Russia Resumes Military-Technical Cooperation With Iran
CEP20001213000342 Moscow Ekspert in Russian 04 Dec 00 P 70
[Article by Oleg Leonov: "Expert Politics--Double Strike. Arms Exports to Iran Will Help Moscow Deal With Paris Club"]
[FBIS Translated Text]
Effective 1 December Russia has resumed full-scale military-technical cooperation (VTS) with Iran. The new Russian government has decided to annul the five-year-old agreement concluded within the framework of the activity of the Gore-Chernomyrdin intergovernmental commission. Under this agreement Russia promised to limit deliveries of conventional weapons to Iran under Soviet contracts from 1989-1991 and not to conclude new agreements.
Vice Premier Ilya Klebanov has already announced that Russia is prepared to deliver the entire range of conventional weapons to Iran. Possibly before the end of the year Defense Minister Igor Sergeyev will travel to Tehran. In response Washington has already threatened to impose economic sanctions against Moscow.
From all appearances, the painful reaction from Bill Clinton's administration is explained by the fact that with Russian arms Iran will be able to reinforce its control over the routes for transporting Near Eastern oil to the United States and Europe and thus will indirectly affect world oil prices. And for Russia exporting arms to Iran is advantageous in that it will help make it easier to live through the "peak situation" in the payment of the foreign debt expected to come in 2001.
Achilles' Heel
At first glance it is quite impossible to understand how the scandal between Moscow and Washington actually flared up. The Gore-Chernomyrdin agreement, in the words of the director of the Center for Analysis of Strategies and Policies (Tsentr AST), Ruslan Pukhov, has no legal force and is a kind of "gentlemen's agreement." When one of the parties decides that the agreement is no longer in its interests, it has the right to withdraw unilaterally.
Moreover, the American statement that "the growing Iranian military power presents a threat to its neighbors in the region," is completely unfounded. After the eight-year-long Iranian-Iraqi war Iran had been deprived of 60 percent of its modern weapons systems, which had either been destroyed or were out of commission as a result of natural wear and tear. The Iranian Air Force, according to information from the Tsentr AST, now has only 30 fourth-generation aircraft that are capable of striking remote enemy territories. The situation is no better in the Navy. Iran has at its disposal five large submarines of American and British production purchased before the 1979 revolution. On the whole arms deliveries from Russia are a "drop in the bucket" and cannot sharply impact the Iranian army's combat readiness.
The problem for the Americans, however, is that certain models of Russian military equipment could change the status quo that exists in the Persian Gulf region. Iran could well purchase Russian antiship systems such as the Moskit and Yakhont. At the same time, according to information from Tsentr AST, Tehran definitely intends to acquire various antiaircraft defense means--from mobile types like the Igla and Dzhigit to the S-300 PMU. And the last is capable of providing a reliable "cover" for antiship systems. Some of the systems they have inquired about could easily cover the entire Strait of Ormuz, through which the most of the Near Eastern oil for export passes (for example, the range of the Moskit complex is 120 kilometers and the Yakhont--300 kilometers). The existence of these missiles in the Iranian arsenal is an effective and fantastically inexpensive means of reducing the significance of the American fleet, which is permanently present in the Persian Gulf. By taking advantage of this circumstance Iran will probably be able to exert pressure on the world oil market, which very attentively keeps track of the geopolitical situation in the Persian Gulf.
Debt Bonus
And so this is a matter not only of the $300 million (approximately 10 percent of Russia's arms exports this year) that, according to Tsentr AST estimates, Russia could receive from military and technical cooperation with Iran each year. Even modest amounts of deliveries could make it easier for Russia to service its foreign debt next year. After all, most likely it will still be necessary to pay the 5 billion in debts to Paris Club of creditors, which were not "planned for" in the 2001 budget. The modern Russian missiles Iran has placed at the exit from the Persian Gulf will probably be an additional risk factor for oil traders, which will keep oil prices at an "elevated" level. Speaking hypothetically, five "extra" dollars per barrel multiplied by the volume of Russian oil exports would produce a total of $5 billion. Nor should one forget about natural gas prices either, which are linked to oil market indicators. This year, for example, the rise in oil prices made it possible for Gazprom to increase its revenues in Europe by $4 billion. The situation with the high cost of hydrocarbons will be advantageous not just in Russia but also in Iran itself, where oil exports account for up to 70 percent of all budget revenues. Tehran's desire to update its army's weapons promises other strategic advantages for Russia as well. In Ruslan Pukhov's opinion, winning the modest Iranian arms market could significantly improve our positions in negotiations with the main importers of Russian weapons--India and China.
As concerns sanctions imposed by the United States, theoretically they could cause a certain amount of economic harm. The United States is Russia's third largest trading partner and, more important, has a decisive influence on such international organizations as the WTO [World Trade Organization], the IMF [International Monetary Fund], and that same Paris Club of creditors. Here, possibly, it would not be a bad idea to gain the support of the Europeans--Germany, France, and Italy--which are now also trying to consolidate their position in the Persian Gulf at the expense of their "American allies."
[Description of Source: Moscow Ekspert in Russian -- Weekly business magazine known for its reporting and analysis of financial-industrial groups and their political interests, partly owned by Vladimir Potanin.]
Singapore Straits Times
December 16, 2000
China Buys 28 Soviet Fighters
By Agence France-Presse
MOSCOW - Russia will sell 28 Su-27UBK jet fighter training planes to China over the next three years, the Itar-Tass news agency reported quoting military sources.
Eight of the planes will be delivered to China this month, with 10 more delivered over the next two years, the source said, adding that the deal was within the framework of the 1999 Sino-Russian inter-governmental accord.
Russian air force chief Anatoly Kornukov is due in China on Monday for a four-day visit, the RIA-Novosti news agency said.
The two sides will discuss delivery of Su-30 planes and Su-30MK multi-functional jet fighters, which the Chinese have ordered, the agency reported, quoting a source in Russia's aviation and space service.
The delegation will also negotiate sale of up to four Russian A-50 radar planes to China.
China opted for the Russian jets after Israel, under pressure from Washington, withdrew in July from a sale to Beijing of one of its Falcon radar planes, which are equipped with the Awacs early warning system.
