Since the Fukushima meltdown in 2011, most of the world has been turning its back on nuclear energy. Although technically cleaner than oil, the risks that it carries, as well as the cost, are deemed by many as too great to pursue. Following the disaster, Germany began to permanently close its reactors; Spain and Switzerland banned the construction of new plants; and multiple other countries took an official position against nuclear power in 2013. It may therefore come as a surprise that a slow adoption of nuclear power can be seen in the Middle East (see Fig. 1), with several countries attempting to secure a spot in the nuclear club.
Last November, Egypt took its first steps towards instigating a nuclear power programme by signing a new deal with Russian state-owned firm Rosatom. The Dabaa-based plant, which will be comprised of four power units that each generate 1,200mW of energy, is expected to be fully operational within the next 12 years. Along with its construction duties, Rosatom has agreed to finance the $20bn project, which will be payable over 33 years, starting with an 11-year grace period.
Jordan also signed a $10bn deal with Russia last year, which will see two reactors built in the north of the country, while Saudi Arabia plans to build 16 units over the next 20 years. Neighbouring UAE, on the other hand, started its own nuclear programme in 2012, when it accepted a $20bn bid from a South Korean consortium to construct four commercial nuclear rectors by 2020. And, of course, there is one country in the region that is already generating nuclear power – Iran.
The arguments for nuclear
There have been various reasons given as to why these states are currently implementing incredibly costly nuclear power programmes. Perhaps the most obvious and plausible is that through nuclear energy, a vital shift away from oil can be achieved. The diversification of a state’s energy mix is increasingly important in today’s unpredictable landscape, with achieving greater sustainability and resilience being key factors in modern-day governance. For oil producing nations, by introducing an alternative energy source, they can benefit from greater export revenue, a commonly cited opportunity cost missed out on due to domestic demand. For non-oil producing nations, such as Jordan, the need for alternative energy is even greater, being a net importer.
“All countries seek to improve the wellbeing of their people by providing affordable and reliable supplies of electric power. Middle Eastern countries are no exception”, William D Magwood, IV, NEA Director General of the OECD Nuclear Energy Agency (NEA), told World Finance. “Nuclear power plants can produce electricity at a large scale for decades without emitting harmful air pollution, enabling economic growth and improved quality of life. While some countries in the region could produce electricity using fossil fuels, doing so consumes valuable export commodities that can have greater value on the global market. In addition to addressing that concern, building nuclear power plants helps diversify the energy supply of any country, making their economies less vulnerable to disruption.”
Countries in the process of economic development naturally contend with a rapidly growing demand for energy. This is particularly true given that when a state opens up more opportunities for business and investment, SMEs multiply in number and an expansion of the middle class takes place – both of which play a considerable role in mounting energy requirements.
The diversification of a state’s energy mix is increasingly important in today’s unpredictable landscape
At present, Egypt is stunted by frequent electricity cuts that disrupt its industries, as well as energy subsidies that cripple the state’s budget on a yearly basis. Quite simply, the need for Egypt to implement a new energy strategy is nothing short of urgent, particularly given its swift decline in gas production. However, with a nuclear programme now firmly afoot, it would appear that greater energy securitisation is imminent for Egypt, which could act as a much-needed catalyst to its struggling economy.
Politically speaking
While there are certainly valid points to be made for energy diversification and increasing export revenue, there is also another side of the picture to be considered. Firstly, it is worth noting that having nuclear power comes with a certain level of international prestige for any state: possessing the technology, capital and expertise required to generate nuclear electricity is a coveted prize for many internationally (See Fig. 2), and so nuclear power is a symbol of strength and a powerful motive for any notable player in the game of global politics.
“It is political because Iran started the process of acquiring nuclear energy way back in the late 1990s, which came to light in 2002”, said Anoush Ehteshami, Professor of International Relations at Durham University. “The completion of the Bushehr power plant by Russian scientists and technology has galvanised other regional countries with an interest, but also [those] with the resources, financial in particular, to seek nuclear energy. They do not want to be lagging behind what was seen, or what Iran portrays at least, as major technological advances. And so these countries, given their financial abilities, felt more or less compelled to follow suit.”
Refuting Iran, which is a major Shia power in the Middle East, is a huge factor for regional players, especially given that tension is once again mounting between Iran and Saudi Arabia as the two carry out a bloody proxy war in Yemen. While keeping up with Israel is also an influential factor, it would seem that Iran’s deal with the P5+1 countries was the real catalyst for Egypt in particular.
Historically speaking, Egypt has long played a leading role in the Middle East, often acting as the bridge to the West and the cultural epicentre to the region. Yet a prolonged economic downturn in recent decades, together with the rise of Turkey, has seen Egypt slip from its once-prominent regional position. As such, it would appear that Cairo endeavours to regain this role through its admission to the nuclear club.
Nonetheless, achieving this is no simple task: Ehteshami told World Finance: “I think Egypt, given its historical weight in the region, has always aspired to be a leader in the region. The general [General Abdel Fattah al-Sisi] is now more or less back in charge, and would want to restore Egypt to what they see [as] its rightful place as the main Arab party. But I don’t see that happening myself: I think Egypt is still a limping sphinx, I don’t think it has the financial or the political capital to reassert itself in the region. This nuclear gambit is little more than an expression of interest to appear to the rest of the region as a power to rival that of Iran.”
That said, it is worth noting that Egypt’s deal with Rosatom was announced shortly after the Turkish attack on a Russian fighter jet in its airspace, which indicates a noteworthy shift in Egypt’s geopolitical standing. With relations between Turkey and Russia expected to worsen, Egypt’s role as Russia’s regional partner could very well augment in the coming years. Also vying for greater regional influence is Saudi Arabia, which sees itself as the natural leader of the Gulf States in particular. In order to consolidate this role – and extend further still – it is vital for Saudi Arabia to stay ahead of the game in terms of military and financial power, as well as technological prowess.
A flawed system
Naturally, achieving nuclear power is a complex process: there are various hurdles to overcome, not least of all the issue of finance for cash-strapped states. “The most significant challenge that developing economies will face is the limited human and industrial infrastructure available to support the safe and efficient operation and safety regulation of nuclear plants. It can take many years to build an appropriate infrastructure. For that reason, many countries in the region have undertaken initiatives to train the engineers and technicians that would be needed to support nuclear operations”, Magwood added.
“Successful introduction of nuclear plants will require the establishment of a strong, independent regulator, first and foremost. If this is done, countries can proceed to seek competitive proposals to build plants from established suppliers who can build plants safely and cost-effectively. They will also need to ensure that the suppliers and contractors needed to support efficient operations will be available over the long operational life of the nuclear plants.”
Moreover, there are several holes in the economic argument presented by nuclear-seeking Middle Eastern states: building a nuclear reactor costs at least $5bn a piece – an unfathomable expense for struggling economies such as Egypt and Jordan; hence the partnership with Rosatom. However, such agreements obviously do not come for free, and while Saudi Arabia and the UAE are in a better position to carry out large-scale infrastructure projects, they too face difficulties in terms of state revenue that have resulted from the current oil price crisis.
“The benefits can only be in the long-run because the capital outlay for generating nuclear power is actually quite substantial”, explained Ehteshami. “It will be many years in the case of Iran, for example, [before] the Bushehr power plant will actually return a profit. So these are all in essence state-managed projects, but none of these states have got bottomless pits of money.”
What makes the scenario even more provocative is that all of these countries already have far easier access to an abundant source of energy: solar power. It therefore seems more logical for them to pursue this sustainable energy source in order to meet growing domestic demand and reduce the volume of oil exported. Furthermore, the cost of generating solar power is substantially less than that of nuclear power, particularly when considering the cost reductions that have permeated the industry in recent years.
Yet, at present, Morocco stands out as the only country in the region taking discernible steps to tap into this enviable asset. The country recently started construction on the world’s largest solar energy production plant, which will allow its move away from a heavy reliance on imported fossil fuels. Rabat has even pledged that by 2020, 42 percent of domestic electricity demands will be supplied by solar energy. That said, the UAE and Jordan have also set targets to expand solar power generation in the coming years, albeit to a lesser degree, which thus makes their nuclear strategy even more curious.
The Russian factor
As a result of the plummeting rouble, the Crimea conflict and economic sanctions, Russia itself is cash-strapped at present, making its mammoth investments in the Middle East somewhat surprising. Certainly, Rosatom’s experience in the field is abundant and the company is the world leader in terms of the number of reactors it currently has under construction (see Fig. 3); factors which make it a logical partner for such projects. Yet it can be argued there is more to the state-owned firm’s big business development push in the Middle East than simply market infiltration.
Receiving financing for these multi-billion dollar projects politically ties states such as Egypt and Jordan to their benefactors – especially given the regional significance of the projects in question. As such, Russia’s partnership indicates a new anchor for the state in the area, at a time when the US is losing much ground geopolitically.
At present, relations between the US and Egypt are at their worst in perhaps decades, as a result of the support lent by the former to the Muslim Brotherhood during its brief stint in power. With a military leader now back at the helm, incumbent ruler Abdel Fattah al-Sisi sees the US as an unreliable partner, and as such is in the market for another powerful ally. Furthermore, the US’ role in Syria and Iraq has reduced its credibility, arguably for the entire region, while its reacquainted allegiance to Iran will certainly cool relations with other nations. All of these factors will collectively contribute to Russia’s mounting political influence in the region.
On your marks
Since the announcement of Egypt and Jordan’s respective deals, there has been talk of a potential nuclear arms race in the Middle East. Of course, such a scenario would take shape in the very long-term, given the length of time and the mammoth costs required to build and maintain nuclear reactors, yet it cannot be denied that such a possibility exists.
Although nuclear energy is indeed a complicated pathway to nuclear weaponry, the former nonetheless enables the technology and expertise required for the latter. As Ehteshami explained, the region is now playing catch-up to Iran, therefore it would be logical to assume that neighbouring nations desire to be on par militarily with their political rival as well.
Military might is a highly significant and pivotal factor in domestic policies for countries in the Middle East, particularly given the levels of instability and turmoil that persist in the region. It is for this reason that Saudi Arabia, despite dealing with a drastic fall in state revenue since the 2014 collapse of oil prices, increased its military budget by 17 percent – to $80.8bn – between 2013 and 2014, making it the fourth largest in the world. Such a financial manoeuvre indicates the sheer importance of maintaining military precedence for leading players in the region and contributes further to the argument that a Middle Eastern nuclear arms race could in fact be on the cards in the not-too-distant future.
The Middle East is a volatile region, and individual states still have a great deal of work to do in their respective stages of development. For some this involves securing a reliable source of energy, while for others it means moving firmly away from oil dependency. In both cases, nuclear energy offers a solution. Yet this solution comes at a great financial cost: given the current global economic landscape, plus the slowdown facing developing countries, there is much to be questioned when the latter decide to pursue multi-billion dollar super projects.
As such, it appears that nuclear energy is the latest pawn in the regional game of geopolitical chess that afflicts the Middle East. With financial partners at the ready to support states in fulfilling their nuclear goals, it seems unlikely that the pool will remain at its current size. Aside from the possibility of plunging these countries into deep economic crisis through the financial burden of nuclear power generation, there is also a real chance that tensions will continue to heat up in the region as players attempt to assert their dominance over one another. And, given most nations’ strained relationship with Iran – the state that set the nuclear precedent in the first place – there is no telling what the end result could be, be it in one decade or in five.
