“You meant evil against me, but God meant it for good”, this quote from the book of Genesis, said by Joseph to his brothers, is often reiterated by Christians in incidents when God turns evil-intended situations to their benefit. It rings true as we follow the war in Ukraine, which we could safely dub the Russian-American war. The two leading actors in this war are Russia and the US; they are the subjects whereas Ukraine is the object. Roles of supporting actors go to western European States on one side, and China, India and economic alliance groups on the other.
Among the harshest economic sanctions imposed by the West against Russia with the aim of paralysing its activity on global markets has been banning Russia from the Swift banking system, thus severely restricting it from dealing with US dollar and euro, the two main global currencies. The world held its breath as it followed the ramifications of the sanctions. Russia announced it would no longer be accepting USD and EUR for its exports, be they fuel, gas or any other commodity; it would only accept rubles (RUB). Accordingly, those who launched the sanctions found themselves in an unenviable situation; they had to arrange for enough cash flow in RUB to settle their dues for Russian imports. Western European countries were thus the first to suffer on account of the new rules they had imposed.
The changes on the global markets instated a new set of trading rules which Egypt, in parallel, was keen to align with. Negotiations with Russia to use RUB in the trade exchange between the two countries promises a new dawn in their economic relations.
++Watani++ published in its paper issue on 12 June 2022, a story titled “In light of the aftermath of the sanctions against Moscow: Russian-Egyptian negotiations to exchange trade in rubles”. The story highlighted the on the ground harmonisation between the sanctions imposed on Russia through US arrogance, and the use of new tools to foster the economic and commercial interests between Egypt and Russia. I will cite here some features of this harmonisation.
Aly Eissa, Chairman of the Egyptian Businessmen Association (EBA) has announced that EBA offered the Egyptian government a suggestion to allow businesses to open bank accounts in RUB to perform trade transactions with Russia. Egypt exports to Russia large quantities of fruit and vegetables, and imports from it large amounts of wheat. Hence EBA’s suggestion to settle these dues in RUB instead of USD since Russia has stopped transfers in USD and EUR.
According to Russian official sources, a number of Egyptian hotels are making provisions to start dealing in RUB in case of Russian tourists, and presumably to open bank accounts in RUB. The issue, these sources affirm, hinges on a decision by the Egyptian Chamber of Tourism for Hotel Establishments to allow the settlement of hotel dues in the Red Sea region—a favourite with Russian tourists—in RUB.
On the other hand, Egypt and Russia are expected to sign a free trade agreement soon. According to the Russian Ambassador to Cairo, the sanctions imposed on Russia, which were meant to curb Russian trade growth, are in fact opening up new tools to boost trade exchange. There are already several promising agreements between Egypt and Russia, topping which is the contract to establish the Dabaa nuclear power station. This in addition to the MoU to attract Russian investments to Egypt, and another MoU which involves establishment of a Russian industrial zone in Egypt. The industrial zone will include industries for car assembly, agricultural equipment, road machinery, tools, building materials, pharmaceuticals, ship building, textile and garment industries, electronic devices and furniture. The Russian industrial zone is also expected to involve information technology, recycling and monetary services.
True trade, industry and economic relations between Egypt and Russia are lush and diversified. However, the readaptation that these fields is going through to deal with RUB instead of USD and EUR, confirms that we are on the threshold of the birth of a new global dawn where US/European sanctions open new horizons for international relations.
17 June 2022