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Russia Report: January 19, 2006

19 January 2006, Volume 6, Number 1
By Victor Yasmann

Earlier this week, Russia appeared to edge closer to the position of the United States and European Union on the issue of Iran's nuclear program, demanding that Tehran discontinue its pursuit of uranium-enrichment activities that the West fears could be used to make atomic weapons.

The board of the UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), is set to discuss the issue in early February and may vote to refer Iran to the UN Security Council for possible sanctions.

On 14 January, Sergei Ivanov, the Russian defense minister, was reported as saying that "if Iran does not stop all research and practical work on uranium enrichment, the referral of the Iranian nuclear dossier to the UN Security Council cannot be ruled out."

The same day, Sergei Mironov, the speaker of Russia's upper house of parliament, the Federation Council, said the referral would be a "natural move."

Since then, however, Russia has made clear it will not be pigeonholed in its stance on Iran.

As momentum gathered for a crackdown on Tehran, Russian Foreign Minister Sergei Lavrov on 17 January joined the West in rejecting a call by Iran for fresh negotiations, saying no new talks would be held until Iran brought to a halt the nuclear-fuel research work it resumed last week.

But Lavrov also said Russia was not yet ready to join Western moves for Iran to be referred immediately to the United Nations Security Council for possible sanctions.

EU foreign-policy chief Javier Solana said 18 January that Russia has proposed a delay in referring Iran to the Security Council, and that a proposal by Moscow -- originally rejected by Tehran -- to enrich uranium for Iran on Russian soil remains a possibility.

The United States and the so-called EU-3 of Britain, France, and Germany, feel the Security Council, with its powerful enforcement mechanism, is the best forum for resolving the Iran nuclear crisis. But Russia and fellow Security Council member China hope the issue can be resolved within the IAEA, which has no substantial punitive power of its own.

There are economic and geopolitical interests behind Russia's softer stance on Iran. Most notably, there is the $1 billion Bushehr nuclear power station that Russia is set to complete in Iran this year -- a project that was strongly opposed by Jerusalem, which sees Iran as its primary security threat, and Washington.

Then there are energy ties. Russia's "Nezavisimaya gazeta" reported that Russia's state-controlled Gazprom monopoly has invested up to $750 million into a number of energy projects in Iran. Russian exports to Iran of metals and machine manufacturing supplies have reached a total of about $2 billion a year.

A second key area of Russian exports is arms sales, which resumed in 2000 after Russia left the so-called Gore-Chernomyrdin protocol, a secret agreement between Moscow and Washington about restricted arms deliveries to Iran.

In late December 2005, Russia signed a deal worth $700 million with Iran to sell 29 of its Tor M-1 antimissile systems. And there is room for such sales to grow. Russian officials with ties to the country's military-industrial complex will be loathe to sacrifice these sales for the sake of UN sanctions.

Russia in October 2005 also launched a booster rocket carrying eight satellites, one of which belonged to Iran. There are plans to launch a second Iranian satellite in 2007.

Geopolitically, Iran is Russia's biggest neighbor in the Caspian, where Moscow is looking to restore its influence and take advantage of short transport corridors leading to the Persian Gulf.

But in late 2005, Russia began distancing itself from the strong anti-Semitic rhetoric of Iranian President Mahmud Ahmadinejad, and complying with Western desires to use its close ties with the Islamic Republic as a lever in the nuclear issue.

This was in part because of Russia's desire to maintain special relations with Israel. An important commercial ally for Russia, Israel also has strong ties with the United States.

Jerusalem soon joined the United States and Western Europe in urging Russia to intervene on the Iranian nuclear issue, and on 17 January, sent its top security and atomic-energy officials to Moscow to press the point.

It remains to be seen whether Iran will be referred to the Security Council, or how veto-wielding China and Russia will act in such a case. Although Beijing and Moscow are currently united in their opposition to sanctions, sanctions would have a different impact on each.

Sanctions would mean a cutoff in Iranian oil supplies, leading to a drastic increase in world oil prices -- a massive boon to supplier nations like Russia, and a major setback to increasingly energy-hungry consumer nations like China.

For now, Russia appears to be keeping its options open. What may be happening behind the scenes is a domestic battle between three political camps: pro-economic forces who relish the thought of Russia profiting from Iran sanctions, foreign-policy watchers seeking stronger ties with the West, and defense-industry stalwarts who hope to boost military sales to Tehran.

By Patrick Moore

German Chancellor Angela Merkel paid a six-hour visit to Moscow on 16 January in which she made it clear that she wants to develop good relations as part of a "strategic partnership" between the two countries. She showed, however, that she is ready to speak her mind on thorny topics and reach out to the Russian opposition, in clear contrast to her predecessor Gerhard Schroeder, who prided himself on his close political and personal friendship with President Vladimir Putin and called him a "flawless democrat."

Merkel's Russian journey was the latest in a series of inaugural foreign trips she has made since taking office in November. Moscow had to wait until she had gone to Paris, Brussels -- first to NATO and the EU and then for an EU summit -- and Washington. Prior to her election as chancellor, she made it clear that she intended to distance herself from what was known as Schroeder's Paris-Berlin-Moscow axis and replace it with a more balanced policy associated with her political mentor and Schroeder's predecessor, Helmut Kohl. That approach included maintaining good relations with Washington and Paris alike and acting within the EU as an advocate for the interests of the small and medium sized countries, being careful to avoid the impression of being overbearing.

Shortly before her trip to Moscow, moreover, she made it clear that she has a different, more critical approach to Russia and its political life than did Schroeder, which many German observers attribute to the fact that she grew up in the former East Germany. She told the weekly "Der Spiegel" of 9 January that she hopes that Russia will take as democratic a path of development as is possible. She added that one must understand the traditions from which Russia is emerging and be careful not to "systematically transfer our understanding of democracy" to Russian conditions. Merkel noted, however, that "there are developments [in Russia] that cause me concern, such as the new legislation regarding NGOs." She argued that the lesson for her country of the recent Russian-Ukrainian gas price dispute is that Germany needs to have "good, stable relations with Russia" but also to diversify its energy sources so as not to be dependent on any particular one. It will be necessary to import Russian gas, but that must not be the only or primary source of Germany's energy supplies, Merkel argued. She described German-American relations as a "friendship" because they are deeply rooted in "the normal lives of the people." She used the term "strategic partnership" for Berlin's ties to Moscow, however, adding that "we do not yet share as many values with Russia as with America."

These remarks set the tone for her 17 January visit, the atmosphere of which one German daily described as "cool but not frosty by Moscow standards." In the Russian capital, she noted the "breathtaking increase" in bilateral trade, the volume of which grew in 2005 by 30 percent to a record level of $32 billion. She and Putin discussed Iran, the Middle East, the Balkans, Russia's current G-8 presidency, and energy issues, including the controversial North European pipeline project, which will run underneath the Baltic Sea and was agreed by Putin and Schroeder in 2005.

Putin assured her of the reliability of Russian gas deliveries, for which she said she was "thankful." Merkel added that "the Baltic Sea gas pipeline is indeed an investment in Europe's energy security. I have already said that it should be made clear to the Baltic countries and Poland that this project is not aimed against anyone." Putin noted that "many questions -- if not a panic -- arose among many of our European partners in connection with the discussion of relations between Russia and Ukraine in the gas sector." He argued that gas supplies to Europe are "now in no way connected to deliveries to Ukraine.... If people in Europe understood the essence of the problem and the agreements we have reached, they would breathe a sigh of relief and be grateful to both Russia and Ukraine."

If her approach on such issues was somewhat more forceful than Schroeder's, while still being diplomatic, she went on to raise matters that her predecessor avoided. She brought up Moscow's policies in Chechnya and the North Caucasus, as well as Russia's controversial legislation on NGO's. Putin responded politely that he found it "very pleasant that our partners are so interested in [Russia's] internal affairs."

After her meeting with Putin, she held a reception at the German Embassy for guests who included members of the State Duma, religious leaders, and some prominent critics of Putin's rule, whom Schroeder refused to meet with. At the gathering, Valentina Melnikova, head of the Union of Soldiers' Mothers Committees, said Merkel told the activists she appreciates the difficulty of their situation. "She did not give us any promises, but told us that what we are doing is important," Melnikova noted. She added that Merkel spoke with the opposition leaders "in Russian, which she speaks very well, and she wished us courage and luck." Melnikova said they talked about Chechnya, the Kremlin's tightening of control over the political process, and the spread of xenophobia and racism in Russia.

Merkel will attend the special Russian-German consultations in Tomsk in April. Putin has been invited to the international air show in Berlin in May, and another round of consultations will take place in Dresden in October.

Russia in the past has discouraged a push by the United States and Europe to refer Iran to the United Nations Security Council over its pursuit of a complete nuclear fuel cycle the West fears could be used to make atomic weapons. But Moscow has signaled a change in its stance toward Tehran. Recently, officials including Russian Defense Minister Sergei Ivanov have indicated they would not block a Security Council referral, although they would likely still oppose sanctions. Vladimir Mukhin, a military analyst with the Russian newspaper "Nezavisimaya gazeta" and a professor at the country's Academy of Military Sciences, spoke on 11 January to Ivanov about Iran. Mukhin told RFE/RL Tajik Service correspondent Iskander Aliev about the interview.

Vladimir Mukhin: I'm curious whether a military scenario would unfold after Iran continues its nuclear tests. [Russian Defense Minister Sergei] Ivanov said he was concerned. Of course, he was echoing a statement by the Foreign Ministry. However, the day before, he said he was hoping that tensions between Iran and the West would not develop into armed conflict.

Why such a statement? Probably because the Russian chiefs of staff are not excluding the possibility of a military solution. That's exactly what we're thinking about right now. Why? Because it is clear that Iran is challenging the West, particularly the United States, but also, to some extent, Russia. Tehran rejected Russia's proposal to enrich Iranian uranium on our soil, saying they wanted to do it on their own. We can speculate, with some certainty, on Iran's desire to build an A-bomb and, if we have sufficient basis for suspicion, then military action against Tehran will be highly likely.

The Americans have been the first to prepare for this. In the press, we have already seen some analyses of how things could play out. Several times last year, [U.S. President George W. Bush] hinted that the United States might have to confront Iran in order to depose the harsh regime and create an Iraq-style government. To what extent is this likely? I think the possibility certainly exists, and the longer Iran continues these nuclear tests, the higher the probability of it happening. Most likely, Russia and China will block the handing over of the so-called nuclear dossier [to the UN Security Council].

It is not profitable for Russia to impose sanctions on Iran, since we just recently signed an agreement to sell them nearly $1 billion worth of medium-range anti-aircraft weapons. These modern weapons are capable of hitting targets of up to 25 kilometers away and will probably be used to defend various testing sites in Iran. Therefore, if some attempt is made to strike at the country and the deliveries from Russia are made quickly enough, we can expect a strong response. In other words, Iran will be able to defend itself. However, if ballistic missiles are used, then nuclear sites can be targeted effectively. We must not forget that Russia has its experts working on some of these sites, and is not interested in a military scenario, if only to protect them.

China has similar interests, because it buys oil from Iran. The Americans are a viable threat, since they have virtually surrounded Iran. First of all, they have planes stationed at air bases in U.S.-occupied Afghanistan, so that is one place they can strike from. At the same time, there is Iraq. There is also the possibility that in the case of an attack, the United States will use Azerbaijan. There has recently been such a tendency and communications outposts are already being developed on the border with Iran. These are troubling symptoms of a potential military conflict. This is very alarming. I am 100 percent sure that Russia will block any sanctions because it profits from trade with Iran and loses out from sanctions against the country. At the same time, Russia understands that the Iranian regime is taking certain false steps and this is where diplomacy must be put to work. Right now, it is difficult to say what success this diplomacy will have, because Iran is currently behaving with confidence and even defiance. These are my prognoses.

RFE/RL: Yesterday, members of Russia's Security Council...reported that although Russia's proposal concerning Iran's possible enriching of uranium on Russian soil was rejected, the next stage of talks will take place in Moscow in February and this topic will come up again. Do you think we can anticipate a change in the stance of either side, Iran or Russia?

Mukhin: You mean whether Iran will agree to enrich its uranium in Russia?

RFE/RL: Yes.

Mukhin: I wouldn't exclude this possibility. Why? Because Russia has ways in which it can pressure Iran. First, there is the weapons supply. There haven't been any supplies to Iran in a long time and the army is demanding new equipment. This is one argument. The other is that Iran and Russia have common interests around the Caspian Sea and if Iran wants to pursue close relations with Russia, this will be an area where influence can be gained by either side. Perhaps, Russia will offer more advanced weapons to Iran, including systems like the S-300, which we supplied to Syria. Iran, of course, is a different kind of country. It is rich, and if Russia wants to, it has ways of persuading Tehran.

RFE/RL: What is the range of the S-300?

Mukhin: Up to 300 kilometers. The equipment I was talking about earlier is for protecting sites on the ground. The S-300, on the other hand, can intercept a ballistic missile. This is one of Russia's strongest cards, since Iran's priority right now is the protection of its territory. The country is basically surrounded by NATO bases and American bases, so sooner or later the conflict could develop into a military one.

RFE/RL: Are there any other details that you, as a military specialist, would like to add that I haven't asked you about yet?

Mukhin: I think that given the current situation, Russia will not take any serious steps or follow the West's cue. As I already mentioned, Russia will probably defend its own interests while helping Iran solve this problem. The reasoning is military and geopolitical. Moscow really doesn't like American activity in the South Caucasus.... Moscow will never go for a souring of relations with Iran, no matter what Iran does. Right now, Iran can act as an ally, because there is the current question of Iran joining the Shanghai Cooperation Organization. It has already been accepted as an observer [just like India] and in this particular case Russia will profit from creating some sort of alliance with Iran to resist the expansion of NATO and the United States in the South Caucasus and the Middle East. These are important goals for Moscow, and our understanding [of them] allows us to predict what [Moscow] will be doing in the future.

RFE/RL: One last question. Next Monday [16 January], the presidents of Iran, Tajikistan, and Afghanistan plan to meet on the border between Iran and Afghanistan [eds. meeting has since been cancelled]. It has something to do with a highway that will connect the three countries. Iran has lately been investing more in the Tajik economy. Do you think that Russia will support this activity in the future? After all, it wants to have influence in the region.

Mukhin: I will say this. In Tajikistan, Iran is no competition for Russia. I am 100 percent sure of this and Moscow's desire to build new factories to produce aluminum is key here. One single factory would double Tajikistan's GDP. You know well that Tajikistan's GDP is only $3 billion. Russia's military budget is $20 billion. Tajikistan is a poor country with good resources, so Russia profits from the investment, even if it comes from Iran. This isn't bad at all. It revives the country and Russia benefits from a stronger Tajikistan, so in this case Iran's actions are only welcome. You may be aware that currently, with India's help, Tajikistan is modernizing the airfield in Aigi and a new Russian air base will be stationed there. Again, there is no competition here, but simply geopolitical pragmatism. This is why I think Russia's, Iran's, and India's goals in Tajikistan, as well as in Central Asia in general, should only be welcomed.

(Translation by Dmitry Levit)