In Geopolitics Today: Monday, March 18th
EU and Egypt Sign €7.4 Billion Strategic Partnership Deal, Niger Suspends Military Agreement with the US, and other stories.
EU and Egypt Sign €7.4 Billion Strategic Partnership Deal
The European Union and Egypt signed a landmark 7.4-billion-euro strategic partnership deal on Sunday, aimed at supporting the indebted North African country, boosting energy sales to Europe, and addressing irregular migration. The agreement, which elevates the EU-Egypt relationship to a “Strategic and Comprehensive Partnership,” includes five billion euros in loans over four years, 1.8 billion euros in investments, and hundreds of millions for bilateral projects, including those focused on migration management and border security.
The deal comes as Egypt grapples with a severe economic crisis, marked by rapid inflation, a ballooning external debt of nearly $165 billion, and the rising cost of servicing that debt, expected to reach $42 billion this year. Egypt's strategic position amid ongoing conflicts in neighbouring countries, such as Libya, Gaza, and Sudan, has also underscored its importance to Europe's security interests. The financial package is designed to help ease Egypt's economic pressures while addressing Europe's concerns over energy security and irregular migration. The agreement follows similar deals the EU has sealed with other countries in the region to stem the flow of migrants across the Mediterranean Sea, highlighting the bloc's efforts to balance its economic and security interests.
Read more about this story here.
India and China's Multifaceted Engagement with the Gulf
India and China's engagement with the Gulf region is a complex interplay of economic, social, and cultural factors that goes beyond state sovereignty and power dynamics. China's '1 + 2 + 3' strategy, emphasizing energy cooperation, infrastructure, and high-tech advancements, has positioned the country as an indispensable ally in the region. Through collective partnerships under the Belt and Road Initiative and the exportation of consumer goods, China has cultivated a favourable image and aligned its interests with the Gulf's socio-economic future. The Gulf countries' multi-alignment strategy complements China's overtures.
India's engagement with the Gulf, historically underpinned by energy cooperation, has evolved into a sophisticated canvas of strategic partnerships marked by technology exchanges and a shared heritage narrative. India's diplomatic agility is evident in its ability to navigate complex alliances, including the formation of the I2U2 grouping with the US, Israel, and the UAE. The country's non-prescriptive and non-intrusive approach towards the Gulf Cooperation Council, along with ongoing free trade agreement negotiations and business-friendly investments, illustrates a shift away from power-centrism as the primary determinant of regional dynamics. As rising global powers, India and China's contemporary engagements with the Gulf are redefining the perimeters of international relations and regional dynamics.
Read more about this story here.
Putin Secures Another Term as Russian President
Russia's presidential election concluded on March 17, with incumbent Vladimir Putin securing another six-year term until 2030. According to official results, Putin received 87% of the vote, with a turnout exceeding 74%. The election took place amid ongoing tensions between Russia and NATO, particularly in light of the ongoing conflict in Ukraine, which has had significant implications for Russia's domestic politics and foreign policy.
The election outcome is expected to provide Putin with a mandate to pursue measures aimed at maintaining Russia's war effort and fortifying the country's financial stability in the face of international sanctions. This may include tax increases to reduce the strain on public finances and slow the depletion of Russia's sovereign wealth fund. Reports suggest that the Russian government has been working on tax reforms since 2023, with potential changes including the expansion of the progressive income tax to affect a larger portion of the population and an increase in the corporate tax rate. Such measures could provide the government with trillions of rubles in new revenues, reducing Russia's budget deficit and mitigating the risk of adverse economic conditions in the coming years. However, the long-term sustainability of these policies remains uncertain as the war in Ukraine continues to impact Russia's economy.
Read more about this story here.
ADNOC Signs 15-Year LNG Supply Agreement with Germany's Sefe
Abu Dhabi National Oil Company (ADNOC) has signed a significant 15-year agreement with German energy company Sefe (Securing Energy for Europe), for the delivery of 1 million metric tonnes per annum (mmtpa) of liquefied natural gas (LNG). The LNG will primarily be sourced from ADNOC's Ruwais LNG plant, currently under development in Al Ruwais Industrial City, Abu Dhabi. The project, consisting of two natural gas liquefaction trains with a total capacity of 9.6 mmtpa, is expected to more than double ADNOC's LNG production capacity when it begins commercial operations in 2028.
The deal, which marks ADNOC's first long-term LNG supply agreement with a European company from the Ruwais project, underscores the UAE's growing influence in global energy markets. As production increases, the UAE is well-positioned to align its energy exports with Germany's efforts to diversify its energy sources and reduce its reliance on Russian gas. The agreement is contingent upon a final investment decision, regulatory approvals, and the negotiation of a definitive sales and purchase agreement between the two companies. For Germany, which still heavily relies on fossil fuels for domestic power production, the deal provides a new source of gas that could enhance its energy security in the coming years and contribute to its long-term decarbonization goals.
Read more about this story here.
Niger Suspends Military Agreement with the US
Niger has announced the suspension of its 2012 military agreement with the United States “with immediate effect,” citing the US delegation's alleged failure to follow diplomatic protocol and having a “condescending attitude” towards the Nigerien government and people. The decision came after a US delegation, led by Assistant Secretary of State for African Affairs Molly Phee and US Africa Command head General Michael Langley, recently visited Niger.
The suspension of the military pact has significant implications for the US military's operations in Niger, which has been a central hub for US counterterrorism efforts in the Sahel region. The US maintains more than 1,000 soldiers and civilian employees in Niger and operates two drone bases, including Air Base 201 near Agadez, which for years has been used to target armed groups in the region. The move also comes amidst shifting geopolitical dynamics in the Sahel, with Niger's recent alignment with the military rulers of Mali and Burkina Faso, who have sought to reduce their ties with Western powers and explore alternative partnerships. As the security situation in the Sahel continues to deteriorate, the suspension of the US-Niger military agreement may have far-reaching consequences.
Read more about this story here.
Countries Expand Footprint in Antarctica
In the past year, multiple countries have moved to expand their footprint in Antarctica, underscoring the growing global interest in the continent's strategic value. Iran announced plans to establish a permanent base on the continent, while China opened its fifth research station in February 2023 after its largest-ever expedition fleet of 460 personnel arrived the previous November.
These activities have unfolded within the framework of the Antarctic Treaty System, a set of international agreements that have governed the region since 1961. The treaty reserves Antarctica for peaceful purposes and scientific cooperation, prohibiting military activities and resource extraction beyond research. Fifty-four countries are now party to the accord, with 29 consultative parties having voting rights. While the treaty's lack of an expiration date or enforcement mechanisms has enabled decades of stability, it also creates ambiguities around acceptable conduct. This is especially prescient as global interest in Antarctica's strategic value grows due to its location, potential resources, and role in communications infrastructure.