Russia and Iran: Cooperation and Competition

[This report was also published in an altered form in The ISCIP Analyst, a publication of Boston University's Institute for the Study of Conlict, Ideology, and Policy, 19 Feb 2009.]

Despite being fewer than two months into the year, Iran has already commemorated two major milestones in 2009. From late January to early February, 10 days of nationwide national celebration marked the 30th anniversary of the country’s Islamic revolution. In the midst of these celebrations, on Feb. 2 Iran launched into space its first domestically produced satellite, Omid (the Farsi word for hope), on the back of its Safir-2 (ambassador-2 or messenger-2) rocket.

These achievements will not alter Iran’s status as the world’s most notorious pariah state, but the underlying implications --- the entrenchment and stability of Islamic rule and the capacity for technological innovation despite sanctions --- point to a changing regional and international role for the country. The Iranian presidential elections in June 2009 will accelerate the pace of change.

Iranian-Russian foreign relations have been important for both parties, particularly during the second half of the Islamic republic’s existence: Russian exports, especially nuclear technology and weapons, have put Iran near the technological forefront of the Middle East despite sanctions; and Iranian reactions to Russian policy toward Muslim state and nonstate entities have demonstrated that Iran’s foreign policy can be more nuanced than knee-jerk radical rhetoric. Given recent and forthcoming events in Iran, though, an examination and reevaluation of the countries’ mutual policies is in order, as forthcoming events in Iran may provide it new opportunities for expanded international relations.

Certainly the most high-profile example of Russian-Iranian cooperation is Iran’s Bushehr Nuclear Power Plant. Although Iran began the plant’s construction in 1975 with the aid of Germany-based Siemens AG, work ceased following the Islamic revolution in 1979, only to be recommenced with the aid of Russia’s Atomstroyexport in 1995. The two countries signed an agreement of nuclear cooperation in 1992, with the Bushehr plant originally scheduled to have been completed by 1999. Throughout the early weeks of 2009, Russian and Iranian news agencies have published a flurry of articles citing officials from both countries, including Rosatom chief Sergei Kiriyenko (1), voicing their commitment to completing the facility this year. In hopes of meeting its most recent deadline, Atomstroyexport has expanded its number of experts in Iran from 1,000 to 1,800. (2)

There is reason to question whether Atomstroyexport’s increased effort will allow construction to meet its latest deadline. Bushehr’s 30-plus-year history is rife with unfulfilled promises from Iran and her nuclear collaborators, of which Russia is one of many, albeit the most important. Iranian Ambassador to Russia Mahmoud-Reza Sajjadi himself recently griped about unnamed “other countries” who had not timely met their commitments to provide construction material for the plant. (3) Considering the Bushehr facility’s multitude of literal and figurative working parts that remain out of commission, the facility at this point primarily plays a symbolic role, emphasizing Iran’s capacity to advance technologically despite sanctions and its possible future as an oil-rich country working to shed its own dependence on carbon-based energy.

Of course, Bushehr also symbolizes fears of a nuclear-armed Iran, the “apocalyptic dangers” of which scandalize the writers of U.S. and Israeli editorial pages, but which have also prompted America to propose building a missile defense shield in Eastern Europe. (4) Yet, Bushehr may never evolve into anything other than what it purports to be (i.e., a warhead). Russia’s former foreign minister and national security adviser, Igor Ivanov, in April 2008 told the Jerusalem Post, “I don't think [Iran’s] political leadership is so stupid” as to attack Israel, and continued, "If all our experts left Iran tomorrow Bushehr would simply close down. ... Sometimes public opinion does not understand, thinking that we are helping Iran in some way to create military nuclear programs. This is not true." (5) If Ivanov is to be believed, it seems that Russian-Iranian cooperation on this very important front will continue for some time.

Doubts about the civilian capacity of Bushehr stem in part from Iran’s appetite for Russian military exports, which average hundreds of millions of dollars annually. (6) In 2005 Russia inked a $700 million deal to deliver to Iran 30 Tor-M1 short-range missile defense systems (7), and in December of last year Iranian defense officials boasted that they had begun receiving deliveries of Russian S-300 medium-range missile defense systems, although Russia denied the claim. (8) The S-300 system’s longer range allows it to be classified as more than simply a defensive system; and although news reports vary as to the specific type of S-300 that Russia may or may not be selling to Iran, the most advanced S-300 system would thwart any Israeli air attack on Iran until at least 2011, at which point the Israeli air force will have received delivery of the Lockheed Martin F-35, which can circumvent the S-300’s advanced radar. (9) In December 2008, Israel’s Foreign Minister Yigal Palmor told the Associated Press that Israeli Prime Minister Ehud Olmert had received assurances from Russia that the latter would not do anything to jeopardize Israel’s security. (10) As of publication in mid-February 2009, news reports are inconclusive as to whether the S-300 sales have happened or even will happen.

The only other major military exporter doing comparable business in Iran is China, which has supplied Iran with a variety of missile technology. However, in recent years Russian arms exports to Iran have trumped Chinese exports by a vast margin: From 2002 to 2005, Russian arms exports to Iran totaled $1.7 billion, while Chinese arms exports to Iran totaled only $300 million. (11) Thus, although China supplies the greatest percentage of Iran’s total imports, estimated at 15% of $67.79 billion annually (compared to Russia’s 5.7% of the total), the Iranian arms market is of greater importance to Russia, and it is in Russia’s interest to continue to satisfy Iran. (12) This may explain why Russia has continued to drag its feet on the S-300 issue; Russia may not want to disappoint an important client, but it may be taking extra time to evaluate the potential diplomatic fallout in the wake of the deal. More conclusive answers may emerge after Iranian Defense Minister Mostafa Mohammad Najjar’s Feb. 16 visit to Moscow. (13)

The two countries also enjoy trade of a more innocuous nature. In late January of this year, a state-run television station in the Iranian province of East Azerbaijan reported on the provincial governor’s visit to Tatarstan, where a variety of automotive and agricultural trade agreements were signed. (14) Additionally, Iran has expressed at the national level an interest in increased Russian agricultural imports. (15)

Of course, given that Russia and Iran hold the world’s largest and second-largest natural gas reserves, respectively, and considering Russia’s recent gas row with Ukraine in light of general global energy anxiety, it should come as no surprise that Russia and Iran plan to cooperate in the energy trade. The countries have mooted plans to form a gas cooperative in the model of OPEC, with Qatar mentioned as a possible additional ally. (16) Iran has also proposed that Russia act as the prime mover in setting up a Central-South Asian power grid. (17) Finally, Russia and Iran are seeking to formalize a gas-swapping deal by which either country may export gas for the other in exchange for a delivery of the same amount of gas. (18) Similar proxy-selling of petroleum has in the past benefited Iran, allowing it find possible buyers even in its own adversaries. (19) In any case, Iran’s Fars News Agency is keen to point out that foreign investment in the Iranian oil and gas sectors is not substantively hampered by sanctions against the Islamic republic. (20)

The monetary benefits of Russia’s catering to an under-served, emerging market are obvious, but Russia’s cooperation with the Islamic pariah state has garnered diplomatic benefits as well, namely Iranian temperance when it comes to conflicts involving Muslim entities. Iran’s overbearing pride in its own religious revolution colors the prism through which it views its more secular Muslim neighbors, and the country’s various efforts to invoke Islamic insurgency throughout the Muslim world have formed a primary pillar of its foreign policy, as has been evident in Lebanon, Iraq and Pakistan. Therefore, Iran’s assertion that the Chechen Wars were Russia’s “internal matter” (21) is surprising. Furthermore, during the Tajikistan civil war, Iran favored diplomacy rather than its typical fiery Islamic rhetoric, which one analyst attributes to Russian influence. (22)

Indeed it seems that there is little evidence that Russia’s and Iran’s mutually beneficial relationship will cease to exist in the near term. However, the character of the relationship is subject to change by three primary factors, the most prominent of which is the presidential election scheduled for June 12, 2009. Former Iranian President Mohammad Khatami, who served as president from 1997 to 2005, announced on Feb. 9 his candidacy for re-election, pitting him against current President Mahmoud Ahmadinejad and possibly other candidates. Khatami is perceived outside Iran as more liberal than Ahmadinejad, who has risen to international fame as a Holocaust denier but who is known in Iran for policies that had engendered a 30% inflation rate as recently as September 2008. Khatami, on the other hand, favors a two-state solution to the Israel-Palestine conflict and has attacked both Ahmadinejad’s inflationary policies and his anti-Semitism; this, in addition to Khatami’s honorary degrees from European universities, makes him a much more attractive leader from a Western perspective. If Khatami were re-elected, Russia would no doubt find itself competing for Iran’s attention, particularly if sanctions against Iran were lifted.

In a different twist, Russia may find itself competing against Iran in the former Soviet republics of Central Asia, where Iran has invested in energy-generation infrastructure. As noted in The ISCIP Analyst, Vol. XIV No. 10, Iran is financing two hydropower stations in Tajikistan, and Tajik government dissatisfaction with Russia may lead to further opportunities for Iranian investment. (23) In turn, Tajikistan has pledged to support Iran’s effort to become a permanent member of the Shanghai Cooperation Organization, to which Iran currently enjoys only observer status. (24) Russia and China do not favor Iran’s entry to the group. (25)

Finally, there is the issue of basic demographics. Iran’s population is significantly younger than Russia’s, with the former’s median age at 26.4 years, compared to the latter’s median age of 38.3 years. A recent Swiss envoy to Iran predicts that Iran’s Islamic regime will outlast the “political time frame” of Iran’s most prominent detractors, which would guarantee that many generations of Iranians will come of age under a relatively stable government. (26) If Iran is able to reverse its economic course and better use its vast oil wealth, it is likely that it will return to its role as the “fulcrum in the Gulf” and additionally play a stronger role in Central Asia. (27)

(1) “Russia Says Iran's Bushehr Nuclear Plant To Be Launched on Schedule,” ITAR-TASS, 5 Feb 09; OSC Translated Text via World News Connection.
(2) “Russia Determined To Complete Iran N. Power Plant,” Fars News Agency, 14 Jan 09; OSC Translated Text via World News Connection.
(3) “Russia Set To Complete Iran's N. Power Plant In 2009,” Fars News Agency, 16 Jan 09; OSC Translated Text via World News Connection.
(4) “What we meant to say was...,” The Jerusalem Post, 15 Feb 08.
(5) “Former Russian Foreign Minister Igor Ivanov to the 'Post': 'Iran's leaders are not so stupid as to think they can destroy Israel,'” The Jerusalem Post, 13 April 08.
(6) “Conventional Arms Transfers to Developing Nations, 1998-2005,” Congressional Research Service, 23 Oct 06.
(7) “Kremlin steps up new Cold War threat with military sales to anti-U.S. regimes,” The Times (London), 19 Sept 08.
(8) “Russia Denies Selling Missile System to Iran,” The New York Times, 23 Dec 08.
(9) “Swords and Shields: F-35s vs. S-300s,” UPI, 20 Jan 09.
(10) “Russia giving Iran only defensive weapons,” Associated Press Worldstream, 22 Dec 08.
(11) “Conventional Arms Transfers to Developing Nations, 1998-2005,” Congressional Research Service, 23 Oct 06.
(12) Respective CIA Factbook entries for Russia and Iran, via https://www.cia.gov/library/publications/the-world-factbook/print/ir.html and https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html.
(13) “Iran defence minister to visit Russia on 16 Feb,” Mehr News Agency, 14 Feb 09; BBC Monitoring Middle East - Political via Lexis-Nexis.
(14) “Iranian Provincial Governor Reports on Visit to Russia's Tatarstan,” Vision of the Islamic Republic of Iran East Azarbayjan provincial TV, 23 Jan 09; OSC Translated Text via World News Connection.
(15) “Iran interested in importing more grain from Russia – diplomat,” Interfax, 21 Jan 09; OSC Translated Text via World News Connection.
(16) “Iran To Discuss Gas Swaps With Russia, Qatar,” Fars News Agency, 11 Jan 09; OSC Translated Text via World News Connection.
(17) “Iran floats idea of Central Asia power grid with Moscow,” Interfax, 6 Feb 09; BBC Monitoring Former Soviet Union – Political via Lexis-Nexis.
(18) “Iran To Discuss Gas Swaps With Russia, Qatar,” Fars News Agency, 11 Jan 09; OSC Translated Text via World News Connection.
(19) “Is Israel indirectly buying Iranian oil?” The Jerusalem Post, 12 June 08.
(20) “Iran, Russia Agree To Swap Gas,” Fars News Agency, 10 Jan 09; OSC Translated Text via World News Connection.
(21) “Moslems, Orthodox Find Common Foe,” The Moscow Times, 08 June 99.
(22) "'Shiite Crescent' Might Not Be What It Seems." The Baltimore Sun, 25 April 07.
(23) The ISCIP Analyst, 27 March 08.
(24) “Foreign minister praises Iran's ties with Shanghai Cooperation Organization,” 3 Dec 08; BBC Monitoring Trans Caucasus Unit Supplied by BBC Worldwide Monitoring.
(25) “Iran: Russia, China Unlikely To Welcome Tehran Into SCO,” Radio Free Europe, 30 March 08.
(26) “Washington's man in Iran,” Los Angeles Times, 9 Feb 09.
(27) “Former CIA Official on Gitmo, Iraqi Elections and Iran Policy,” Harper’s online, via http://harpers.org/archive/2009/02/hbc-90004376.

By Blake Brunner (brunner@bu.edu)