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The US-EU-Iran-Saudi-Russia Jigsaw Puzzle

First there is the news that President Bush has authorized under secretary of state William Burns to sit in on this weekend’s EU-Iran talks in Geneva, home of the IAEA’s headquarters. What this exactly means is likely less obvious than the first round of reporting generally suggests. More on that in a bit.

Interestingly, this development comes with related Saudi context: Saudi Arabia just offered to buy $1.6 billion worth of Russian weapons and an $800 million railroad construction contract totaling a $2.4 billion sweetener in exchange for Russia to break its support of the Iranian regime in Tehran.

Kommersant sources in the defense industry say that concluding an agreement about military and technical cooperation is to become the corner stone of the allied relations between Russia and Saudi Arabia. The latter has shown much interest in concrete armaments: February Riyadh claimed eager to purchase more than 100 BMP-3s (infantry fighting vehicles) for a total of $200 mln, some 150 T-90S tanks for $600 mln and more than 160 Mil Mi-17, Mi-35 and Mi-26 helicopters for a total of $1.6 bln. In connection with Iran’s recent tests of missiles, which can hit targets on the entire territory of the kingdom, Saudi military are particularly interested in different air defense systems. According to the information of Kommersant, recent negotiations have mainly concerned purchases of tanks and helicopters. Most likely, the details of these agreements were thrashed out during the talks in the Kremlin and in the White House especially. The Prime Minister’s Press-Secretary Dmitry Peskov told Kommersant that apart from Vladimir Putin, Deputy Prime Minister Sergey Ivanov, who is in charge of the military-industrial complex, and Head of the Rosoboronexport federal state unitary enterprise Anatoly Isaykin took part in the meeting with Bandar bin Sultan.

In the view of experts, developing the arms market of Saudi Arabia, whose military budget is expected to reach $44 bln by 2010, will be quite a success for the Russian military-industrial complex. “This market will never be completely Russian. The USA, Great Britain and France have retained strong positions there,” Konstantin Makienko, expert with CAST (Centre for Analysis of Strategies and Technologies), told Kommersant, “However, if the current dynamics of oil prices keep on, the arms market in the country will grow, so, controlling even 5% of it will truly boost the profits of Russia’s enterprises.”

At the same time, the counterparts are not going to confine themselves to armaments. Dmitry Peskov told Kommersant that one of the major issues discussed during the negotiations in the White House was the future of Russian Railways’ $800 contract to construct a railroad Az Zabirah-Riyadh, which the company got in January. In May the authorities of Saudi Arabia canceled the results of the tender and announced a new one. According to the sources of Kommersant in the diplomatic circles, the reason for it was Russian Railways’ getting a contract in Libya, whom Saudi Arabia has complicated relations with. Nevertheless, Riyadh stated that Russian Railways will be allowed to participate in the second tender. Now the company wants to get the contract back, and it seems to reckon with political support.

Russia had recently been upset at the Iranian failure to meet its $25 million monthly payments for the construction of the Bushehr nuclear plant. No such fear would likely exist with regards to Saudi remittance. And Russia’s support of Tehran has little to do with a genuine meeting of the minds between the two states, and everything to do with money - lots of it - and lending support to a state that vehemently and quite usefully opposes the United States.

The appearances of these developments - Burns to Vienna and Bandar bin Sultan to Moscow - suggests that the Bush Administration is beginning a new phase and pace of coordinated efforts to isolate the Iranian regime. The Burns flight to Geneva is likely less a change of direction or policy vis-a-vis Iran and negotiations with expectations of different results, as is implied by reporting thus far, but rather a move that can later be referred back to as an indication that Washington made efforts and bent a bit in efforts to resolve the nuclear crisis that is a potentially nuclear-armed messianic regime in Iran.