The Russian war on Ukraine posed many challenges to all countries of the world, especially in light of the economic sanctions that are increasing daily on Russia by America and Europe, although some countries have announced their non-commitment to economic sanctions, but matters relate to difficulties related to money transfer, and the uncertainty of the future of dealing Direct with Russian institutions.

According to the data of the Russian Central Bank, foreign investments in Russia amounted to about 482 billion dollars, including financial and non-financial investments, as well as investments by banks, companies, the government and the family sector, which is a huge amount.

However, it is noted that the platforms of the first ten countries that acquire these investments are not one Arab country, for Cyprus is the front for the first Russian investments, then the Netherlands, then other European countries such as Britain and Germany, and one Asian country is Singapore.

The Arab region is linked to Russia by a set of economic activities, on top of which is Russia’s investments in some Arab countries in the oil and gas sector, as is the case in Iraq and Egypt. There are trade relations that include the import of wheat and grain by Arab countries from Russia, although Russian tourism is an important resource for many From Arab countries, such as Egypt, Tunisia, Morocco and Jordan.

Although Russia has extended relations with Arab countries on the economic level, it is noted that after the dissolution of the Soviet Union in 1989, these relations witnessed a marked decline, due to Russia's poor economic performance, and its tendency to deal significantly with Europe.

But after more than two decades of President Vladimir Putin's assumption of power, Russia has once again returned to the Arab region, in several areas, including the economic field.

investment projects

Describing Russia's relations with the Arab region in terms of investments, Russian Foreign Minister Sergey Lavrov stated in April 2019 that his country has implemented 400 investment projects in the Arab region at a cost of $40 billion, and that the share of Russian companies is $25 billion, and it is noted that there is a kind of Focusing on Russian investments in the region between the UAE and Egypt.

The UAE Minister of State for Foreign Trade, Thani bin Ahmed Al Zeyoudi, stated that his country acquires 90% of Russian investments in the Arab region through 4,000 Russian companies operating in the UAE, and that his country also acquires 80% of Arab investments in Russia.

The Russian ambassador to Baghdad, Maxim Maksimov, had stated in August 2020, that his country’s investments in Iraq amounted to 13 billion dollars in the oil and gas sector, without naming a time frame for pumping these investments into the Iraqi oil sector, which makes these statements lose transparency and credibility. Although the Russian presence in the Iraqi oil sector is significantly noticeable.

The volume of foreign direct investment flows to the Arab region in 2020 amounted to $40 billion, according to the statistics of the UNCTAD report.

But by reviewing the investment climate report in the Arab countries for the year 2021 - which is issued by the Arab Corporation for the Guarantee of Investment Risks and Export Credit - it was found that Russia is not among the top 10 investing countries in the Arab region, whether in 2019 or 2020.

Russia has major investments in Iraq in the oil and gas sector (Reuters)

Russian presence in oil and tourism in Egypt

The Russian presence in the field of investment in the Arab region in general, and in Egypt in particular, is more media than real.

When it is announced by Egypt that it has 467 Russian companies working in the field of investment in Egypt, it is expected that there will be a huge amount for the investments of these companies, but the number is shocking in terms of its modesty, as the capital of these companies is about 60 million dollars only.

Most of these investments are in the tourism sector. According to what the media reported about some of these companies, such as “Tees Tour” or “Red Sea Pearl” working in the tourism sector, their capitals amounted to $9.9 million and $4.2 million, respectively. There is a company "Sima" for the manufacture of concrete materials and road construction, which has a capital of 1.4 million dollars.

Russia had a presence in the natural gas fields in Egypt, especially in the Zohr field, where it bought 30% of the ownership of the Zohr field from the Italian company Eni, and then sold 10% of its ownership in the Zohr field to the UAE and Qatar, with a share of 10%.

There is talk of Russian contributions devoid of actual figures in the Gulf of Suez region, which includes industrial zones of a special nature. It is expected that Russia, through its investments in the Gulf of Suez Special Economic Zone, will pump about $7 billion, and these investments are expected to create about 35,000 jobs.

As for the El-Dabaa nuclear plant, agreements have been signed between Russia and Egypt in this regard, and the cost of this project has been estimated at about $40 billion, with Russia providing 80% of the project’s needs, and Egypt providing 20% ​​of it, and that the plant will include 4 units to generate electric power, about 1,200 megawatts per unit, at a cost of up to $10 billion.

Russia is expected to pump about $7 billion through its investments in the special economic zone in the Gulf of Suez (Reuters)

The future of Russian investments in the Arab region

It is too early to talk about the impact of Russian investments in the Arab region, although the activity of companies operating in the tourism sector will be greatly affected, in the short term, due to the decline - or even cancellation - of Russian tourism to all countries of the world in general, given Russia's financial situation, It makes it very keen on what it has of foreign currencies.

On the other hand, Russian investments in the oil and gas sector in the Arab region will not be affected, given that the economic sanctions imposed on Russia excluded the oil and gas sector.

On the other hand, the Arab countries hosting these investments will be difficult to dispense with, as this is an opportunity to reap profits in light of the high oil prices in the international market.

As for Egypt, for example, it may be negatively affected by the level of Russian investments that are planned to operate in the special economic zone that Russia intends to establish in the Gulf of Suez region, as it has not yet entered into force, and the same may apply to the project El Dabaa for the establishment of nuclear plants.

It is noted that Khaled Al Mubarak, who is one of those responsible for the investments of the UAE sovereign fund, has stated that his country's investments in Russia should be halted in light of the crisis of the war on Ukraine, a call that Russia may reciprocate. Sanctions on itself more than one front of war, especially that the economic aspect is one of the most prominent tools of the Russian conflict with Europe and America.

Russia may resort to the back doors to engage in investment business in the Arab region, especially in the field of indirect investments, through its citizens who hold other nationalities, or through a greater presence in the oil and gas sector in the Arab region, taking advantage of the fact that US and Western sanctions do not include the oil sector Russian.

The medium and long terms will have their consideration in determining the paths of the crisis of the Russian war on Ukraine, and its consequences, especially since the crisis has passed a month and a few days, and its scenarios are still open.

It can be said that Russian investments in the Arab region do not have a competitive advantage, as they exist only in the fields of tourism, oil and gas, areas in which Russia is not distinguished by unique technology or huge capital, as is the case with Europe and America, but some Asian countries as well.