Penetrating Persian Gulf

At last month's air show in Paris, Russia's advanced Sukhoi-37 fighter couldn't truly "shake the world" with its never-before-seen acrobatics, as President Boris Yeltsin later said it had. Some industry experts say this is owing to an "insidious plot of overseas competitors." Others point to the allegedly strained relations between the Sukhoi aircraft company and the state arms trading company, Rosvooruzheniye. Nonetheless, they still haven't managed to draw attention to Russia's aircraft wonder. Russian aviation is no more competitive than before on the world market, at a time when competition over military aviation technology has become much sharper.


At the Elys?e presidential palace following the show, President Jacques Chirac announced the sale of 22 Mirage 2000-9 fighters to the United Arab Emirates. The deal was estimated to be worth 14 billion francs ($2.3 billion). France's Dassault Aviation vied with Lockheed-Martin's F-16 as well as the European consortium of companies from England, Germany, Spain and Italy that makes the Eurofighter 2000. France seems to be squeezing out its main competitors and spoiling prospects for Russian fighter manufacturers to penetrate the lucrative market.


There are serious political and economic factors that lie behind the increasing competition among Western nations to arm the so-called Big Six leading Persian Gulf oil-producing nations, which include Saudi Arabia, Kuwait, the United Arab Emirates, Oman, Bahrain and Qatar. In the wake of the Iraqi invasion of Kuwait, these countries united in their opposition to Iraq and continued their traditional opposition to Iran. Now the six are not so united, and certain members are acting more independently. It seems that Kuwait intends to begin cooperating with Iran as a counterweight to its "sworn enemy Iraq." The United Arab Emirates would like to see "Iraq returned to the Arab ranks" in order to restrain "Iranian expansionism." In such circumstances, it is quite understandable that these countries have become more attentive to their own defense capabilities.


Persian Gulf officials are talking more and more of how the Western military presence there will not last forever. "The presence of foreign powers here is a temporary measure," United Arab Emirates Defense Minister Mohammed Ven Said an-Nahian told me. "Sooner or later they will leave -- as soon as they carry out their task or feel that such a presence is financially not to their advantage. The foreign powers came here for economic reasons. They will leave for the same reasons. Besides, the increased military potential among the Big Six in no way runs counter to the basic interests of the West in the region. I imagine that in a crisis situation, foreign powers would help us in the second stage of a potential conflict without having to provide a constant line of defense, as is the case today."


The Arab monarchies have a part in the increased competition among Western arms suppliers, occasionally announcing their intentions to purchase one type of high-priced arms or another. At the opening ceremonies of the IDEX Arms Show, the exhibition's organizer Sultan as-Sueidi said the Big Six nations would spend at least $80 billion on arms purchases over the next 10 years. The United Arab Emirates alone intends to spend an average of $1 billion a year on arms until 2010. Saudi Arabia plans to spend even more. And these figures are realistic given the sharp increases in oil revenues over the past year.


Rosvooruzheniye is closely following the evolving market in the region and looking for ways to penetrate it. The head of the state arms trading company, Alexander Kotelkin, even said recently that aside from small arms and armored personnel carriers, high-tech Russian arms would find their niche in the Persian Gulf countries.


This, however, won't be a simple task not only because of the highly competitive market, but because of its specific features that are far from favorable to Russian arms sellers. First of all, there is the political factor. The Big Six countries have very close ties to their traditional arms suppliers. Those ties include military and political pacts and even "strategic partnership" agreements that lay the ground for commercial deals. It is no accident that the above-mentioned Mirage fighter deal coincided with Chirac's announcement that France was willing to go from a security agreement with the United Arab Emirates to one of strategic partnership. Second, the Big Six nations have been exploiting their Western partners' interests with so-called offsetting principles, requiring arms suppliers to invest certain sums in civil projects of the countries to which they sell arms.


It is not simple for Rosvooruzheniye to meet these two important conditions: Moscow's current military and political collaboration is rather oriented toward the enemies of the Arab monarchies. The Big Six could not help but take note of the Kremlin's ceremonial welcome for the chairman of Iran's parliament, Ali Akbar Nateq-Nouri, earlier this year and the recently adopted State Duma law on cooperation with Iraq. Moreover, Russia is not in a position at the moment to invest in civilian projects in these countries for obvious reasons. This leaves Russian commercial military strategists only with the option of coming up with nonstandard solutions to entering the market.





Alexander Shumilin is a Cairo-based correspondent for Novoye Vremya. He contributed this comment to The Moscow Times.