Konstantin MAKIENKO

I n theory any aggravation of the international situation, to say nothing of an armed conflict results in growing demand on arms markets. Thus arms transfers reached their highest peak in 1987 at the height to the Iran-Iraq war. Later the Taiwan crisis in March 1996 and especially the NATO aggression against Yugoslavia in 1999 strongly influenced demand. Hence a year and a half after the aggravation of the situation in the Taiwan Strait China acquired two Russian destroyers of project 956E[1] . The NATO air strikes at Yugoslavia were followed by an upsurge in Chinese orders for Russian Su-30MK multirole fighters[2] what actually lie at the core of Russia's record arms exports of $4.8 billion in 2002. It's true that the Politbureau of the Central Committee of the Chinese Communist Party had planned the contracts long before the hostilities but both crises - Taiwanese and Yugoslav - strongly stimulated China's determination to purchase Russian armaments.

I ndia noticeably stepped up arms procurements after the Kargil incident in summer 1999. The Indian army immediately bought several arms systems that had demonstrated their high effectiveness in difficult conditions high in the mountains, namely Mi-17 helicopters and Krasnopol-M laser-guided anti-tank artillery shells.

G iven the beginning of the hostilities in Iraq the impact of the new conflict on the arms market seems an interesting question. The analysis of the emerging market possibilities and risks for Russia is especially important.

General situation

I t is impossible to forecast the developments on the arms market without adequately interpreting the general political situation. From the very start we will proceed from the assumption that the usual talk of resisting terrorism has nothing to do with the actual state of affairs. As usual an absolutely different reality lies behind the empty rhetoric of combating the axis of evil or international terrorism. In addition to purely domestic American objectives the crushing of Iraq is meant to undermine the main seat of anti-Western civilized resistance in the Islamic world - Saudi Arabia. The thing is that for Saudi Arabia and OPEC the system of embargoes against Iraq and exemptions from it has become an effective mechanism of regulating oil prices while the Iraqi regime addicted to Saudi money during the past two-three years has kept only the appearance of its former secular nationalism. The influence of integrating networks in the country and more importantly in its governing institutions is growing. In fact the United States is preparing the deepest remodeling of the whole geopolitical landscape of the Middle East since the end of World War I. And it is Saudi Arabia, not even Iraq that will fall the greatest victim to this remodeling.

G enerally in our opinion, Samuel Huntington's hypothesis of a clash of civilizations describes the situation in and around Iraq most accurately. The hypothesis recognizes that at a time of an evident crisis of nation states civilizations - large cultural entities with a complex and heterogeneous structure - are becoming the main parties in international relations. Among others Hungtingon named Western, Confucian (Chinese), Islamic, Japanese, Hindu and Slavic-Orthodox civilizations. In his opinion, in the future a conflict will break out between an alliance of Confucian and Islamic civilizations, on the one hand, and Western, on the other, with India and Russia backing the latter. The majority of scholars sharply criticized the hypothesis what is our opinion, indisputably speaks for its benefit.

D uring the previous decade it seemed that Huntington had misinterpreted the configuration of alliances between civilizations. The cooperation of the West and Muslims in splitting Yugoslavia and their common anti-Russian stance on Chechnya were sooner an indication of the existence of a Western-Islamic alliance and the Slavic-Orthodox civilization being a victim of its aggression. The alliance started taking shape immediately after the ideological defeat of Arab military nationalist regimes and the beginning of the Afghan war, i.e. in the late 1970s - early 1980s. It is curious that if arms transfers are regarded as an indicator of alliances of civilizations, the existence of a Western-Islamic alliance is indisputable because the United States and Britain, not China have been the main sources of the latest high tech arms systems for the Islamic world. One more nuance in the relations between the West and the Islamic civilization is that the United States and Europe are well aware of the strong anti-Western potential of the Muslim world. Therefore their anti-Russian and anti-Yugoslav alliance in the 1990s could be interpreted also as an archetypal attempt to channel anti-Western challenges against Russia as had been the case with Marxist and Nazi threats.

S imilarly we get another alliance of civilizations of the 1990s - the Sino-Indo-Russian. As is widely known in the late 1990s Russia suggested transforming the de facto existing military-technical triangle into a strategic one, i.e. actually into a military-political union. The suggestions did not materialize but the objective reality still is that the three biggest countries of the world still preserving their cultural and civilization identities and ready to fight for these identities are armed with genetically related arms systems.

H owever, the September 11, 2001 terrorist attacks demonstrated that the fragility of the union of the West with several Arab elites. With a certain degree of simplification we can speak of the beginning of a cold spell, if not confrontation in their relations. In our opinion, the current situation in and around Iraq should be regarded from this viewpoint. It should be added that during the past two or three years Saddam Hussein who earlier had been one of the chief targets for Islamic fundamentalists' forces in the Arab world reached a modus vivendi with them. One more important observation is that the Western world is not acting as an single entity in the unfolding conflict: a relatively influential bloc of pro-Iraqi states has appeared in Europe led by France and Germany, countries with the biggest Muslim communities in the Old World, by the way. With a certain degree of simplification one can also speak of a split in the Western world.

Impact of Iraq crisis on international arms markets

I n the past two-three years there have been signs of recovery on world arms markets ending a period of stagnation that lasted throughout the 1990s. The recovery stems primarily from Chinese and Indian procurements and also the beginning rearmament in West European countries. We can assume that as a result of the Iraq crisis world arms trade growth will become a more distinct trend. The reasons for the upsurge in demand will be as follows:

• A rise in American assistance (actually payment for loyalty) to Israel, Turkey and probably Egypt,
• Saudi Arabian acquisitions of French armaments in gratitude for the stance taken by Paris at the beginning of the Iraq crisis,
• The possible strengthening of Saudi-Pakistani ties, a hike in Saudi subsidies to Pakistani missile and nuclear programs,
• The intensification of American-Indian military technical ties.

S o, firstly, Israel will try to use the aggravation of the situation in the region for making the United States boost its military assistance 85% of which is spent on purchases of American armaments. It is likely to invest funds in R&D and procurements of new anti-missile systems, including tactical. Israel may step up purchases of twenty to thirty American F-22 fifth generation fighters. In this connection we want to remind you that in the past Israel was ready to exchange its withdrawal from the Golan Heights for additional American military assistance to the tune of $17 billion.

A similar strategy is likely to be applied to Turkey, another key strategic partner of the United States in the Middle East and also the biggest recipient of American military assistance. The arms procurements' programs that the Turkish military would want to implement but cannot afford are well known: the purchase of 145 attack helicopters and 1,000 main battle tanks, air-borne radars, missile frigates and anti-missile defense systems.

B esides, we can assume that Egyptian arms procurements that are also largely paid for in the framework of the U.S. military assistance program and are in a way pegged to Israeli imports will grow after the expected increase in Israeli purchases. In conditions of resisting radical Islam the United States will be glad to support a moderate secular pro-Western regime.

S econdly, we cannot rule out that Saudi Arabia, the United Arab Emirates and Kuwait will demonstrate their opposition to American strikes against Iraq by placing major contracts for new armaments in France and Germany. Thus, to demonstrate their gratitude for French-German resistance to American plans at the United Nations and NATO Saudis could replace their F-5 fighters with French Rafale instead of the British Eurofighter expected now or (if a symmetrical replacement of light fighters is in question) with Mirage 2000-9. The Arab demarche could be especially effective, if the UAE ventured to annul the contract for F-16 block 60 and purchase the same Rafale instead. However, Arab-American confrontation will hardly reach such an acute stage. Thankfulness to Germany may be expressed by imports of expensive Project 212diesel electric submarines.

T hirdly, in conditions of a world war that has actually begun between the Islamic and Western civilizations Saudi Arabia will evidently try to fortify "Muslim Prussia" - Pakistan. The Pakistani nuclear and missile programs are funded by Saudi Arabia and the UAE and regarded not only as national assets but also assets of the entire Islamic civilization. It would be logical to assume that the Saudis will increase assistance to Islamabad for purchases of conventional armaments not just its nuclear and missile programs. If this does happen, China will emerge as the greatest winner because it has become Pakistan's biggest partner in military-technical cooperation after France switched from the Pakistani market to the Indian.

Russia's opportunities

'Traditional' financially-constrained partners

C learly that the first ones to sense the threat of war after Iraq are countries that the United States attributes to the axis of evil or hostile nations, primarily Syria and Iran. Both are regarded as Russia's traditional partners in military-technical cooperation (MTC). However, in the past few years their purchases remained relatively low. The biggest Russian deal with Syria was the delivery of Kornet-E and Metis-M anti-tank systems for almost $140 million. After Russia withdrew from the restrictions of the Gore-Chernomyrdin protocol it signed contracts with Iran for 30 Mi-17 helicopters for approximately $150 million and for 300 BMP-2 fighting vehicles evaluated at $60 million by the Russian press[3] .

W e can hope that the current military threat will encourage Iran and Syria to think of large-scale purchases of more advanced Russian armaments. To strengthen their defense capabilities in the face of a possible American strike they must buy Russian Tor-M1 (SA-15) short-range SAM systems and the latest Igla-S MANPADs. The Tors and Iglas may be transferred in a matter of months unlike the powerful and expensive S-300PMU1/2 (SA-10) surface-to-air missile systems the production cooperation of which was undermined by the artificial marginalization of the Financial and Industrial Group Defense Systems and the formation on paper of the Air Defense Concern due to which their delivery may take years. The fulfillment of the Greek and Chinese contracts by Antey Concern and the Indian contract by Kolomna Machine-Building Design Bureau prove that Iran's purchase of powerful anti-ship missiles that would threaten the U.S. naval group in the Persian Gulf and seafaring in the Strait of Hormuz would be a strong military-technical response. Syria could pose an asymmetrical threat to Israel by purchasing Russian surface-to-surface high precision tactical missiles.

H owever, all these considerations are quite abstract and detached from reality in which the Russian leadership will not dare to deliver high tech arms, especially anti-aircraft weapons to Iran and Syria ahead of possible American strikes. It is curious to note in this context that deliveries of armored vehicles to the two countries have never aroused such a sharp reaction from the United States or Israel than even rumors of a possible transfer of air defense systems.

T he fact that Iran and Syria remain countries with limited resources that simply cannot afford to buy truly big batches of air defense systems and/or anti-ship missiles on their own remains another restraint.

Russia's chance in Saudi Arabia

I n conditions of the absolute military-technical and technological superiority of the United States any attempts to compete with it in the field of conventional arms or military hardware in general are doomed to failure from the very start. The responses of the Arab world could be only asymmetrical to the extent of surpassing the boundaries of purely military or any power instruments.

S audi Arabian responses will lie mainly in the political and economic spheres, not defense. The withdrawal of capital from the American economy with the purpose of undermining it and the stimulation of a split in the indivisible Western military-political space are already quite visible lines of the Saudi strategy. The stance of France attracts special attention in this context. Clearly that one of the most Islamized countries in Europe is forced to maneuver very cautiously in the clash of civilizations. But there is also the other side to the matter. Saudi Arabia will surely pay generously for the political stance of Paris by placing arms contracts for billions of euros. We want to remark in this connection that Arab arms purchases in general rarely have the objective of building up the military-technical foundation of security. Much more frequently it is an instrument of buying security guarantees or foreign policy support.

I n these conditions Russia is getting a unique chance of using its remaining political influence at the UN Security Council for a breakthrough to the Saudi Arabian arms market that used to be closed to it. It seems that even a simple veto at the UN Security Council on Anglo-American draft resolutions could have been exchanged for contracts to the tune of $1.5 billion. A more systemic and long-term policy aimed at preserving the present status quo in the Middle East could bring $5-7 billion to the Russian high tech sector.

Risks in India

I f we remain in the framework of the Huntington methodology and theory of the beginning of a global clash between the Western and Islamic civilizations, we will have to assume that a noticeable rapprochement of the United States and India should be expected in the nearest future. While destroying Iraq, a key economic tool of the Saudis, the United States cannot overlook Pakistan - the main military mechanism of the Islamic world. Clearly the cheapest and most effective way of pressuring Islamabad is to build up the military might of India and if need be to provoke an armed conflict between the two countries. In this context it should be said that despite the outward absolute superiority of India over Pakistan in conventional armaments Delhi has not ventured to take radical military steps during the military alert after the act of terrorism in parliament. Consequently we can assume that Indian military experts are quite critical about the outcome of the 1999 Kargil armed conflict. There is no need to prove that the United States has the military hardware in its arsenals the acquisition of which would make the Indian military more confident of their might. It should also be remembered that in 2002 MTC between the two countries jump-started to $190 million even in the absence of contracts for major arms systems.

O n the whole it seems that the unfolding of the Iraqi crisis is opening up chances for Russia on the markets of Persian Gulf oil monarchies but simultaneously creating additional risks to its relations with India the current stage of which should be regarded as critical even without them.

1. The contract was signed in November 1997.
2. Contracts for a total of 100 vehicles were signed in August 1999, in summer 2001 and in January 2003.
3.Alexei Nikolsky, Rossiya vooruzhayet Iran, Vedomosti, 12.02.2003. The price of the contract seems understated.