{"id":970,"date":"2023-06-22T10:00:36","date_gmt":"2023-06-22T13:00:36","guid":{"rendered":"https:\/\/wp.ufpel.edu.br\/geomercosul\/?p=970"},"modified":"2023-06-22T00:27:12","modified_gmt":"2023-06-22T03:27:12","slug":"russia-is-looking-for-new-economic-partners-in-africa","status":"publish","type":"post","link":"https:\/\/wp.ufpel.edu.br\/geomercosul\/2023\/06\/22\/russia-is-looking-for-new-economic-partners-in-africa\/","title":{"rendered":"Russia is Looking for New Economic Partners\u2014in Africa"},"content":{"rendered":"

Russia\u2019s turn towards the Global South, including and especially Africa, may turn out to be one of the most defining legacies of the war in Ukraine. By\u00a0Vuk Vuksanovic<\/span><\/p>\n

<\/p>\n

Western sanctions have isolated Russia from its usual Western trading partners, necessitating its move into new markets. This primarily includes countries and regions where governments have not participated in the sanctions against Russia. Amidst this endeavor to diversify its economic relations, Moscow has demonstrated a keen interest in Africa, where it increasingly seeks to involve itself in a number of industries.<\/p>\n

For Western policymakers and observers, the dynamics of Moscow\u2019s engagement with Africa is notable; partially for geopolitical concerns, partially for economic competition considerations, and partially because they help highlight what\u00a0many in the West\u00a0believe is a policy failure: the inability to inflict more severe economic damage on Russia is in part driven by the fact that the rest of the world was not willing to follow the West\u2019s lead.<\/p>\n

\n
\n
How and What Does Russia Invest in Africa?<\/strong><\/div>\n
<\/div>\n<\/div>\n<\/div>\n

In\u00a0an interview late last year, Russian academic Natalia Piskunova indicated that Russia\u2019s policymaking process regarding African investment is divided into two levels: what the Russian state does and what private Russian businesses do.<\/p>\n

\n
\n
According to Piskunova, in the years before 2010, when Moscow started showing more open interest in Africa, Russian companies with interests in the African market such as Rusal, Rosneft, and Lukoil unsuccessfully lobbied for government support for their operations on the continent. It was only after the Russian government gradually began showing interest after 2010 that the state and companies began cooperating more.<\/div>\n
\n

Russian companies, regardless of whether they are private, state-owned, or have a level of state participation, receive assistance from the Kremlin in the form of subsidies and tax-free agreements. Aside from making up for lost time, this support enables Russian business interests to better establish themselves and expand operations. This is worth noting, as Moscow is particularly interested in some specific key fields and industries.<\/p>\n

Logistics, Finance, and Sanctions Evasion<\/em><\/p>\n<\/div>\n

Many African ports are essential in terms of international trade logistics, including those in North Africa (Egypt, Tunisia, and Algeria), East Africa (Kenya), and Southern Africa (South Africa). Likewise, African airports, particularly regional airline hubs such as Cairo, are also helpful for Moscow, as Russian businesses and tourists make use of flights to Africa. One example is\u00a0Ethiopian Airlines, which renewed its flights to Russia in August 2022. This access is important for Russia because the EU has closed its airspace to Russian-owned and-registered planes.<\/p>\n

On a more cynical level, Africa\u2019s trade infrastructure also serves an avenue for evading sanctions. These countries do not support Western sanctions and, unlike the European Union, have not prohibited Russian ships from using their ports. Russian ships can thus undergo repairs in these ports if necessary and pay for such services. As\u00a0China and India\u00a0account for 40 percent of Russia\u2019s oil exports and the Red Sea is a significant transit route for oil tankers, port access in the Red Sea\u2019s littoral countries\u2014Egypt, Sudan, Eritrea, and Djibouti\u2014is also crucial. In addition,\u00a0the Port of Cape Town\u00a0in South Africa is useful for Russian oligarchs\u2014they avoid having their luxury yachts seized by docking them in countries that have not joined the sanctions.<\/p>\n

On the financial side, the largely state-dominated banking sector on the continent can help Russia conduct international banking and financial transactions in the face of sanctions elsewhere. African finance uses China\u2019s UnionPay payments system, which is essential for Russia given that Visa and Mastercard have left the Russian market.<\/p>\n

Russia\u2019s political and military backing of various regimes on the continent also grants it an additional financial boon: access to gold from Sudan and diamonds from the Central African Republic. These resources are essential for the Russian budget, making the country\u2019s economy\u00a0more resilient to foreign sanctions, especially since gold and diamonds are not as easily frozen and seized as other financial assets.<\/p>\n

Extractive Industries: Mining, Agriculture, Oil & Gas<\/em><\/p>\n

For the Kremlin, African gold and diamonds are not just financial assets. Russia\u2019s mining industry, which has considerable expertise, has found considerable success in the continent and plays a major role in Moscow\u2019s policymaking.<\/p>\n

In Angola, the Russian company Alrosa, the world\u2019s largest diamond miner, is one of the owners of\u00a0Catoca<\/a>, the world\u2019s fourth-largest diamond mine. The country is important to Moscow because of its copper reserves, which are crucial in producing machinery and high technology, especially considering the fact that Russian copper ore is hard to extract. There are\u00a0concerns<\/a>\u00a0that the sanctions against Russia and Alrosa may disrupt mining operations through a lack of spare parts and machinery. Meanwhile, in\u00a0Guinea<\/a>, Rusal, one of the world\u2019s largest aluminum companies and owned by sanctioned Russian oligarch Oleg Deripaska, owns Dian, the world\u2019s largest bauxite deposit. About half of Rusal\u2019s aluminum ore bauxite production comes from its mining operations in Guinea.<\/p>\n

Africa is also rich in\u00a0\u201crare earth\u201d minerals, which are essential in the production of hi-tech devices (such as smartphones and monitors), energy conversion systems (wind turbines, photovoltaic panels, and electrical machinery), and military equipment (lasers and radar). While the West, particularly the United States, has been wary of exploiting these elements owing to environmental considerations, the Russians and the Chinese have made inroads in Africa to secure these vital resources. As a result, Russia has leverage with the West, as the technology needed for transitioning to a green economy relies on these minerals. Even Russia\u2019s Wagner Group, a private military outfit with Kremlin ties, frequently provides security to African governments in exchange for\u00a0access to natural resources. It will most likely be compensated for its collaboration with the military junta in Mali, for example, through access to uranium, diamond, and gold mines.<\/p>\n

Russia\u2019s agriculture and fertilizer industry also enjoys success in Africa, granting it much policymaking heft in Moscow. The Russian Ministry of Agriculture views African nations as worthy agricultural partners. Its importance is reflected in its leadership: the ministry itself is headed by Dmitry Patrushev, the son of Nikolai Patrushev, who is the secretary of the Russian Security Council.<\/p>\n

Relatedly, Russia is a major partner of the continent in terms of food and fertilizer exports. Food accounts for 40 percent of the consumer basket in Africa, which is directly impacted by the war in Ukraine, as Russia and Ukraine account for nearly 30 percent of global wheat exports.\u00a0More than 50 percent of wheat imports\u00a0in Burundi, Uganda, Rwanda, Tanzania, Sudan, and Somalia come from Russia and Ukraine. In addition, in 2021 Russia, was the leading exporter of nitrogen fertilizers, the most used fertilizer on the continent, and the second-biggest exporter of potassic and phosphorous fertilizers, accounting for 14 percent of global exports.<\/p>\n

Somewhat unexpectedly, Russia\u2019s oil and gas industries are not as successful in Africa as elsewhere owing to political security considerations. This is because oil and gas operation processes\u2014extraction, refining, transportation, etc.\u2014require specialized facilities, which themselves require significant capital and time to develop. For example,\u00a0Russian energy giants such as Gazprom and Rosneft\u00a0returned to Libya after leaving the country owing to NATO\u2019s 2011 intervention there. Yet while countries such as Libya appeal to Russia as an investment destination, Moscow also views security and political stability as preconditions for the influx of capital, thus putting certain limits in place.<\/p>\n

Nuclear Energy<\/em><\/p>\n

In contrast to the oil and gas industries, Russia\u2019s nuclear industry has recorded successes in Africa. Rosatom, a state-owned nuclear energy company, is active in constructing nuclear power plants and helping African nations address their energy supply needs. In both economic and political terms, nuclear power plant projects are suitable investments for Moscow, as they create a dependency on its nuclear expertise and materials.<\/p>\n

After a delay of several years, in July 2022 the concrete was poured for\u00a0Egypt\u2019s first nuclear power plant, which Rosatom will build in the town of El-Dabaa. The project was agreed to in 2017 by Russian president Vladimir Putin and Egyptian president Abdel Fattah el-Sissi, and is \u201cthe largest Russian-Egyptian cooperation project\u201d since the 1950s. Although\u00a0South Korea<\/a>\u00a0has introduced sanctions against Russia because of the Ukraine invasion, a state-owned Korean company, Korea Hydro & Nuclear Power, will provide turbine-related equipment and construction services at the El-Dabaa plant.<\/p>\n

Other countries are also potential partners for the Russian nuclear energy industry and Rosatom going forward, as the continent\u2019s growing population forces it to address the issue of energy supply, with\u00a0potential clients\u00a0including South Africa, Nigeria, Ethiopia, Ghana, Zambia, and Rwanda. It is worth mentioning that South Africa planned to build more nuclear plants, with Russia\u2019s Rosatom as one of the bidders. One project\u00a0was announced<\/a>\u00a0by former South African president Jacob Zuma, only to be canceled by his successor, Cyril Ramaphosa, in 2018 for being too expensive. In 2017, the South African High Court declared the contract between South Africa and Rosatom on increasing nuclear capabilities at South Africa\u2019s only nuclear power station, Koeberg,\u00a0to be unlawful.<\/p>\n

Defence Industry<\/em><\/p>\n

Speaking of creating dependencies, Russia\u2019s defense industry plays a prominent role in Moscow\u2019s economic collaboration with Africa. Between 2015 and 2019 the Russian government signed\u00a0nineteen agreements\u00a0related to military cooperation with African governments, focusing on weapon sales. Russia\u2019s presence in the African arms market is expedited by the fact that many national army arsenals come from the Soviet Union when Moscow was a major weapon supplier to the continent. In addition, Russia does not place conditionalities on arms transactions framed around human rights and governance standards. From 2017 to 2021, Moscow provided almost half of\u00a0Africa\u2019s imported military equipment\u00a0(44 percent), followed by the United States (17 percent), China (10 percent), and France (6.1 percent). Algeria, Angola, Burkina Faso, Egypt, Ethiopia, Morocco, and Uganda are\u00a0among the largest buyers\u00a0of Russian weaponry.<\/p>\n

It remains unclear how much the war in Ukraine, Western sanctions, and disruptions in global supply chains in recent years have and will further impact Russian arms exports to the continent, in terms of both delivering new equipment and providing maintenance for old equipment. Russia does appear willing to fight for its markets, however. In August 2022, it held its\u00a0\u201cArmy 2022\u201d military exhibition\u00a0with visitors from seventy-two countries, during which Putin said it was ready to share its weapons with its allies in Latin America, Asia, and Africa.<\/p>\n

Other Interests: Tourism and Pharmaceuticals<\/em><\/p>\n

\n
\n
<\/div>\n<\/div>\n<\/div>\n

A number of other industries factor into Russia\u2019s relationship with African countries, though with mixed results.<\/p>\n

Tourism is one of the winners. Consider, for example, Russian tourism in Egypt. Before the Ukraine war, tourists from Russia and Ukraine made up\u00a0around 40 percent o<\/a>f beach holidaymakers in Egypt. However, at the start of the war, hotel occupancy rates in Egypt\u2019s Red Sea resorts dropped by 35 to 40 percent. That fall is now being reversed: in\u00a0August 2022<\/a>\u00a0Egypt was the second most popular destination for Russian tourists, after Turkey and ahead of the United Arab Emirates. In terms of\u00a0wealthier Russian tourists, from the beginning of Russia\u2019s invasion of Ukraine in late February 2022 to December 2022, premium travel from Russia to Egypt went up by 181 percent. This suggests that Egyptian tourism has profited from the war in Ukraine, to the extent that Egypt is considering introducing\u00a0the Russian payment system Mir\u00a0in Red Sea resorts.<\/p>\n

\n
\n
Russia\u2019s pharmaceutical industry has seen less success. A good example of this is Moscow\u2019s attempts to promote its Sputnik V vaccine<\/a>\u00a0against COVID-19 on the African continent through so-called \u201cvaccine diplomacy,\u201d which largely failed. This was owing to issues with vaccine efficiency, high prices, and delayed deliveries\u2014as well as the fact that the World Health Organization has not approved it.<\/div>\n
<\/div>\n
\n

The Consequences of War<\/strong><\/p>\n

Given that African nations are still developing and that Russia\u2019s primary economic goal in the short and medium term is withstanding the impact of Western sanctions, there is a limit to Moscow\u2019s economic engagement with the continent. However, Russia and African nations will use any opportunity to boost economic ties.<\/p>\n

Overall, Russia\u2019s turn towards the Global South, including and especially Africa, may turn out to be one of the most defining legacies of the Ukraine war. The Global South countries may not wield the financial heft of the Western economies, but their landmass, population, and resources make them important partners for non-Western powers like Russia and China. This is something that Western policymakers ought to keep in mind.<\/p>\n

Dr. Vuk Vuksanovic is a Senior Researcher at Belgrade Centre for Security Policy (BCSP) and an associate at LSE IDEAS, a foreign policy think tank within the London School of Economics and Political Science (LSE). Follow him on Twitter at\u00a0@v_vuksanovic<\/a>.<\/em><\/p>\n

This article is based on\u00a0<\/em>a report<\/em><\/a>\u00a0he authored for the South African Institute of International Affairs (SAIIA).<\/em><\/p>\n

https:\/\/nationalinterest.org\/feature\/russia-looking-new-economic-partners%E2%80%94-africa-206564<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Russia\u2019s turn towards the Global South, including and especially Africa, may turn out to be one of the most defining legacies of the war in Ukraine. By\u00a0Vuk Vuksanovic<\/p>

Continue lendo<\/a><\/p>\n","protected":false},"author":636,"featured_media":972,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[65,1],"tags":[14,42,51],"class_list":["post-970","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-geopolitica","category-noticias","tag-comercio-internacional","tag-geopolitica","tag-russia","item-wrap"],"jetpack_featured_media_url":"https:\/\/wp.ufpel.edu.br\/geomercosul\/files\/2023\/06\/james-wiseman-IebZAH6kaNw-unsplash-scaled.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/posts\/970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/users\/636"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/comments?post=970"}],"version-history":[{"count":1,"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/posts\/970\/revisions"}],"predecessor-version":[{"id":973,"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/posts\/970\/revisions\/973"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/media\/972"}],"wp:attachment":[{"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/media?parent=970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/categories?post=970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.ufpel.edu.br\/geomercosul\/wp-json\/wp\/v2\/tags?post=970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}