Russia extends hands to Arabs now

TRADE TIES: Trade between the Arab world and Russia currently totals $8bn a year. (Getty Images)

Russia, entrenched in economic woes, is positioning itself as a firm trading partner with Arab nations who are keen to rekindle their Soviet-era alliance, government officials said on Thursday.

Trade between the Arab world and Russia currently totals $8bn a year - a figure dwarfed by that of Russia's heavyweight partner, the European Union, amounting to hundreds of billions of dollars - but Russia hopes a wave of new investments will cement trade for years to come.

"The Russians are coming, and not to plunder your wealth," Russia's Vice Premier and the cabinet's top anti-crisis manager, Igor Shuvalov, told a group of Arab ministers at a conference in the country's second city St Petersburg.

"Investment to the Arab world and from the Arab world to Russia is all important and we'll work on it."

Russia's gross domestic product (GDP) shrank by 10.5 percent year on year in April, making it the worst hit major emerging market in the global financial crisis, and its companies owe $400 billion abroad.

Shuvalov said Russian banks are currently "in talks with Muslim banks" over possible joint ventures and said combined Russian-Arab trading platforms should be set up.

The Arabs welcomed the offer, saying they want Russia to help develop their infrastructure and develop energy.

"Saudi Arabia is open (to Russia), like many others in the region," said Amr Dabbagh, the head of Saudi Arabian General Investment Authority.

Kuwait's Trade Minister Ahmad al-Haroun said the Gulf Arab state is banking on Russia -- through joint ventures or direct investment -- to construct railway networks, build car-making plants and develop a port in the north of the country to serve neighbouring Iraq.

"That ($8bn) is not the number we want to obtain here. We have possibilities to enhance trade turnover between our two countries... The investment climate is good," he said.

Another top government official who spoke on condition of anonymity said he hoped trade between Russia and the Arab world would reach $10 billion either this year or in 2010.

Qatar's Finance Minister Youssef Kamal said the world's largest exporter of liquefied natural gas (LNG) wants to develop more mutually beneficial projects in the energy sphere with Russia over the next 10-15 years.

Late last year Russian state-controlled gas giant Gazprom, Iran and Qatar agreed to form a "gas troika" to strengthen cooperation in gas production. (Reuters)

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