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Russia/Iraq: Moscow, Baghdad Stress Trade During High-Level Visit

A visit to Moscow by Iraqi Vice President Taha Yassin Ramadan this week has underlined both sides' desire to rebuild their past high level of trade, even as the UN and Baghdad remain stalemated over lifting sanctions on Baghdad. RFE/RL correspondent Charles Recknagel reports.

Prague, 19 April 2001 (RFE/RL) -- Russian Foreign Minister Igor Ivanov offered some of the clearest statements to date of Moscow's impatience with sanctions on Iraq when he summed up a meeting between Russian President Vladimir Putin and the visiting Iraqi vice president yesterday.

Speaking to reporters, Ivanov said Russia and Iraq both want to restore the high level of cooperation that once existed between the two countries. He reiterated Russia's desire to see the sanctions lifted, saying that they harm not just Iraq and the Iraqi people but also, in his words, "inflict great losses on Russia."

At the same time, Putin and Iraqi Vice President Taha Yassin Ramadan -- the highest-level Iraqi to visit in 14 years -- discussed cooperation in Iraq's energy sector. They agreed that experts from the two countries will determine the exact amount of past debts Iraq owes Russia.

Those debts are reported to include some $8 billion worth of arms delivered to Iraq prior to its invasion of Kuwait. The UN sanctions imposed on Iraq immediately after the invasion have so far kept it from paying.

By stressing trade and debts, Moscow appeared to signal that it regards the trip by Ramadan as much more of an opportunity to talk about what happens after UN sanctions come to an end than for pressuring Baghdad to cooperate with the UN requirements for getting them lifted.

Regarding the sanctions, Ivanov said only that they should be lifted, in his words, "concurrent with the fulfillment by Iraq of a corresponding resolution of the UN Security Council."

That statement served to downplay any tensions which might have resulted from Iraq's rejecting a Russian proposal earlier this month that the UN should promise to lift economic sanctions if any renewed weapons monitoring proved negative over an agreed time period. Baghdad rejected that idea, as it has any readmission of UN arms inspectors, which it has barred since late 1998. Instead, Iraq demands an unconditional end to all sanctions.

Analysts say Russia, a permanent member of the UN Security Council, now appears to be content to let Baghdad and other council members battle over the question of sanctions-lifting, while Moscow itself addresses what it sees as the more pressing business of building bilateral ties.

Terrence Taylor, an arms control expert with the International Institute for Strategic Studies in London, says that posture is consistent with the lukewarm interest Moscow has taken in Iraqi arms control since the UN approved a new arms monitoring agency for Iraq -- dubbed UNMOVIC -- in late 1999.

"Moscow has never been an advocate of the new inspection regime organization and in fact abstained along with France and China on the resolution setting up UNMOVIC. So it hasn't [taken a leading role] on that."

The 1999 UN resolution approved suspending sanctions on Iraq's importing of civilian goods if Baghdad cooperates with UNMOVIC. But Russia, France, and China objected that the resolution did not set a timetable for lifting the sanctions. The United States and Britain argued that any timetable must hinge on Iraq making real progress on disarmament first.

Taylor says that one reason both Moscow and Baghdad now seem less concerned with lifting sanctions than with preparing for future business is that the Iraqi government earns enough from oil smuggling to insulate itself from the effects of the sanctions regime -- which it hopes will eventually collapse.

"Moscow is leaving the lead [on sanctions-lifting] to Iraq and Iraq has been quite blunt about saying it is not going to have inspectors back -- probably because they don't need [sanctions lifted at that price]. From the financial point of view the regime itself -- not the Iraqi people generally -- is pretty secure."

Widespread smuggling of Iraqi oil through neighboring states is reported to earn Baghdad some $2 billion a year outside of the UN-approved oil-for-food program, significantly weakening the sanctions regime.

In an effort to tighten the trade bans on Baghdad, Washington has recently launched a new initiative to convince Iraq's neighbors to close their borders to sanctions-busting. U.S. Assistant Secretary of State Edward Walker is making a swing through Jordan, Syria, and Turkey this week as Washington looks for ways to convince those countries they will not suffer economically from such steps.

But if Washington's desire to tighten the sanctions on Iraq has increased as they are violated, Moscow's desire to see the sanctions end completely has grown.

Irina Zviagelskaya of the International Center for Strategic and Political Studies in Moscow says Russia's priority now is to assure its oil companies are among the first to get back into Iraq should sanctions be lifted or abandoned.

She says that Russian companies feel their transnational competitors are already preparing to return to Iraq and they do not want to be left behind.

"As soon as the first steps are taken toward [the end of sanctions], a lot of [transnational] companies will rush to occupy the Iraqi market and to start again the production of oil on a large scale. The problem for Russian oil companies might be that since they are less experienced they might lag behind."

Analysts say Moscow sees Russian investments in Iraqi oil fields as its best chance to recoup at least some of its outstanding debts from the Soviet era, providing a welcome boost to its own revenues.

Russia has repeatedly said that as long as the UN sanctions regime officially remains in place, it will abide by it. But in summing up Putin's and Ramadan's talks yesterday, Ivanov clearly expressed Moscow's hope that the sanctions' end will come sooner rather than later.

The Russian foreign minister quoted Putin as describing as "not normal" the continuance of sanctions against Iraq for more than 10 years. The Russian president repeated his country's support for ending sanctions, saying, in his words, Russia "will work further in this direction."

A Russian news report (Interfax) today quoted an unnamed Foreign Ministry official as saying that before the Kuwait crisis, trade between Moscow and Baghdad amounted to some $2 billion a year. The official said that currently a third of Iraq's total oil exports under the UN-approved oil-for-food program are sold through Russian companies.