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Global Economy

The main thing is not Russia

"Details were not mentioned": This statement ran through all agency reports on the conversation between Chancellor Olaf Scholz and Egyptian President Abdel Fattah al Sisi in Berlin when the question came up as to whether Scholz al Sisi had raised the issue of human rights. Yes, we talked about it, it was simply said afterwards. And Scholz emphasized that he had pointed out to Sisi the beneficial effects of "determined steps" towards more participation and the rule of law – these "help to improve the situation and to strengthen and stabilize the economy in the long term".

It can be doubted that al Sisi gives a lot to such advice. The former commander-in-chief of the army has ruled the country since 2014 and is taking tougher action against members of the opposition than his predecessor Hosni Mubarak, who was overthrown in the Egyptian spring of 2011. The prisons are said to hold more than 65,000 political prisoners, half of them in custody. Al Sisi's government wants nothing to do with it and claims that there are no political prisoners at all.

Although al-Sisi recently called for a national dialogue, after which some were released, the direction of this dialogue is still unknown. Opposition figures suspect that the initiative is aimed more at the EU and the USA than at the opposition. Egypt has been in a deep economic crisis for years and is dependent on foreign funds. Sisi offered the EU an energy partnership in Berlin. Egypt ranks 14th on the list of natural gas producing countries.

Algeria's hopes for political change did not last long. Although the aging long-term ruler Abdelaziz Bouteflika was overthrown by the "Hirak" uprisings in 2019, his successor Abdelmadjid Tebbounes rules in a similarly authoritarian manner.

Amnesty International noted in 2021 that the authorities were increasingly "relying on allegations of 'terrorism' or 'conspiracy against the state' to prosecute human rights defenders and Hirak activists". In order to smash contradictions and to silence protests, the authorities are entitled to any means. Hundreds of Algerians are now said to be in custody, Amnesty writes in a new report citing Algerian organizations.

Algeria is now Italy's most important gas supplier, also because Russian supplies have fallen significantly. Prime Minister Mario Draghi negotiated another contract in Algiers at the beginning of the week. This should be followed with attention in Spain, because the country also obtains gas from Algeria, but is in a dispute with Algiers over Western Sahara. Spain has recently started supporting Algeria's neighboring country Morocco, which annexed the area in 1975. Algeria, in turn, supports the Polisario resistance movement, which is seeking a referendum on Western Sahara's independence. Algeria therefore suspended the friendship treaty with Spain last week, but denied that such a decision had ever been made after intervention by the EU.

Angola was another target of Italian efforts to get off Russian gas. In April, representatives of the Italian government and the state energy supplier Eni traveled to the West African country and returned with a declaration of intent for more gas supplies: Angola is to send one billion cubic meters to Italy from 2023.

Angola is one of the largest crude oil producers in Central Africa and, despite counter-movements, is heavily dependent on oil exports. In the country itself, the energy supply often collapses, and large parts of the rapidly growing population live in slums. Decision-making power – including in many economic processes – is concentrated in the hands of President Joao Lourenco, and corrupt elites are preventing a broad-based upswing.

There is hardly any separation of powers or an awareness of the rule of law, but there are frequent reports of brutal police operations with fatalities against the population. At the time, Interior Minister Eugénio Laborinho responded to outrage because citizens had been killed during the meeting of the Corona protection measures in 2020: "The police are not on duty to distribute sweets or give out chocolate."

After the Italian delegation successfully negotiated in Angola in April, they moved on to Congo, and there an even bigger deal was struck. 4.5 billion cubic meters of LNG are to be shipped to Italy from 2023.

When it came to the negotiating partner, the Italian side knew only too well who they were dealing with. President Denis Sassou-Nguesso has ruled the country uninterruptedly since 1997, having previously been head of state from 1979-1992. The opposition regularly accuses the 78-year-old of manipulation in the presidential elections. In the Democracy Index of the "Economist" the Republic of the Congo gets the label "authoritarian regime". In Transparency International's Corruption Perceptions Index 2021, Congo, together with Guinea-Bissau, ranks 162 out of 180 countries – probably also an explanation for the fact that the population has little of the country's wealth of natural resources, in contrast to those around the president, as international research on the Panama Papers 2016 showed.

Azerbaijan

EU Commission President Ursula von der Leyen and Azerbaijan's President Ilham Aliyev were all beaming when, at the beginning of the week, they signed a preliminary agreement on doubling the ex-Soviet republic's natural gas supplies to the EU within five years. From 2027, at least 20 billion cubic meters should flow annually – so far it has been 8.1 billion cubic meters annually.

Aliyev has ruled the country since 2003 – as the successor to his father Heydar, who had ruled the country since 1993, and he rules it no less authoritarian. The opposition and independent political organizations were systematically marginalized and taken to court. In the 2020 parliamentary elections, the OSCE identified "significant procedural violations in counting and registering votes on election day". The Parliamentary Assembly of the Council of Europe stated in the same year that "there is no longer any doubt that Azerbaijan has a problem in connection with political prisoners and that this can be traced back to structural and systemic causes".

Azerbaijan is seeking total control of the Nagorno-Karabakh region, parts of which are controlled by neighboring Armenia. In the autumn of 2020, there were weeks of heavy fighting with thousands of dead, in which Azerbaijan conquered part of the area.

Qatar is one of the world's largest exporters of liquefied natural gas. As early as March – about a month after the start of the Russian invasion of Ukraine – Federal Economics Minister Robert Habeck traveled to Qatar to act as a "door opener" for German energy deals, as he called himself.

It was probably not an easy journey for Habeck, as Qatar has been the focus of massive criticism for many years – from human rights activists as well as trade unions. Qatari legislation is based on Sharia, women are not legally equal to men, sexual minorities are criminalized, the country imposes and continues to carry out the death penalty.

And then there's the matter of the soccer World Cup at the end of the year: Numerous investigations confirm that foreign workers are being systematically exploited and mistreated, for example in the construction of the stadiums – there are also reports of deaths. Reforms promised by Qatar, which limit the relationship between employers and wage earners who depend on kafala, have so far, according to critics, only been implemented inadequately.

Habeck himself says that he spoke about the importance of occupational safety standards, which the Ministry of Economic Affairs in Doha had confirmed. At the end of the visit there was an agreement on a long-term energy partnership, which is to include both LNG supplies and the expansion of renewable energies – such as hydrogen technology. The exact quantities are still unknown, the details are now being negotiated at company level.

Gas from Senegal – this variant received little attention in this country until the outbreak of the war against Ukraine. The deposits off the coast of Senegal and Mauritania, which were only discovered a few years ago, have now become attractive; not least because of this, Chancellor Scholz started his first trip to Africa in Dakar in May.

Senegal wants to export liquefied gas from 2023, but Europe will not be among the first recipients: the export will initially go to Asia. Among other things, President Macky Sall wants to promote the expansion of the power supply in his country – and with this argument he also rejects the criticism of environmentalists about the planned exploitation of gas reserves at sea. The population in the country is growing rapidly, the average age is 19 years.

Sall has ruled the country since 2012, and the constitution prohibits him from standing again in 2024. The opposition suspects that Sall wants to ignore this passage. The Democracy Index of the British "Economist" put Senegal in the category of "hybrid regimes" in 2020 – one step ahead of the authoritarian regimes. With 86th place out of 167 countries, Senegal was one place ahead of Hong Kong. In its 2022 annual report, Reporters Without Borders attested the country to have a “solid democracy”, but at the same time referred to an unprecedented increase in violence against journalists in the previous year.

United Arab Emirates

Western heads of state and government court the new ruler of the United Arab Emirates, Mohammed bin Zajed al Nahjan, internationally known as MBZ, like few others. Federal Minister of Economics Habeck agreed in March to intensify cooperation in research into hydrogen as an energy source and synthetic kerosene, US President Joe Biden invited the Emir of Abu Dhabi to Washington during his trip to the Middle East, and on Monday MBZ was a guest in the office on his first trip abroad in Paris: French President Emmanuel Macron received him with military honors and a state banquet.

As a result, Macron and bin Zajed signed an agreement on diesel supplies and future cooperation on hydrogen as an energy source.

The UAE ranked seventh among all countries with natural gas reserves in 2020, and eighth for oil. The Emirates are converting this and the bulging state fund into political power. Their soldiers are involved in the conflicts in Yemen and Libya, and the smaller Qatar, together with Saudi Arabia, have long tried to bring the Emirates into line with a blockade. As far as Russia is concerned, the emirate has so far refused to condemn the attack on Ukraine, while at the same time offering wealthy Russians a place to stay.

Inside, there is only limited democratic participation, women are not legally equal to men, and homosexual relationships are punishable by imprisonment. Human rights organizations continually point out that the Emirates violate human rights in many places: domestic workers and construction workers, for example, are forced by the kafala system to hand over their identity papers and their freedom of choice to the employer.

Was all of this a topic in talks with MBZ? Not clear. France's Finance Minister Bruno Le Maire said before the visit that the increased energy imports from the Emirates should be an "interim solution".

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