Despite the positive stances of the Russian Federation towards Arab and Islamic issues, and its support for Arab and Islamic causes presented in international organisations from time to time, economic relations and joint ventures between the two sides do not reflect developments on the ground.
During the past 18 years from 2003 to 2021, the value of Russian investments in Arab countries has been very low.
There are also no economic and marketing forums to enhance economic relations, except for some coordination on the matter of international oil prices through the Opec+ alliance, in addition to the signing of some agreements to purchase Russian arms during the past few years.
This is what prompted the Arab Corporation for Investment and Export Credit Guarantee (Daman), which is based in Kuwait, to recently express its willingness to enhance trade and investment cooperation between Arab countries and Russia.
This support covers insurance, information and research cooperation on issues aimed at revitalising Arab exports to the wider world.
According to UNCTAD data, the volume of foreign trade between Arab countries and the Russian Federation between 2011 and 2020 recorded a modest $14.7 billion, which represents 2.1 per cent of Russia’s foreign trade volume and less than 1 per cent of the Arab countries’ foreign trade volume on average.
In terms of Russian foreign direct investment in the Arab countries, it amounted to $64.4 billion from 2003 until the end of 2021, representing 5 per cent of the volume of foreign project investments in the region.
In contrast, Arab direct investment projects in Russia amounted to about $3.8 billion, representing 1 per cent of all foreign investment projects in Russia.
There is no doubt that the establishment of the Arab Investment Guarantee Corporation to provide specialised insurance services for Arab exports, investment and financing against commercial and political risks, will work to strengthen investment, and commercial and financial cooperation between the two parties.
In addition, it will be securing non-commercial risks in the event of appropriation, nationalisation, wars and civil unrest.
This will enable Arab industries to access Russian markets, and create relationships between private sector businesses in Russia and Arab countries by enabling direct contracts covering imports of capital and strategic goods and the inputs of Arab industries to the Russian market.
Such a policy will help secure them against political and commercial risks related to bankruptcy or insolvency of importers, or their failure to pay for exported Arab goods and products in a timely manner.
From this standpoint, it is important for the Arab countries to seek to understand the Russian political and economic factors in order to smooth the path between the two sides. This will strengthen cooperation, research and relations to develop their horizons. The global market is large enough to absorb Arab products and goods, as well as Russian products that will reach the region.
