by Huseyn Panahov | Feb 19, 2016

Published by The Washington Institute for Near East Policy

Also available العربية

Joint support of Basher al-Assad’s regime has highlighted Moscow and Tehran’s developing political alliance. In contrast, the level of economic cooperation between the two states has historically been very modest: 2014 trade between the two countries amounted to $1.68 billion and was just 0.2% of all Russian foreign trade. Yet now that Iran’s nuclear sanctions have been lifted and Russia has lost many of its trade partners, Moscow is demonstrating a markedly increased interest in economic cooperation with Tehran.

One element driving this interest is Russia’s increasingly restricted trade options in the past few years. Putin’s 2014 military intervention in Ukraine resulted in trade restrictions between Russia and a substantial list of countries that included the European Union, the United States, Japan, Canada, Norway, and Australia. Despite the ensuing economic recession in Russia and the harmful drop in oil prices, the Kremlin also recently cut off economic relations with historic trade partners Ukraine and Turkey. Instead, Russia has begun to offer special trade privileges to Iran.

After meeting with his Iranian counterpart, the Russian minister of agriculture emphasized this new economic interest, stating that, “We need to establish modern logistics [for transportation] of Iranian goods to Russia, to create a ‘green corridor’ on the Russian border for Iranian goods and to ease customs formalities to speed up clearance of Iranian cargoes.” Iranian businessmen may even begin to receive the same tariff-free privileges that are offered to the members of the Kremlin-backed Eurasian Customs Union.

In another effort to foster an economic relationship, Russia organized the largest business exhibition in the history of the countries’ bilateral relations during December 2015. Representatives from over eighty leading Russian companies from defense, energy, and other industries attended the conference in Iran. According to Iranian Press TV, Russian Energy Minister Alexander Novak attended the event and referred to Tehran as Moscow’s “most important economic and trade partner,” adding that the two countries have devised a new trade bundle worth $35 to $40 billion.

The largest element of this package is the agreement that the Russian company Rosatom will construct a new nuclear power plant in Bushehr, Iran, an agreement worth $11 billion. The package also reportedly includes Russian produced satellite-operation equipment and Sukhoi-100 passenger jets, which are jointly worth $21 billion.

A significant part of other recent economic agreements between the two states have related to the defense sector. Months before the nuclear agreement was signed, Moscow resumed its 2007 agreement to deliver five S-300 missile systems to Iran. It had previously reneged on this agreement after the adoption of the United Nations Security Council arms embargo against Iran in 2010. Iran is also planning to purchase Russian Sukhoi-30 fighter jets, which are similar to the American F-15E fighter bomber.

However, the current spate of economic activity between the two states belies the considerable friction that remains between the two countries. When Moscow withheld delivery of the S-300 systems, Tehran filed a lawsuit in International Court against Russia. Iran has agreed to drop the case, but only after Russia delivers the first regiment of the missile systems. Iran has also lost interest in purchasing Russian T90 battle tanks, since according to Ground Force Commander Ahmad Reza Pourdastan, “We were once interested in buying the Russian tanks. But since we can manufacture similar models within the country and we plan to do so in the near future, the deal is now off.”

Relations are further hindered by the fact that conservative and traditionalist Iranian politicians do not consider Russia to be a partner that can be trusted. Iran has a long track record of attacking foreign embassies on its soil, but the Russian diplomatic mission to Tehran is the only one that has been attacked multiple times. An angry mob first attacked the Russian embassy in Tehran in response to the Turkmenchay treaty that ended Russo-Persian war of 1826-1828.  The mob killed the ambassador, who played a key role in negotiating the treaty that had conceded control over the South Caucasus from Persian to the Russian empire. Even today, many Iranians use the term Turkmenchay Treaty to refer to an unfair settlement.

Iranians also attacked the Soviet embassy over a century later in 1988 during the Iran-Iraq war, responding to the Soviet army provision of missiles to Saddam Hussein. Moreover, Iran’s religious leaders found the communists’ atheistic views incompatible with Islam. Soviet intervention in Afghanistan only made matters worse, since the move drove almost a million Afghan refugees to relocate to Iran.

It took the collapse of the Soviet Union for comparatively warm relations to develop between Moscow and Tehran. Shared political animosity against the West and joint support for Assad has brought Russia and Iran closer together. Russia also played a constructive role during Iran’s nuclear negotiations, making no attempts to compromise the negotiation process and helping Iran facilitate the terms of the agreement. On  December 28,  the Russian ship Mikhail Dudin carried 11,000 kilograms of low-enriched uranium material from Iran to Russia via Caspian Sea in order to fulfill one of the key provisions of the nuclear agreement, since Iran could not dilute the uranium domestically. In turn, sanctions relief made Iran a more attractive economic partner, as Iran received $56 billion in unfrozen foreign assets and set the country on a new path towards economic rehabilitation.

Now, Russia wants to convert its recently developed political friendship with Iran into economic benefits. An expert on Iran at the Moscow-based PIR Center think tank, Andrei Baklitskly, explained that, “There is a feeling in Russia that, “We’ve been your friends for all this time and now you should give something to your friends.” However, other experts believe that Russia has already missed its opportunity for a sturdy economic partnership. Prominent Russian expert on Iran Rajab Safarov commented that, “Prior to sanctions relief Russia could be a real queen in Iran, since at the time there was no one else and Iranians were ready to let Russians into their projects without competition.” Now, Iranians may be more discerning since their diplomatic and economic options have widened.

Many Russian economists have also expressed concerns over Iran’s return to the international energy market and its consequences for Russia, a sector where Russia and Iran are natural competitors. Currently, Russia exports around 3.5 million barrels of oil per day to Europe and 988,000 barrels to China. Under sanctions, Iran supplied 992,000 barrels to China and none to Europe, but both numbers are expected to increase substantially through Iran’s post-sanctions oil exports. Considering that neither Europe nor China’s energy market is likely to grow significantly in the near future, Iran’s reentry into the field will shrink Russian shares in both markets.

Tehran has offered a $6.55 discount on oil for European customers in an attempt to regain its share of the market. And in China, Iran has already made considerable headway: during Chinese President Xi Jinping’s official visit to Iran, both sides agreed to increase the bilateral trade tenfold to $600 billion in the next decade. Right after, President Rouhani left for a four-day tour of Europe, where he spoke about a “New Spring” in the relations with the European Union. President Rouhani returned to Iran with dozens of new contracts and memorandums that will help promote Iran’s return to the international market.

Between signing of the JCPOA in July 2015 and lifting of the sanctions in January 2016, Moscow had a special window of opportunity to gain economic benefits from its politico-military friendship with Tehran that may bear fruit in the future. But in return, Russia must now prepare itself for competition: Russia will compete with Iran in the international energy markets while also competing with European, Chinese, and American investors for a slice of the newly opened Iranian market. This will be an especially challenging task in light of the domestic economic challenges that Russia currently faces, but the payoff may be worth it.

by Huseyn Panahov | 2015, Oct 23

Published on Eurasianet.org

Russian Defense Minister Sergei Shoigu announced in early October that Russian warships in the Caspian Sea launched 26 missiles against targets in Syria. The revelation caught Western analysts off guard, and demonstrated that the Kremlin has developed in recent years a significantly enhanced ability to project force.
 
According to Russian media reports, ships belonging to the Caspian Flotilla fired a version of 3M14 missiles on October 7 that travelled roughly 1,500 km, hitting targets in the Syrian cities of Raqqa, Idlib and Aleppo. The strategic implications of the Caspian Flotilla’s involvement in the operation are significant.
 
Russian planners clearly meant to send a signal that would reverberate well beyond Syria’s borders: the missile strike had the tactical goal of weakening rebel elements seeking to topple Bashar al-Assad’s regime in Syria. The strategic aim would seem much broader: intimidating governments across the Caucasus and Central Asia.
 
It is worth noting that Russia maintains a Mediterranean naval base at the Syrian port city of Tartus. But none of the 10 Russian warships believed to be operating in the Mediterranean are equipped with the Kalibr system that fires the 3M14 missiles.
 
So why are Russia’s military vessels in the Mediterranean not equipped with the country’s latest missile launching systems? One plausible explanation is that Russia’s Defense Ministry did not have enough time to deploy its most modern warships to the area. But many regional analysts believe the Kremlin’s primary motivation was a strategic desire to exhibit its improved offensive military capacity, which is the product of massive defense spending in recent years.
 
According to Western media reports, Russian involvement in the Syrian conflict was brokered by Qassem Soleimani, a top commander of Iran’s Revolutionary Guards, during his visit to Moscow in July 2014. Following that visit, Russia proceeded rapidly to transform an airfield in Latakia, Syria, into its operational hub for military actions there. Russia had plenty of time, then, to either equip its naval ships at Tartus with Kalibr missile systems, or deploy them at the Latakia airbase. It seems fairly clear that Russian defense planners opted not to.
 
It would have made tactical sense to deploy Kalibr systems to either Tartus or Latakia. The distance from either of those spots to intended targets inside Syria is around 300 kilometers, a much shorter distance than a Caspian Sea-based launch.
 
There is also the matter of cost. Russia could have launched shorter-range missiles from Tartus or Latakia, or tried to achieve the same result with tactical bomber raids. Either option would have had a cheaper price tag than the use of 3M14s. Russia has not disclosed the cost of its 3M14s, but the most analogous missile in the American arsenal is the Tomahawk, which costs around $1.5 million. While it is likely the 3M14s cost the Russian government less to produce, it is reasonable to assume that the 26 rockets launched from the Caspian Sea cost at least $15 million collectively.
 
The 3M14 missiles are believed to have a maximum range of 2,600 kilometers. By demonstrating that it can carry out a successful strike from the Caspian Sea against a distant target, Russia made every government in Central Asia and the Middle East take notice.

On a practical level, the Russian launch from the Caspian has forced at least one civil aviation change. The Kazakhstani carrier Air Astana announced it was altering the route of its Almaty-Baku flight to reduce the risk of a potential missile-related accident. The shoot-down of Malaysian Airlines Flight 17 over eastern Ukraine in July 2014 no doubt helped prompt Air Astana officials to take such action.
 
The political ramifications are harder to discern. Top officials in Central Asia have not publically commented on the appearance of Kalibr missile systems on the Caspian Sea.
 
Silence in this case, however, should not be construed as indifference. The show of Russian force may well have encouraged Central Asian leaders to agree to a Kremlin-backed military cooperation agreement  that was signed during a meeting of CIS leaders in Kazakhstan on October 16. At the summit, Russian President Vladimir Putin warned ominously that the cooperation pact was needed to contain Islamic militants in Afghanistan. “The situation [in Afghanistan] is close to becoming critical,” Putin told a news conference, adding that Islamic militants were aiming “to penetrate the Central Asian region.”
 
Regional media outlets have offered other reasons why Russia decided to launch the missiles from the Caspian Sea. Some see it as a marketing opportunity intended to make 3M14 missiles more attractive to potential foreign buyers. Others suggest it was a domestic propaganda exercise designed to reinforce popular support for the Kremlin’s massive defense expenditures amid generally hard times for the Russian economy. Yet another hypothesis attributes it to vanity: Shoigu, the defense minister, ordered up the raid to please President Putin, who celebrated his 63rd birthday on October 7, the same day as the missile strike.
 
Whatever the reason, or combination of reasons, it is clear that Russia is trying to position itself not only as a political alternative to the United States and European Union, but also as a military rival and counterweight. The main unanswered question at this point is whether Putin’s Russia has a purse large enough to successfully implement that goal.

Authored by Daniel Bennett and Huseyn Panahov

Published on the NATO Source blog of the Atlantic Council

September 24, 2015

At the 2014 NATO Summit and as a response to the Russian invasion of Ukraine, the leaders of the Alliance agreed on a Readiness Action Plan (RAP) to improve NATO’s ability to deal with immediate security threats. The RAP includes a Very High Readiness Joint Task Force (VJTF) of 3,000 – 5,000 troops that can be deployed within 2-7 days. Considering the volatile nature of the current security environment, NATO’s new plan is a timely initiative. However, the RAP leaves open a question about the decision-making mechanism that threatens to undermine its overall efficacy: who authorizes the VJTF to deploy and engage?

In other words, the RAP will enable the Alliance, at the operational level, to rapidly deploy troops in crisis situations, but it lacks the political level decision-making mechanism needed to rapidly initiate the process. Based on current rules and regulations, this decision still rests with the North Atlantic Council (NAC). The NAC is the primary decision-making body of NATO, where high-level representatives of 28 member states hold regular consultations. The NAC holds emergency meetings on occasion, including consultations under Article 4 of the NATO treaty whenever “the territorial integrity, political independence or security of any of the parties is threatened.” Reaching a decision in the NAC is a lengthy process, since every decision needs a unanimous consensus of all member states. Subjecting NATO’s high readiness units to the political lethargy of the NAC’s unwieldy 28-member consensus model undermines its ability to deter incursions in the first place and respond rapidly when they do occur. 

One could argue that tying the VJTF to the NAC may actually create a greater political advantage for aggressors, such as Russia, who deftly calculate their actions to intentionally create discord and paralysis within the NAC. For adversaries planning to use such hybrid strategies, the insertion of one more decision-point requiring NAC debate increases the time between when their incursion takes place and the eventual response, allowing more latitude for aggressors to consolidate gains while NATO debates the appropriate course of action. This encourages further aggression. 

NATO is aware of this challenge. At the last Defense Ministerial, members collectively recommended that special powers be granted to the Supreme Allied Commander Europe (SACEUR) to streamline the decision making process by readying the VJTF without NAC approval. While a step in the right direction, this does not eliminate the proverbial “chokepoint” of requiring complete agreement at the NAC for the decision to actually deploy the VJTF. 

To resolve this problem, NATO members should agree on a mechanism that respects the overall authority of the NAC, while delegating the decision to deploy at least part of the VJTF to an “Emergency Council” (EC). The EC should consist of three parties – a representative of the VJTF lead country (these rotate every year), the NATO Secretary General, and NATO military commander, SACEUR. The EC would greatly streamline NATO’s decision making process during times of crisis, so VJTF troops can actually be deployed within hours, instead of days. 

Considering the magnitude of this responsibility, the EC would need detailed procedural guidelines. The NAC would retain overall control by reviewing the decision of the EC and ultimately deciding if deployment should be recalled. The NAC would also decide the duration of the VJTF’s deployment. The NAC would review the EC decision to deploy as soon as possible after it was made. 

If we compare the EC to the internal decision-making process of a country, in some NATO members the head of state can deploy troops and initiate a war for limited periods of time. However, long-term military engagements often also require the approval of legislative institutions. The reasoning behind granting such authority to one person is to ensure the state responds to national security threats as quickly as possible. 

A similar precedent also exists in NATO itself. On January 30, 1999, amid a rapidly deteriorating crisis in Kosovo, the NAC empowered Secretary General Javier Solana to authorize airstrikes against targets in Yugoslavian territory at his own discretion if he deemed them necessary to halt the crisis, without the need to further consult the NAC. In March, further authority was granted for the Secretary General to authorize a broader range of air operations in Yugoslavia. These decisions by the NAC were explicitly taken to “contribute to creating the conditions for a rapid and successful negotiation on an interim political settlement.” Such a precedent establishes the feasibility of the NAC granting limited deployment decision-making authority to individual alliance leaders specifically to allow for rapid military reaction in time-sensitive situations, whether to expedite a political agreement, halt the ongoing military actions of an opponent, or deter future aggression. 

In a similar fashion, the EC would allow NATO to become more united and agile in response to contemporary time-sensitive threats. We live at a time when various non-state actors, self-proclaimed states, terrorist organizations, and authoritarian regimes demonstrate undeterred aggression and are ready to exploit any vulnerability to achieve their ambitions. As Russian hybrid tactics demonstrate, this includes vulnerabilities in NATO’s political decision-making structure.

Today, NATO remains the largest military alliance in history. However, it’s not only sheer size that matters, but also the agility and speed of forces to respond to rapid changes in the security dynamic. Given the volatile nature of the security environment in Europe, even a one-day delay could come at a high cost. For this reason, NATO should consider developing an Emergency Council that can trigger a defensive deployment when a threat requires an immediate response.