Posted on 04/04/2003 8:11:01 AM PST by knighthawk
With U.S.-led forces reaching the outskirts of Baghdad, the Kremlin is softening its staunch opposition to the war in what analysts say is an indication Moscow wants to mend frayed relations with Washington and, perhaps, win a spot for Russian companies in postwar Iraq.
"For political and economic considerations, Russia is not interested in the defeat of the United States," President Vladimir Putin told reporters in the provincial city of Tambov on Wednesday.
Putin did not elaborate, but he continued to toe the softer line Thursday, saying Russia will still cooperate with the United States despite differences over Iraq.
"In the political sense, the United States and Russia are the biggest nuclear powers in the world, and the special responsibility for the protection of international peace rests upon us," he told reporters, who were hastily called late Thursday to his suburban residence of Novo-Ogaryovo, The Associated Press reported.
"In solving any problems of a global character, including crisis situations, we have always cooperated, are cooperating and will cooperate with the United States."
Putin emphasized the importance of the U.S. economy for Russia, saying trade turnover in 2002 was $9.2 billion and was expected to approach $10 billion this year.
The Foreign Ministry, however, did not tone down its strong criticism of the war to match Putin's rhetoric. Ahead of a meeting earlier Thursday with U.S. Secretary of State Colin Powell in Brussels, Foreign Minister Igor Ivanov reiterated his demands that the crisis be returned to the United Nations.
A Foreign Ministry official refused to comment on Putin's Wednesday remarks. The ministry on Wednesday summoned U.S. Ambassador Alexander Vershbow to protest U.S. airstrikes on a Baghdad district where the Russian Embassy is located.
Alexei Malashenko, a political analyst at the Moscow Carnegie Center, said Putin can no longer afford to sit on the fence as U.S.-led forces inch closer toward ousting Saddam Hussein's regime.
Viktor Kremenyuk, deputy director of the Russian Academy of Sciences' USA and Canada Institute, agreed.
"This is a clear shift in Kremlin rhetoric ... [showing] that the endgame is near in Iraq and it is time to try to mend relations," he said.
Putin's comments came as France and Germany, which earlier teamed up with Russia to derail U.S. efforts to win the UN Security Council's blessing for a forceful regime change, also soften their stances toward the United States.
German Foreign Minister Joschka Fischer, speaking hours before meeting with Powell on Wednesday, said he hoped the Iraqi regime would fall quickly. Both Germany and France agreed Wednesday that NATO should start considering how to enhance the alliance's peacekeeping role in Afghanistan. This indicates that Paris is becoming more open to the engagement of NATO beyond its traditional zone of influence in Europe, The Associated Press quoted unnamed diplomats as saying.
Putin, who previously called the start of the war "a big political mistake," chose a rather unusual location to make the shift in rhetoric. Putin was in Tambov, located about 400 kilometers southeast of Moscow, on a visit meant to discuss medical insurance reforms, and most of the reporters in his entourage concentrated on covering this issue. It was not until 9:30 p.m. that Russian news agencies and the Kremlin's official web site reported Putin's remarks on Iraq, and Vremya Novostei was the only large newspaper to report them on its front page Thursday.
After weeks of verbal offensives and counter-offensives, U.S. President George W. Bush's administration also appears to be adopting a more conciliatory tone toward Russia. Vershbow -- who has spent the past few weeks spelling out what economic sticks the United States can apply to Russia -- was quoted by Izvestia on Thursday as saying Washington recognizes that Russian oil companies have formidable interests in Iraq.
He suggested that Russia participate in shaping a vision of a postwar Iraq, as this would increase "Russia's role in [its] postwar reconstruction."
Analysts estimate that Iraq has $57.2 billion in contracts -- primarily in energy and communications -- with companies from Russia, the Netherlands, Egypt, the United Arab Emirates, China and France. Of those deals, 90 percent, or $52 billion, are with Russia, according to the Washington-based Center for Strategic and International Studies. Iraq owes Russia more than $8 billion.
Russian companies are split over whether a new Iraqi regime will honor their interests. "We expect the contract to be honored at the end of the war. After all, after the revolution the Soviet Union accepted [part of] the debts of tsarist Russia," a LUKoil spokesman said Thursday.
Zarubezhneft expressed doubts about its deals, saying it stands to lose $150 million to $180 million in potential profits in Iraq. The company was drilling dozens of oil wells in cooperation with Tatneft and the Iraq-based Northern Oil Co. when the war broke out.
Zarubezhneft and Mashinoimport signed a contract in 1997 to develop oil fields in Western Qurna, but this deal is also likely to fall through, Zarubezhneft said.
Mashinoimport, which has some $30 million worth of oil drilling equipment in Iraq, shared Zarubezhneft's pessimism. "More questions have been raised than answered," a company official said.
Tekhnopromexport is not counting on filling a contract worth hundreds of millions of dollars to build a large power station. "Our contract was through the UN, a respected organization, so of course we hope to get some form of compensation at some point," said Tekhnopromexport spokesman Samvel Oshinyants.
A spokesman for KamAZ, which had planned to sell $75 million worth of trucks to Iraq this year, said his company has struck those earnings from its business plan.
GAZ, however, is continuing to assemble Volga sedans to be shipped to Iraq under a $47 million contract signed in 2001. "Even if the Iraqi regime changes as a result of the U.S. military operation, international trade law stipulates that agreements have to be observed and carried out," GAZ head Alexei Barantsev told reporters this week.
Analysts also are divided over the fate of Russia's economic interests.
"There is a possibility that current contracts and contracts that have been discussed but not signed might be broken," said Alexei Vorobyov at Aton. "I am confident that Russian interests in the oil sector will be infringed upon."
However, Christopher Weafer, chief strategist at Alfa Bank, said, "It is very likely that Russian companies will retain those interests in Iraq." He said some Russian contracts have a good change of being renegotiated.
Staff Writer Lyuba Pronina contributed to this report.
If people want on or off this list, please let me know.
This has got to be the reptilian quote of the day.
Obviously, for moral reasons, the Russians hope for our defeat.
Putin is an amoral snake.
Leni
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