Energy concerns drive China-Central Asia defence ties

Here’s the latest of my Central Asia series of Oxford Analytica briefs. This one is from late February.

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In shaping its relations with Central Asian states, Beijing has primarily focused on developing energy imports and forging economic ties in other areas. At the same time, China faces several security concerns emanating from the region, most importantly, Islamic radicalism and regional separatism. Beijing has been attempting to address these concerns via multilateral and bilateral cooperation with Central Asian states. The conflicts and tensions are likely to become more acute as NATO begins to withdraw from Afghanistan.

Impact

  • China’s desire to avoid alienating Russia has prompted it to de-emphasise military ties in favour of economic and trade relations.
  • Most Central Asian states prefer the focus on trade relations with China, although Uzbekistan has recently sought to increase military ties.
  • Chinese leaders favour multilateral initiatives, which countries in the region regard as less threatening than bilateral approaches.

Analysis

Although China has long sought to increase its influence in Central Asia, it has sought to do so largely through economic and trade relations, rather than in the security sphere. As a result, China’s military ties with Central Asian states are relatively limited. This is due to a combination of factors:

  •  Beijing is keen to avoid alienating Moscow, which continues to see itself as the primary guarantor of Central Asian security.
  • Central Asian leaders are concerned that China is already enjoying a disproportionate degree of influence in the region. This has led them to be extremely cautious in extending military cooperation.
  • China is reluctant to become the region’s main security guarantor, due to a combination of its long-standing policy of non-interference abroad, and more significant security challenges elsewhere, especially in its maritime region.

Multilateral initiatives

The primary mode of interaction between China and the Central Asian states in the security sphere revolves around multilateral initiatives organised through the Shanghai Cooperation Organization (SCO). These are closely related to China’s desire to combat terrorism, separatism and extremism. As a result, most multilateral security activities in the region that involve China revolve around counter-terrorism.

Peace Mission exercises

The Peace Mission series of counter-terrorism exercises have been held since 2003. The most recent took place in Tajikistan in June 2012 and included participants from all of the SCO member states except Uzbekistan. This was the smallest of the eight exercises held to date, highlighting the lack of emphasis on the military component of regional cooperation within the SCO. Uzbekistan has consistently refused to participate in the SCO exercises. The Uzbek leadership’s fear of domination by external powers — Russia, in particular — has made it keen to avoid any possibility that potential conflicts among Central Asian states might be internationalised.

RATS

China has also established a regional organisation dedicated to fighting terrorism. The Regional Anti-Terrorism Structure (RATS) of the SCO is dedicated to coordinating the anti-terrorist activities of member states, with a particular focus on radical Islamist organisations. RATS was established in 2004 and is headquartered in Tashkent, capital of Uzbekistan. In recent years, it has expanded its activities to include counter-narcotics coordination.

Bilateral cooperation

Kazakhstan is the most significant partner in China’s bilateral security activities in Central Asia. The two countries have had regular military exchanges since 1993 and have engaged in numerous, though mostly small-scale, military exercises since 2002. As with the multi-lateral activities, China’s military engagement with Kazakhstan focuses on non-traditional threats such as terrorism and drug trafficking. China provides a significant amount of military assistance to Kazakhstan, but it is limited almost entirely to non-lethal equipment.

Kyrgyzstan

China’s security relations with Kyrgyzstan are more limited and opaque. They are focused primarily on countering Uighur separatist networks. Beijing has also provided equipment to the Kyrgyzstani security forces, but as with Kazakhstan, this has been limited to non-lethal goods such as vehicles and computers.

Turkmenistan and Tajikistan

Security relations with Turkmenistan and Tajikistan are not a priority for China. With Turkmenistan, the basis of the bilateral relationship is natural gas exports. Security assistance is provided by Beijing in order to ensure that pipelines and other energy infrastructure are protected. China’s interests in Tajikistan are also very limited due, in part, to the widespread hostility towards the Chinese in Tajikistan, which is largely driven by the success of a recent Chinese effort to renegotiate the border between the two countries.

Uzbekistan

Uzbekistan withdrew from the Russia-led Collective Security Treaty Organization (CSTO) in June 2012, not long after President Islam Karimov had signed a strategic partnership agreement with China on the sidelines of an SCO summit. These circumstances, in conjunction with a prior visit to Tashkent by the chief of the Chinese General Staff, have led to speculations that Karimov decided to strengthen the security partnership with China at the expense of the traditionally strong ties with Russia’s military and security establishment. So far, China has not given any indications that it is eager to make this relationship deeper than its security relations with the other four Central Asian states.

Afghanistan concerns

Beijing is concerned with the potential spread of Islamic radicalism and political instability in Central Asia in the aftermath of NATO’s planned withdrawal from Afghanistan. It is particularly worried that instability in Central Asia would negatively affect its ability to import energy. The potential for the instability to spread to Xinjiang is an important secondary concern. Both of these threats may be realised if Afghanistan returned to a state of civil war or if the Taliban came back to power and began to export its ideology and methods of governance to Central Asia.

China will continue to tread cautiously, since the political reservations that limited its military involvement in Central Asia are equally relevant for Afghanistan. It will seek to ensure that its security initiatives in the region remain largely multilateral.

What next

China will continue to emphasise economic relations with Central Asia while soft-pedalling military ties, which will largely focus on the security of Chinese energy imports and continued stability in Xinjiang. Despite increased security concerns in the aftermath of the NATO withdrawal from Afghanistan, China will not attempt to become a regional security guarantor. It will leave that role primarily to Russia and focus instead on establishing its economic dominance in Central Asia.

Great Powers vie for sway in Central Asia

Here’s an Oxford Analytica brief from early February on basing in Central Asia.

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As NATO and the United States prepare to withdraw the bulk of their military forces from Afghanistan in 2014, both regional powers and local actors in Central Asia are preparing for the aftermath. NATO countries have already negotiated short-term access to new and existing military bases in the region to facilitate the step-by-step withdrawal of their troops. At the same time, the United States and Russia are working out deals with local players to maintain their military presence in an effort to preserve regional security, as well as guarantee their long-term influence in Central Asia.

Impact

  • The Russian military presence in Kyrgyzstan is becoming more entrenched due to the recent changes in the legal status of its facilities.
  • US influence in Central Asia will decline after NATO’s withdrawal from Afghanistan, as the region is not a US foreign policy priority.
  • Given its de facto economic dominance in Central Asia, China is cautious about stepping up its military involvement in regional affairs.

What next

The Western focus on Afghanistan will decline after the NATO operation is completed. The United States will seek to maintain a presence at the Manas base in Kyrgyzstan, but the number of personnel there will depend primarily on the supply needs of the US troops remaining in Afghanistan after 2014. Russia, on the other hand, will aim to solidify its position as the dominant regional security provider. Finally, China will continue to strengthen military ties with Central Asian states, though it will stop short of the potentially incendiary step of sending its forces to the region.

Analysis

Over the past few months, discussions of post-2014 military bases in Central Asia have resurfaced. Although Moscow and Washington remain the key contenders in their efforts to ensure continued military access to the region, several other countries involved in NATO operations in Afghanistan have sought to secure access to the bases as they are beginning to plan troop withdrawals. For example:

  • Germany wants to maintain its lease on the base in Termez, Uzbekistan; and
  • France recently signed an agreement with Kazakhstan to develop a military transit hub in Shymkent.

Both countries are almost certainly going to pull out of these bases once the withdrawal of their troops is complete. Russia and the United States, on the other hand, will likely stay for the longer term.

US-Russian Manas rivalry

The Manas transit centre in Kyrgyzstan served as the key link in the US effort to bring equipment and troops to Afghanistan. It is poised to play a similar role during the US withdrawal from the region. At the same time, there is a great deal of competition for access to Manas after 2014.

United States

Kyrgyzstan’s President Almazbek Atambayev sees the base as a regional airport. The United States appears to support Atambayev’s plan and has already submitted a proposal to transform the facility into a civilian aviation hub. This may prove beneficial in future negotiations with Kyrgyzstan should Washington decide to retain some local military presence. The mid-January visit to Bishkek by the US Assistant Secretary for South and Central Asian Affairs Robert Blake was widely perceived as the first step toward bilateral discussions on the future of the Manas Transit Centre.

Russia

Moscow is also keen to provide assistance for Manas redevelopment as it seeks to ensure base access while, at the same time, hoping to prevent the United States from remaining in the country. A delegation of Russian state officials visited Bishkek in December 2012 for discussions about the possibility of establishing a joint Kyrgyzstani-Russian logistics centre at Manas.

Russia: Access to Kyrgyzstan facilities

In December 2012, Russia succeeded in convincing Kyrgyzstan’s government to allow it to consolidate into a unified military base its existing local facilities. These consist of:

  • a weapon test range in Karakol;
  • a signals centre in Kara-Balt;
  • a radio-seismic laboratory in Mayly-Suu; and
  • an airbase in Kant.

Until now, these facilities were governed by several agreements that made them more vulnerable to political pressure from the Kyrgyzstani side. To reduce the risk, Moscow had been looking to change their status for the last two years. The new agreement will last for at least 15 years.

The deal appears to have ended speculation that Russia was planning to build a second military base in southern Kyrgyzstan near Osh. Although Moscow was keen to build a base in that region for several years, the importance of this initiative diminished after the United States announced in the summer of 2010 that it will not proceed with its plans to establish a counter-terrorism training centre in the area.

Russia: Long-term presence in Tajikistan

In October 2012, Russia finalised with Tajikistan an arrangement to extend its lease on local military facilities for 30 years. Tajikistan agreed to forego significant rent payments in exchange for:

  • 200 million dollars toward the modernisation of its armed forces;
  • additional economic assistance, including Moscow’s help with the construction of hydroelectric power stations; and
  • fewer restrictions for Tajik migrant labourers in Russia.

Fuel supplies hurdles

Several obstacles have been delaying the ratification of the agreement in Tajikistan’s parliament. They include duty-free Russian fuel shipments. Moscow insisted on a clause that would prevent Dushanbe from re-exporting the fuel and, after initial reluctance, Tajikistan relented in late January 2013.

Migration issues

The two sides remain at odds over restrictions imposed on Tajik guest workers. The current migration agreement stipulates that Tajikistan nationals are allowed to stay in Russia for 15 days without registration and are eligible for a work permit of up to three years. Dushanbe is seeking to improve the terms of the agreement while, on its part, Moscow is requesting that Tajikistan control the flow of migrants by sending them through dedicated organisations. Migration law is a critical issue for Tajikistan; remittances from its migrant workers in Russia comprise almost half of the country’s GDP.

Despite delays in negotiations, both sides appear committed to completing the deal, which is likely to be ratified in Tajikistan’s parliament in the next 1-2 months.

China: Military reluctance

Although China has strengthened its military ties with Central Asian states through frequent multi-national exercises and occasional arms sales, it has not attempted to establish a permanent military presence in the region. The strategy is part of an effort to assuage the fears shared by Central Asian leaders of excessive Chinese dominance. It also addresses Russia’s concerns of being displaced by China as the security guarantor, having already been sidelined in the economic realm.

The modernization of Russia’s nuclear submarine forces

Yet another Oxford Analytica brief. This one from January. Planning to resume new posts in June, though there will be a couple more OA briefs posted in May.

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The nuclear-powered ballistic missile submarine (SSBN) Yury Dolgoruky officially became part of the Russian navy on January 10, more than a decade after it was initially contracted. It is the lead vessel of the Borey class, equipped with the new marine-launched ballistic missile system (SLBM) Bulava, which has a maximum range of over 8,000 kilometres. The Yury Dolgoruky was commissioned soon after the launch of SSBN Vladimir Monomakh, the third submarine in the series, in late December. These developments have led to conjectures that Russia may again pose a serious security threat to the United States and its NATO allies.

Impacts

  • Work on the Borey and Bulava projects will help Russia assess quality control issues and improve production in other areas.
  • The Russian defence budget will continue to prioritise nuclear weapons, limiting Moscow’s ability to modernise its conventional military.
  • Moscow’s defence upgrades will not have a major impact on US-Russian relations, which are increasingly focused on other issues.

ANALYSIS: In February 2011, Russia’s former deputy minister of defence announced the launch of the State Armament Programme 2020, stressing that the modernisation of Russia’s strategic nuclear weapons would be a top priority.

Motivating factors

Moscow’s decision to focus on nuclear modernisation is motivated by several practical and strategic considerations:

  • Outdated nuclear arsenal: The bulk of the arsenal is approaching the end of its service life.
  • Insufficient conventional forces: Russia’s non-nuclear forces cannot, on their own, deter potential conflicts with major powers.
  • Protection: A solid nuclear arsenal would help protect Russia’s interests, including its economic stakes in the Arctic.
  • ‘Superpower’ status: Nuclear forces are one of Russia’s few remaining claims to a prominent position in the international system.

Critically, modernisation efforts should not be misinterpreted as a serious new threat to NATO.

Strategic naval forces

The Russian navy currently operates a fleet of six Delta IV and three Delta III SSBNs.

Outdated fleet

The older Delta IIIs, based in the Pacific Fleet, are armed with 16 SS-N-18 missiles per boat, carrying three warheads each. These submarines first entered service in the late 1970s and are now approaching the end of their lifespan. The Delta IV SSBNs, which are based in the Northern Fleet, are each armed with 16 SS-N-23 Sineva missiles carrying four warheads per missile. They entered service in the mid-1980s and are gradually being overhauled in order to extend their lifespan by an additional ten years. The oldest submarines will be decommissioned in 2019 and the last of the class is expected to be retired by 2025. Because of the overhaul schedule, in recent years, between six and seven strategic submarines were on active duty at any one time.

Modernisation

The Delta IIIs are slated to be replaced by three Borey-class submarines, which are expected to be commissioned over the next two years. Following the commissioning of Yury Dolgoruky, the first of these SSBNs, earlier this month, the navy will be commissioning the Aleksandr Nevsky later in 2013 and the Vladimir Monomakh in 2014. Each of the nuclear-powered submarines will contain 16 launch tubes for the Bulava missile. Subsequent hulls — known as Project 955A — will be modified to carry 20 Bulava missiles.

According to the State Armament Programme, another five modified Borey submarines will be commissioned by 2020, bringing the total number of next generation SSBNs to eight. Since the six Delta IV submarines are slated to retire between 2019 and 2025, the construction schedule for the new submarines can be extended by up to five years without forcing the Russian military to reduce its current active fleet of eight SSBNs, which it perceives as the necessary minimum for maintaining Russia’s strategic deterrent capability.

Expansion

In the longer term, there is a chance that Russia will increase its SSBN fleet from eight to ten units either through the procurement of two additional modified Borey submarines or the construction of a new class of SSBNs. The ultimate decision to expand will depend on the availability of funding as well as the successful completion of the Bulava missile tests.

Missile problems

The Bulava is the sea-based version of the SS-27 and RS-24 missiles. In contrast to its land-based prototypes, its development ran into serious obstacles during the initial testing phases. In eight of the first twelve flight tests, the Bulava suffered critical failures.

Bulava problems rectified?

According to the weapon’s lead designer, the problems were due to lack of necessary equipment and insufficient oversight. Moreover, the Russian industry was unable to provide Bulava manufacturers with the necessary components in a timely manner. The production team has recently increased control over the production process, which appears to have paid off: since October 2010, there have been seven consecutive launches of the Bulava, all of them successful.

Further production issues

In July 2011, the Ministry of Defence announced its plans for the serial production of the Bulava. The next launch was expected to take place in October 2012. However, it was postponed until July 2013 because of unresolved problems with automated control systems for the launch mechanism. As a result, the Yury Dolgoruky submarine was commissioned with 16 empty missile containers. Without the missiles, the submarine has little practical value, which places a great deal of pressure on the defence industry to solve the outstanding problems as quickly as possible.

Implications

Since the end of the Cold War, nuclear arms have become largely peripheral to US-Russian relations. Instead, issues such as energy security, international terrorism and the future of newly independent states on Russia’s periphery have taken centre stage. The ongoing dispute with NATO concerning plans to erect a missile defence shield over the alliance’s territory appears to be primarily due to Russia’s perception of having been excluded from the European security infrastructure, rather than to fears of a nuclear attack by the United States or its allies.

CONCLUSION: The defence industry will endeavour to resolve the remaining technical problems with the Bulava, indispensable to the new generation of strategic submarines, which were designed simultaneously with the missile system. The missile will likely be fully operational by the end of 2013. Given that the new submarines are primarily intended to replace existing SSBNs that are nearing the end of their lifespan and that the role of nuclear arms has become less prominent in the US-Russian security relationship over the past decades, SSBN modernisation should not be misinterpreted as a new threat to NATO.

 

Russia and China vie for influence in Central Asia

I’m still swamped with various projects, so in the meantime, here’s another Oxford Analytica brief. This one is from mid-December…

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Although China and the United States have focused greater attention on Central Asia in recent years, Russia remains the dominant power in the region. Its size and the cultural, political and economic connections that remain from the Soviet period are such that Central Asian countries are reluctant to take any actions that would antagonise Moscow. For Russian leaders, Central Asia serves as a buffer zone that protects Russia’s southern border from potential threats.

Impacts:

  • Increasing Chinese economic presence in Central Asia will curtail Russia’s efforts to limit China’s regional political influence.
  • After NATO’s exit from Afghanistan, Russia and Central Asian states will cooperate to prevent radical Islam from destabilising the region.
  • Shifting patterns of energy demand and supply will reduce Russia’s ability to use energy as a tool for political influence.

ANALYSIS:

Russia’s various initiatives in Central Asia are shaped by three interest groups with widely divergent interests that often work at cross-purposes to each other:

  • The military and defence industry is focused on the role of great power competition in the region; it seeks to promote arms sales and to increase Russia’s military presence.
  • The energy industry focuses on securing exclusive rights to gas transit from Central Asia to Europe.
  • The security services concentrate on the transnational threats to Russia from radical Islam, terrorism and drug smuggling.

Maintaining monopoly

Throughout the last decade, Russia sought to maintain its energy-transit monopoly on the export of petroleum and natural gas from Central Asia. Until 2005, all major export pipelines from the region went through Russia giving it control over transit fees. Russia’s monopoly over natural gas transit to Europe also gave it political and economic leverage over downstream countries dependent on supplies of Russian natural gas for domestic consumption.

The construction of alternative pipelines over the last decade has eliminated Russia’s monopoly on hydrocarbon transit from Central Asia. Energy-producing states in the region can now sell their products to China and Iran. At the same time, changes in patterns of supply and demand for natural gas in Europe have decreased the political and economic significance of Russia’s remaining monopoly on natural gas supply to some European countries. The development of new methods of shale gas extraction in the United States has increased the supply of LNG to Europe at the same time as the 2008-09 global financial crisis has led to a sharp drop in demand for natural gas.

These factors decreased Russia’s ability to set prices and to use its control of energy supply for political ends, thus reducing the importance of future Caspian pipeline transit. Russia is now likely to focus on energy production in the Caspian Sea region and has already begun to develop several oil and gas fields that it controls jointly with Kazakhstan.

Keeping China at bay

China has sought to increase its economic and political influence in Central Asia without alienating Russia for a number of reasons. For example:

  • Central Asia has become one of China’s primary energy suppliers;
  • Central Asia serves as a security buffer zone between China and both Russia and the United States; and
  • China seeks to prevent Uighur separatists in Xinjiang from using Central Asia as a safe haven.

To further these goals, China made large investments into the Central Asian economies and, in particular, in energy infrastructure. The region provides raw materials to China in exchange for finished products such as machinery, food and consumer goods.

Russian leaders fear that their country’s position in Central Asia is gradually being displaced as China’s political influence and economic power grow. To maintain its sway in Central Asia, Russia has focused on ‘tying’ China into regional networks and institutions while retaining levers of influence through institutions in which China is not a member.

In the security realm, Russia has combined participation in the Shanghai Cooperation Organization (SCO) with its role in the Collective Security Treaty Organization (CSTO). While the SCO provides a neutral forum where Russia can discuss security and plan joint operations and exercises with China, the CSTO allows Russia to address Central Asian security issues without China’s participation. At the same time, Russia has sought to counter China’s economic influence in Central Asia by setting up the Customs Union, which, in 2014, is expected to include Kyrgyzstan and Tajikistan. Recent discussions concerning the establishment of the Eurasian Union in 2015 are also part of the effort to cement Central Asian economic ties to Russia.

Ensuring political stability

Although most of the regimes in the region have endured for over 20 years, Central Asia is now entering a period of potential political instability.

  • Uzbekistan, Tajikistan and Turkmenistan are all bracing for a potential resurgence of Islamist radicalism in the aftermath of the likely US withdrawal from Afghanistan in 2014.
  • Kazakhstan and Uzbekistan — both states ruled by authoritarian presidents in their mid-1970s — are highly vulnerable to succession risks.
  • Kyrgyzstan is still recovering from two episodes of violent regime collapse in the last decade.

The potential destabilising influence of radical Islamist groups and drug smuggling networks is a key concern for Russia. Moscow believes that the current Central Asian leadership has been able to contain the threat of radical Islam and is worried that a regime change, combined with the withdrawal of NATO troops, would facilitate the spread of radical Islam to Russia.

These concerns have led Russia to provide various forms of security assistance to the region’s more vulnerable states. In the last year alone Russia has:

  • extended leases on military bases in Kyrgyzstan and Tajikistan;
  • sold weapons to Kazakhstan and Turkmenistan;
  • sought to persuade Uzbekistan to re-engage with the CSTO; and
  • agreed to provide 1.3 billion dollars to Kyrgyzstan and Tajikistan to modernise their military forces and ensure their security after the departure of Western troops.

The extension of Russia’s military base agreements with Central Asian countries, together with Kyrgyzstan’s decision to ask the United States to vacate the Manas base after the NATO departure from Afghanistan, will leave Russia as the sole security provider to vulnerable states in the region.

CONCLUSION: Russia’s security relations with Central Asian states will strengthen as they face the consequences of NATO’s withdrawal from Afghanistan in 2014. At the same time, Moscow’s efforts to remain the dominant economic partner of the region’s key players will likely falter as China strengthens its position as the main recipient of Central Asian energy exports and a key supplier of imported consumer products.

Russian Military reform moves beyond Soviet legacy

Here’s an Oxford Analytica brief I wrote a few months ago. This was originally published November 19, 2012. There have been a number of new developments since then, but this is still worth reading for my perspective of what worked, what didn’t, and what challenges Shoigu will be facing in the near future…

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SUBJECT:Key accomplishments of Russia’s military reform and its mid-term prospects.

SIGNIFICANCE:Russia’s defence industry remains in a fairly decrepit state, plagued by outdated equipment, lack of experienced personnel, inefficient production processes and extensive corruption. Government efforts to revive the industry through restructuring and targeted investment have produced few improvements, creating instead a large number of unwieldy government-controlled monopolies.

ANALYSIS: Impacts

  • A mobile and well-equipped military will enable Russia to become a more efficient player in local and regional conflicts.
  • The higher budget allocations could translate into higher salaries for the military, raising the prestige of military service.
  • The defence industry’s difficulties in manufacturing ultramodern equipment will hinder the efforts to improve Russian military capabilities.
  • Recent personnel changes in the Ministry of Defence (MoD) provide an opportunity to assess the state of the Russian military after four years of reforms and the issues that it is facing at the start of the incoming defence minister’s tenure.

Russia’s most successful defence minister?

One of the greatest successes of former Defence Minister Anatoly Serdyukov was the radical military reform that he launched in the immediate aftermath of Russia’s war with Georgia in August 2008.

More mobility

Working closely with Chief of the General Staff Nikolai Makarov, who masterminded much of the reform, Serdyukov succeeded in dismantling the Soviet-era structure of the Russian military and replacing it with a structure more suited to 21st century warfare. He substituted the unwieldy divisions geared towards fighting large frontal wars with much more mobile and largely self-sufficient brigades.

Faster mobilisation

The reform also ended the Russian military’s dependence on mass mobilisation to fight its wars. During the post-Soviet period, many military units existed mostly on paper and were staffed by only a few officers in charge of warehouses filled with unusable weapons and equipment. It could take up to one year for most of these units to become combat-ready. Under Serdyukov, they were eliminated, and the military began a gradual transition to a structure based on fully staffed units that could mobilise in less than a week. Some of these units should be able to respond to a sudden conflict within 24 hours.

Better inter-service cooperation

The military also made great strides in becoming better coordinated in its operations. Under the previous command structure, inter-service cooperation on the battlefield required coordination from Moscow. This led to numerous incidents of miscommunication that resulted in losses to friendly fire and problems with essential combat requirements, such as the timely provision of air cover for advancing ground forces. The establishment of four regional unified strategic commands allowed local commanders to organise all military elements in their respective region, which greatly enhanced inter-service cooperation.

All of these organisational changes have been made in an effort to enable the Russian military to respond more quickly to unexpected local or regional conflicts. These are the only types of wars that the Russian military has been engaged in since the Afghanistan conflict of the 1980s. Military planners expect this to be the most common form of warfare in the foreseeable future as well.

Failed reforms

Although he did a great deal to rid the Russian military of its Soviet legacy, Serdyukov was far less successful in interpersonal matters: the minister’s lack of military experience and his hard-charging style, which earned him the nickname ‘Bulldozer’, alienated most of the senior and junior officers under his command.

Military continues to face housing crisis

Although military salaries were increased substantially during Serdyukov’s term, the MoD failed to fulfil its long-standing promise to provide its serving and retired officers with acceptable housing. Although the MoD asserted that large numbers of apartments were being constructed, many eventually turned out to be uninhabitable because of poor construction methods. At the same time, a rapid reduction in the number of serving officers resulted in yet more retired personnel on waiting lists for permanent housing.

Corruption remains rampant

Before Serdyukov became head of the MoD, the military was widely known as one of Russia’s most corrupt institutions, with senior officers accumulating large amounts of money by redirecting procurement and construction funding and using conscript labour for personal needs. The circumstances surrounding Serdyukov’s removal suggest that his goal of stamping out corruption in the military during his tenure was far from being achieved.

Challenges ahead

Shoigu, the new minister of defence, has maintained a relatively clean reputation throughout his tenure as minister for emergency situations and as the governor of the Moscow region. He also appears to have the support of senior officers, most of whom despised his predecessor. However, the military he has inherited is still facing a number of serious challenges.

Military remains small and untrained

The most pressing problem is the military’s lack of soldiers. A decline in childbirth in the early 1990s has resulted in a corresponding drop in the number of 18-year-old men available for conscription. At the same time, salary increases and improvements in living conditions have done little to encourage Russians to serve in the military as contract soldiers. As a result, the military is facing significant personnel shortages. Moreover, the military’s inability to attract a sufficient number of contract soldiers also affects its battlefield readiness: conscripts who serve for only a year before demobilisation do not have enough training to handle the modern weapons that the military hopes to acquire by 2020.

Need for more modern equipment

The second major challenge facing the new defence minister is the implementation of a highly ambitious ten-year rearmament programme that is expected to modernise 70% of Russia’s weapons by 2020. Serdyukov and Makarov had made many enemies in the defence industry by insisting that the MoD would not pay inflated prices for substandard, domestically manufactured equipment. Shoigu, at least initially, appears poised to take a softer line with the industry. This may win him friends but is also likely to burden the military with outdated and overpriced weapons systems.

CONCLUSION: As Russia’s new defence minister, Sergei Shoigu faces several key challenges: he will need to modernise military equipment, raise the number of well-trained personnel and crack down on widespread corruption. Shoigu will have to walk a fine line between remaining on good terms with the military-industrial lobby and seeing through the reforms initiated by his predecessor.

Iran’s S-300 lawsuit against Russia may backfire

I’m resuming posting briefs I write for Oxford Analytica. This one was published in early September.

In July, news broke that Iran had filed an arbitration case in Geneva seeking a 4 billion dollar fine against Russia for cancelling its contract to sell S-300 anti-aircraft missile systems to Iran. There has been speculation that the claim is actually part of a move by the two sides to restore the contract, perhaps as part of a larger deal that would have Russia resume significant military sales to Iran. In fact, Tehran’s move has angered Moscow.

Impact

o   The presence of the S-300 systems would make Iranian nuclear installations much less vulnerable to attack by Israeli or Western forces.

o   The situation complicates Russia’s relations with Iran, and makes it harder for Moscow to maintain ambiguity on Iran’s nuclear programme.

o   It is possible that Moscow has already threatened, in private, to cease UN Security Council vetoes of anti-Iranian resolutions.

o   If it moves forward, the case in Geneva is likely to be decided in favour of Russia.

What next

Tehran’s lawsuit may result in at least a temporary cooling of Russian-Iranian relations and a corresponding opportunity to increase international pressure on Iran over its nuclear programme. Russia is less likely than ever to resume sales of weapons to Iran in a situation where such a move would be seen as caving in to Iranian pressure. Instead, Moscow will seek to pressure Tehran to withdraw the claim without preconditions, and may publicly threaten to stop vetoing anti-Iranian resolutions in the UN Security Council if Tehran does not comply.

Analysis

The contract to sell five S-300PMU-1 battalions to Iran for 800 million dollars was originally signed in December 2007. The Russian government promptly became subject to a great deal of private and public lobbying by Israel, the United States and other Western countries that sought to have the deal cancelled.

Russia reverses its decision

Although the Russian government has resisted Western pressure for several years, it decided to cancel the contract in September 2010. Soon after the passage of UN Security Council Resolution 1929, which imposed sanctions banning the sale of most missile systems to Iran, then-President Dmitry Medvedev went further by announcing that Russia would stop virtually all military exports to Iran. The Russian government then returned the 167 million dollar advance it had received from Iran for the missiles. The units themselves were disassembled. The total losses to Russian arms exporters as a result of the freeze on military sales to Iran could be as a high as 1 billion dollars per year.

Iran has periodically sought to restore the contract. These efforts initially consisted of quiet diplomacy, followed by public complaints. To increase pressure on Russia, in April 2011, the Iranian government filed a case with the International Chamber of Commerce in Paris, claiming damages of around 900 million dollars from the cancellation of the contract. Iran’s argument is that the UN-mandated sanctions approved in 2010 did not apply to the S-300 missiles, since these were ground-to-air missile systems and designed primarily for defensive purposes. Observers largely agree that Russia’s move went beyond what the UN sanctions required.

The S-300 dispute generated widespread attention again this summer, as the Iranian government withdrew its case from the Paris tribunal. Tehran refiled it at the International Court of Arbitration in Geneva, and raised the damages sought to 4 billion dollars. Neither side drew attention to the lawsuit; information about the filing became public in July with the publication of the annual report of Rosoboroneksport, Russia’s state arms dealer. Since Rosoboroneksport is listed as the defendant in the claim, the potential liability was listed in the report.

Iranian officials have repeatedly noted that they are not interested in receiving the money they would get by winning their case. Iran saw Medvedev’s decree as a public humiliation that affected its pretensions to status as a regional power, in addition to reducing its ability to defend itself against possible Israeli or US air strikes.

Iran wants contract restored

The Iranian ambassador to Moscow has openly stated that should Russia agree to send the missiles, Iran would withdraw its suit. The implication is that Iran was using the suit in order to pressure Moscow to reinstate the contract. The size of the claim is equal to one-third of Rosoboroneksport’s annual revenue.

Tehran makes serious miscalculation

Tehran believes that the return of Vladimir Putin to the presidency, combined with escalating war of rhetoric on the part of Israel vis-a-vis Iran, has created a window of opportunity for Russia to reconsider its decision. It may be easier for Putin to restore the contract than it would have been for Medvedev, who signed the original decree to cancel the sale. Iranian leaders also believe that Russia wants to avoid the regional chaos that would most likely follow Israeli or US air strikes against Iranian nuclear facilities. One way of preventing such strikes is to bolster Iranian defences against air attack, which is the main purpose of S-300 missile systems.

However, if Iranian leaders believe that putting financial pressure on Russia will force them to resume arms sales, they have miscalculated. Russian leaders have already indicated that they will take a harder line against Iran’s nuclear programme if Iran does not withdraw the suit. One Kremlin official was quoted stating that if Tehran does not withdraw its claim in the near future, it will be on its own in dealing with the international community on nuclear issues.

Change of tactics

Iran appears to have recognised its error in judgment and has already begun to back off. The Iranian ambassador said that the size of the claim was increased by the court, rather than by Tehran. This seems unlikely, as even if the court chose to include punitive damages without an explicit request from Iran, the amount would have been discussed with the plaintiff in advance.

An end in sight?

Russia does not want to be seen as Iran’s pawn. At the same time, Moscow wants to maintain an ambiguous position on Iran’s nuclear programme — seeking to prevent Tehran from acquiring nuclear weapons while helping it resist Western pressure to completely shut down its nuclear programme, which Tehran insists is for peaceful purposes.

While the case is unlikely to result in a long-term shift in Russian-Iranian relations, it may damage the relationship in the short term. Iran will test the domestic Bavar 373 long-range air defence system during military exercises in October. If the system proves successful, Tehran may feel less of a need to continue seeking the S-300 and may decide to end the episode by withdrawing its claim.

 

Escalation fears underwrite Russia’s strategy on Iran

In honor of the recently concluded round of negotiations on Iranian nuclear weapons, here’s a brief I wrote back in February for Oxford Analytica.

——

In response to Tehran’s announcement of advances in its civilian nuclear capabilities, the Russian Foreign Ministry yesterday urged the international community to re-engage Iran in serious negotiations, with the aim of forestalling the development of a credible nuclear weapons programme. While Russia is often portrayed as uncritically supportive of Iran, the bilateral relationship is more complicated than it appears. Moscow’s resistance to strong UN Security Council sanctions reflects its strategy of trying to maintain a relatively robust economic relationship with Tehran, while also hoping that Iran can serve as a bulwark against other Middle Eastern states that Russia views as hostile to its own interests. Yet Russia does not want Iran to acquire nuclear weapons, as this would threaten its own national security.

What next

Russia would like to see a comprehensive agreement, whereby Tehran agrees to stop its nuclear weapons programme in return for the end of sanctions and reintegration of Iran into the international community. Should Iran make the first aggressive move by following through on its threat to close the Strait of Hormuz, Russia will benefit in the short term from higher oil prices. However, this would be more than off-set by a subsequent intensification of regional instability. Over the longer term, Russia would be best served by stable oil prices, not extremely high ones.

Analysis

Most Russian corporates have complied with international sanctions, which have made it difficult for multinationals to pursue opportunities in Iran: large contracts have been repeatedly called off or postponed. Yet economic cooperation remains significant, and Russian civilian aviation manufacturers (such as Tupolev and Sukhoi) regard Iran as an important growth market, though there has been some criticism from the Iranian side that Russian companies have been slow to deliver on their promises. Russian telecommunications major Megafon occasionally has been linked to efforts to expand Iran’s cellular network, but has repeatedly denied any interest in operating there.

Oil and gas opportunities?

Russian firms are actively interested in the Iranian hydrocarbons sector — but results have usually fallen short of ambitions:

o   The two countries have signed various treaties to cooperate in gas and oil extraction, and were part of an effort (along with Qatar) to establish a gas cartel that could parallel the OPEC in oil markets.

o   Russian firms have also sought to play a role in Iran’s efforts to boost production and build new pipelines. However, this relationship has recently soured, culminating last autumn with Iran removing Gazprom Neft from the development of the Azar oilfield. Earlier, Lukoil withdrew from a project to develop the Anaran oilfield as a result of US sanctions against Iran.

o   Mooted gas-swap arrangements have never moved beyond the discussion stage.

o   The Iranian National Petrochemical Company and Sibur are considering possibilities for the latter to build several major petrochemical plants in Iran.

Civilian nuclear engagement

The long-delayed Bushehr power plant finally came online last September, and will continue to be operated by a Russian-Iranian joint venture for at least the next two years before passing to sole Iranian control. Russia receives all spent fuel from the reactor, thus helping to ensure that it cannot be weaponised. Since the completion of Bushehr, there have been discussions about Russia helping Iran build another reactor. So far, these talks have not progressed; given that Iran is now working on its own reactor at Darkhovin, Tehran may believe that it no longer needs Russian assistance.

Dwindling military-technical ties

While Iran used to be one of Russia’s leading defence industry customers, this relationship has almost completely collapsed in the wake of President Dmitry Medvedev’s September 2010 decision to ban sales of missile systems, armoured vehicles, warplanes, helicopters and ships to Iran. This decision — which went beyond the UN-mandated sanctions — ended the long-standing saga of whether Russia would transfer S-300 missile systems (a contract for which had been signed in 2007) to Iran. Since then, Russian military sales have been limited to equipment needed to modernise previously transferred anti-aircraft defence systems and electronic warfare and reconnaissance systems.

Recent discussions between Deputy Prime Minister Dmitry Rogozin and the Iranian ambassador to Moscow have resulted in a verbal agreement to restore military cooperation, but this is unlikely to result in significant arms sales and will not lead to the revival of the S-300 deal.

Russia’s strategic calculus

While bilateral ties have been periodically difficult, Moscow is well aware of Iran’s important geopolitical role — not just in the Middle East, but also Central Asia and the Caucasus. Russian leaders have long believed that protests such as the 2009 Green Movement could destabilise a great many states in Russia’s ‘south’, and this view has only been confirmed by the ‘Arab awakenings’. They also fear that an Israeli strike on Iran would be the first step in a regional conflict that could engulf the entire Middle East and generate massive refugee flows into Russia via Azerbaijan.

At the same time, Russian policymakers are also concerned about the possibility of Iran creating instability on Russia’s southern border, especially in light of difficult relations between Iran and Azerbaijan. In autumn 2011, Russia and Kazakhstan conducted a military exercise designed to defend offshore oil and natural gas platforms from an attack by state-sponsored sabotage teams. Though no specific opposing state was named in the scenario, the potential adversary could only have been Iran. Russian military planners recently announced that next autumn’s large-scale military exercise would take place in the Caucasus and involve the premise of a war that begins with an attack on Iran, but turns into a regional conflict that draws in Russia.

Nuclear perceptions

Russian leaders believe that Iran already has the technical ability and materials to build a nuclear weapon should it choose to do so. For this reason, it opposes the use of air strikes (or other military means) to damage the Iranian nuclear programme. The logic is that while military strikes would certainly set back the programme in the short term, they would only reinforce Iran’s determination to acquire a nuclear weapon in order to deter potential future attacks. From Russia’s perspective, negotiations are thus the only means to prevent Iran from developing a nuclear arsenal.

Impact

o   If talks with Tehran were to fail, Russian leaders perceive that Israel and the United States would attack Iranian nuclear facilities.

o   The concern is that such a course of action would lead to wider destabilisation — and would not deter Iran from obtaining nuclear weapons.

o   In the event of an Israeli strike on Iran, Russian interests would be best served by remaining on the sidelines.

Russia fears demonstration effects of Syrian uprising

Here’s the full text of my Oxford Analytica brief from January. I posted an abbreviated version earlier, but now can post the whole thing.

As the uprising in Syria approaches its one-year anniversary, the stand-off between its government and the international community seems set to continue for the foreseeable future. Throughout this period, Russia has been Syria’s foremost protector in the international arena. It has taken on this role because of Syria’s economic significance for the arms export industry, its role as the host of Russia’s only military base outside the former Soviet Union — and concern that a successful mass uprising might have negative consequences for its own political stability.

What next

Russian leaders will use the Syrian crisis as an opportunity to show that their country is still a force to be reckoned with in the Middle East. They will also press their case that overthrow of the current Syrian regime would lead to further instability in the region — which might even spread to parts of the former Soviet Union. As a result, Russia will continue to do its utmost to prevent the fall of President Bashar al-Assad’s regime.

Analysis

Syria is one of the five largest foreign buyers of Russian defence equipment, receiving 6% of all arms exports in 2010 (the most recent full year for which data are available). In recent years, Syria has received:

  • 2,000 anti-tank missiles for modernised T-72 tanks (delivered between 1999-2005);
  • 200 Igla (SA-18) portable surface-to-air missiles, delivered without portable launchers as a result of US and Israeli pressure — and therefore usable only on ships, helicopters or vehicles (delivered in 2006);
  • 36 Pantsir-S1 mobile air defence systems, armed with 500 SA-19 surface-to-air missiles (delivered between 2008-10);
  • 2 K-300 Bastion coastal defence batteries, armed with Yakhont (SS-N-26) anti-ship missiles (delivered in 2010).

Contracts for future deliveries include:

  •  200 more SA-19s;
  • additional Igla portable surface-to-air missiles;
  • 2 MiG-31M interceptors, second-hand from the Russian air force;
  • 8 Buk-M2E missile system batteries (worth 1 billion dollars); and
  • an unknown number of 9M123 Chrysanthemum self-propelled anti-tank missile systems (status uncertain);
  • 36 Yak-130 training aircraft (worth 550 million dollars, announced this month);
  • modernisation of 24 Syrian MiG-29s to the SMT level;
  • modernisation of S-125 Pechora-2 surface-to-air missiles; and
  • modernisation of 200 T-72 tanks, as part of a 500 million dollar contract to upgrade 1,000 tanks, with 800 already completed by end-2010.

The total value of these contracts is around 4 billion dollars; the agreements are critical for some companies’ financial survival. Russian exporters fear that regime change in Syria would lead to the loss of contracts, as new rulers may pursue opportunities to purchase weapons from other countries. They point to Libya as an example of the economic impact of a government overthrow on Russian arms sales. Since the uprising began, Russia has continued to send weapons to Syria, including a shipment of various munitions that came to attention this month after the ship carrying the weapons made an unscheduled stop in Cyprus because of high seas.

Wider interests, higher stakes

In addition to military contracts, Russian companies have other investments in Syria, primarily in natural gas extraction. These are valued at approximately 20 billion dollars and include a pipeline and a liquefied natural gas production facility.

Based on their experience with the new government in Libya, Russian leaders believe that these contracts will be lost if the opposition comes to power in Syria. Even if Russia abandons Assad at this point, they assess that the opposition would not forgive their earlier strong support for his regime. The announcement of a new contract for training aircraft this month, with initial deliveries scheduled for 2013, shows that the Russian government has decided to bank on the survival of the Assad regime. If the regime falls, both this contract and the other unfulfilled contracts for Russian military equipment are almost certain to be cancelled. Russia’s economic interests in Syria can be maintained only if Assad defeats the opposition or there is a negotiated settlement.

The role of Tartus

In the years after the break-up of the Soviet Union, Russia gave up all but one of its military facilities outside the territory of the former Soviet Union. The one remaining is the naval logistics facility in Tartus. This is not a true military base, since it does not permanently host any Russian military personnel other than the 50 sailors who staff it. It consists of two floating piers, a floating repair facility, and a supply depot. Its primary purpose is to repair and resupply Russian navy ships transiting the Mediterranean.

Russian leaders are concerned that the fall of the Assad regime may lead to the closure of this facility. While the Syrian opposition has not made any statements regarding the future of Tartus, Russia has long depended entirely on Assad and cannot expect to have good relations with his successors, especially if they come to power by force.

Power projection

The recent visit to Syria by a Russian naval group that included the Admiral Kuznetsov aircraft carrier was designed to demonstrate the importance that Russia attaches to its relationship with Syria and its current leadership. While official Russian sources repeatedly stated that this was a routine resupply visit scheduled long ago and had no political connotations, it was almost certainly intended as a political signal. The arrival of the ships was interpreted at home and abroad as a sign that Russia would not tolerate a ‘Libya scenario’ — and was perceived as such by the Syrian government and official media, which trumpeted the arrival of the ships as an indication of Russian support for the Assad regime.

Russian leaders may have actually meant to signal something slightly different: they want to demonstrate that Russia remains a player in the Middle East, and that its positions have to be taken into account. They believe that Assad’s departure will result in Syria either becoming a Turkish ally or descending into long-term chaos and civil war. In either situation, Russia will lose a dependable ally.

Syrian demonstration effects

The authorities in Moscow are also concerned that further successful popular uprisings in the Middle East may lead to demonstration effects in its own neighbourhood — and perhaps even in Russia itself. Initially, the greatest fear was about the possibility of popular uprisings bringing down ‘friendly’ autocrats in Central Asia. However, the recent large demonstrations against the falsification of elections in Russia itself have only increased its leaders’ determination to ensure that no additional ‘dominoes’ fall under popular pressure.

While the ‘Arab awakenings’ have little direct connection to the emergence of protests against Vladimir Putin’s political order, Russian leaders feel that they are surrounded by a tide of anti-incumbent protests — and see each government toppled as potentially feeding the mood throughout the world. A related fear is that the overthrow of the Assad regime may feed a resurgence of anti-government protests in Iran, bringing the region’s political instability even closer to Russia’s borders.

Furthermore, Russian leaders are concerned about the gains made by Islamist forces in the region, and particularly in Egypt. The twin dangers of popular overthrow of local autocrats and the subsequent victory of Islamic parties in elections raise the danger of an Islamist takeover of parts of Central Asia. Such a scenario would likely lead to a significant increase in migration flows from the region to Russia, further destabilising the domestic political situation.

A New Push for Nuclear Submarine Development

The following is an Oxford Analytica brief from early December 2011. Some of the material has been overtaken by events, but I decided it was still worth posting. One of these days, I will write up an update on naval procurement plans, but it will take some time, so this will have to do in the interim.

—-

Russia’s fleet of nuclear submarines may be about to get an overhaul. Until recently, the State Armaments Programme’s plan for eight new Borey-class and six Yasen-class submarines by 2020 looked highly dubious. However, the Defence Ministry last month signed a series of contracts with design bureaus – in the presence of Prime Minister Vladimir Putin, and with full media coverage – suggesting that submarine modernization will proceed as quickly as possible.

What next

The conclusion of these contracts by no means guarantees that the plans will be fulfilled in the next eight years. While serial production is always faster than the building of the first ship in a class, given the state of Russian shipyards, it will probably still take a minimum of two to three years to construct each vessel. The makeover of Russia’s nuclear submarine fleet is a strategic priority – but it may take significantly longer than a decade to realize.

Analysis

The deals were reportedly worth more than 280 billion rubles (9.2 billion dollars), including contracts for:

  • design of the modernized Yasen-class submarine by the Malakhit design bureau (13.4 billion rubles);
  • construction of the first modernized Yasen-class submarine, theKazan, by Sevmash (47 billion rubles);
  • construction of four additional Yasen-class submarines by United Shipbuilding Corporation’s (OSK)Severodvinskshipyard (164 billion rubles);
  • design of the modernized Borey-class submarine by the Rubin design bureau (39 billion rubles).

In addition, the Defense Ministry leaked information that a contract to build five more Borey-class submarines will be signed next year at a likely cost of 23 billion rubles per unit.

These deals represent the last unsigned contracts of the 2011 military procurement plan. They were held up for several months because of a row between the federal authorities and the defense industry – primarily OSK – over pricing. The Defence Ministry refused to accept price increases requested by OSK, because the requests did not spell out all aspects of the contract’s cost, as required by new regulations put in place this year. In the end, OSK agreed to lower prices in exchange for the right to choose its own subcontractors; in the past, the choice of subcontractors was dictated by the Defense Ministry.

Russia’s strategic submarines

The maritime ‘leg’ of Russia’s strategic nuclear triad currently consists of a combination of Delta III and Delta IV ballistic missile submarines (SSBNs):

  • Northern Fleet. The Navy operates six Delta IV SSBNs, all based in the Northern Fleet. Four have already been upgraded to carry Sineva missiles. Two others are currently being overhauled, with expected relaunch dates in 2012 and 2013. The expectation is that these subs, built in the late 1980s, will continue to serve into 2020-25.
  • Pacific Fleet. The Pacific Fleet has four active Delta III SSBNs, all built between 1979 and 1982. These subs carry SS-N-18 missiles. They will probably be withdrawn from service as the new Borey-class SSBNs enter the fleet. Original plans called for them to have been withdrawn by 2010, but persistent problems with the Bulava missile have pushed the timetable forward.

Borey class’s troubled history

The Borey class has a long and complicated history. Work on the first sub of this class, the Yuri Dolgoruky, began in 1996. Because of a series of redesigns involving both the submarine and its armament, it was not launched until 2008. Borey-class submarines have a displacement of 24,000 tons, a top speed of 29 knots, and can dive to a depth of 450 meters.

Construction of the second submarine (the Aleksandr Nevsky) began in 2004, and it was finally launched in 2010. The Pacific Fleet expects to deploy both Borey submarines next year, if all goes well in sea trials. A variety of problems with the Aleksandr Nevsky detected during initial testing have reportedly been fixed, though officers report continuing issues with the reliability of digital control systems. The Boreys are the first Russian submarines to be equipped with digital (rather than analog) control systems, and evidently not all the bugs have been worked out.

A third submarine is under construction and may be launched next year. The five vessels expected to be ordered next year will have a modified design that will likely include 20 launch tubes (up from 16). If they are completed on schedule, the Russian navy will have its eight new SSBNs in place well before 2020, allowing for the retirement of the Delta IIIs and most, if not all, of the Delta IVs.

Bulava delays

The main potential roadblock is the checkered history of the Bulava ballistic missile. Three consecutive failed test launches in 2008-09 led to the removal of the director of the missile’s lead design bureau. It appears that the problems were related to quality control in the production cycle, rather than any defects in the missile’s design. Since the production cycle was improved in 2009, the last five tests have been successful, including one that achieved the maximum range of 9,300 kilometers.

A test firing of two missiles simultaneously was planned for November or December, but this has just been postponed to May 2012. While the official reason had to do with poor weather in the Barents Sea, the real cause was probably the desire to avoid any chance of failure so close to the December 4 parliamentary elections. While success cannot be guaranteed, the missile’s recent track record means that commissioning by the end of 2012 is highly likely.

Why Yasen submarines

The Yasen class may be the world’s most sophisticated nuclear submarine, capable of 31 knots, equipped with eight torpedo tubes and able to launch up to 30 cruise missiles simultaneously. The Yasen is a multi-purpose attack submarine originally designed during the Cold War to hunt NATO aircraft carriers, protect strategic submarines, and fire cruise missiles at onshore targets. This class is expected eventually to replace all existing classes of Soviet-era attack submarines (Oscar, Akula, Victor, and Sierra). The Severodvinsk, the first of the Yasen class, could be commissioned this winter.

The Yasens are highly capable but also extremely expensive, with a unit cost of over 40 billion rubles. With the end of the Cold War, their purpose is unclear – especially given the extremely low likelihood that Russia could commission enough to threaten the US Navy. At the same time, the submarine is more powerful than needed to fight against any other potential adversary, including China. The Pentagon canceled the comparable Sea Wolf because of similar cost-benefit calculations, replacing it with the much cheaper Virginia class.

Impact

  • Fear of a missile-test-launch failure so close to the elections will delay the Borey-class’s deployment until mid-2012.
  • Russia appears committed to developing the new Yasen-class despite dubious cost-benefit calculations.
  • Fiscal strains – notable, a sharp and sustained fall in oil prices – would cast doubt on the entire naval procurement plan.

 

 

Russia’s Iran Strategy

Another piece that I wrote for Oxford Analytica has been picked up (in edited form) by CNN. Here’s the repost.

In response to Tehran’s announcement of advances in its civilian nuclear capabilities, the Russian Foreign Ministry on February 15 urged the international community to re-engage Iran in serious negotiations, with the aim of forestalling the development of a credible nuclear weapons program. While Russia is often portrayed as uncritically supportive of Iran, the bilateral relationship is more complicated than it appears.

Most Russian corporates have complied with international sanctions, which have made it difficult for multinationals to pursue opportunities in Iran. Large contracts have been repeatedly called off or postponed. Yet economic cooperation, especially in the civilian aviation, telecom and hydrocarbons sectors, remains significant.

While Iran used to be one of Russia’s leading defense industry customers, this relationship has almost completely collapsed in the wake of President Dmitry Medvedev’s September 2010 decision to ban sales of missile systems, armored vehicles, warplanes, helicopters and ships to Iran. This went beyond the U.N.-mandated sanctions. Since then, Russian military sales have been limited to equipment needed to modernize previously transferred anti-aircraft defense systems and electronic warfare and reconnaissance systems.

While bilateral ties have been periodically difficult, Moscow is well aware of Iran’s important geopolitical role – not just in the Middle East, but also Central Asia and the Caucasus. Russian leaders have long believed that protests such as the 2009 Green Movement could destabilize a great many states in Russia’s ‘south’, and this view has only been confirmed by the ‘Arab awakenings’. They also fear that an Israeli strike on Iran would be the first step in a regional conflict that could engulf the entire Middle East and generate massive refugee flows into Russia via Azerbaijan. At the same time, Russian policymakers are also concerned about the possibility of Iran creating instability on Russia’s southern border, especially in light of difficult relations between Iran and Azerbaijan.

Russian military planners recently announced that next autumn’s large-scale military exercise would take place in the Caucasus and involve the premise of a war that begins with an attack on Iran, but turns into a regional conflict that draws in Russia.

Russian leaders believe that Iran already has the technical ability and materials to build a nuclear weapon should it choose to do so. For this reason, it opposes the use of air strikes (or other military means) to damage the Iranian nuclear program. The logic is that while military strikes would certainly set back the program in the short term, they would only reinforce Iran’s determination to acquire a nuclear weapon in order to deter potential future attacks. From Russia’s perspective, negotiations are thus the only means to prevent Iran from developing a nuclear arsenal.

Russia would like to see a comprehensive agreement, whereby Tehran agrees to stop its nuclear weapons program in return for the end of sanctions and reintegration of Iran into the international community. Should Iran make the first aggressive move by following through on its threat to close the Strait of Hormuz, Russia will benefit in the short term from higher oil prices. However, this would be more than off-set by a subsequent intensification of regional instability. Over the longer term, Russia would be best served by stable oil prices, not extremely high ones.