#12 - JRL 7023
January 17, 2003
DIMITRY SIMES: THE UNITED STATES WILL TAKE HEED OF RUSSIA'S INTERESTS IN IRAQ
But only to the extent to which Moscow helps Washington with the Saddam Hussein problem
Author: Yevgeny Verlin
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
DIMITRY SIMES, HEAD OF THE NIXON CENTER - A THINK-TANK CLOSE TO MODERATE REPUBLICAN CIRCLES IN THE UNITED STATES - IS COMING TO MOSCOW ON SUNDAY WITH A DELEGATION OF BUSINESS LEADERS AND POLITICIANS. HERE HE TALKS ABOUT SADDAM HUSSEIN, THE BUSH ADMINISTRATION'S MOTIVES, AND THE ROLE OF RUSSIA.
An interview with Dimitry Simes, head of the Nixon Center
DIMITRY SIMES, HEAD OF THE NIXON CENTER - A THINK-TANK CLOSE TO MODERATE REPUBLICAN CIRCLES IN THE UNITED STATES - IS COMING TO MOSCOW ON SUNDAY WITH A DELEGATION OF BUSINESS LEADERS AND POLITICIANS. SUCH TRIPS USUALLY TAKE PLACE AT MOMENTOUS TIMES IN BILATERAL RELATIONS.
Question: Do you think Russia's oil interests in Iraq will be taken into consideration if a new regime is established there?
Dimitry Simes: The legitimate and important interests of the Russian Federation will be taken into consideration in any solution to the Iraq crisis. This is the official position of the US Administration. President George W. Bush said as much to Vladimir Putin on more than one occasion - in their telephone conversation and during the latest meeting in St. Petersburg. This position was reiterated in Russia as well, during talks between Colin Powell and Igor Ivanov and at other levels.
It is absolutely clear that the United States is interested in diversifying its energy sources, and views Russia as a major potential source. There is not yet a new government in Iraq. As for the possibility of another regime over there, I suppose official Washington has already decided who is going to rule Iraq after Saddam Hussein, and how. But I do not mean that there is some kind of puppet government in Washington, waiting to be airlifted to Baghdad.
Question: Russia would have preferred firmer "guarantees"...
Dmitry Simes: It is clear that no guarantees can be offered at this point. No one can say what the future government of Iraq will do. Washington cannot guarantee anything, you understand.
We assume, however, that if the Iraqi regime were to be replaced, it would happen largely with the help of the US Armed Forces. Besides, post-war restoration in Iraq would proceed with American assistance as well. It means that the United States is going to have substantial leverage over the major decisions of the government of Iraq, at least at first. We intend to use this influence and leverage to see to it that Russia's legitimate interests in the oil sector and state debts are heeded.
I do not think that the US Administration can offer any more specific or binding guarantees.
Question: Will America flood the world with cheap Iraqi oil afterwards?
Dimitry Simes: No one is concerned about the prospect of the potential military operation in Iraq (provided it takes place at all, that is) pushing oil prices to below $18. Everybody fears that oil prices will rise to $50 a barrel. Remember how Saddam Hussein set fire to oil wells in Kuwait in 1991? Intelligence reports that official Baghdad is considering similar treatment for its own oil wells in the event of war. It does not take much time to set remote-controlled bombs... What I mean is that predicting future oil prices is next to impossible.
I'm confident that lower oil prices are not what the United States is seeking. The more I talk to officials of the US Administration (and there are different opinions there, some officials object to the military operation), the more I become convinced of it. The real motives are the ones Bush advocates in public. The matter concerns a deadly combination of weapons of mass destruction and terrorism.
It is clear that the effectiveness of the United States as a great power cannot be regarded separately from the Israeli-Palestinian conflict. But Iraq is an instrument of Palestinian radicalization, something that negates all attempts at crisis management. As such, it has a negative effect on fundamental American interests. This is another point against Saddam Hussein, as far as the United States is concerned. An Israel-hater, this man encourages the suicide bombers and sponsors them. By the way, not everybody in the United States likes Ariel Sharon or believes that the United States should follow in the wake of Israeli policy. These people understand that the suicide bombers will merely embitter public opinion in Israel. In short, Saddam Hussein is an obstacle to Israeli-Palestinian dialogue, and that makes the United States even more vulnerable at the international leve. And I do not mean in the Mideast alone.
Question: No one calls Saddam Hussein an "obstacle" in Moscow...
Dimitry Simes: Well, there are serious motives behind the US Administration's concerns. But motives do not always grow out of proportion, in order to make military operations essential. I do not think the geopolitical motives we've mentioned are sufficient. Needless to say, the position taken by Russia, China, France, and other states is of paramount importance. As far as the United States is concerned, the war on Iraq is not a jihad in which you go to extremes regardless of the consequences for yourself or the enemy. This is an important military-political action. That is why the US Administration is bound to give the matter serious thought before going ahead with it, if it fails to prove to its allies and its own Congress that Saddam Hussein disregards the UN Security Council resolution, refuses to disarm, and is hiding weapons of mass destruction.
Question: Let us get back to oil. Surely, low oil prices will only benefit the West in general and the United States in particular.
Dimitry Simes: Do not forget that falling oil prices will primarily strike at Bush's traditional groups of support. I'm talking about American oil companies. Yes, prices under $18 a barrel will be a serious blow to Russia; but for Alaska it would be a catastrophe. It will be a blow no less serious for the oil produced in Texas and in the Mexican Gulf, given its cost of production. It is therefore illogical to assume that the United States wants low oil prices. And do not forget American allies, countries like Norway - or Britain, which is to become a major participant in the anti-Saddam coalition. Had they thought the military operation would bankrupt them, Tony Blair would have never supported it.
There are other considerations as well for why the United States would not want oil prices to fall significantly. It would affect Iran, Saudi Arabia, and other conservative regimes.
And another detail: the war will result in a lengthy period of instability in Iraq, and instability does not encourage investment or economic growth. I understand that the people in charge of the national economy in Russia cannot help considering all this, but in their place I would not have it become an idee fixe, or exaggerate the danger of falling oil prices.
Question: But not everyone in the American establishment likes Russia...
Dimitry Simes: In the United States, there are different groups, different views, and different opinions on absolutely everything - including Russia. But as for the US Administration and the Congress, I'd say that they lean towards cooperation with the Russian Federation.
When we discuss the legitimate interests of Russian oil companies in Iraq, the attitude towards them will depend on Russia's position in the war (if it takes place). Will Russia protest, as it did during the operation in Bosnia? Or will it find a different formula for more active participation? As a rule, participants can claim more in terms of dividends.