international analysis and commentary

Is Russia losing the Middle East?

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Now that the regime of Colonel Gheddafi has come to an end (whatever the final domestic balance), Russia faces challenges ahead as its long-term economic interests in the Middle East are vastly damaged by the new foreign policy of non-alignment and neutrality adopted during the Libyan conflict. Many experts suggest that the Kremlin’s reluctance and acquiescence in regards to the regime change supported by NATO and the imposition of an arms embargo on Libya has discredited Russia in the eyes of other Arab states, pointing to a general decline of Russia’s prestige in the region.

In recent years, Russian foreign policy has set out to assume the role of mediator in the international community, especially between the West and the Muslim world. Although this role means advantages for Russia, it also entails significant risks. During the G8 held in May in Deauville, France, Western leaders created the opportunity for Russian diplomats to fully act as mediators between Gheddafi’s representatives and the rebels. That effort begs the question of whether Russia was able to make a practical contribution to the peaceful settlement of the conflict or whether the activity of Russian diplomacy was doomed to fail from the start. Yet, since the first negotiations of the Russian Special Envoy to Africa, Mikhail Margelov, it was clear that Russian diplomacy never had enough leverage to reach a political solution, especially since other interested parties were opposed to it. And, now, Russia’s non-aligned foreign policy risks undermining also its long-term economic interests in the post-revolutionary Arab world.

Amongst the lucrative business deals signed between Gheddafi and Russian entrepreneurs, we can count a $3.1 billion contract for building a railway in Libya and millions invested in the oil and gas field. Gazprom, together with Eni, was in the process of acquiring a stake in Libya worth $170 million when the violence erupted. Overall, nearly $4 billion were lost in contract cancellations since the beginning of the war. Russian companies often made statements about resuming their work in the country once the fighting was over, as the Transitional National Council promised to respect the contracts signed by Gheddafi. However, the non-aligned foreign policy adopted by Russia since last March was interpreted by the rebels as a “half-hearted, tentative and tardy” attitude.

As Ruslan Pushkov, Director of the Center for Analysis of Strategies and Technologies, suggests, Russia might find itself in the dark as European countries move in to claim trade links with Tripoli which they earned through months of fighting. Notably, Abdelijail Mayouf, the Information Manager at Libyan rebel oil firm AGOCO recently declared that “we don’t have problems with Western countries like Italians, French and British companies. But we might have some political issues with Russia, China and Brazil.”

Although it was already clear that the fall of the Gheddafi regime was only a matter of time, only on September 1st did President Medvedev officially recognize the Libyan Transitional Council. In other words, Russia was reluctant to distance itself from Gheddafi, with whom it had good relations, and was critical of NATO’s military campaign to assist rebel fighters. Consequently, Russian diplomatic efforts largely failed to maintain a persistent position regarding the conflict, adding only more ambiguity to the alleged Russian non-aligned foreign policy. The ambivalence, analysts say, was an effort to protect Moscow’s interests in Libya regardless of the conflict’s outcome.

On the other hand, as Dmitri Trenin, Director of the Carnegie Moscow Center, wrote in a recent paper, it requires creative diplomatic skills in order to become a trustworthy mediator in the international community. Russian authorities could have, for instance, employed their informal contacts with the Arab dictators guaranteeing assistance and immunity as long as the bloodshed had ceased. If Russia had gone down this path, thousands of lives could have been saved, raising the international prestige of Russia as a country able to effectively influence decisions on global issues, as well as protecting its interests after the fall of the regime. Notably, Russia’s ambiguous and irresolute policies in Libya shed light on the broader inefficiency of Russian diplomacy as it failed to effectively assess risks and opportunities in the context of the Arab Spring.

As the situation is Libya will slowly stabilize, the focus of the international community will shift towards Syria. In this regard, Western media already highlight Moscow’s irritation. Foreign Minister Sergey Lavrov, in fact, has recently condemned the ban on oil imports from Syria, declaring that it “destroys international cooperation”. Moscow’s position on the Syrian crackdown has been noted and is being followed closely also in the Arab world.

Russia has extensive business interests in many Arab countries. More specifically, the collapse of the USSR brought an evolution in Moscow’s policy regarding Middle East arms supplies. The country’s financial needs became a more important factor in decisions to sell military equipment. At the same time, the arms industry emerged as a semi-independent lobby in promoting such sales. While Tunisia and Egypt – whose governments were overthrown in the first stages of the Arab Spring – were of little economic significance to Russia, Syria, on the contrary, is highly important.

Russia rejected demands from the US and the EU for Syrian President Bashar al Assad to step down because of his regime crackdown. Russia’s reluctance to join the West in condemning Assad’s actions was based, to a large extent, on what it viewed as an abuse of the Security Council’s resolutions on Libya. The Kremlin’s historic alliance with Syria and aversion to interference in the internal affairs of other countries, even when there are clear violations of international human rights, may well have played a part in its initial position as well. In fact, Russia’s only military facility in the Middle East is in Syria – which was a Soviet ally and is currently a major buyer of Russian weapons. Additionally, Russian companies in Syria are losing out financially. As well as lucrative arms contracts, Russian firms have a substantial presence in the Syrian infrastructure, energy and tourism industries. The overall Russian investment in the country was valued $19.4 billion in 2009.

Having chosen to invariably support the authority and reputation of the Security Council, and not to obstruct the adoption of its collective decisions to stop further bloodshed, Russia also agreed to sustain inevitable material losses in Libya, namely the suspension of its participation in economic projects and the curtailment of military-technical cooperation. However, a more efficient and forward-looking foreign policy could have better guaranteed Russia’s future influence in the Arab World. As far as Syria is concerned, Russia will likely change its approach: what is needed the most is not the abiding support of the current leaders but a new, flexible and creative foreign policy in the Middle East.