Russia’s last-minute attempt to rewrite the terms of the oil-for-food program could very well be the result of increased pressure which Baghdad has exerted on the Russian government. Although Moscow has been Iraq’s foremost supporter on the Security Council, Iraqi leaders have complained in recent months that Moscow needs to go beyond mere “declarations” in order to express support for Baghdad more concretely. The clear implication of such Iraqi statements is that Russia should forego compliance with the UN sanctions on Baghdad by restarting economic relations between the two countries. Indeed, Iraqi oil officials have warned that Russian companies could lose lucrative oil development contracts in Iraq if they do not move quickly to fulfill the terms of those contracts–sanctions or not.
Billions of dollars are at stake in this game, and Moscow last month hedged for the first time over its determination to stay in compliance with the UN sanctions. Following a visit to Baghdad during which he signed new contracts with Iraqi leaders, Russian Fuel and Energy Minister Viktor Kalyuzhny told reporters in early October that Russian authorities may now choose to look the other way if Russian oil companies begin to fulfill contracts in Iraq. On October 27, moreover, an Iraqi newspaper quoted the country’s oil minister as saying that Russian companies had already begun implementing some US$400 million worth of contracts in Iraq. Although the report was quickly denied by Russian diplomats, it seemed apparent that Iraqi pressure on Moscow to violate the sanctions was continuing (see the Monitor, October 8, 29).
Russia’s defense of Iraq at the UN is based on considerations involving not only the billions of dollars in potential oil contracts which will be up for grabs once the UN sanctions on Baghdad are lifted, but also on what Moscow sees as the potential to reestablish itself as an influential power in the Persian Gulf. Baghdad is clearly playing upon Moscow’s hopes and fears in both of these areas–Iraq has, after all, other potential suitors–when it pressures the Russian government into defying the UN sanctions regime against Iraq.
More recently, moreover, Iraqi leaders have undoubtedly sensed the way in which the wind is blowing in Moscow. The rise of Russian hardliners and the seeming reemergence of a belligerent Soviet-style world-view in official Russian policymaking has probably raised the hopes of Iraqi leaders that they have new and ever more influential friends in Moscow. As the deadlock over UN policy toward Iraq persists and the sanctions remain in place, there are likely to be mounting pressures in Moscow to defy the West one more time by reestablishing economic relations with Baghdad. Russian efforts to promote the UN as a diplomatic counterweight to the United States and NATO would under such circumstances be the primary restraint on Russian behavior in this area.
Russian efforts to pose as Iraq’s most steadfast international defender suffered an embarrassing setback last week, however, when reports emerged suggesting that Moscow was prepared to trade concessions on Iraq for less U.S. criticism of Russia’s war in Chechnya. The informal proposal, apparently leaked to the press by Clinton Administration officials, was reportedly presented to U.S. Secretary of State Madeleine Albright during talks in Istanbul last week with Russian Foreign Minister Igor Ivanov. Among other things, the Russian side reportedly hinted at a willingness to be more flexible in negotiations over UN policy toward Iraq if the United States ensured that Chechnya would not become a topic of discussion in the UN Security Council. Russian officials, not unexpectedly, denied the report (Reuters, New York Times, November 19). But Moscow does face a mounting challenge at the UN posed by calls for the UN Security Council to take up discussion of Moscow’s crackdown in Chechnya.
OIL PRICES INCREASES MAY ACCELERATE RUSSIAN CAPITAL FLIGHT…