To circumvent sanctions, Russia says Mena countries exchange using national currencies

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In contemporary Russia, which has been subject to various boycotts since 2014 and even more so since the war in Ukraine, political decisions have economic dimensions, and economic choices have geopolitical aims.

In addition to his leading allies, Vladimir Putin is seeking to diversify his partnerships in order to obtain diplomatic goodwill, as well as ways to circumvent economic sanctions.

In the same way that it has sent multiple signals to sub-Saharan Africa, Russia is taking a close interest in the Mena region (Middle East and North Africa, including Morocco, Tunisia and Algeria), which includes two-thirds of the nations of the Organisation of Petroleum Exporting Countries (OPEC), i.e., 60% of the world’s oil reserves and 45% of its natural gas reserves.

Bypassing the dollar and the euro

Moscow could not miss the Annual Investment Meeting (AIM), which was held from 8 to 10 May in Abu Dhabi in the United Arab Emirates, presented as the “world’s leading investment platform.” As such, the Russian Minister of Economic Development made the trip with a proposal in his pocket that would flatter the egos of his interlocutors, as well as bypass certain Western mechanisms functioning within the global economic system.

In his remarks reported by the Russian public press agency Tass, the Minister of Economic Development, Maxim Reshetnikov, asserts that the Russian stock exchange is ready to exchange currencies such as not just the UAE’s dirham, but also the Azerbaijani manat, or the Egyptian pound, thereby encouraging transactions in local currencies with his country.

Currencies and geopolitics

This is not an obscure detail at hand when one knows the rate of circulation of the American dollar, the pound sterling, or the euro, notably on Egyptian territory which is linked to international tourism, where the change in certain exchange rate paradigms could concern increasingly important transactions.

The Russian minister, while in Abu Dhabi, assured everyone that trade between his country and those of the Mena region has increased by 83% in five years, due to revitalised bilateral partnerships, but also to recalibrated collaborations via the Organisation of Islamic Cooperation.

If the objective of this Russian strategy is, in part, to circumvent Western sanctions, each partner involved will have to assess its specific interest, with regard to the strict monetary impact of foreign exchange operations, but also with regard to its geopolitical relations with countries that are trying to isolate the Russian economy.

The United Arab Emirates, which is hosting the Annual Investment Meeting, has been a strategic regional partner of Washington for decades. In a world of uncertain developments, the ridge of non-alignment is narrow.

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