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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Jon Koplik who wrote (1082)4/23/2000 7:26:00 PM
From: CIMA   of 1301
 
Baghdad, Belgrade and Moscow Collaborate Against Washington

SUMMARY

Russia has reportedly brokered a deal to upgrade Iraqi air defense
systems. The weapons upgrades Iraq could receive are of the same
type that may have downed an F-117 stealth plane over Serbia during
Operation Allied Force. After a visit to Belgrade, Iraq's defense
minister met his Russian counterpart in Moscow April 14. There is a
substantial history of military cooperation among the three
countries, and Iraq and Yugoslavia have recently indicated a
possible alliance. The possibility of such an alliance, tacitly
supported by Russia may be nearing reality and could threaten U.S.
policy.

ANALYSIS

Iraqi Defense Minister Col. Gen. Sultan Hashim Ahmad arrived in
Moscow April 14 and met with Russian Defense Minister Igor
Sergeyev, reported Interfax. Prior to his arrival in Moscow, Ahmad
was in Belgrade, Yugoslavia. The past military cooperation among
the three countries offers an explanation of Ahmad's travels. The
three may be cooperating to create simultaneous crises for U.S.
policy.

Prior to and during Operation Allied Force, Yugoslavia and Iraq
maintained close military cooperation. A Yugoslav military
delegation, headed by the deputy defense minister, visited Baghdad
just before commencement of the NATO bombing of Serbia, according
to a March 1999 Jerusalem Post report. Both nations, threatened by
U.S. warplanes, needed improved air defense systems. Serb
technicians regularly serviced Iraq's Soviet-made MiG-21s and
MiG-29s, according to the Jerusalem Post. The two nations also
reportedly worked out a deal. In return for Yugoslavia rebuilding
Iraqi air defenses, Baghdad would provide Belgrade with oil and
cash to sustain the war effort.

The Washington Times in March 1999 cited a U.S. intelligence
official who said that some of Iraq's integrated air-defense
system, including surface-to-air missiles (SAM), was of "Yugoslav
origin" and may have been sent from Russia via Yugoslavia. The
paper also claimed that there were reports of limited contacts
between Iraqi and Yugoslav air-defense officials several months
prior to Operation Allied Force.

During Operation Allied Force on March 27, 1999, a U.S. Air Force
F-117 stealth fighter-bomber went down over Yugoslavia. A U.S.
Pentagon official initially assessed that a Serb SAM hit the F-117,
reported The Washington Times. The official said the plane
apparently dropped below 20,000 feet, at which time the Serbs
optically spotted the plane and launched either an SA-3 or SA-6
SAM. The report also cited several unnamed U.S. sources, who
speculated that Russia had helped upgrade Serbia's air defenses.

The Times of London reported Oct. 7 that Russia, in violation of an
arms embargo, had actually supplied the Yugoslav army with new
warheads, fuses and sensors for its SA-6 missiles. The Pentagon has
still not officially disclosed its findings on what caused the
F-117 to go down.

Operation Allied Force stretched U.S. forces to their limits. When
the bombing campaign began in March 1999, the aircraft carrier USS
Theodore Roosevelt, stationed in the Persian Gulf, re-deployed to
assist the war effort. Another carrier, the USS Kitty Hawk re-
deployed from the Pacific region to cover the Persian Gulf -
leaving the entire Pacific region void of a U.S. carrier presence
for 86 days. Additionally, many U.S. warplanes stationed in Turkey
to enforce the northern no-fly zone in Iraq were used for missions
in Yugoslavia - leaving the northern no-fly zone under-patrolled.

Recently, Iraq and Yugoslavia have expressed renewed enthusiasm in
mutual cooperation. A Yugoslav delegation, headed by Deputy Prime
Minister Maja Gojkovic, was in Baghdad March 28 and met with Iraqi
Vice President Taha Yasin Ramadan, who expressed Iraq's eagerness
to expand comprehensive cooperation with Yugoslavia.

Iraq now appears to be looking to Yugoslavia and Russia to upgrade
its air defenses. Interfax Russian News reported April 16, 2000,
that Iraqi Defense Minister Col. Gen. Sultan Hashim Ahmad arrived
in Moscow via Belgrade. In Moscow, Iraq's defense minister met with
Russian Defense Minister Igor Sergeyev.

On the same day, the London-based Sunday Telegraph reported that
Russian military officials have brokered a deal with Belarus to
rebuild Iraq's air defenses. The report stated that the Belarussian
state-owned military hardware company, Beltechexport, agreed to
upgrade Iraqi air defense systems. Under the deal, Beltechexport
will upgrade Iraqi anti-aircraft guns as well as Iraq's SA-3 anti-
aircraft missiles. Also, Iraqi air defense crews will reportedly be
sent to Belarus for specialized training, where they will be
familiarized with the latest Russian electronic warfare systems.

If the report is true, it would not be the first time Iraq has
attempted to upgrade its air defenses to threaten U.S. and British
warplanes. In 1998, the CIA uncovered a plot by Iraqi agents to
secretly purchase Tamara - a special electronic warfare system made
in Czech Republic that can track radar-evading stealth planes like
the F-117 and B-2 and may have been involved in the F-117 stealth
shoot-down over Serbia.

Military and technological cooperation between Baghdad and Belgrade
poses potential simultaneous threats in two different arenas.
Milosevic may simply be helping Iraq to give himself some leeway
without launching his own crisis. However, if Iraq seriously
threatened U.S. warplanes while Milosevic simultaneously ignited a
crisis in Kosovo, the United States would have serious trouble
containing both crises. It is not certain that Saddam acting alone
would want to shoot down U.S. planes even if he could. There would
be severe repercussions, such as the extensive bombing of palaces
and military facilities. The real threat is dual-crises in Iraq and
Yugoslavia.

Russia is positioned to challenge U.S. policies and has criticized
the NATO bombing of Yugoslavia and the U.N. bombing of Iraq. The
downing of the F-117 in Serbia was linked to reports that Moscow
upgraded Yugoslav air defenses, and Russia is now reportedly behind
Iraqi attempts to upgrade its air defenses. The possibility of an
Iraqi-Yugoslav alliance tacitly supported by Russia is becoming
more of a reality. The ramifications of such an alliance could
result in simultaneous crises that threaten the safety of U.S.
forces and the maintenance of U.S. policy in each region.

(c) 2000 WNI, Inc. stratfor.com

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