Russia Looking For Foothold In Iraq

by Kester Kenn Klomegah

(IPS) MOSCOW -- The Russian government has announced its intention of looking for economic opportunities under a new regime in Iraq.

President Vladimir Putin has asked "all Russian departments to assist normalization inside and outside Iraq and to protect Russian economic interests in that country." Many officials have seen this as indication of an Russia's expanding economic strategy in the Mideast.

Putin further said in a statement circulated by the Kremlin that Russia and Syria should cooperate in implementing joint viable projects to develop Iraq's economy and social infrastructure.

"The most difficult task now is to ensure the stabilizing effect of the election results on the situation in Iraq," Russian foreign ministry spokesman Alexander Yakovenko told IPS.

Yakovenko said the first representative body elected by the Iraqi people "must comprise representatives of the country's influential political forces and ethnic and religious groups." The statement follows a widespread boycott of the election by Iraq's Sunnis. Yakovenko called for a broad dialogue aimed at national reconciliation.

The spokesman said Russia is prepared to assist Iraq in overcoming problems left by war and terrorism, as well as building and strengthening its new state system and restoring its national economy.

Russia indicated its eagerness to work with the new government in its firm, if qualified, support of the election.

"The setting in which the elections proceeded was very complicated, to put it mildly, and we understand this," Putin said in his statement. "The fact that the elections have been held is an event of great historical importance for the Iraqi people."

But Putin did indicate the Russian view of the difficulties that remain. "A great deal of work is still to be done to attain the Iraqi people's vital goals and sovereignty," he said.

An Iraqi embassy spokesman told IPS that agreements were in place to allow Russian involvement in viable sectors while also ensuring that Iraq would pay back debts it owed Russia from its long pre-war relationship. This involvement, he said, would help Iraqi people build a strong and improved economy.

"The Iraqi government has not yet set the timeframe for Russia's economic projects to begin but this will be after the establishment of a new cabinet now that the elections are successfully over," the senior Iraqi diplomat said. He declined to name Russian firms that have shown interest. "We would move with a concrete decision to expand economic partnership after the installation of the cabinet," chairman of the Russian Federation Council international affairs committee Mikhail Margelov told IPS. "Lukoil [a major Russian oil company] has already resumed negotiations on the West Qurna project with the Iraqi oil ministry," Margelov said.

Debt resettlement is a major factor in Russian-Iraq relations and has featured in official discussions.

Russia's decision to write off substantial Iraqi debt is guided, among other reasons, by the interests of Russian companies planning to put previously signed contracts into place, sources in the executive office of the Russian Security Council said.

"Firstly, Russia agreed to take this step due to its solidarity with the friendly people of Iraq," according to a statement from the council. "Secondly, in making this decision, Russia was governed by its long-term economic interests aimed at helping Russian companies take part in reviving the Iraqi economy and implementing our previous contracts with the Iraqi party."

Russian finance minister Alexei Kudrin had said earlier that Iraq's original debt to Russia stood at $10.5 billion. Restructuring this debt will reduce it to a figure between $700 million and $1 billion, Kudrin said. The write-off procedures are expected to be completed by 2008.

"Russia has planned to write off this debt even though we believe that Iraq is capable of paying its debt," Putin had said earlier. "Iraq is not an economically underdeveloped country; rather, its development is medium. It is by no means a heavily indebted, poor country," Putin said.

"Russia's interests are still very high on the government agenda for Iraq," Alexander Fomenko, a prominent member of State Duma committee on Middle East and Asian affairs, told IPS.

"Russian-Iraqi relations will be developed radically and positively after the last Sunday's election process which will establish peace, internal security and political sovereignty."