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#6 - JRL 7014
Russian Business Leader Warns of Economic Impact of Gulf War

Moscow, 12 January: Russian business stands to lose in Iraq, Georgiy Petrov, vice-president of the Russian Chamber of Commerce and Trade, has told Interfax.

"Russian companies have major economic interests in Iraq. They have signed contracts with that country, are involved in tenders, and are prepared to build railways and ports in Iraq. Iraq is Russia's debtor, and is also a vast market for selling equipment for the steel, oil and petrochemical industries," said Petrov, who is responsible for the Chamber of Commerce and Trade's foreign relations. He noted, however, that reports about the USA's intention to take Russia's interests in Iraq into account cannot influence Russia's position on the Iraq issue.

"Foreign policy cannot be made a matter of bargaining. The use of military force is possible only in accordance with the UN Charter. Otherwise, important mechanisms of international cooperation created after World War II may come under threat," he said.

Petrov believes that a strike against Iraq, unauthorized by the UN, "may split the Arab world, which could entail global consequences for the world economy and politics, and create new problems in the struggle against international terrorism".

He also thinks that the oil factor in the Iraq conflict is being overly exaggerated.

"In better times, Iraq exported about 3m barrels of oil per day. Now it exports some 2m barrels, of which one-third is bought by the USA. OPEC extracted about 29m barrels per day in 2002, or more than 40 per cent of the world's oil output totalling 77m barrels per day," he said.

In this context, the share of Iraqi oil as such shouldn't cause any major price fluctuations on the world market. But if oil exporters in neighbouring Arab countries become entangled in a Gulf conflict, "the oil market will become unpredictable", Petrov said.

However, there are certain things that inspire optimism, he continued. "A political settlement based on UN Security Council Resolution 1441 is in progress and international inspectors continue to work in Iraq," he said. He believes, however, that the concentration of military force in the region may reach its critical mass and go off.

"Military operations in other countries and regions suggest that problems could remain unsolved even after a military strike," Petrov said.

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