Like many events, there are those who benefit from the events and make gains, and there are those against whom the events are against and they suffer losses.
And because the Arab region is not a single economic entity, the economic repercussions of the Russian war on Ukraine will differ from one country to another, according to the data that resulted from the war at the global level, in the various economic indicators.
Economic Relations
According to the published figures, the volume of trade exchange between Arab countries with Russia in the period from 2019 to 2021 ranges between 18 and 21 billion dollars, but there are other relations that include investment between the two parties.
Most of the country’s policies and relations come within the framework of promises or memoranda of understanding, which have not been translated on the ground to a great extent, as was announced during visits by senior officials from the Gulf states, the Russian industrial zone in Egypt, or the nuclear power plants in the El-Dabaa region in Egypt.
The limited volume of trade between Russia and the Arab countries is due to the fact that Russia, as well as the Arab countries, produce competing, not integrated, goods.
Russia is one of the largest exporters of oil and gas in the world, as well as about 9 or 10 Arab countries, which depend on oil and gas exports, and most Arab countries tend to import equipment and machinery from America, the West, and finally from China, given the technological progress in these countries compared to Russia.
In 2019, Russian Foreign Minister Sergey Lavrov stated that Arab and Russian companies implemented about 400 projects at a cost of $40 billion, of which the share of Russian banks was $25 billion. Russian companies are also enjoying the implementation of some projects in Iraq in the field of energy, exploration and oil extraction.
Wheat and rebar are the two most important commodities that Arab countries import from Russia and Ukraine, in varying proportions from one country to another. Some Arab countries, including Egypt, export some fruits, citrus fruits and vegetables to Russia and Ukraine.
Wheat and rebar
Wheat and rebar are the two most important commodities that Arab countries import from Russia and Ukraine, in varying proportions from one country to another. Some Arab countries, including Egypt, export some fruits, citrus fruits and vegetables to Russia and Ukraine. past years.
However, Russia has a new position in terms of political and economic geography, after its permanent presence in Syria, and its occupation of the areas of the Syrian coast, which is expected to contain a great wealth of oil and gas, and Russia will not miss this opportunity, but will use it within the framework of the pressure cards it played In the international energy market, in the previous stage.
It is expected that this card will be in Russia’s hands in the future, at least in the short and medium terms, unless America and the West accept Russia’s role in the energy market, and do not look for other alternatives to Russian oil and gas, and if they decide to replace Russian oil and gas with another alternative, It will not be in the short term.
Winners from the crisis
In a quick reading of the repercussions of the Russian war on Ukraine, oil prices reached 105 dollars per barrel, and it is natural for Arab oil and gas exporting countries to benefit from the high price, as the share of Arab countries in oil exports worldwide is 24%.
And the International Monetary Fund’s estimates, over the past lean years in the oil market, were that the price equivalent to the general budgets of the Arab oil countries ranged between $45 a barrel in Qatar, and $100 a barrel in Bahrain, and between them the UAE at a price of $60 a barrel, and in Saudi Arabia 75 Dollars per barrel, and in Kuwait $65 per barrel, especially after its great financial crisis two years ago.
Hence, according to the recently announced prices of high oil prices in the global market, at 105 dollars per barrel, this means that Arab budgets are expected to deposit deficits, achieve a financial surplus from oil revenues, and may be able to dispense with external and domestic debts, and they can also restore What lost foreign exchange reserves balances.
imported inflation
On the other hand, when the Arab oil countries benefit from the rise in oil prices on the international market in light of the Russian-Ukrainian crisis, they will be saddled with high imported inflation rates, resulting from high production costs due to high energy prices.
And because most Arab oil countries depend heavily on importing their needs of goods and services, they will pay a large part of what they have obtained from the rise in oil prices, in addition to the price of the goods and services they import.
The losers due to the crisis
The position of non-oil Arab countries will be difficult in the next stage, because of their dependence on importing a large part of their needs, and this will burden them with the imported inflation bill in the next stage, and then increase the burden of living on their citizens.
On the other hand, these countries depend on imports to manage their energy needs, and from here the problem of budget deficits in those countries will increase, and their public debt will also rise.
Egypt's privacy
Egypt is one of the largest Arab countries affected by the crisis of the Russian war on Ukraine. In terms of oil, Egypt so far - according to the balance of payments data for the year 2020-2021 - achieves its oil trade balance with a deficit of about $100 million, and if oil prices continue to rise, it is likely that The oil trade balance deficit is rising.
If the foreign partner's share of Egyptian oil exports is excluded, the oil trade balance deficit will be larger, which will put new pressure on the demand for foreign exchange.
On the other hand, Egypt counts Russia and Ukraine as one of its most important sources of wheat, in which Egypt is the first importer in the world, with a balance of nearly 10 million tons annually, and the occurrence of problems in both Russia and Ukraine will undoubtedly stop exports from Wheat, or at best export quantities will decrease.
This means that Egypt should look for alternative sources in the next few months, and the alternative may be France, Australia, or America, and France in this case is the best, due to considerations of proximity compared to America and Australia, and in order to save shipping costs.
Egypt’s problem also has negative repercussions on it due to the Russian war on Ukraine. Egypt receives a good share of tourist delegations from Russia and Ukraine, and the decline in the number of tourists from these two countries will greatly affect the tourism revenues that Egypt greatly needs, as the most important foreign exchange resource. , especially that Egyptian banks have suffered in the past months from a decline in their foreign exchange assets by about $7.1 billion.
Algeria and Iraq may be better off compared to Egypt, as they are two oil countries, and they can search for an alternative to import their needs of wheat or iron, even if the alternative is more expensive, but the resources from oil wealth will enable these two countries to pay these differences.
Predictions are correct
Previous expectations remain hostage to the current reality, as we are faced with two scenarios for the future of the Russian war on Ukraine: the first is to end the war in a short time, with Russia’s victory, and its resolution of the files related to this war, and what will lead to matters, and the survival of the booms in the price of oil in the international market, with the sanctions remaining The economic impact of Europe and the West on Russia, and the stumbling of obtaining the needs of Arab countries from Russia or Ukraine.
The second scenario is that the Russian war on Ukraine will be prolonged, and Russia cannot be resolved in the short term, and the war will extend to a medium or long term, and then we will be facing greater increases in the costs of external dealings at the level of the world in general, and with Russia and Ukraine in particular, and then It is expected that the profit and loss accounts for Arab countries will increase, unless other matters arise.