$2 Billion Arms Deal Takes Shape - Egypt And Russia
Jeffrey C. Borneman | August 14, 2014
Signed in February of this year, the deal is looking like Egypt will receive “24 Mikoyan MiG- 29 fighter jets, as well as its Kornet anti-tank missile systems, attack helicopters Kamov Ka-25, Mil Mi-28 and Mi-25,” says the Jerusalem Post.
Make no mistake, even as Egypt's income has evaporated with the tourist industry and the average citizen knows hunger, DEMAND for Defense is the primary concern of Egyptian President Abdel Fattah al-Sisi.
So broke is Egypt that the deal was essentially co-signed by wealthier neighbors Saudi Arabia and the United Arab Emirates, who hope to gain some benefit from an armed and friendly Egypt.
What investors should not miss is Russia's effort to steal US influence. As the US has acted coldly to Egypt's new leadership, and NATO encroaches ever-closer to the Russian border and strangles its economy, Russian President Vladimir Putin is playing the hand he has been dealt in spreading Russian influence (Defense) in the Middle East.
"We are supplying arms to Egypt and have agreed to expand this cooperation,” the Russian president said in remarks at a press conference after the talks, the Kremlin website reported. And, just like any NATO arms deal which includes heavy weapons (air-power, tanks) Russia will be supplying troops to properly "train and maintain" the equipment.
Supplying Egypt's DEMAND for Defense is also a two-way street as "Egypt (purchases) around 40 percent of the grain it consumes (from Russia) and ... agricultural products make up 90 percent of its imports from the Arab country."
Other perks offered Egypt were the creation of a free trade zone and the possibility of setting up an Egyptian logistics center on the Black Sea.
Investors should always scrutinize geopolitical events through the lens of Metals, Defense, Energy and Food. These are the only market sectors of concern to those in power as they are the only tools necessary in retaining that power.
If you want to know more about how the MDEF™ Investing strategy is positioned in this, or other geopolitical possibilities, please contact us directly.