Thursday, April 30, 2009

Russia and Iraq: Russia seeks ‘reset’ with Iraq

[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, 30 April 2009.]

In a March 2009 editorial in Israel’s Haaretz daily, Zvi Bar’el surveyed the developing Middle Eastern situation and concluded, “A new strategic alliance is emerging right in front of us. It comprises Iran, Syria, Turkey and Iraq. In this alliance, Russia holds the cards and the United States, which stood by watching under George W. Bush, is trying to find room at the table.” (1) Coincidentally, the four previous issues of The ISCIP Analyst have included special reports on Russia’s relations with Iran, Turkey and Syria, finding that in all of these countries Russia indeed “holds the cards” thanks to its arms sales and development of the countries’ energy infrastructure. Although one may question whether the alliance truly exists — Bar’el omits Qatar, an important ally for Iran and Syria; current good relations between Turkey and Syria are still in their initial phase — Russia’s importance for Iran, Turkey and Syria is without doubt.

What about Iraq, where it is practically impossible for any country other than the United States to “hold the cards”? Recent comments from Russian and Iraqi officials seem to indicate that both countries are planning on renewing the relationship they shared before 2003. Greeting Iraqi Prime Minister Nouri al-Maliki at the Kremlin on April 10, President Medvedev heralded the opening of a “new page in Russian-Iraqi relations” (2). Condemning the U.S. presence in Iraq without specifically mentioning the U.S., Prime Ministers Putin and Maliki signed a joint statement looking to the future: "The Russian Federation attributes special significance to the agreement on the pullout of foreign forces from Iraq, which has been reached by the Iraqi government and ensured the possibility of Iraq's full control over security issues. … [Russia] supports the principles of independence, sovereignty, unity and territorial integrity of Iraq, non-interference in Iraqi internal affairs, and the right of Iraqi people to a democratic choice of their political future and use of natural and financial resources." (3)

Regarding natural and financial resources, Putin optimistically hopes for Iraq’s “full-scale renewal” of energy development contracts signed with Russia during the Saddam Hussein era. (4) Of particular concern is a 1997 contract estimated to be worth $3.7 billion over 23 years, stipulating that a consortium led by Lukoil would develop Iraq’s West Qurna-2 oil field, which is estimated to hold at least 8 billion barrels. (5) The Iraqi Oil Ministry inexplicably canceled the contract in the December 2002 run-up to war; although Lukoil believes that the Oil Ministry’s action was invalid, Lukoil president Vahid Alakbarov has said that the company is willing to “adapt” the terms of the contract. (6)

An anonymous Iraqi source told Russian newspaper Nezavisimaya Gazeta that Qurna-2 is out of the question. "The new authorities have already handed out to Western companies the oil contracts that were signed with Russian firms under the previous regime, primarily Western Qurna 2," the source claimed. (7) However, there has been no official announcement regarding the status of the contract, and as long things remains ambiguous, Russia has a few cards it can play from its hand to influence Iraq’s decision on Qurna-2 and future business deals.

Iraq is keen to have Russia cancel all of its outstanding debt to Russia, which totals approximately $1.5 billion, due to be repaid over 34 years. (8) The debt had totaled $11.3 billion up until February 2008, when Russia canceled nearly 90% of it without obtaining any reciprocal guarantees from Iraq, a decision that one Russian energy expert dubbed “extremely strange.” (9) During Maliki’s visit to Moscow, an Iraqi government spokesman made clear that debt cancellation is the key to the Iraqi energy market, even requesting further action from Russia: “Iraq is grateful to Russia for having written off its debts. This is why we believe that the way to the further development of relations is open. … We hope that a mechanism for the further writing off of Iraq's debt to Russia will begin to operate in the course of this visit.” (10)

In addition to the debt cancellation, Iraq covets Russia’s permanent U.N. Security Council vote. Iraq is still subject to some of the Hussein-era U.N. sanctions, the disposal of which requires a unanimous vote from the security council. Although it is unlikely that Russia would ultimately deny support to Iraq in this realm, Russia could stall the proceedings. China, another U.N. Security Council member that canceled a significant portion of its Iraqi debt, in November 2008 won reinstatement of a Hussein-era contract for China National Petroleum Corporation to develop Iraq’s Al-Ahbad oil field. (11)

Even if Russia is unable to reinstate the Lukoil Qurna-2 contract, Iraq presents other possibilities to generate revenue. Iraq has released an estimate predicting that Russian companies will be assisting with the extraction of 6.5 million barrels of oil daily by 2016, and to that end Rosneft and Tatneft have reached the second round of bidding for contracts to develop 11 untapped oil fields. (12) Tekhnopromeksport has received a $133 million contract to renovate Hussein-era Russian-built power plants, with the possibility of further work upon fulfillment. (13) And of course, Russian arms sales, including helicopters and armored personnel carriers, are always on the table. An expert from Russia’s Center for Analysis of Strategies and Technologies told Kommersant, “The Iraqis are geared toward working with Soviet-era technology: It is cheap and familiar.” (14)

“We are certain that Russian companies should and will be our important partners,” Maliki affirmed during his meeting with Putin. (15) For now though, contrary to Bar’el’s Haaretz editorial, the U.S. holds all the cards in Iraq, and the warm-but-restrained Russian-Iraqi relationship may not drastically change for years to come. In the meantime, an editorial in the Moscow Times imagined a scenario significantly different than that put forth by Bar’el. Extrapolating on the potential for a thaw in relations between the U.S. and Iran, Fyodor Lukyanov writes, “[N]ormal U.S.-Iranian relations would open Iran's domestic market to Western technologies, including in the civilian nuclear power sector, thereby potentially leaving Russia on the sidelines in these lucrative markets.” (16) Lukyanov, like most observers, is pessimistic that the U.S. and Iran will patch up their differences any time soon, but his (and others’) willingness to moot the possibility is indicative of the notable changes, however minor, in U.S.-Iranian relations. The strategic alliance that Bar’el envisions is not a foregone conclusion.

(1) “We learned from the Palestinians,” Haaretz, 08 March 09, via http://www.haaretz.com/hasen/spages/1069327.html.
(2) “Russia Eyes Resumption of Military-technical Cooperation with Iraq,” Rossiyskaya Gazeta, 16 April 09, OSC Translated Text via World News Connection.
(3) “Russia Voices Importance Of Agreement On Coalition Pullout From Iraq,” ITAR-TASS, 10 April 09, OSC Transcribed Text via World News Connection.
(4) “Russia: Iraq seeks military, technical and oil-industry cooperation with Russia,” RBK Online, 21 April 09, OSC Translated Text via World News Connection.
(5) “Russia: al-Maliki Moscow Visit To Show He Is Not ‘American Puppet,’” Nezavisimaya Gazeta, 14 April 09, OSC Translated Text via World News Connection.
(6) “Iraqis Woo Russian Investment in Energy Projects, Plan Helicopter Purchase,” Nezavisimaya Gazeta, 14 April 09, OSC Translated Text via World News Connection.
(7) “Russia: al-Maliki Moscow Visit To Show He Is Not ‘American Puppet,’” Nezavisimaya Gazeta.
(8) Ibid.
(9) “Russia Will Shake Up Iraqi Oil; Renewal of Contracts Will Be Discussed in Talks With Country's Premier," Kommersant, 14 April 09, OSC Translated Text via World News Connection.
(10) “Russia: al-Maliki Moscow Visit To Show He Is Not ‘American Puppet,’” Nezavisimaya Gazeta.
(11) “Russia Will Shake Up Iraqi Oil; Renewal of Contracts Will Be Discussed in Talks With Country's Premier," Kommersant.
(12) “Iraqis Woo Russian Investment in Energy Projects, Plan Helicopter Purchase,” Nezavisimaya Gazeta. “Russia Eyes Resumption of Military-technical Cooperation with Iraq,” Rossiyskaya Gazeta.
(13) “Iraqis Woo Russian Investment in Energy Projects, Plan Helicopter Purchase,” Nezavisimaya Gazeta.
(14) “Russia Will Shake Up Iraqi Oil; Renewal of Contracts Will Be Discussed in Talks With Country's Premier," Kommersant.
(15) “Russia Eyes Resumption of Military-technical Cooperation with Iraq,” Rossiyskaya Gazeta.
(16) “High Stakes for Moscow in U.S. Play for Iran,” The Moscow Times, 15 April 09, via http://www.themoscowtimes.com/article/1045/42/376232.htm.
By Blake Brunner (brunner@bu.edu)

Thursday, April 16, 2009

Russia and Iran: Ambiguity clouds Russian-Iranian missile deal

[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, 16 April 2009.]

Iranian Defense Minister Mostafa Mohammad Najjar was on a “missile quest,” according to Agence France Presse, when he met his Russian counterpart, Anatoly Serdyukov, in Moscow on Tuesday, February 17. (1) The missiles in question belong to Russia’s S-300 medium-range surface-to-air defense system, which Iran signed an agreement to purchase approximately two years ago and which would provide Iran the ability to fend off any assault from Israel’s air force. That Iran would still be on a “quest” to obtain the missiles despite the years-old purchase agreement is a testament to the ambiguity and mystery surrounding the affair.


Official Russian sources have downplayed the S-300 agreement, with some going so far as to disavow it completely. Last October, Russian Foreign Ministry spokesman Andrei Nesterenko nixed the possibility of selling the S-300 system to Iran, saying, “Our high-ranking politicians have declared many times that we will not supply such weapons to countries located in what we call perturbed regions.” (2) Even after the Najjar-Serdyukov meeting, a Russian Foreign Ministry spokesman told Interfax on March 18, “We confirm the fact that Russia is not shipping S-300s to Iran or to any other Middle East countries.” (3) Iran’s Fars New Agency reported March 26 that Konstantin Kosachev, the Duma’s Foreign Affairs Committee chief, said that S-300 missiles were “out of the question” for Iran. (4)

Iran, on the other hand, has never hesitated to completely contradict Russia on the subject of the S-300s. Last December, the deputy head of the Iranian Parliament's Commission for Foreign Affairs and National Security declared, “Now the S-300 system is being delivered.” (5) Najjar himself emerged from his meeting with Serdyukov boasting of “success.” (6) And on April 3, the vice president of Iran’s National Security and Foreign Policy Committee told the Tehran-based Hamshahri daily, “We have talked with the Russians about this issue for several years and we have achieved good agreements that are being implemented now. This missile system will be used to reinforce the … borders and territory of Iran.” (7)

Of course, the truth of the matter seems to lie somewhere in between the two countries’ respective accounts. On March 18, an anonymous official from Russia’s Federal Service of Military-Technical Cooperation told ITAR-TASS, “Air defense systems S-300 were not supplied to Iran under the contract concluded two years ago. … [T]he contract is being fulfilled gradually [depending on] the current international situation and the decision of the country’s leadership.” (8)

Russian newspaper Izvestiya followed up on April 3, reporting that Russia had delivered S-300 launchers to Iran, but not the actual missiles. Izvestiya also reported that the original S-300 contract was worth $800 million, and that there is a new incentive for Russia to fulfill the contract sooner rather than later: China has just unveiled its own exact copy of the S-300, which it plans to sell for cheaper, undercutting Russia. Russian analyst Ruslan Pukhov told Izvestiya, "In view of diminishing arms exports to India and China, it would be foolhardy of us to allow ourselves also to lose the Iranian market." (9)

In light of the basic financial motive, it is likely that Russia will eventually fulfill the terms of the contract and transfer the missiles to Iran. However, as mentioned in the previous issue of The ISCIP Analyst, Russia’s arms sales to Iran have proved a contentious issue in Russian-American relations, given that Iran funnels arms to Hizballah in Lebanon. Last September, then-Vice President Dick Cheney deemed the arms sales “aggressive” on Russia’s part, (10) and there are signs that the issue has almost certainly been taken up by the Obama administration. At a press conference following his early-March meeting with U.S. Secretary of State Hillary Clinton, Russian Foreign Minister Sergei Lavrov made a point of stating, “We are not violating anything in our military-technological cooperation with Iran, and at the same time we fully take into account all concerns expressed by our partners from the U.S. and Israel.” (11)

Weighing the high price of the S-300 deal against U.S. and Israeli concerns about Russian weapons winding up in the hands of Hizballah, Russia may have adopted a pro-government, pro-security stance toward Lebanon in order to shield itself from criticism when or if it finally fulfills its contract with Iran.

For example, in April 2008 Russia donated $500,000 to the U.N. trust fund for the Special Tribunal for Lebanon, which seeks to determine the culprit behind the 2005 assassination of Lebanon’s then-Prime Minister Rafiq al-Hariri. Along with its donation, Russia gave its support to “ensuring the stable and peaceful development of [Lebanon] on the basis of Lebanese national consensus and consideration for the interests of all political and ethno-confessional forces.” (12)

Presumably to further that end, Russia made another donation to Lebanon in December 2008, this time in the form of 10 MiG-29 fighter planes, which Russia has promised to modernize out of its own pocket; it will also provide a limited warranty and train Lebanese pilots to fly the planes. The reaction from the Lebanese ruling coalition, which opposes Hizballah, has been overwhelmingly positive, with Rafiq al-Hariri’s son Saad saying, “Russia gives a good example of how to deal with Lebanon's cause, and we hope that all those calling for Lebanon's independence and sovereignty would do the same.” (13) Even a subsequent report in Russia’s Kommersant stating “one-third of the MiG-29 should be written off as obsolete because they are too rusty to take off without crashing” was not enough to stop Lebanese parliament member (and famed political survivor of Lebanon’s civil war) Walid Jumblatt from flying to Moscow in late February to express his gratitude. (14)

Considering the strategic and monetary value of the S-300s, as well as Israel’s increasing vigilance toward halting weapons shipments to hostile neighbors, it is unlikely that Iran would consider funneling the missiles to its Hizballah clients. However, with its charitable approach toward Lebanon, Russia seems to be investing political capital for the future, in case a finalized sale of the S-300s leads again to accusations that it indirectly provides the tools that Hizballah uses to destabilize the region’s security. And as with its approach to neighboring Syria, in Lebanon Russia is openly wielding influence where the U.S. has for decades had trouble finding a receptive audience. Likely in response to Russia’s generosity, the U.S. will increase its military aid to Lebanon to $189.1 million from $90.7 million, if an anonymous report in the Lebanese An-Nahar daily is accurate. (15)

Regardless of the results of Russia’s arms deals with Iran, both Russia and the U.S. may be forced to reconsider their respective approaches to Lebanon following the latter country’s general elections on June 7, 2009. The Western-aligned Sunni Muslim, Christian and Druze ruling coalition that benefited from Lebanon’s so-called Cedar Revolution in 2005 has been fracturing and is not predicted to remain in power, at least in its current state. A coalition of Shiite Muslim Hizballah, Christians and leftists is predicted to fare well, in which case any dealings with Lebanon would become much trickier for all involved. In any case, given Lebanon’s perpetual status as an arena for countries to carry out hot and cold proxy wars against each other, some future Russian and U.S. presence seems likely.

(1) “Iranian defence minister in Russia on missile quest,” Agence France Presse, 17 Feb 09, via Lexis-Nexis Academic Universe.
(2) “Russia Won’t Supply S-300 Missile Systems to Iran – Ministry,” Russia & CIS Diplomatic Panorama, 9 Oct 08, via Lexis-Nexis Academic Universe.
(3) “Russia Denies Shipping S-300 Missiles To Mideast Countries, Including Iran,” Interfax, 18 March 09, OSC Transcribed Text via World News Connection.
(4) “Russian official says Moscow not to provide S-300 missile to Iran,” Tehran Press TV, 26 March 09, OSC Transcribed Text via World News Connection.
(5) “Russia Denies Selling Missile System to Iran,” The New York Times, 23 Dec 08, via Lexis-Nexis Academic Universe.
(6) “Iran defence minister says Moscow trip was success,” Press TV Tehran, 20 Feb 09, via BBC Monitoring Trans Caucasus Unit.
(7) “Delivery of S300 Missile System to Iran Started,” Hamshahri, 2 April 09, OSC Translated Text via World News Connection.
(8) “Russia concludes contract with Iran on S-300 supply,” ITAR-TASS, 18 March 09, via http://www.itar-tass.com/eng/level2.html?NewsID=13689099&PageNum=0.
(9) “Iran's Waiting for the Russian SAM Launchers Finally Ended; but So Far They Still Have No Missiles," Izvestiya, 3 April 09, OSC Translated Text via World News Connection.
(10) “Cheney: Russian arms reaching Hizbullah,” YnetNews, 06 Sept 08 via http://www.ynetnews.com/Ext/Comp/ArticleLayout/CdaArticlePrintPreview/1,2506,L-3592868,00.html.
(11) “Russia's cooperation with Iran does not violate any agreements – Lavrov,” Interfax, 7 March 09, OSC Translated Text via World News Connection.
(12) “Statement by Russian MFA Spokesman Mikhail Kamynin Regarding the Russian Federation’s Contribution to Finance the Special Tribunal for Lebanon,” 4 April 08, via http://www.un.int/russia/new/MainRoot/docs/off_news/040408/newen1.htm.
(13) “Lebanon's supersonic solution?” The Guardian, 21 Dec 08, via http://www.guardian.co.uk/commentisfree/2008/dec/21/lebanon-russia.
(14) "Arab Unity Being Restored," ITAR-TASS, 2 March 09, OSC Translated Text via World News Connection.
(15) “US wants to boost military aid to Beirut – report,” Daily Star, 14 April 09, via http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=2&article_id=100948.
By Blake Brunner (brunner@bu.edu)