E. N. KORENDYASOV

PhD in Economics Institute of Africa, Russian Academy of Sciences

Keywords: Russia, Africa, cooperation, investment, foreign trade, business, loans, natural resources

The African vector is gaining an increasingly significant place in Russia's foreign policy strategy. It is known that the collapse of the Soviet Union and the "troubled times" of the 1990s caused significant damage to Russia's position and prestige in Africa. On the continent, 9 embassies, 4 consulates, most cultural centers, and trade missions were closed. The African air lines were abolished. Moscow has lost important tools for exerting influence and creating new forms of cooperation.

In the eyes of the Moscow political establishment and the business community, the prevailing view is that Africa is a continent stuck in pre-industrial stages of development, a continent of insurmountable poverty, endless wars and epidemics, surviving only thanks to international aid. Meanwhile, there was and still is another Africa-Africa of rapid economic growth (5% or more per year for the last 20 years), a major player in the natural and labor markets, a key source of global demand growth, and a lucrative area of investment operations.

At the turn of the 20th and 21st centuries, rising economies loudly declared themselves and their ambitions. They put forward and began to promote a program for the formation of a world order based on fair consideration of the interests of all countries and all regions. The most important point of the new players ' program was the requirement to build a multipolar, polycentric system of international relations, a new financial and economic architecture. Under the banner of this program, a kind of coalition of Asian, African and Latin American states is emerging, the prototype of which can be seen in the BRICS association (Brazil, Russia, India, China, South Africa), based on the principles of multipolarity, openness, non-alignment, and solidarity for development. Russia supports the aspirations of emerging countries to increase their role in world politics.

One of the results of rethinking foreign policy priorities based on the initiatives of President Vladimir Putin was, in particular, a certain shift in the axis of the Russian foreign policy vector towards the East. The Ukrainian crisis has not revealed anything new in this regard. It only served as a new incentive for further development of mutually beneficial cooperation with non-Euro-Atlantic partners.

A NEW PERSPECTIVE ON THE CONTINENT'S ROLE IN THE WORLD

Analysis of the officially approved Concept of Russia's Foreign Policy, the first version of which was published in June 2000, and the last (third) version was signed by President Vladimir Putin on February 12, 2013, as well as the practical activities of Russian diplomacy in the African direction allow us to state that the significance of the African vector of foreign policy strategy is considered primarily through the prism of its possible contribution c establishing Russia as a world power, advancing the goals of creating a multipolar world order, and achieving optimal commonality in the face of new global challenges and threats.

Russian politicians are aware of the growing role of the African continent in the world economy.-

political issues and the need to increase the potential of Russian-African relations.

The Russian Foreign Ministry's Review of Russia's Foreign Policy in 2007 emphasized: "Without the active participation of African countries in world affairs and international economic life, it is impossible to establish fruitful cooperation and create a holistic and stable global security system based on the primacy of generally accepted legal norms."¹. When President Dmitry Medvedev visited Africa in 2009, he acknowledged that Russia was "late in returning to Africa."

But the "new deal" comes with some caveats. The mentioned Foreign Policy Concept contains the provision: "The use of political, diplomatic, legal, military, economic, financial and other tools in solving foreign policy tasks should be proportionate to their real significance for ensuring Russia's foreign policy interests,"he said.². Given the current scale of presence of Russia and its business structures on the continent, this dialectic plays a role.

POLITICAL AND DIPLOMATIC VECTOR

The greatest activity of Russian-African relations is observed in the political and diplomatic sphere. Russia's commitment to the principles of independence, State sovereignty, and non-interference in internal affairs, as well as its prudence and restraint in considering some of the proposed innovations in international legal norms, are widely supported by African States.

They have just freed themselves from the heavy shackles imposed by the logic of the cold war and inter-bloc confrontation.

The economic boom of the last decade and the emergence of new players on the continent in the form of rising economies that successfully compete with traditional partners have significantly expanded the opportunities for African countries to put forward and defend their own initiatives and interests. All the more painfully do they perceive unceremonious attempts on sovereignty under various pretexts, including the protection of human rights or the promotion of democracy. The famous French researcher Jacques Attali declares that the market, being by nature a conqueror, "will spread to the entire state apparatus and deprive governments (even in a polycentric world) of their last prerogatives, including sovereignty."³. However, the author attributes the implementation of his forecast in Africa to a more or less distant future.

Problems of forming a new world order and international security constitute the main content of interaction between Russia and African states.

The alarming military and political situation on the continent has a sensitive impact on the state of affairs in the world. Africa is only twelve kilometers from Europe. Threats to peace and uncontrolled military violence on the continent are many and often reach a critical level.

The interstate borders that were arbitrarily marked during the colonial period and preserved after decolonization (when the continent's population was 100 million in 1900 and about 300 million in 1960) passed through uninhabited or sparsely populated areas. And in the 2000s, when the population of Africa exceeded 1 billion, borders became a tool for a rough division of ethnic and tribal communities, an obstacle to the laws of economic development. The number of inter-State and inter-ethnic conflicts has multiplied, and the scope of separatist movements has increased. American futurologists predict the emergence of a dozen new states in Africa ⁴. According to the decisions of the UN Security Council, more than 25 peacekeeping operations have been carried out on the continent. Currently, there are 110,000 Blue Helmets in Africa (out of 125,000 worldwide) under seven OPMs. Some of them last for more than 10 years (Western Sahara, Somalia, DRC).

Russia is particularly sensitive to terrorist threats emanating from Africa, the main hotbeds of which today are the Sahel region, Somalia, and northern Nigeria (Boko Haram). In fact, countering the penetration of extremist Islamism into Russian territory is a key task of Russian cooperation with African states.

12-15 million adherents of Islam live in Russia. It is not forgotten that natives of African countries fought in the ranks of Chechen jihadists. Even today, foreign Salafists and Islamist terrorists continue to conduct subversive work among Russian Muslims.

Russia has signed agreements with a number of African countries on the coordination of anti-terrorist efforts at the level of intelligence and security agencies. Anti-terrorist motives also affect military ties with African countries. It is no coincidence that in the 2000s, military-technical cooperation developed more noticeably with countries where there were sharp clashes with Islamists - Algeria, Egypt, and Uganda.

The entire international community must participate in addressing security challenges in Africa. But the main responsibility, of course, lies with the African countries themselves and their sub-regional associations. Russia is taking part in the creation of a peacekeeping potential and the permanent readiness force of the African Union (AU). It assists in the training of African peacekeepers. In order to establish coordinated actions, in September 2014 the Russian Foreign Ministry and the AU African Commission signed an agreement on holding regular consultations.

An important goal of joint efforts is to ensure adequate application of the right to external intervention recognized by both sides in cases of crimes against humanity, genocide, mass violence, and humanitarian disasters committed in a particular country (UN General Assembly Resolution on Responsibility to Protect of 2005, relevant resolutions of the Assemblies of Heads of State and Government of the African Union). However, at the same time, Russia insists that in these cases the intervention should be authorized by the Security Council and carried out in strict compliance with the mandate given; that all possibilities for reaching a compromise through peaceful means should be used first; that all possibilities of the African Union should be exhausted; and that the intervention should not be used to change the existing system, to "force

The Libyan crisis confirms that arbitrary reading of UN Security Council resolutions, the armed intervention of the NATO coalition, and ignoring the efforts of the AU lead to disastrous consequences. Political and diplomatic cooperation between Russia and Africa, of course, is not limited to African affairs. It is quite actively implemented in the sphere of limiting weapons of mass destruction, as well as in the field of environmental protection, climate change, etc. But the discussion of these issues in this article is hardly appropriate.

FOREIGN TRADE RELATIONS

Foreign trade turnover in 2013 was $9.76 billion, including Russian exports - $7.12 billion, and imports - $2.553 billion.⁵ Five North African countries (Algeria, Egypt, Libya, Morocco, and Tunisia) account for more than 70% of the trade turnover. The trade turnover with sub - Saharan Africa reaches $2.96 billion, including $1.07 billion with South Africa, $336 million with Kenya, $300 million with Nigeria, and$168 million with Tanzania. It should be noted that the growth rate of trade exchanges is quite high: from $1.6 billion in 2000 to $9.6 billion in 2013, i.e. 6 times (see Table). 1 and 2).

The structure of Russian trade with Africa reflects the state of the Russian economy. The lion's share of trade is accounted for by food, coffee, cocoa (40%), petroleum products and metals (20%). Finished products make up about 18%, and transport and equipment - 6%.Russian exports to almost all countries are dominated by petroleum products, fertilizers, and cereals (see Table 2).

The lack of a sufficiently significant amount of the machine and electronic industries is a serious deterrent to the proper filling of trade exchange channels. To some extent, this is compensated by the arms trade.

2000-2013 Russia exported $11.7 billion worth of military products to Africa. (in constant 1990 prices) ⁶, which is 11.7% of the total volume of Russian exports of weapons and military equipment. Most of the exported weapons (in terms of value) account for complex high-tech weapons: aircraft, air defense missiles, warships, rocket and artillery systems. In 2013, Russia accounted for up to 30% of the African arms and military equipment market (over 40% in the North of the continent and 12-15% in sub-Saharan Africa).⁷. Military supplies to Algeria (in 2000-2013) exceeded $7 billion, to Egypt - $1.3 billion, to Uganda - $0.56 billion, and to Ethiopia - $0.55 billion.⁸

The continent's arms market is expanding. Russian companies intend to radically improve the system of after-sales service of weapons, expand the practice of state lending and insurance, and expand the implementation of transactions on the arms market.

Table 1

Russia's foreign trade turnover with Africa in 2000-2013 ($ million, current prices)

Source: Customs Statistics of Russia. Rosstat.

Table 2

Russia's foreign trade with Africa, 2000-2013 ($ million, current prices)

* Alcohol.

** Equipment.

Source: Customs Statistics of Russia. Rosstat.

It is necessary to use modern mutual payment schemes on a compensatory basis, which should allow doubling the volume of arms exports in the next five years.

FOCUS ON INVESTMENT PROJECTS

The main and most dynamically developing component of Russia's presence in Africa is the investment activity of Russian private and state-owned companies. More or less accurate data on the inflow of Russian investments are not available in the statistical documentation. Judging by the published statements of the heads of the respective companies, the inflow of Russian investments over the past decade reaches $10-12 billion. The investment volumes announced for the next 5-10 years amount to $13 billion (see Table 3). The African Development Bank estimated the volume of Russian investment inflows to Africa in 2008 at $20 billion. ⁹

The lion's share of investments is directed to the development of African deposits of solid mineral and hydrocarbon resources. As one of the key players in the commodity markets, Russia seeks to increase the competitiveness of its mining complex by expanding its geographical scope of activity and increase the potential of its influence on world markets. No less important motives are compensation for the depletion of domestic deposits of a number of minerals through import, increasing the level of internationalization and international prestige of Russian corporations.

Russia is not deprived of nature-

Table 3

Assets of some major Russian companies in African countries

Compiled by the author.

these resources. However, in recent years, many profitable deposits have been on the verge of depletion. A number of the most important solid minerals were deficient at a high level. The development of new deposits, mostly located in the Siberian regions, is associated with large capital investments and the risk of irreversible damage to the environment. Cooperation with Africa provides an opportunity to address these challenges.

Thus, for manganese ore, Russia has a deficit of 100%, while Africa accounts for 60% of world reserves and up to 40% of world production; for chromium, respectively, - 60%, 50% and 37%. Approximately the same picture for cobalt, bauxite, vanadium, and titanium. In terms of uranium, Russia has a deficit of 80-85%, reserves in Africa are 19-20% of the world level, and production is 15-16% (see Table 4).

The main volume of Russian investment is directed to the extraction of minerals.

In 2006 - 2007, together with the South African company Pitsara Seschaba, the Russian holding Renova founded the company United Manganese of Kalahari (UMK), in which Russians own 49% of the share capital. UMK launched work on OSVO-

Table 4

Complementarity of the raw material base of Russia and Africa

Note: The table shows only confirmed reserves.

Sources: 1) State Report "On the state and use of mineral resources of the Russian Federation in 2008-2010". MPR. Moscow, 2009, 2011

2) Statistical reference book "Mineral resources of the world". Information and Analytical Center "Mineral", Moscow, 2009.

3) USGS. Minerals Yearbook 2009, 2013.

The company developed a manganese deposit in the Kalahari Desert and reached its full capacity in 2010. Renova has invested about $1 billion in the company. Renova has invested $200 million in an enterprise that produces silico-manganese up to 170 thousand tons per year. Renova is seeking the right to develop titanium sand and gold deposits in Mozambique.

Another major Russian corporation, Evraz, acquired 79% of the capital of Highveld Steel and Vanadium Corporation Ltd in 2006. Evraz's investment is estimated at $1.1 billion. In 2014, Evraz sold 26% of its shares to a South African company for $26 million, in accordance with the requirements of South African laws.

Russian and South African companies coordinate their operations in the platinum Group metals (PGM) markets. South Africa accounts for up to 80% of global platinum production, while Russia accounts for up to 40% of palladium production.

An important achievement of Russian business in Africa is the signing in September 2014 in Harare, the capital of the Republic of Zimbabwe, of an intergovernmental agreement on the joint development of the largest world-class deposit of valuable metal ores, Darwendale. Proven platinum reserves reach 19 tons, and the total volume of resources is 755 tons, including all precious metals contained in ores.

At the first stage, it is planned to build a mine and a mining and processing plant.-

The investment volume is $500 million. In Ruschrome Mining, which holds the license to develop the field, 50% of the capital belongs to Russians, and the other half belongs to Zimbabwe Mining Development Corporation.

The Russian joint company RUSAL holds a dominant position in the production of bauxite in Guinea. The company's investment volume is estimated at $1-1.5 billion. Guinea bauxite supplies up to 60% of RUSAL's needs for this raw material. However, due to difficulties encountered in recent years, RUSAL has reduced bauxite production in Guinea, suspended alumina production in that country and aluminum production at the ALSCON plant in Nigeria10.

Severstal, the largest Russian steel company, is actively expanding its assets in Africa. The structures under its control operate in South Africa, Gabon, and the Congo. In Guinea and Burkina Faso, they produce gold in the amount of 20-23 tons per year. But the most significant is Severstal's $37.5 million acquisition of a 61.5% stake in Liberia's Iron Ore Group, which gave it access to the richest deposit of high-quality Putu ore in Liberia. The Government of Liberia issued the relevant license in 2014. Severstal has announced its intention to invest up to $2.5 billion in this project in order to start producing 20 million tons of iron pellets per year by 2017.

The most important goal of Russian investors ' expansion is the energy resources of the African continent. Russia positions itself as a global energy power.

The African continent is actively developing its potential as a significant player in the global energy market. Proven oil reserves in Africa amount to 17.3 billion tons (7.7% of the world's), in Russia - 10.9 billion tons (4.9% of the world's volume).

Currently, 10 African countries produce oil. Its production in Africa in 2013 exceeded 422 million tons ¹¹. This is comparable to the volume of Russian production - 600 million tons.

However, the main advantage of African oil compared to Russian oil is its quality (almost 50% of the oil produced belongs to the "light" category) and significantly lower production costs. The Russian oil and gas business is also concerned about the fact that with oil production at the level of 600 million tons per year and at the level of current profitability, the existing domestic oil reserves will be exhausted in the next 30 years.¹²

Russian companies have made a significant contribution to the exploration of oil and gas fields in Africa, in particular, in Ethiopia, Mozambique, Sudan, Mauritania, Egypt, Algeria, and the Gulf of Guinea. Lukoil, Russia's largest private oil company, has expressed particular interest in acquiring assets in Africa. Significant progress has been made in Libya. However, the overthrow of the Gaddafi regime disrupted the plans. Lukoil has acquired the right to develop 11 blocks in the coastal countries of the Gulf of Guinea: Ivory Coast, Sierra Leone, Ghana, Nigeria, and Cameroon.

The last transaction (2014) concerns Lukoil's entry into the Chevron offshore project in Nigeria, under which Lukoil receives 45% of the capital and 18% of the profit of the joint venture being created. In June 2014, Lukoil also acquired a 37.5% stake in the project to develop the Etinde site on the Cameroon shelf from the British company Bowleven Pic. Lukoil has opened representative offices in Angola, Ghana, Ivory Coast, Nigeria, and Sierra Leone.

Another major Russian investor in African countries is Gazprom. According to forecasts of the International Energy Agency, gas production in Africa will increase to 400 billion ^m3 by 2035. Large gas fields have been discovered in Algeria, Libya and recently in Tanzania (900 billion ^m3), in Mozambique (2.8 trillion ^m3).

The supply of African gas through pipelines laid in the Mediterranean Sea to Southern European countries is significantly increasing, threatening the interests of the Russian supplier. Gazprom has established partnership relations with the Algerian company Sonatrach; signed agreements with partners from Nigeria on joint development of gas and oil fields, and participation in the construction of the trans-Saharan gas pipeline Nigeria-Algeria. In March 2010, Gazprom reached agreements with Namcor, the state - owned company of Namibia, and Tullow Oil, a British firm, to jointly develop the Kudu gas field (with a reserve of 28 billion ^m3).

Rosneft, which implements projects in Algeria, has also announced plans to build an oil pipeline from Mozambique (Port of Beira) through Zambia, Malawi and Botswana to Zimbabwe. The cost of the first stage of the project is$700 million. The project is being implemented jointly with the State Agency for Export Credit and Investment Insurance, which is part of Vnesheconombank of Russia.

Russia is involved in the implementation of projects aimed at achieving energy security using nuclear energy. She has extensive experience in the construction of

Nuclear power plants, modern technologies with post-Fukushima generation safety systems. Nuclear reactor construction projects are being discussed with Egypt and Nigeria.

But the partnership with South Africa, whose government has approved a program for the construction of 9 nuclear reactors, has become the most realistic. Negotiations on this issue have been underway for several years.

On September 22, 2014, an Intergovernmental Agreement on Strategic Partnership between Russia and South Africa in the field of nuclear energy and Industry was signed in Vienna. Responding to the appeal of the South African side, the head of the state corporation "Rosatom" S. Kiriyenko in November 2013 declared Russia's readiness to participate in the construction of 9 nuclear power units with a total capacity of 9.6 GW with a total investment of $40-50 billion. At the same time, it provides for the possibility of providing a state loan in the amount of 70-85% of the transaction amount, localizing production at the level of 40-60%, and providing local enterprises with orders for performing contract work for $16 billion. The agreement itself and the terms proposed by the Russian side gave rise to a new round of competition around the deal. Areva (France), which is a "historical partner" of South Africa in this field, is particularly energetic: it was the company that built the first Coberg nuclear power plant in South Africa and on the continent with a capacity of 1,830 MW.

It is difficult to predict the outcome of the" fight " in which China, Westinghouse Electric, and other companies are involved. Moreover, the positions of both the political elites and the public opinion of South Africa are far from ambiguous both on the issue of the very fact of using nuclear energy in the country, and on the specific modalities of project implementation.

It is important to emphasize that the Russian-African partnership is beginning to expand beyond the mineral resources segment. Branches of Russian banks (VEB, VTB, Badr-Forte Bank, etc.) have started operating in Africa, mobile communication projects are being implemented using Russian satellite launch capabilities, the use of Russian software products, the organization of assembly plants, the creation of solar-powered power plants, etc.

* * *

The scope of Russian-African cooperation remains limited for most African countries. Structured mechanisms were not formed. Business deals are sometimes concluded on a case-by-case basis. The exception is a small group of countries that includes the states of North Africa, and in the Sub - Saharan zone-South Africa, Ethiopia, Tanzania, Kenya, Guinea and to some extent Angola, Mozambique, Sudan, Ghana, Ivory Coast, and Nigeria. But even with these countries, the schedule of foreign trade exchanges looks zigzag, like a carpenter's saw blade.

Political and diplomatic cooperation is developing more effectively and fruitfully. The growing weight of the African continent, the broad convergence of positions on key issues related to the formation of a new world order, and the effectiveness of coordinated efforts make relations with African countries more valuable in the eyes of Russian politicians. The political partnership with Africa fits well into Russia's foreign policy strategy and its efforts to achieve current and short-term goals and objectives in the international arena.

Russia's return to Africa, however, continues. But this comeback does not take place in the costumes of the Cold War and ideological confrontations, as some Western publicists try to imagine. The world has changed. Russia is firmly on the path of market and democratic development.

The future of the Russian-African partnership in world politics and economy depends, first of all, on the pace of formation of the modern Russian national economy and on building a carefully balanced hierarchy of geo-economic and geopolitical priorities of the Russian state. But it is also important to eliminate the underestimation of the African factor by Russian politicians and entrepreneurs and the discrepancy between the level of partnership achieved and the objective needs and real opportunities to accelerate Russia's return to the continent.

¹ www.mid.ru 431 - 27 - 03 - 2007.

² The concept of Foreign Policy of the Russian Federation. February 12, 2013-www.mid.ru

^{Attali Jacques.} 3 A brief history of the future, Moscow, 2014, pp. 171-172.

^{J. Friedman} 4 The next 10 years. 2011-2021. Moscow, 2011. pp. 281-289; Attali Jacques. Decree, Op. pp. 238-240.

⁵ Customs statistics of Russia. Rosstat.

⁶ SIPRI. Arms Transfers Database.

⁷ Ibidem.

⁸ Ibid.

⁹ African Development Bank Group. Chief Economist Complex. Africa Economic Brief. Vol. 2. Issue 7. 11 May, 2011. P. 3.

¹⁰ News, February 18, 2014

¹¹ Data from the French National Institute of Statistics (INSIEE) http://www.insee.fr/fr/themes/tableau.asp? Reg id=98 et ref_id=CM...

¹² http://ria.ru/economy/20140528/ 1009685659.html

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