Soviets Exhibit New Flexibility in Effort to Improve Mideast Ties

The Soviet Union, moving to capitalize on apparent disarray in the Reagan Administration, is intensifying its effort to improve relations with Middle East countries that have been cool if not openly hostile toward Moscow.

“We are seeing a new Soviet diplomacy, a diplomacy that is more open and more flexible” than in the past, a senior Egyptian official said the other day.

A Western diplomat concurred, saying, “The amount of activity that is going on is striking.”

The new Soviet approach in the Middle East is described as more polished and pragmatic than before, and many observers agree that this is a reflection of the smoothness and diplomatic savvy of Soviet leader Mikhail S. Gorbachev.

However, in the opinion of a number of senior officials and diplomats here, the success of this approach reflects to some degree the difficulties and embarrassment that have beset U.S. attempts to formulate coherent policies for the region.

Long before U.S. credibility was damaged by disclosure of the Iran- contras affair, Egyptian and Jordanian officials were complaining about what they saw as a vacuum in the Reagan Administration’s Middle East policy, a lack of momentum and what appeared to be a reluctance to become more involved in the Arab-Israeli peace process.

This reluctance, coupled with what is seen increasingly as Washington’s unqualified support for Israel, has created new openings for Soviet diplomacy. Moscow’s ambassadors acknowledge this.

“Nowadays, there are some favorable trends for us,” said Gennady K. Zhuravlev, the new Soviet ambassador to Egypt.

Soviet diplomacy continues to be stigmatized in the largely conservative, Islamic Middle East by the atheistic nature of communism and the Soviet military intervention in Muslim Afghanistan. But recent Soviet gains have been significant, Middle East experts say.

Last year, Oman and the United Arab Emirates established diplomatic relations with the Soviet Union, a development seen at the time as an important breakthrough for Moscow’s long-stymied efforts to establish a toehold in the Persian Gulf region. This left Israel, Saudi Arabia, Bahrain and Qatar as the only Middle Eastern states without formal ties to Moscow. (The United States, by contrast, has no diplomatic relations with South Yemen, Libya and Iran).

Earlier this month, the Soviets succeeded in signing several economic and commercial agreements with Iran, which had signaled its interest in expanding relations with Moscow. While this may reflect Iran’s growing economic desperation as a result of its war with Iraq rather than any fundamental policy shift, it was nevertheless considered remarkable given Iran’s opposition to the Soviet occupation of Afghanistan and the Soviet Union’s open support of the Iraqi war effort.

The Soviets, driven out of Egypt in the 1970s by President Anwar Sadat, are also making a modest, cautious comeback in Egypt, America’s largest and most important ally in the Arab world.

Since full diplomatic relations were restored two years ago, Moscow has sent a steady stream of visitors to Cairo, from ballet troupes to a high-level economic delegation that recently signed an $850-million trade protocol.

“The Soviets are really energizing themselves in the diplomatic context with the Egyptians,” a Western diplomat said. “They’ve sent an increasing number of visitors and missions here. As they become more active in the Middle East, they see the advantage of having an opening in Cairo.”

Although the trade talks produced a new barter agreement for 1987, they were not entirely successful. The Egyptians wanted to increase the level of trade and negotiate a longer-term agreement. The Soviets wanted first to settle the $3-billion in debt that the Egyptians stopped servicing 10 years ago. The Soviet negotiators also wanted Egypt to reform an absurdly low official exchange rate that exaggerates the value of Egyptian exports to the Soviet Union by a factor of at least three.

The talks did not get very far on those issues because, in the words of Egyptian negotiator Shawkat Yanni, under the existing terms of trade between the two countries, “we are gaining all the time--and we knew it and they knew it, and they knew that we knew it.”

The talks will continue early next year, and the Soviets have held out two inducements by offering to reduce or forgive the interest on the debt and to help renovate some of the aging Soviet-built factories that are still the backbone of Egypt’s heavy industry.

No one expects any momentous shift or diplomatic realignment to emerge from all this Soviet diplomatic activity. For one thing, the Soviets “haven’t got the kind of cash the Americans have,” an American diplomat said.

For another, despite all the new-found diplomatic savoir-faire, the Soviet track record in the Middle East is pretty poor. The countries that have put all or most of their eggs in Moscow’s basket--Syria, South Yemen and Libya--are all beset by internal difficulties and economic hardship.

Still, a number of pro-American Arab officials and Western diplomats say they are concerned by the fact that the effectiveness of Soviet diplomacy in the region has risen while that of the United States, under President Reagan, has declined.

As examples of what is perceived here as the inept and indifferent policies of the Reagan Administration in the Middle East, they cite the Iran-contras affair, the insensitivity Washington demonstrated toward the Arab world by furnishing weapons to non-Arab Iran, and the growing conviction that it is not going to do anything to get peace talks off the ground.

“Russia has a policy of acting,” an Egyptian military official complained recently, “but your policy is always one of reacting to events.”

Another official, speaking privately to a reporter after the Iranian arms affair was disclosed, put it more bluntly.

“America,” he said, “has a genius for embarrassing its friends.”