The Bear's Hunt for Arms Sales

WITH increasing aggressiveness, Russia is seeking what American officials see as dangerous liaisons with some of the world's pariah states.

Feeling a little isolated internationally, and hard-pressed economically, Russia is looking for allies and markets in countries accused by the United States and others as sponsors and protectors of terrorism, including Iran, Iraq, and, most recently, Libya.

Last week brought a sign of the tension between Western political concerns and Russia's economic needs. At a meeting aimed at forming a new organization intended to keep military technology out of politically dangerous hands, Russia displayed a sudden reluctance to share information on its weapons sales with Western countries. Russia had agreed to the step a few months earlier, but remains uncomfortable with the new organization, which succeeds one that aimed to keep Western military technology from Russia, among others.

"The Russian arms industry is unhappy with restraints that the US is pushing for, with respect to Iran especially,'' says Dmitri Trenin, an analyst at the Carnegie Endowment for International Peace in Moscow and an expert in arms proliferation.

On another front, just over a week ago, Russian Foreign Trade Minister Oleg Davydov returned from talks with Libya's Col. Muammar Qaddafi to announce that Russia would no longer be sidelined in the Libyan market by United Nations air-travel and arms-trade sanctions. The sanctions were imposed in 1992 after Libya refused to turn over the chief suspects in the Pan Am Flight 103 bombing.

Mr. Davydov announced agreements on over $10 billion worth of Russian engineering projects in Libya, and that Russia would continue trying to "break the deadlock around Libya" by lobbying the UN to lift sanctions.

Russia - along with France - has also been lobbying the UN to lift Gulf-War-related sanctions on Iraq, which like Libya had been a longtime trading partner and arms buyer from the Soviet Union. Russia is unlikely to violate UN sanctions as long as they are in effect. Such proposals have been defeated in the Duma, or lower house of parliament, every time the radical nationalist faction led by Vladimir Zhirinovsky introduces them.

But Russia wants to be ready with strong relationships and already-negotiated deals to sign the moment that international policy changes, Mr. Trenin says.

Much of the pressure within Russia to move into controversial markets comes from the makers of military hardware. Armsmakers, a large sector of the Russian economy, were devastated by the fall of the Soviet Union. But they are surging lately as high-tech exporters. Military technology is one of the few fields where Russian products are often competitive with the best of the West.

The economic incentive is so powerful that concerns about global political risks can drop quickly into the background. "We are in so deep an economic crisis that I can't imagine any serious Russian politician who would try to stop arms sales to a country for political reasons - other than internationally established sanctions,'' says Vladimir Averchev, a deputy in the Duma and a member of the international affairs committee.

The relationship of most concern to American officials is Russia's trade with Iran. The US has strongly protested Russia's sale of nuclear-power technology that they worry will either lay the foundation or provide cover, or both, for a potential nuclear-weapons industry in Iran. Russian officials argue that the nuclear technology has no weapons applications or byproducts and that Americans are only promoting their own economic sanctions against Iran.

In Iran, especially, Russia's motives are not solely economic. Russia lost its Soviet-era alliance system when the Warsaw Pact dissolved and now finds that it shares some strategic interests with Iran. Both are concerned about the eastward spread of Turkish trade and influence into the Caspian Sea region; both support the current regime in war-torn Afghanistan and worry about the ultra-fundamentalist Taliban movement there; and both want veto power over the development of oil reserves in the Caspian Sea.

The friendship helps the Iranians - whom Americans regard as the leading state sponsors of terrorist groups in the Middle East - break their global isolation. For the Russians, it provides an ally on its troubled southern flank and badly needed markets.

President Yeltsin has decreed that Russia will send no new arms to Iran after filling current contracts. But American officials speculate that new sales will continue to be grandfathered into existing contracts.

By most measures, efforts at massive conversion of Russian defense industries into nonmilitary product lines have so far failed. So the industries are aggressively selling their traditional wares abroad. Military exports peaked in 1987 at about $22 billion a year, although only about $2.5 billion of those exports were ever paid for, according to Rosvooruzhenye, the state arms exporter. After that, Russian production collapsed, and the world arms market contracted dramatically.

Now Russian armsmakers are beginning to bounce back. They sold $1.7 billion worth in 1994, $2.8 billion in 1995, and Rosvooruzhenye recently forecast $7 billion in sales in 1996. Aircraft and air-defense systems, as well as tanks and armored vehicles, are among the few sophisticated technologies where Russian products can compete with the best in the world.