[A-List] Russia: UAE arms deal

["Michael Keaney" <michael.keaney@xxxxxx>]

Russia, United Arab Emirates in $4bn defense deal
By Dmitry Slobodanuk
Asia Times, October 9 2002

MOSCOW - The Arab world has for some time been attracted to Russia as a
possible investment destination, and several attempts have been made to set
up, for instance, an Arab bank in the country to deal with Muslim
investment.

However, some obstacles, and pressure from the US, have always hampered such
projects. But given today's tension in relations between the Arab world and
the US, Arabs are even more keen on exploring the Russian option.

It is no surprise, then, that news has just emerged that Russia is to
shortly to sign a US$4 billion deal with the United Arab Emirates (UAE) for
the development and supply of a new generation Anti-Ballistic Missiles (ABM)
and air defense system. The UAE will virtually finance the development of
the fifth generation integrated advanced air defense system, which would be
simultaneously deployed in UAE and Russia. Moscow would be barred from
exporting it to any other country within five to seven years of its
deployment in the Emirates.

The proposed ABM deal with the UAE dwarfs the $3.3 billion Sukhoi deal with
India for the licensed production of 140 Su-30MKI fighters over a span of 17
years. The new generation air defense system for the UAE will be developed
on a turnkey basis by two top Russian companies, Almaz and Antey, which are
merging into the Almaz-Antey Air Defense Corporation.

The UAE wants the Russian defense establishment to develop a new,
multifunctional defense system that will work on many levels against attacks
from the air. The system's requirements, as currently set out, will exceed
the fourth generation air defense systems now being tested in Russia.

Arab anxiety about armament is understandable as Gulf countries are asking
which of them will be targeted by the Pentagon once the campaign to oust
Saddam Hussein from Iraq is over. Just to be on the safe side, the Arabs
want to buy modern and high accuracy weapons.

Until recently, Arab countries bought the bulk of their weapons from the US
and its North Atlantic Treaty Organization allies. This source could easily
dry up, though, should the US exert its muscle in the Arab world.

That leaves Russia as the only country in the world capable of supplying the
Arab world with weapons of a quality and effectiveness comparable to
American weapons. However, there is one problem: Russia is loosely allied to
America as a global partner in its war on terror, which includes the Muslim
East. Moreover, a "Muslim revival" poses a real danger to Russia's national
interests, such as in Chechnya.

Muslims have made several attempts in the past to invest in Russia's
economy. Towards the end of the 1990s, a group of Muslim bankers, who were
citizens of Russia, suggested that a large Muslim investment bank, named
Badr, should be opened in the country. Financiers from remote countries such
as Sudan and Nigeria visited Moscow, as well as delegations from Saudi
Arabia, Kuwait and Bahrain looking for potential investment opportunities as
Arab oil magnates were already suspicious of the US. And Russia's defense
industry, which at that time suffered from a lack of orders, attracted them
especially.

However, the idea of a Muslim bank never materialized; the initiators were
accused of having connections with extremist Russian Islamic groups, and
practically blamed for financing Chechen terrorists. High-ranking
authorities were afraid of establishing contacts with oil sheikhs, and the
Russians who suggested creating the bank suddenly fell under the scrutiny of
law enforcement authorities - very likely after "friendly" consultations
with the US embassy in Moscow.

That was five years ago. The US is now in open opposition to the Arab world,
and Russia still needs investment - and the Muslim world seems to have
finally determined what it wants: a new generation weapon from Russia to
have something strong to oppose the US's hegemony.

Increasingly, Moscow is going its own way in its foreign policy, regardless
of what the US might think. For instance, it has pressed on with developing
Iran's nuclear program. Thus it is happy to develop a new air defense system
for the United Arab Emirates.

© Pravda, 2002.