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Economy & Trade

Russia Still Struggling to Gain Foothold in Africa

MOSCOW, May 21 2012 (IPS) - As Russia’s new president Vladimir Putin begins a new phase of economic growth, trade experts are keeping a watchful eye on Moscow’s policies with the African continent, which they see as a huge, untapped source of economic opportunity.

But experts like Dmitri M. Bondarenko, vice director for research at the Institute for African Studies at the Russian Academy of Sciences and a long-time critic of Russia’s stagnant relationship with Africa under Dmitry Medvedev’s administration, is not very hopeful that a new president will bring any change.

Russia has a lot to offer African countries and the two regions can easily work together to create the best possible conditions for their entrepreneurs in an effort to develop mutually beneficial economic ties.

Several Russian companies like Russian Aluminuim (RusAl), LUKoil, Gazprom, and Renova, are ready and waiting to offer financial and banking services while others are eyeing local manufacturing industries in the continent.

Still, many potential African exporters still harbour negative perceptions about the Russian market, often comparing it unfavourably to export opportunities presented by the United States, Europe and increasingly by countries that comprise the BRICS group, of which Russia is a part – such as Brazil, India, South Africa and, particularly, China.

Last October, speaking in an exclusive interview with the Voice of Russia, the Echo of Moscow and the Radio of Russia, Foreign Minister Sergei Lavrov informed listeners that “Russia’s trade turnover with African countries currently stands at four billion dollars, while China’s trade turnover with these countries amounts to 120 billion dollars.”

A study of Russia’s trade statistics between 2001 and 2011 show very little development on the continent; within that same decade, Chinese products have become highly visible in African markets, while traditional African items are also found frequently on the shelves in China.

Fyodor Lukyanov, a senior member of the Council on Foreign and Defense Policy and editor-in-chief of the prominent ‘Russia in Global Affairs’ journal – the most authoritative source on Russian foreign policy and global developments – has acknowledged that China’s strategy is purely based on accessing natural resources like oil and minerals that are vitally important to China’s development.

Beijing has used every tool possible to secure these resouces, including soft power, technical and economic assistance and political support to leaders of countries that have been shunned by the rest of the international community, including to Zimbabwe’s Robert Mugabe and Sudan’s Omar al- Bashir.

But Russia, a resource and mineral rich nation, has little need to gain these goods by embroiling itself in controversial conflicts, and cannot be expected to compete fiercely with China in this arena, Lukyanov said.

Still, trade experts in the country believe it is very important that Russian authorities use Soviet-trained graduates as a bridge to a business relationship with Africa, particularly in the face of China’s rising influence.

Moscow’s presence in Africa waned after the fall of the Soviet Union, as African countries turned increasingly to Asian states, especially China and India, for mutual economic cooperation.

Soviet activities in Africa were based largely on the logic of the cold war, when two superpowers clashed across the globe to expand and strengthen their ideological influence. Africa, with its huge reserves of human and natural resources, was indispensable to both sides.

But after the Soviet Union’s collapse, Africa vanished from Russian foreign policy.

To make matters worse, Russian media write very little about Africa. If the press and non-governmental sector take steps towards increasing knowledge and awareness about the possibilities of better cooperation, this knowledge will immediately stimulate increased economic interaction.

Jonathan Fianu, a British-born African entrepreneur and managing director of PPP Local Ltd, a Russian- British consulting company operating in regional Russia, believes there was some positive progress by the Medvedev administration to pursue a more active policy in Africa, which ignited a more active debate on what can and should be done.

In June 2009, Medvedev even visited four African countries – namely, Egypt, Nigeria, Namibia and Angola – in an effort to build a better relationship.

In order to stimulate dwindling ties between the two regions, Medvedev also appointed Russian senator Mikhail Margelov as his special envoy for cooperation with Africa in March 2011, but unfortunately Margelov’s diplomatic rhetoric failed to take root in African soil.

Harry Verhoeven, a lecturer on African politics at the University of Oxford in the United Kingdom, explained to IPS, “Russia has continued its traditional arms trading on the continent, including with controversial regimes like the military-Islamist rulers in Khartoum (Sudan). Overall though, despite this activity, Russia strikes most Africans as a secondary actor, which by no means has the same importance as the European Union (or its three leading member states), the U.S., China or Saudi Arabia.”

“It’s now up to the next administration (now headed by Putin) to act in a positive way to pursue a policy of harmonious business development and trade,” Fianu told IPS.

According to James Shikwati, founder and director of the Inter Region Economic Network (IREN) in Nairobi, Kenya, the question now is: will Russia follow the same paradigm as China and Western industrialised nations, which preach peace and non-interference while exploiting African resources at the expense of the continent’s human and economic development? Or will it play a different trade game altogether?


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