab sufferings on the hands of the west.” Some of the posts went as far as posting photos of the Ukrainian President, Volodymyr Zelenskyy, wearing a Jewish kippah, and asking Arabs not support him because he is Jewish. Sadly, such racist rhetoric appeals to many Arabs.

On the official level, the Egyptian state seems to be seeing the issue from a different perspective. Like the majority of Arab countries, Egypt does not want to take one side against the other. Historically, Egypt has always favored the western camp. Egypt is a decades-long strategic ally to the United States and it has a growing economic and security relationship with focal European countries, such as France and Germany. But at the same time, Egypt depends on Russia, China, and North Korea in procuring arms and various forms of economic needs. In the past year, the flawed Middle East policy of the US President Biden pushed Egypt, as well as the majority of Arab Gulf countries, to lean more towards the Russia/China axis. On the eastern camp, it is easier to procure arms and make trade, without having to worry about the diplomatic pressures from the U.S. to improve their human rights record.

However, that does not mean that the Egyptian state is now excited that Russia is hitting Ukraine and provoking such unprecedented retaliation from the west. Ukraine has always been an important country for Egypt, for several geopolitical and economic reasons.

Egypt is one of the top five importers of wheat, in the world. On annual basis, Egypt imports its needs from Russia (50%) and Ukraine (30%). The ongoing war has already caused the prices of wheat to increase to unprecedented levels. That will soon be reflected as a huge burden on the Egyptian economy, that may also affect the prices of other basic food products. Even after the Russia-Ukraine war comes to an end, the sanctions imposed by western powers on the Russia economy will continue to affect wheat prices. For Egypt, finding alternative resources with reasonable prices is not even an option.

Meanwhile, the Egyptian tourism sector, which is barely recovering from the consequences of the COVID-19 pandemic, is also expected to be badly affected by the ongoing war between Russia and Ukraine. Large percentage of the Egyptian tourists come from Russia, Ukraine, and Belarus during the winter season. When the flights between Russia and Egypt were suspended between 2015 and 2021, the Red Sea resorts had been suffering to keep their business alive. Given the fact that the current Russia-Ukraine war is expected to keep happening for a long time, as the French President Macron said, the Egyptian tourism sector is doomed to go through the same sluggishness and complications, once again. That will eventually echo in other sectors of the Egyptian economy.

Nevertheless, the rapidly ascending Egyptian energy sector is expected to make up for these losses, especially now, as Europe is seeking alternative resources to the Russian Natural Gas. Since 2018, Egypt has been building up its reputation as the new hub for Liquified Natural Gas (LNG) in the Mediterranean. Since the last quarter of 2021, Egypt started to export regular shipments of LNG to Turkey and southern Europe. In January 2022, for the first time ever, Egypt started shipping LNG to countries as far as Netherlands, in northwestern Europe. Although Egypt is not one of the giant producers of Natural Gas, like Qatar, Iran, or Russia, it has an advantageous geographic location that will make it more favorable for Europe to import gas from. Yet, to hunt this ripe opportunity, Egypt needs to expand its cooperation with neighbor large producers of gas, such as Libya, Algeria, and Israel in fulfilling Europe’s needs from gas.

The unjustifiable military assault by Russia on its neighbor Ukraine, on February 24th, is only the beginning of an international turmoil that will change the face of the world forever. The transformation process will take years to shape into a stable format, within which some global powers will fall while others arise to portray a whole new world order. In the middle of that process, all the countries of the world – no exception – are going to face varied degrees of political and economic challenges. While the majority are expected to suffer, some are expected to survive and grow throughout the future crises. Let’s be optimistic that Egypt becomes one of these lucky countries.