Russia dreams of new pyramid scheme in Egypt 'Haaretz'

Egyptian President Mohammed Morsi seeking 'real political pact' with Russia, and asked a $2-billion loan while about it

Is it possible that during a period of Muslim Brotherhood rule, secular Russia will find its way back into Egypt? It seems that as Egypt’s economic millstone grows, ideological differences are being pushed aside.

On Friday, Egyptian President Mohammed Morsi asked his Russian counterpart, Vladimir Putin, for a loan totaling $2 billion. It appears that Russia will accommodate the request, and even encourage Russian investment in Egypt − in addition to supporting efforts to build a nuclear reactor to bolster the nation’s power supply.

During a press conference in Moscow, Morsi declared that his government is seeking to make a “real political pact” with Russia, and that his country needs the Russian loan to increase Egypt’s foreign currency reserves. This is in order to meet the International Monetary Fund’s condition for receiving a $4.8 billion loan that has been stuck in the pipeline for many months.

It seems there is a strategic aspect behind the Russian loan and Putin’s support. “The Americans support the Egyptians with about $2 billion every year. They understand the strategic importance that Egypt has in the area. We also need to fund our foreign policy,” said Yuri Ushakov, a foreign policy adviser to Putin, while speaking to the Bloomberg news agency.

This is not the first such statement made by the Russians that reflects a new direction for the Kremlin. According to the Iraqi newspaper Azzaman, Russia has asked Egypt and Algeria for permission to build a naval base in their territory, to replace their Syrian port of Tartus, if and when Syrian President Bashar Assad’s regime falls.

That request could symbolize a new perception in Russia, according to which not only is Assad close to the end, but also that those who replace him are likely to sever ties with Russia over its unreserved support of the Syrian president.

According to the newspaper, which cited sources in Algeria and Cairo, Russia made the request before Morsi’s visit to Russia this week so that the proposal could be discussed.

In return, Russia promised to supply Egypt with wheat at prices lower than the world market, as well as providing military and economic support. According to Egyptian sources, Egypt refused the Russian request after Algerian President Abdelaziz Bouteflika refused the request. Algeria also refused a Russian request for permission to use its seaports in order to create an intelligence-gathering center, and to service its submarines and other naval vessels.

Relations between Egypt and the Soviet Union, close allies during Nasser’s regime during the 1950s and 60s, became strained while Anwar Sadat was in power, after he decided to switch Egypt’s strategic orientation from the U.S.S.R to the U.S.
Now, Russia hopes to renew the countries’ trade pact with a joint committee and increase trade between them − valued at $3.5 billion last year − by almost 70 percent.

“The nearing of Egypt and Russia will not come at the expense of Egypt’s relations with the U.S.,” one Western diplomatic official opined. “The interesting aspect is that Russia has begun to realize that its bet on Syria is going to fail, and that it will have to prepare itself for a strategic alternative.”

An Egyptian analyst told Haaretz that “Egyptians have yet to recover from the trauma of the Soviet presence in Egypt during the 1950s and 60s. Despite the criticism of the U.S., Egypt cannot swap its diplomatic ties with the U.S. for ties with Russia. The global situation today is not like it was, and Egypt cannot play Nasser’s game between Moscow and Washington.”