RIA Novosti reported that Russia has concluded a deal with Iran for the sale of long-range missile systems. Russian-owned Rostec chief executive Sergei Chemezov was quoted at the Dubai Airshow stating that the deal for the S-300 surface-to-air missile defense system was already signed. Observers note that the contract has the potential to alter the balance of power in the Middle East, citing US, Israeli and Arab state concerns about Tehran’s alleged expansionist agenda and military activities in the region.
Chemezov stated that Saudi officials repeatedly approached Rostec representatives to request they not sign the deal to supply Iran with the advanced missile defense system. The $800 million contract was concluded in 2007 but frozen by Russia in 2010 after pressure from the West over sanctions against Iran. Putin lifted the ban on arms export to Iran in April 2015, and deputy foreign minister Mikhail Bogdanov reported in August that the deal had already been resurrected. Iran has promised after the first delivery of missiles to revoke a $4 billion lawsuit filed at an international court in Geneva against Russian arms exporter Rosoboronexport. Analysts have highlighted the S-300 systems’ potential to enhance Iran’s military capabilities, emphasizing they would give Iran the ability to track civilian aircraft in the Persian Gulf and preempt any attacks on nuclear sites in the country.
The deal comes as part of substantial Russian activity at the Dubai Airshow. Rostec also concluded a deal with Indonesia for the sale of Sukhoi Su-35 aircraft, after the Indonesian Ministry of Defense reported in September that it would buy 16 of the Russian-made aircraft. The head of Russian Helicopters, owned by Rostec, told Reuters at the Dubai Airshow that military conflicts in the Middle East and elsewhere are predicted to offset falling demand for helicopters linked to low oil prices. A spokesman for Sukhoi Civil Aircraft Company, part of Russia’s United Aircraft Company, was also quoted by Reuters stating that it plans to boost production by three times by 2020, and is in talks with Egypt, Iran, Qatar, Oman and Saudi Arabia for sales of its regional Sukhoi Superjet 100.
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- Turkmen President Gurbanguly Berdymukhamedov ordered the commencement of Turkmenistan’s section of the Turkmenistan-Afghanistan-Pakistan-India pipeline. The Turkmen section of the pipeline will be completed by state-run gas company Turkmengaz and construction division Turkmenneftegazstroi, with construction slated to begin in December of this year and end in 2018. Observers note that full-blown construction is not likely to begin until next year. Shortly after the announcement was made during the president’s weekly cabinet meeting, Minister of Oil and Gas Baymurad Khodjamukhamedov offered his resignation, which was then promptly accepted by the president, who later appointed Yagshigeldy Kakayev. Kakayev will also continue to serve in his current role as the head of the presidential State Agency for the Management and Use of Hydrocarbon Resources. The 7th International Turkmenistan Investment Forum is scheduled to take place November 10-11 in Ashgabat, where the commencement of $9.7-18 billion in infrastructure and industrial investment projects is expected to take place. The TAPI pipeline project has been endorsed by the US as a way to reduce dependence on Russian gas in Central and South Asia, although Russia has recently made steps towards strengthening ties with both Pakistan and India and boosting its security presence in the region.
- A Eurasianet.org report highlighted Uzbekistan’s increased efforts at privatization in a risky economic climate. First Deputy Prime Minister Rustam Azimov stated at the International Investment Forum in Tashkent last week that Uzbekistan is offering stakes in the sale of 1,247 state enterprises, where about $12 billion in deals was allegedly concluded. The report highlighted what it called the risky nature of investment in Uzbekistan, citing recent allegations of international companies including Russian mobile service provider MTS bribing high-level government officials for shares of private markets. Moody’s Investors Service recently upgraded Uzbekinvest national insurance company to up one notch on its rating system for strong economic growth. Trend News Agency reported that the Uzbek State Committee on Privatization, De-monopolization and Development of Competition has put four chemistry and industrial manufacturing companies’ state-owned assets worth $267.6 million up for sale. According to Trend reports, Uzbek President Islam Karimov recently met with the World Bank Vice President for Europe and Central Asia and South Korean First Deputy Minister of Industry, Trade and Natural Resources to discuss $6 billion in joint projects ($2.6 billion of which would be funded by the World Bank) and South Korean investment and acquisition of privatized assets in over $220 million at last week’s forum.
- The National Bank of Kazakhstan has prohibited individuals and small trading companies from participating in the Kazakhstan National Stock Exchange (KASE), limiting participation to the National, commercial and national Development banks in order to keep the market from rampant speculation that could further destabilize the tenge, Kazakhstan’s national currency. Tengrinews quoted KASE vice chairman Andrei Tsalyuk stating the tenge’s strict regulation does not allow for the greater risk implicated in giving bank customers direct access to the currency market, as has been done previously on the Moscow Stock Exchange. The National Bank holds a 50.1% share in KASE, and retains the right to veto KASE decisions on regulation of the tenge and Kazakhstan government bonds market. KASE spokesmen have previously cited ambitions to become the region’s foremost stock exchange and an international competitor to London.
- Iranian President Hassan Rouhani reported that Iran would begin selling enriched uranium in the coming weeks, as the Central Bank reported the payout of $16 billion in loans to the industry and mining sectors in the first half of the current Iranian fiscal year, which began March 20 and ended on October 20. Rouhani claimed that Iran had gained the ability to commercialize its nuclear industry under the nuclear deal reached with world powers in July, which drew criticism from Iran’s hardline conservatives. His comments come after Rouhani criticized hardline media in the wake of perceived crackdowns on political, business and media actors with connections to the West. Iran banned the import of U.S. consumer goods last week in a gesture seen as largely symbolic, and not applying to the private sector.
- Russian bloggers reported the geolocation of several Russian soldiers in Syria. The group of Russian investigative bloggers, Conflict Intelligence Team (CIT) published screenshots from the social media accounts of three individuals known to be former or serving soldiers for Russian forces, all with posts tagged in Hama Province, Syria. The report also highlighted Russia’s supply of military hardware to Syria including heavy tanks and ballistic missiles. Reuters noted the report suggests greater range to Russian efforts in Syria than previously reported, citing repeated Russian denials of troop deployment to the area. CIT was the initial reporter of the first death of a Russian serviceman in Syria in late October, a 19-year-old airforce support staffer who the Russian military claimed hanged himself while serving at the Hmeimim airbase in Latakia, an assertion his family denied.