Tuesday, June 7, 2011

Russians Are Notoriously unreliable Trade Partners

Interview with Bahram Amir-Ahmadi

Moscow’s Ambassador to Tehran, Alexander Sadovnikov, has recently invited Russian energy companies to invest in Iran’s energy sector. But Bahram Amir-Ahmadian, Russian affairs’ analyst, is quite cynical about the outcome of cooperation with the Russians, and regards them as unreliable partners.

IRD: Dr. Amir-Ahmadian, regarding Russians’ general policy towards Iran, how reliable is collaboration with their companies in the oil and gas sector, given the debacle of the S-300 contract?

BA: They are not honest trade partners. The Russians have frequently failed to deliver on their promises in previous joint projects and contracts. Iran seeks help from Russia only because of the restrictions it’s facing in the international arena. But Moscow has not lived up to Iran’s expectations. It has been a signatory to all UN Security Council resolutions against Iran, while sustaining its trade ties with us. The Russians have meanwhile made the most of the sanctions in order to court the West. For Iranian statesmen, Russia is still a technological and armaments lifeline, but they seem not to have read history. Russia’s predecessor, the Soviet Union, left Egyptians high and dry during their war with Israel, and equipped Saddam Hussein’s army during the 8-year war with Iran. They turn covetous when dealing with other countries; fans of the win-lose game indeed.

Moscow is also fond of the perpetual strain in Iran’s ties with West. The more distant Iran is from West, the closer it gets to Russia. Moscow has also frequently stated that it does not want to see a nuclear Iran on its southern borders. Take the Bushehr nuclear power plant project as an example of believing that Russia is Iran’s most notorious trade partner. They protracted its construction long enough to ensure that the technology became obsolete. As former head of Iran’s Atomic Organization Hassan Ghafourifard once said, the building of a nuclear plant from scratch would be more cost-effective than assigning the Russians to resume construction of the reactor at Bushehr [80% of it completed by Germans before the 1979 Islamic Revolution]. And anyway, this power plant will generate only 1/34th of Iran’s electricity. Iran is also buying civilian aircraft from Russia, particularly the infamousTupolev, while Russian domestic airlines have been using a Western fleet for years.

IRD: Will Russian companies welcome the idea of investment in Iran?

BA: The Russians have kept to the terms of UN Resolution 1929 so far, and have shown little interest in circumventing the sanctions, since that would bring criticism from other members of P5+1 [five UN Security Council members plus Germany]. The energy sector has not been officially sanctioned by the UN, so Russia, unsatisfied with its current state as a raw material exporting country, can seize the opportunity. It can also find another opportunity to expand its sphere of influence in the Middle East. Moscow has lost part of this influence as a result of the pro-democracy uprising in Libya –with which they were a strong trade partner- where Qaddafi continues to crack down on the opposition with Russian weapons.

Iran’s economy needs an extensive and deep restructuring. But I think the oil sector should not be our priority. Agriculture and industry need further attention, while tourism is also potentially a highly lucrative source of revenue. Maybe if we focus on cooperation with the Turks –who attracted nearly 30 million tourists last year- it would pay more dividends.

IRD: How will Iran receive Russian companies’ investment in its oil and gas sector?

BA: Iran would have never reached out to Russia if it had better options. Of course, Iran is in need of investment in its energy sector-- reportedly 200 billion dollars in the next 10 years. Sanctions imposed by West –most importantly the D’Amato Act that restricts investment in Iran’s energy sector- have deprived Iran from obtaining advanced technologies and equipment. The Russians will use this opportunity to sell their outdated technology to Iran, and will import advanced Western technology for their own oil and gas industry....

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