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Mar. 25, 2008
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Atom in Exchange for Weapons
// Moscow hopes to return to Egypt’s weaponry market
Egypt’s president Hosni Mubarak opens his visit to Moscow today. Besides getting acquainted with Russia’s President-elect Dmitry Medvedev, the major element of the visit will be signing the Russia-Egypt cooperation agreement on peaceful application of nuclear energy. According to Kommersant’s information, Moscow agreed to make a number of concessions to Cairo when drafting the document. Kremlin now expects a reciprocal gesture. First of all, Moscow hopes that Cairo returns to buying Russian weapons.
Nuclear Prospects

The Orient has always attributed great importance to personal relations between politicians. That is why Hosni Mubarak called his acquaintance with Dmitry Medvedev and another meeting with Vladimir Putin nearly the main purpose of his visit to Moscow. “They [Putin and Medvedev.--Kommersant] have worked together for many years; I expect meeting with both of them during my visit to Moscow so as to discuss the ways to strengthen the existing cooperation, as well as to move our relations forwards, to open new prospects,” said Mubarak before his flight to the Russian capital.

Cairo links these new prospects mostly to developing the peaceful nuclear cooperation. In autumn 2007, Mubarak announced the start of implementing the program on building a cascade of nuclear power stations and at least eight reactors in Egypt. According to Cairo’s plan, it should provide for the needs of Egypt’s economy and boost its growth, in the current situation of constantly increasing hydrocarbon prices. According to Mubarak’s plan, the first reactor’s construction is to begin already in 2009, and to be over by 2017. Just this stage only is expected to take in the investment of $1.8 billion.

Reactor construction tender will be announced before the year ends. So far, representatives of western companies, which have firmly pegged Egypt’s market for themselves, have had most preferable chances to win the tender. It primarily concerns France. French leader Nicolas Sarkozy, during his recent visit to Cairo, insistently lobbied the interests of French nuclear companies. However, Egypt aims to strengthen the competition so as to drive down the price at the expensive nuclear services market.

Competitors from Russia

It was Cairo’s initiative to attract Russian nuclear experts to Egypt’s market. Several years ago, Egypt had already offered to Russia to sign a bilateral agreement on peaceful nuclear cooperation. However, according to Kommersant’s information, from the very beginning Cairo insisted on making the document lay down the creation of complete nuclear fuel cycle, including its main component—uranium enrichment, on Egypt’s territory. Moscow wanted to avoid this slippery point. Its stand was largely affected by the on-going scandal around Iran’s nuclear program, which is, in a similar way, linked to Tehran’s ambition to independently carry out the complete cycle of uranium enrichment. Russia encountered much trouble when implementing the contract to build a nuclear power station in Bushehr, Iran (for the West believes that Iran works at creating nuclear weapons under cover of its peaceful nuclear program). Consequently, the agreement’s final text puts the point on Egypt’s access to the complete nuclear cycle so that it can be interpreted either way.

Cairo’s wish to attract Russian nuclear experts to Egypt’s market did not make the West happy. The U.S. was especially irritated. Al-Masri Al-Youm newspaper, with reference to high-ranking sources in Egypt’s government, states that Cairo feels “strong pressure” coming from Washington. According to the newspaper’s information, the U.S. is trying to hamper and torpedo the Russia-Egypt nuclear cooperation up to wrecking the agreement’s signing. Among other things, Washington demands for itself the right to inspect nuclear facilities and to control the implementation of Egypt’s nuclear program. It includes the demand to transfer Iran’s spent nuclear fuel to the U.S., which will actually allow Washington to supervise the entire process.

Cairo has been resisting the pressure so far. Yet, the cost of Egypt’s independence will become clear only when the tender is summed up. Moscow remains uncertain whether it is worth taking part in the tender at all. “It is questionable whether we will participate in the tender,” said a high-ranking source in Russia’s Federal Atomic Energy Agency. Meanwhile, the state corporation assures it has enough potential for building a new atomic power plant, despite that AtomStroyExport (Russian nuclear industry’s engineering company) is now building nuclear power plants in Iran, India, and Bulgaria. It has also signed the key agreement on building the third and the fourth blocks of Tyanvan nuclear power station in China.

Back to the Past

According to Kommersant’s information, at every stage of preparation for signing the peaceful nuclear cooperation agreement, Moscow made a point of not being very interested in it. Moreover, the Russian party actually communicated to the Egyptian partners that it bears significant sacrifices and risks. Especially by signing a nuclear cooperation agreement that contains a point on complete nuclear cycle. Russia has had its own reasons for that line of conduct. By agreeing to make a number of concessions to Cairo, Moscow expects reciprocal steps. It concerns the access to Egypt’s weaponry market, which has been closed for Russian producers since the 1970s.

Moscow is expected to offer to Cairo during today’s negotiations to supply Russia-made air defense systems, fighter jets, and training aircrafts. However, the chances for a more or less considerable expanse are small. “Russia’s opportunity to export weapons to Egypt is extremely limited due to that country’s dependence on U.S. aid,” said Konstantin Makienko, expert of the Strategy and Technology Analysis Center. Indeed, Washington announced in July 2007 that it prolongs for another decade the program of financial aid for Egypt. Between 2008 and 2017, the U.S. will allocate some $13 billion to Cairo for purchasing the weapons. No wonder that Egypt’s armed forces are oriented chiefly at U.S. military equipment. The country’s air force includes over 200 F-16 fighter jets and several tens of AH-64D Apache Longbow strike helicopters. In the early 2000s, Egypt’s army acquired a large set of M1A1 Abrams tanks. In 2006, the U.S. began supplying PAC-3 Patriot air defense systems to Egypt.

Meanwhile, the Russia-Egypt military-technical cooperation, which was of great extent in the 1960s, was minimized in 1972. Afterwards, the military equipment supplies were very small and rare. So, in 1999-2000, Cairo received 20 Mi-17-1V and several Mi-172 helicopters. Back then, Russia and Egypt also signed a $150-million contract on modernizing 50 S-125 ‘Pechora’ air defense systems, supplied to Egypt back in the Soviet times. In 2005, they signed a small contract on supplying four ‘Tor-M1’ complexes to Egypt. Same year, they signed an agreement on modernizing old Soviet-built ‘Kvadrat’ anti-aircraft missile complexes. Apparently, the contract’s first stage was a trade-in, that is the direct supply of a small party of ‘Buk-M1-2’ complexes to replace old ‘Kvadrat’s. In mid-2007, Russia and Egypt signed a contract on supplying ZSU-23-4-M4 ‘Shilka-Strelets’ anti-aircraft self-propelled mounts.

In April 2006, MiG Corporation’s deputy director general and deputy chief designer Sergei Tsivilev made a sensational statement about the plans to supply MiG-29 fighter jets to Egypt. Later it turned out that Moscow had offered to Cairo to buy 40 MiG-29SE fighter jets or more modern MiG-29SMT. The deal was planned as a trade-in as well. The new jets were to be supplied instead of over a hundred of old MiG-21, which remained without Russian technical maintenance for over 30 years. The contract was estimated at $1.5 billion. However, that so large acquisition of jets must have proven impossible due to U.S. pressure. Along with MiGs, Moscow offered to Cairo its Yak-130 and ‘MiG-AT’ training aircrafts, which were to replace outdated Czech-Slovakian L-39 jets. However, these plans as well are far from implementation. Anyway, despite pessimistic prognoses from experts, Moscow truly hopes that it can manage to bring Russian weapons back to Egypt’s market in package with the nuclear deal.

Alexander Reutov, Konstantin Lantratov, Vladimir Ravvinsky

All the Article in Russian as of Mar. 25, 2008

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