A Relationship in Need of a Spark
By Ariel Cohen
Ariel Cohen, Ph.D., is a research fellow at the Heritage Foundation in Washington and author of "Russian Imperialism: Development and Crisis." He contributed this comment to The Moscow Times.
All of a sudden, it looks like Sept. 11 never happened.
After the announcement of a 10-year, $40 billion cooperation deal with Iraq, the sale of five nuclear reactors to Iran and the recent visit of North Korean leader Kim Jong Il, some people in Washington are beginning to think that Russia is returning to its position as patron saint of the "axis of evil." But not so fast.
It is true that powerful interests in Russia would like to distance their country from the Soviet-era "principal adversary" -- the United States. These forces include the military-industrial complex, anxious to maintain markets in China, India, Iran and, eventually, Saddam Hussein's Iraq. They also include Soviet-era elites still running the Defense and Foreign ministries, people like former Prime Minister Yevgeny Primakov who fail to realize that in the new century Russia has new enemies -- enemies that do not include "American imperialists."
The window of opportunity for the United States to develop a closer relationship with Moscow has not closed -- at least not yet. But there are warning signs that the United States' inability to deliver the goods for President Vladimir Putin -- combined with the anti-Americanism of many of Russia's ministers and bureaucrats -- could derail the beginning of a beautiful friendship.
In the 21st century, alliances are as much about geoeconomics as geopolitics. Will the State Department take into account Russia's economic interests without compromising U.S. defense concerns? Will Russia understand that it cannot dance at Iranian and Iraqi weddings while flirting with the United States?
The Russian-Iraqi agreement, which has been in the works for two years, was announced as the clouds over Baghdad are getting darker and the life expectancy of Saddam's regime is getting shorter. The Iraqi leader, realizing that he is about to be sunk by a U.S. attack, is grasping at straws in the hope of finding shelter and support through his former patron.
But the Iraqi-Russian economic pact is a fantasy, a figment of the bureaucratic imagination in Moscow and Baghdad. The pact was lobbied and rammed through the Russian bureaucracy by the country's biggest oil company, LUKoil, which is eying Iraq's giant West Qurna field.
LUKoil, which is owned by Azeri billionaire Vagit Alekperov, has signed agreements with Saddam's regime in Baghdad and is hoping to preserve its strategic investment in Iraq. But lobbying for ties with Saddam today could backfire against its interests in postwar Iraq tomorrow.
Slavneft and Tatneft are other companies deeply into Iraqi oil and active on Saddam's behalf in Moscow. Until recently, Slavneft, which has a Belarussian connection straight to President Alexander Lukashenko's office, also had close ties with the fiercely anti-American, ultra-nationalist politician Vladimir Zhirinovsky. State Duma and government sources in Moscow have repeatedly alleged that Zhirinovsky and his Liberal Democratic Party (which in reality is neither liberal nor democratic) is supported by Saddam's purse.
Pavel Felgenhauer, the well-known Russian defense analyst, told the BBC on Monday that it is not clear which Russian foreign policy is served by the recently announced agreement with Iraq: that of President Putin or that of LUKoil. "We have several foreign policies," Felgenhauer said.
Other Moscow-based analysts, who requested anonymity, said LUKoil had bought the Russian Foreign Ministry "lock, stock and barrel." Some took pride in the fact that private interests now influence Russian foreign policy, just as in any other state. "It is safer that companies influence our decision making," one observer said. "In the past it was all done behind the closed doors of the Politburo."
The problem of articulating Russian foreign and defense policy is not a new one, but it worries Putin's advisers in Moscow and Russia-watchers in Washington. Foreign Minister Igor Ivanov, an appointee of Primakov, reflects the anti-American and pro-Arab opinions of Soviet-era diplomats. Ivanov is not trusted by Putin's inner circle, but he has not been replaced because Putin is delaying a purge of the Foreign Ministry.
The Defense Ministry is now under the control of Putin's confidant, former KGB General Sergei Ivanov. Ivanov is Russia's first "civilian" defense minister, but defense reforms have been slow in coming. When U.S. President George W. Bush and Putin seemed to hit it off, the bureaucrats were less than thrilled.
It will be unfortunate if Putin's foreign policy is hijacked by greedy oilmen, corrupt Duma factions and the Soviet-era anti-American elite -- for one thing because their figures simply don't add up. If Russian-Iraqi trade now stands at about $1 billion a year, it would need to quadruple in order to meet $40 billion during the 10-year cooperation period. This is not about to happen.
However, the gazillion-dollar figure may be a signal to Washington that Russia wants to be compensated if Saddam is removed. At the recent Group of Eight summit in Canada, Putin told Bush that Moscow would shed no tears over Saddam's removal -- as long as Iraq repays its $7 billion of Soviet-era debt. Adjusted for inflation, Iraq's debt now amounts to about $12 billion. Furthermore, if Russia loses the oil concessions that have been signed off by Saddam, and if oil prices go down as Iraq starts to pump more oil to pay for postwar reconstruction, Moscow will lose some of its oil-export revenues -- perhaps as much as $4 billion a year.
With Iran, the story is different. The huge Iranian nuclear contract was lobbied for by the Nuclear Power Ministry, a Soviet-style monolith that is trying to keep a host of factories with tens of thousands of jobs afloat.
The Nuclear Power Ministry's bureaucrats are not exactly Yankee fans. True, in the long term, an Iran with nuclear weapons on Russia's borders would make it a difficult neighbor; Tehran could stir up unrest in the Muslim areas of the Caucasus and Central Asia. But it is short-term greed -- and millions of dollars in bribes -- that is keeping the Iranian contract on track, despite the United States' loud protests.
Finally, the take on North Korea in Moscow is that the former satellite is finally coming to its economic senses, and could provide a lucrative opportunity for Russian companies. The Russians believe that the country's Dear Leader, Kim, presides over a North Korean version of perestroika, which could bring elements of a market economy and foreign investment to Pyongyang. Russia does not want to lose out to China, Japan, South Korea -- or to the United States -- when the last business frontier opens up.
So is the honeymoon over for the United States and Russia? The message from Putin's policy advisers is that they are still willing to negotiate to address U.S. security concerns. As Washington contemplates what to do next in its war on terrorism, the Kremlin and the White House should seriously explore this opportunity to forge a strategic relationship. While Moscow needs to understand that it can't entertain Iran and Iraq and still be considered a legitimate partner in the anti-terrorism effort, the Bush administration should give Russia's economic interests a fair hearing.
One hopes that the chilly U.S.-Russian summer will not turn into a frosty fall.
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