CLINTON ADMINISTRATION INTEFERING WITH REBUILDING OF RUSSIA-IRAQ TIES.

Russia’s Foreign Ministry this week lodged an official protest over what it charged is a concerted U.S. policy to block contracts signed between Russia and Iraq under the UN’s “oil for food” program. According to an October 23 report, Russian Deputy Foreign Minister Sergei Ordzhonikidze delivered a message containing the Russian concerns to an American UN representative. The message, addressed from Russian Foreign Minister Igor Ivanov to his U.S. counterpart, Secretary of State Madeleine Albright, accuses the United States of pursuing a “selective and deliberate policy… spearheaded against Russian companies” which have signed such contracts with Baghdad.

The note also accused Washington of failing to provide any justification for its actions vis-a-vis these Russian-Iraqi contracts. It warned that “this practice, if continued, could lead to the unfair ousting of our companies from the Iraq market.” The note demanded that the U.S. side respond to the Russian message “with ample seriousness,” and that Washington reconsider its policy of blocking the contracts” (Itar-Tass, October 23).

The Russian complaints come amid a related and acrimonious battle reportedly shaping up between UN Secretary General Kofi Annan and the Clinton administration. Annan has accused the U.S. administration of using its muscle on the UN sanctions committee to put indefinite “holds” on more than US$500 million in humanitarian goods which Iraq wants to purchase with the proceeds from sales under the “oil for food” program. The 1996 “oil-for-food” deal permits Iraq to sell US$5.2 billion every six months to purchase food, medicine and other items which would alleviate civilian suffering in Iraq. Washington has charged, however, that many of the imports sought by Iraq do not fit that description and would in no way benefit the health of the Iraqi population. Clinton administration officials have characterized some proposed Iraqi purchases as frivolous, and others, insofar as they might have military applications, as frightening (The Washington Post, October 25).

The face-off between Washington and both Russia and the UN secretary general over administration of the “oil for food” program reflects the broader divisions among permanent Security Council members over policy toward Iraq. Moscow leads a group which is seeking a quick lifting of the UN sanctions on Baghdad. Washington and London, conversely, want to make the lifting of sanctions dependent upon further proof that Iraq is complying with UN disarmament requirements. Annan has tended to identify himself with the Russian-led group.

Back in Moscow, Russian leaders would like to rebuild the strong ties with Iraq which existed between the two countries prior to the Soviet Union’s dissolution. To further that goal, Moscow has become the foremost defender at the UN of Iraqi leader Saddam Hussein. Moscow sees in close ties with Baghdad an opportunity to reassert its influence in the Persian Gulf. Russia also sees in the quick lifting of sanctions an opportunity both to collect on the billions of dollars in Soviet era debt that Baghdad owes Moscow, and to move forward on a package of trade deals–particular in Iraq’s energy sector–which would be very lucrative for the Russian companies involved. Moscow cannot begin to implement those deals until sanctions against Iraq are lifted. Iraqi government officials, however, have in recent months begun to threaten that Russian companies must either begin work in Iraq immediately or face the loss of those contracts. The Russian government had earlier resisted such threats, but Russia’s oil minister intimated earlier this month that Moscow may be altering its stance (see the Monitor, October 8).

FLIGHT OF CAPITAL ACCELERATES IN RUSSIA.