Iran Paid for Su-35 Jets, But Russia Won’t Deliver Them

Earlier this month, Brigadier General Hamid Vahedi, Iran’s air force commander, ended weeks of speculation about the imminent delivery Russian Sukhoi Su-35 fighter jets. “Regarding the purchase of Su-35 fighter jets [from Russia], we need them, but we do not know when they will be added to our squadron. This is related to the decision of [Iran’s] high-ranking officials,” he stated in an interview on state TV.

Vahedi's comments sparked speculation about dysfunction in the Russia-Iran partnership, including that Israel had successfully convinced Russia to postpone delivery of the advanced fighter jets to Iran.

While officials in Tehran continue to pursue a partnership with Russia, it is increasingly clear that Russian officials see their relationship with Iran as little more than a card that can be played according to their needs.

Russia’s potential sale of Su-35 jets to Iran has been connected to the deeper military cooperation between the two countries since the Russian invasion of Ukraine in February 2022. Iranian drones are being used by Russian forces to bomb Ukrainian cities. The first drones were transferred from Iran to Russia around one year ago.

But Iran has been waiting for far more than a year to receive the Su-35, which would prove a major upgrade in capabilities for Iran’s aging air force, largely comprised of American jets in service since before the 1979 revolution.

According to one current and one former diplomat with direct knowledge of the matter, Iran made “full payment” for 50 Su-35 fighter jets during the second term of President Hassan Rouhani. The officials requested anonymity given the sensitivity of Iran’s arms purchases. According to the former diplomat, at the time of purchase Russia had promised to deliver the Su-35s in 2023. Neither source expects that the deliveries will be made this year.

A third source, a security official, speaking on background, expressed disappointment that Vahedi’s “uncoordinated interview” had called attention to the fact that the deliveries were now in doubt. Iranian officials feel embarrassment over Russia’s failure to adhere to commitments.

The delay in the delivery could be traced to the strong relationship between Russia and Israel. In June, Axios reported that Israeli officials confronted Russian counterparts over Russia’s growing military cooperation with Iran and the possibility of Russia providing Iran advanced weapon systems. Israeli Prime Minister Benjamin Netanyahu disclosed the “open and frank” dialogue with Russian officials in a closed-door hearing with Israeli lawmakers on June 13.

In the view of the former diplomat, due to their arrogance, Iranian hardliners “fell into the trap” of believing that they were an equal partner to Russia, simply because “the Russians are queuing up to buy arms from them.”

The drone transfers have contributed to Iran’s political isolation, giving Western officials the impression of deepening cooperation between Russia and Iran, even as the Iranian Foreign Ministry continues to claim that Iran remains a neutral party in the Ukraine war. According to the security official, neutrality remains the consensus position of the Iran’s Supreme National Security Council, but he warned that country’s military brass may not all share that same view.

Notwithstanding the ambitions of Iranian generals, Russia continues to treat Iran far worse than an ally. Earlier this week, Russia issued a joint statement with the Gulf Cooperation Council (GCC), affirming the United Arab Emirate’s claims on three Iranian islands: the Greater Tunb, the Lesser Tunb, and Abu Musa. The statement enraged Iranian officials. Ali Akbar Velayati, a senior advisor to Iran’s Supreme Leader, called Russia’s assent to the statement “a move borne of naivety.” Iran’s foreign minister and its government spokesperson stressed in statements that Iran will not tolerate claims on the three islands from any party. The officials had made such statements before—a China-GCC joint statement from December 2022 caused a similar public outcry.

As Iranian officials are forced to defend their ties with Russia once again, a question remains. Why does Iran have so little leverage over Russia, even after the Russian invasion of Ukraine? The answer lies in the mindset of Iranian officials.

Back in May, Iran’s Supreme Leader, Ali Khamanei, declared that “Dignity in foreign policy means saying no to the diplomacy of begging.” The slogan “diplomacy of begging” has become popular among conservatives and the hardliners, who have used it to condemn the signing of the Joint Comprehensive Plan of Action (JCPOA) and to accuse former Iranian foreign minister Javad Zarif of begging the West for sanctions relief. But if begging the West for sanctions relief is wrong, why are hardliners eager to beg Russia for the Sukhoi jets?

Tehran’s ties with Moscow were never built on trust. They were built on mutual fears and mutual needs. Were the administration of President Ebrahim Raisi to realize that looking to the West does not preclude political and economic relations with Russia and China, Iran could strengthen its position in the Middle East and regain leverage in its relationship with Russia. Until then, the Russians will continue to look at their relationship with Iran as a nothing more than playing card.

Photo: Wikicommons

As China-Led Bloc Heads to Samarkand, Leaders Struggle to Find Common Aims

This week, Uzbekistan is hosting the Shanghai Cooperation Organisation (SCO) in Samarkand. The two-day summit begins on September 15. The leaders of China, Russia, India, Pakistan, Iran and other member and observer states are expected to attend. It will be the first time since the 2019 summit in Bishkek, Kyrgyzstan, that leaders will meet face to face in the SCO format.

The upcoming summit in Samarkand aims to present the organisation as a stable, capable, and evolving bloc with the capacity to address regional and global crises. For the host nation, Uzbekistan, the summit is a chance to promote the “Spirit of Samarkand” and to encourage global cooperation over global competition.

For years, the Uzbek government has sought to deepen its relations with other SCO member states. Having the opportunity to host the summit cements Uzbekistan’s position as a valuable member of the SCO community and allows it to push its regional agenda forward. Connectivity, cooperation, and the promotion of regional stability are at the core of President Shavkat Mirziyoyev’s goals, outlined on the eve of the summit.

Iran Takes Next Membership Step

One of the most important events expected to take place during the summit is Iran’s signing of binding documents related to its admission as a full member of the organisation. Iran’s accession will mark only the third time since its founding in which the SCO has admitted a new member—India and Pakistan joined in 2017. While Iran’s membership will not become official for at least another year, the procedures for its full membership will commence at the summit. Iranian leaders have faced a long wait for admission—it has been 15 years since Iran formally applied to join the bloc.

Tehran views joining the SCO as an important diplomatic achievement. The SCO represents a platform for non-western alignment and provides a platform for negotiations on tangible security and economic projects with other member states. Taking Iran on board, however, does not automatically guarantee either significant immediate benefits for Iran or an increase in the bloc’s capacity to effectively address security and economic challenges facing Asia, particularly while Iran remains under US secondary sanctions.

Eyes on Afghanistan

The situation in Afghanistan has proved strategically important for all SCO members, and especially the Central Asian republics. Security and humanitarian issues in Afghanistan were discussed in a large international conference hosted by Uzbekistan in July.

Among the Central Asian states, Uzbekistan is the loudest supporter of a taking a proactive approach towards the Taliban. While there are clear political issues with the Taliban, the Uzbek government realises that the critical south-eastern infrastructure corridor runs through Afghanistan. Development of this route promises significant economic benefits for Uzbekistan. The Uzbek president has stated that the SCO “must share the story of its success with Afghanistan.” In other words, it is a task for all regional states to engage with Kabul, and this task may become a benchmark for the capacity of SCO as an organisation. However, Afghanistan must become stable and a reliable partner to allow for its own development, as well to enable regional infrastructure projects to advance.

Tajikistan has a fundamentally different view towards the regime now in charge in Kabul. Dushanbe remains highly critical of the Taliban, raising concerns regarding terrorism and the safety of the Tajik ethnic groups in Afghanistan. However, neither Mirziyoyev or Emomali Rahmon, his Tajik counterpart, wishes to see Afghanistan further destabilised. China, India, and Russia basically hold the same position. Most regional countries are facing security threats from the Islamic State Khorasan Province and its affiliated groups. To add to the worries of the Central Asian states, Pakistan, a major player in Afghanistan, has itself faced political turmoil in the past year following the ousting of Prime Minister Imran Khan.

A Russian Dilemma

Russian president, Vladimir Putin, will face a difficult task in presenting his country as a global power in the face of unsuccessful military operations in Ukraine and economic strains caused by sanctions. The countries of Central Asia have close economic ties to Russia and are suffering the inevitable consequences of Moscow’s isolation.

As most regional countries are engaged in efforts to find ways to mitigate the negative impact of the Russian invasion of Ukraine, Moscow is expecting a not-so-warm welcome in Samarkand. Recently reported battlefield losses in Ukraine have incentivised some SCO member states to more forcefully resist Moscow's ongoing attempts to influence their foreign policy, including their aims and activities within the organisation.

The SCO is largely dominated by China rather than Russia, but Russia has long been seen as a key partner in shaping the bloc’s political and economic aims. But it appears that Russia’s future position and influence within the organisation will be increasingly determined by the priorities of other member states and not Moscow’s ambitions. Moreover, while Russia’s ties with China have been described as a “partnership with no limits” by Chinese officials, the upcoming summit will be the first time Xi and Putin meet in-person since the start of the Ukraine invasion. Their engagements on the side-line of the summit will be telling of the extent of the bilateral partnership, particularly within the framework of the SCO.

Struggling for Common Aims

According to the Uzbek foreign ministry, numerous agreements on cooperation in specific areas, ranging from digital security to climate change, are will be discussed at the summit. The SCO is also seeking to establish partnerships with countries outside its primary geographical core, namely with Egypt, Saudi Arabia, and Qatar, in an effort to further extend the bloc’s political reach. 

Until now, the greatest advantage of the SCO was that the bloc did not impose strict rules or apply pressure to prevent its members from cooperation with non-member states, even those who may be perceived as adversaries to China and Russia. This flexibility has been particularly important for Central Asian states who maintain significant security and economic relations with the United States and Europe alongside their partnerships with China, Russia, and India—as required by their multi-vector foreign policies.

Since the Russian invasion of Ukraine, however, that flexibility seems at risk. For example, Russian politician Nikolai Patrushev recently declared that military training provided by the United States to certain SCO members poses a threat to Russia. Such accusations will no doubt colour bilateral and multilateral engagements in Samarkand.

Issued at the end of the summit, the "Samarkand Declaration" will present "a comprehensive political declaration on the SCO's position on international politics, economy and a range of other aspects." To what extent the SCO will be able to accommodate its members' varied and even contradictory aims is a question yet to be answered. The Samarkand summit will convene an organisation still searching for its trajectory.

Photo: Wikicommons

Russia’s Economic Crisis Threatens Uzbekistan from Within

This article was originally published by the East Asia Forum.

Russia’s invasion of Ukraine is devastating the lives of Ukrainian civilians and impacting the global economy. Low-income economies that were hit hardest by the COVID-19 pandemic, such as Uzbekistan, are the most vulnerable to supply chain disruptions and potential political unrest caused by the invasion.

Significant attention has been paid to the impact of the Ukraine crisis and Russia’s economic contraction on Uzbekistan. But this analysis is somewhat incomplete—Uzbekistan’s exposure to the crisis does not just stem from the contraction of remittances coming from Russia.

The greatest danger for Central Asian economies emanates from weak political institutions. The economic shock rippling from Russia to Uzbekistan is compounding the economic effects of the COVID-19 pandemic, which had already spurred protectionist economic policy and threatened the reform agenda in Uzbekistan. This new crisis might convince policymakers to impose trade restrictions, price controls and rollback reforms.

Since 2016, bold market reforms have enabled Uzbekistan to unlock higher rates of economic growth. But public sector entities will likely seek further subsidies and preferential schemes from the state, attributing their inefficiency to yet another economic shock. This could further entrench rentierism in an economy that has been taking important strides towards fiscal discipline, privatisation and the targeting of fiscal spending towards private sector businesses and households.

To emerge from the new economic crisis, Uzbekistan must double down on its reform agenda. Policy interventions might be necessary to support businesses given the scale of the economic crisis. But these interventions should be targeted and limited to avoid hobbling reforms. Instead of providing carte blanche support for inefficient businesses—raising the government debt burden—Uzbekistan should condition state aid in ways that support reforms, especially those reforms seeking to reduce state dominance of the economy.

The Uzbek government continues to provide preferential loans, subsidies for economic operators and preferential tax regimes in ways that favour state-owned enterprises and politically-connected firms. Economic resources flow from taxpayers to these firms, while households and small and medium-sized enterprises remain vulnerable to economic headwinds. The country’s privatisation plan, a largely untapped source of government revenue, risks being further delayed as state-owned enterprises cite the crisis as a reason to slow critical reforms. The speed and transparency of privatisation auctions should be increased.

The stalled land reform must also be advanced. Agriculture accounts for 28 per cent of the Uzbek economy and employs the same proportion of the labour force. The government should expand property rights reform cover to all types of land, including agricultural land, which would boost private investment and production of food staples now subject to rising prices. This reform could also soften the blow of lower remittances, as repatriated labour migrants could earn their livelihoods as smallholder farmers or agricultural labourers.

In the case of Uzbekistan, a country in which expansive price controls have historically distorted incentives, the temptation to introduce price ceilings should be avoided. Higher prices will encourage producers to increase supply—increased investment by private producers will boost employment and eventually stabilise prices.

The government should continue to prioritise inclusive development by focusing on poverty reduction. Uzbekistan has made progress in measuring poverty. Uzbek President Shavkat Mirziyoyev has acknowledged that 12–15 per cent of the population is living below the poverty line and created specialised registries to capture unemployed youth, vulnerable women and people with disabilities.

Such approaches have also underpinned the rollout of programs targeted at the community level. Some initiatives, such as the free school meals and conditional cash transfers for the purchase of agricultural equipment or livestock, will likely produce mixed results due to distorted incentives. Other community-based initiatives, such as cash transfers for families dependent on labour migrants, record educational subsidies, incentives to hire women and mass health screenings, are more promising.

But citizens are not merely a target for support during periods of economic crisis—they are also a source of economic resilience. The government should continue to engage communities to better target fiscal interventions during the crisis. Uzbekistan’s timely Open Budget initiative gathered 6.7 million votes and offers a powerful platform for local communities to voice their needs in the pursuit of a more efficient allocation of state resources.

Easing the registration and operation of NGOs will result in the broader empowerment of vulnerable populations and better distribution of state aid. This may improve trust in the state institutions by ensuring that a larger portion of aid reaches the intended audiences.

The government needs to carefully delimit policy interventions so as not to derail the broader reform agenda that requires Uzbekistan to move away from excessive state intervention in the banking sector. For a short period, the Central Bank of Uzbekistan instituted recommended exchange rates for the Russian rouble that were effectively compulsory and below market rates. Over 80 per cent of Uzbekistan’s banking sector being state-owned is especially concerning at a time when policymakers are under pressure to expand financial support to banks.

Given the new economic reality, Uzbekistan should prioritise its talks on WTO membership and actively pursue new trade partnerships. To incentivise both local producers and foreign suppliers to continue to meet the needs of Uzbek consumers, fostering free markets is vital. Uzbek policymakers should resist the temptation to revert to the orthodoxies of the planned economy as they devise their crisis response—the best way out of the crisis is to look forward, not back.

Photo: Kremlin.ru

As Putin Invades Ukraine, Uzbekistan Feels Vindication and Fear

Vladimir Putin has begun his invasion of Ukraine, sending troops across the border to “defend” the Luhansk and Donetsk People’s Republics, which Russia has now recognized as independent states. The unfolding crisis in Ukraine offers the latest evidence of Putin’s irredentist obsessions and the ways in which those obsessions threaten the political and economic integrity of Russia’s neighbours.

Last week, Uzbekistan marked Ukraine’s “Day of Unity,” a Ukrainian national holiday. The façade of the historic Hotel Uzbekistan, overlooking Tashkent’s main square, was lit in the colors of the Ukrainian flag. Beyond shared affinities, Uzbekistan and Ukraine are both confronted by the challenge that is Putin. For Uzbekistan, the events unfolding in Ukraine validate a decades-long effort to hedge relations with Russia. But they also raise the spectre that Putin will no longer tolerate divided loyalties among the former Soviet republics.

As Maximillian Hess has written, Uzbek president Shavkat Mirziyoyev has sought to rebuild relations with Russia since coming to power in 2016. Mirziyoyev‘s predecessor, Islam Karimov, who led Uzbekistan from 1989 until his death in 2016, believed that “Moscow’s vision for Central Asia was to keep it as a colonial backwater.” In both security and economic spheres, Karimov challenged Russia’s regional dominance. Uzbekistan was an on-again, off-again member of the Collective Security Treaty Organization (CSTO), a military alliance of post-Soviet countries. Uzbekistan served as a staging ground for NATO operations in Afghanistan from 2001 to 2005. Karimov also delayed joining the customs union that preceded the founding of the Eurasian Economic Union (EEAU), Putin’s grand vision for an economic bloc.

Mirziyoyev’s ascendence to the presidency required horse-trading. Developing more constructive ties with Putin was an important aspect of his attempts to consolidate his authority after a power struggle with Rustam Inoyatov, the chief of Uzbekistan’s intelligence services. Inoyatov was eventually sacked in January 2018. In October of that year, Putin visited Uzbekistan bringing with him a large delegation of Russian companies. The visit saw the signing of contracts totalling $9 billion, including provisional agreements for the construction of a nuclear plant that would help Uzbekistan free its natural gas production for export.

But Mirziyoyev has also sought to limit Russian political and economic influence in Uzbekistan by pursuing a multilateral foreign policy and economic liberalisation. While Uzbekistan is expected to join the EEAU, Mirziyoyev has slow-rolled accession, meanwhile pursuing formalised ties with the European Union, including preferential trade terms under the EU’s  Generalized Scheme of Preferences. Uzbek officials have continued to engage with counterparts in the United States, building on a state visit by Mirziyoyev to Washington in May 2018. Since the outset of his term, Mirziyoyev has also sought to develop better relations with neighbours. At the heart of this strategy is a series of “consultative meetings” among Central Asian leaders that exclude the presence of either Russia or China, the two states that typically wield convening power.

In this way, Uzbekistan has hedged in its relations with Russia. While developing more constructive bilateral relations, it has also ensured that parallel developments in its foreign policy and economic agenda serve to circumscribe Russian influence. Recent events have shown the prudence of such an approach.  

In January, as protests accelerated into a full-blown political crisis in Kazakhstan, the Uzbek government reacted cautiously. But Putin’s deployment to Kazakhstan of a “peacekeeping” mission comprised of CSTO forces raised concerns over Russia’s respect for the sovereignty of its neighbours. Likely commenting on the circumspection of Uzbek leaders, Belarussian president Alexander Lukashenko issued a veiled threat to Uzbekistan, suggesting that the country’s failure to join CSTO would leave it vulnerable to “terrorists.”

For many Uzbek political commentators, the threat underscored the risks of posed by the increasingly irredentist Russia. Xushnudbek Xudoyberdiyev, deputy director of state news agency UzA and a prominent blogger, criticized Lukashenko, calling the CSTO a “trojan horse.” In a lengthy interview published two days after the threat, political analysts Farhod Tolipov and Kamoliddin Rabbimov questioned the wisdom of joining the EEAU.

Similar dynamics can be seen in the response to the Russian aggression against Ukraine. While Uzbek officials have yet to issue statements on the crisis, Uzbek editors and bloggers have been quick to label Putin a “savage,” a “criminal,” and a “bandit,” who has “lost his mind” and “spit on international law.” Political commentators have questioned the slow response to the new crisis from the Uzbek Ministry of Foreign Affairs and have also wondered about the risk posed by deepening economic ties with Russia.

Uzbekistan does not share a border with Russia—perhaps a silver lining of being one of just two double landlocked countries in the world. But the Ukraine crisis does have a bearing on Uzbekistan’s place in the political and economic order in West Asia. As Putin takes a more confrontational approach with the West, he may begin to see Mirziyoyev’s hedging of its relations with Russia as an afront, putting Uzbek elites with strong ties to Russia in a difficult position.  

Moreover, if Western countries place Russia under significant sanctions as is expected, the consequences for the Uzbek economy could be profound. Russia hosts 3 million migrant workers from Uzbekistan, whose remittances shore Uzbek household consumption. As the rouble comes under pressure and as the economy falters, these workers, already struggling due to Russia’s general economic malaise, will see their employment prospects diminish and the value of their earnings erode. The devaluation of the rouble would also hit Uzbekistan’s economic elite who maintain assets in Russian banks. Moreover, financial sanctions placed on those banks could see a significant portion of Uzbek wealth effectively frozen.   

Over the last five years, Uzbekistan has been one of the few former Soviet republics to enjoy political stability and economic prosperity. That alone sets Uzbekistan apart. But the country’s political and economic agenda is also unique given the ways in which it has sought to modulate Russian influence. Putin’s invasion of Ukraine vindicates that agenda, but it will also stoke fear. Among Putin’s complaints about Ukraine is that its leadership “preferred to act in such a way that in relations with Russia they had all the rights and advantages, but did not bear any obligations.” One can imagine a similar charge being made against Uzbekistan.

Photo: Kremlin.ru

An Opportunity in Iran’s Latest Tragedy

Iran has sought international assistance in the investigation of the crash of Ukraine International Airlines Flight 752, which killed all 176 people onboard on Wednesday. But the ongoing tensions between Washington and Tehran threaten to prevent the involvement of American experts in the investigation of what brought down the Boeing 737-800 aircraft.

The U.S. National Transportation Safety Board faces two quandaries. It must determine whether the Trump administration’s sanctions on Iran prohibit engagement with Iranian authorities in the investigation, and whether it is safe to send investigators to the crash site at a time when the two countries are in a heightened state of confrontation.

NTSB experts are widely recognized as among the best crash investigators in the world and they regularly participate in investigations at the behest of foreign governments, under a process outlined in Annex 13 of the Convention on International Civil Aviation.

Boeing Co. has said it is ready “to assist in any way needed,” but the airplane maker, too, must reckon with sanctions restrictions.

American sanctions on Iran require NTSB investigators to procure a license from the Treasury Department in order to work with Iranian counterparts—such clearances can take as long as a year to be issued.

The tragedy presents the Trump administration an opportunity to demonstrate its often-stated goodwill toward the Iranian people by immediately issuing the licenses. In return, the U.S. should seek public assurances about the safety of American experts who would travel to Iran, and for these experts to be provided access to the plane’s black boxes—which Iranian officials are reportedly reluctant to provide. 

Part of this reluctance stems from the fact that Iranian civil aviation officials believe their own efforts to improve the safety of Iran’s airlines have been significantly hampered by the Trump administration’s “maximum pressure” sanctions policy. Boeing’s contracts to sell 100 aircraft to Iranian airlines were cancelled when the U.S. withdrew from the Iran nuclear deal in May 2018—Iranian airlines fly some the oldest aircraft still in service anywhere in the world. The reimposition of secondary sanctions also blocked Iran’s ability to purchase spare parts from U.S. suppliers for its existing fleet, and even prohibited the sale of training manuals and technical documentation.

The International Civil Aviation Organization, a United Nations body, has long gathered evidencedemonstrating that U.S. sanctions hamper the safety of the Iranian aviation industry. A 2010 ICAO Universal Safety Audit found that “Iranian carriers are unable at present to fulfill most requisite ICAO aviation safety and maintenance standards and recommended practices (SARPs)… because they were denied access to updated aircraft and aircraft spare parts and post-sale services around the world.” The rate of passenger fatalities in Iran is 5.5 times higher than in the rest of the world.

As a foreign carrier, the safety of the Ukraine International Airlines flight is unlikely to have been impacted by these sanctions issues. But the death of over 100 Iranian nationals in the crash has compounded the grief for a country where planes all-too-regularly experience catastrophic accidents.

When issuing licenses to enable U.S. participation in the investigation, the Trump administration should also respond to the wider concerns around aviation safety in Iran by issuing licenses for planemakers such as Airbus SE, Boeing and ATR to resume sales of safety-related materials, including flight manuals used in pilot training and schematics used in aircraft maintenance. These limited licenses would in no way undermine the Trump administration’s “maximum pressure” policy, but could generate some trust between American and Iranian authorities seeking to de-escalate tensions.

This would not be the first time that the U.S. has sought space for understanding and cooperation with Iran under tragic circumstances. In the aftermath of the devastating 2003 Bam Earthquake, American search and rescue teams traveled to Iran to provide disaster aid and medical assistance to survivors—without in any way compromising the U.S. position on Iran’s nuclear program.

This is another moment for that kind of cooperation.

Photo: IRNA