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Wednesday 14 January 2015

Obama Abandons Egypt Leading to Russian and Chinese Ascendancy

Terence Rosenthal

stratfor_egypt

Now is the time for the U.S. to renew its affiliation with Egypt. Good things have happened since the ousting of the Muslim Brotherhood. Due in part to the freeze in U.S. presence with regard to Egypt, relations between Al Sisi and Netanyahu are vigorous. Egypt plans on purchasing five billion cubic meters of natural gas from Israel’s Tamar reserves.

For the past year, Israeli and Egyptian forces have been working side by side to counter agitation in the Sinai, especially near the border with Gaza. Al Sisi has made distinct overtures that he wants an end to militant Islam in Egypt and world-wide, exclaiming that jihad among Islamists must be reevaluated moving forward. The reality, however, is that Egypt is currently fighting for its economic survival.

Egypt has accepted proposals from both Russia and China. Last year, Moscow and Cairo agreed on an arms deal worth $2billion, superseding the U.S. as Egypt’s prime weapons supplier. China is negotiating with Al Sisi about a prospective New Suez Canal project. For China, this is part of their “Silk Road” expansionist diplomatic strategy. Russia and China stand behind Iran, and thus support Iranian Islamic militant operations in Iraq, Syria, Lebanon, Yemen, Sudan and the Sinai. China has doubled its investment in Iranian oil. Russia actively supports the Syrian regime. Because of Russian and Chinese backing of Iran, the presence of Hamas in the Sinai is stronger than ever. It is quite ironic that China seeks to fund the New Suez Canal since Sudan is quite capable obstructing trade in the Red Sea. If the U.S. does not resume influence in Egypt, it will virtually fall under the control of Moscow, Beijing, and possibly Tehran.

It is conceivable that Iran and Russia will temporarily tone down their development in the Middle East, including Egypt due to drastic increase in Saudi oil production. Current Saudi production has caused a major fall in oil prices. As a result, the ruble has also nosedived. The Russian economy is 60% dependent on oil. Moscow was planning on oil costing between $90 and $95 per barrel. At present, the average cost per barrel of oil is at $82.

Saudi Arabia has made clear its feelings of vulnerability in recent years because of waning U.S. influence in the Middle East, and new détente between Washington and Tehran. Coupled with the growing alliance between Russia, Iran, and China, and it is logical to understand why the Saudis are making this tactical move. With regard to Egypt, this increase in Saudi production has set up the perfect opportunity for the U.S. to resume presence in Egypt.

The present window of opportunity afforded by plummeting oil global prices will not last long. If the U.S. remains passive with regard to Egypt, eventually Russia, China, and Iran will control its terms of access. It is arguable that the Strait of Hormuz is already primarily under their control. If Egypt is lost to Russia and China, U.S. power in the Middle East will become irrelevant. From the middle of North Africa to the Persian Gulf, Russia and China will be seen as the dominant global powers. This transition will have negative consequences with regard to the world economy, and global terrorism.

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