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DIRECTORATE OF INTELLIGENCE9 Soviet-Iranian Relations After Khomeini

ed carpet treatment President Gorbachev accorded Iranian Assembly Speaker Rafsanjani during his just-cornpleted villi lo the USSRew, more cooperative

stagein the bilateralbegins. The

its influenee^bx Iran,

unprecedented letter lo President Gorbachev In January was ihe signal Moscow hadfor thai Iran was prepared to de-ideologize the relationship With the falloutfrom with the West, the USSR finds

area where ihey can compete most effectively wiihestern sudors.

Rushdie affair holding up the normalhatlon of Tehran's ties itself, at least lempora As their pledge during

We expect that,apse into chaos bt domestic Iranianenewed outbreak of fighting between Iran and Iraq or extensive Iranian meddling In Afghanistan, compelling reasons on both sides for seeking Improved ties win keep rrfabonj on the upswing; for die near term. However, ihe pace of improvements, though kistcr now than before Khomeini's letter, will probabfy he measured rather than precipitate. Implementing economic projects will take lime and require some large inputs of capital which neither side has in abundance. Moscow will continue io regulate the volume and quality of the weapons it stUs lo Tehran directly or Indirectly through Soviet allies. The Kremlin willose watch on radicalism ui Iranian politics. Moscow prefers llie relative moderation of Rafsanjani and the newly-appointed President Khamenei to the more ami- Western but less predictable radicalfactions in Tehran. At the same lime, the Soviets will temper iheir policy toward Iran to avoid damaging their relations with Iraq and Ihe Gulf Arabs.

Soviet-Iranian relations remained stalemated during most of the Gulf war. actically motivated "flirtation of convenience" when the US increased Its naval praaonce in the Persian Gulf Inoviet-Iranian relations initially failed to jrtovo boyond diplomacy into the more tangible areas of economic or military cooperation. Moscow's decision to end its military intervention-in Afghanistan and Tehran's acceptanceeasefire in the Gulf removed two key obstacles to progress, with the Gulf War ceaaaflre two montha old, Soviet economic advisers end technicians, withdrawn bacause of threats to their security fro* Iraqi air raids and from political turmoil within Iran, began to return. Nonetheless, little change occurred in the pace or subetance of economic Beatings last year, and private comments by Soviet officials consistently axprassed the view that there couldno aigniflcent prograaa in Soviet-Iranian gelations at least until Xhooalni had paaaad fros thm mjSJ^


Moscow- salted on Khomeini's latter to Gorbachev last-Januaryevidently as muchurprise to tha Soviets aa Xran's sudden acceptance In8 of UN ign that Tehran was readyenuine Improvement inhe Kremlin's response to Khomeini's overture wae to send foreign Minister Shevardnadze to Tehrantha highest-level Soviet visitor in eixteen yearssignalling Moscow's belief that the tiae was finally ripe for major progress In bilateral ties.

KhomeiniDeath. Rafeanianl's Visit

The wording of Gorbachev's personal telegram, of condolence to the Iranian leadership upon Khotaeini'B death was meant to realnd them that the recent movement In bilateral relations bore Khomeini's personal imprimatur. Iranian Assembly Speaker Rafsanjani picked up on Gorbachev and publicly declared at hie first press conference following Khomeini's death that Iran would follow the policy, which he claimed Khomeini had elaboratedim just days before he died, of continuing to seek better relations with the Soviet Union. Hie remarks were probably aimed, in part, at ensuring that the antl-coatmunlst rhetoric in the Ayatollah's last will and testament, published shortly after Khomeini's death, did not take precedence over the more recent softening in his stance toward the USSR.

une visit to the USSR solidified this improvement in relations. Gorbachev gave Rafsanjani hesd-of-state treatment, and both ;eaders were effusive in their public chanotarizations of their talks and of the current stage of relations. Rafsanjani and Gorbachev signed an agreement on trade, scientific and technological cooperation up to the as wellDeclaration on the Principles of Relations and friendly cooperation." The declaration contains mutual pledges on respect for national sovereignty and territorial Integrity, nonaggrosslon, noninterference in each other's

Internal affairs, and nonuse of force. Th* Soviets also plodded in the declaration to help Iran strengthen Its "defensivend the two sides signed an agreement toail line fron Tedihan in the Soviet Turkmen Republic to Hashad in eastern Iran.

The declaration on the principles of relations makas no reference to the contentious article in1 Soviet-Irenlan Treaty that glvee Moscow the right to intervene in Iran, but the Soviets probably argued that the language of the declaration sokes formal abrogation of that article unnecessary. The Iranians, who may still be concerned that the nonintervention pledgee areees formalrobably will claim that1 treaty has not been superseded. SJmV

Soviet and Iranian Post-Khomeini Qbiaetiv

Each side has strong reasons for seeking to keep the warming

trend In ties on track. For Moscow:

o Iran Isvaluable strategic prite because of its long shared border with the USSR, its oil weelth and large population end its laportence to the Waet.

o Tehran laajor regional power with influence In Afghanlatan and throughout th* Islamic world.

oore solid relationship with Iran would sscurs one ofrimary goalskeeping Western influence in Tehran from approaching the levels it enjoyed under the Shah. gpHB

Although Iranian leaders have not abandoned the maxim "neither East norxpressing their desire to avoid dependence on either sids, Iran will, in our judgment, continue toignificant improvement in reletlons with the USSR. Tehran views Gorbachev's policies as offering new opportunltlea4 for friendlier tiee. Khomeinl'e letter to Gorbachev Indicated hie approval of the warning trend already underway and signaled Moacow that Tehran no longer regards ideological difference,arrier to expanding political and economic relations.

The Rushdie affair gave Iran additional incentivo to court Moscow. Iran's relations with most Western European countries have deteriorated eharply aa Tehran severed ties with ths UK and reduced trade with West Germany, ite major Woatern trading partner. This has significantly lowered Iran's prospects for acquiring arms andexpandlng trade with those countrlee ln

near future. -

Iranian radicals, who exploited the Rushdie affair to policy, see expanded ties with Moacow

and Eastern Europe as helping vindicate their claims that close

ties with the West are not crucial for Tehran. They probably alao hops that stronger economic and military links with the USSR and its alllaa will help thwart any efforts by aoro pragmatic Iranian leaders to turn back to tho Heat. tiH&fM

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Although no arms deel was ennouncad during Rafeanjani's visit, tha Soviet pledge in the Joint declaration to aid Iran militarily and the participation of military officiate in the talks suggesteal is Imminent. Tha Sovlete probably hope to avoid publicity of such an agreement to deflect further crltlclam from both the Arab states and tha Hast.

In the early yeara of the Gulf war, the Soviet Union provided Iran with0 million worth of armsmainly spare perte and soma artillery. Moscow also permitted lte Best European allies to supply Tehran with emailand munition, though generally not major weaponry. To our knowledge, the last direct transfer of weapons from the USSR to Iran occurred Moscow's decision to ceaae shipments probably steamed in part froe lta concern that they might alter the balance of power agalnat Iraq and in part from concern thatsales were particularly damaging to Soviet reletions with the Gulf Arabs at z tiae when Iraq was not faring woll In the war. fJBHi

The Soviets told US end Iraqi officials beforevisit that the USSR would eoon abandon this policy and reopen the aras supply pipeline to Tehran. Gorbachev probably views ana sales as ths best way touick foot in the door by taking advantage of Iran's eagerness to rebuild its defensee. Moscow may also calculate that Xreq's present superiority in equipment la great enough tooderately large transfer of weaponry to Tehran without serloualy disturbing the balance of power. mm

In justifying to Iraqi and us officials Moscow's intention to sell weapons directly to Iran, Soviet diploaats neve said thej jrfill^ provide only defensive aras. une discussion (SmamaTmBa^saBammmmVoscow,oviet Foreign .Ministry expert on Iran claimed that sales would comprise such "limited use" items aa field artillery and nothing as provocative as missiles. Although recent Soviet anna transfers In the Middle East suggest that Hoscow uses abroad definition ofdefensive* weapone think the Kremlin will approach with caution any decision to provide Iran with types and quantities of weapons which Iraq would see as exceptionally provocative, such as theurface-to-air missile for which the Iranians have long been aaking. We

expect the Soviets to sell Iran sonsSAXs andartillery, and would not rule out the eventual aale reatly enhanced Iranian air defensecertainly be viewed In Baghdadhreat to Iraq's In

Moscow will feel, lose restricted in providing ground equipment, such ss tanks, armored personnel carriers, and multiple rocket launchers. How far and how faat tha Sovlete pursue arma saleeeans of gaining influence in Tehren dependaontinued stable ceasefire in the Gulf and political stability In Tehran, sustained reduction in Iran's anti-Soviet rhetoric, and on the reaction of Iraq and the other Gulf Arabs to such sales.

Ecpnomlc Cooperation

During the Shah's rule and in tho early years of tha Khomeini era, Moscow had carved out forodest niche in Iran's steel, oil, gas, and power generation sectors. eak2 billion worthilateral trade dropped off sharply in the latter yeara of the war,ow6 of0 million. lest year's figures totaled5 olllion, but trade with Moscow represented only one percent of Iran's total exports and two percent of its Imports. There is thus considerable room for growth in this sphora. SSBasmt

Movement toward implementation of Moscow's agreement to resume purchases of Iranian natural gas was apparently already underway prior to Gorbachev's receipt of the Ayetollah's letter. Preparations for the resumption accelerated in January, when the Sovietseam to examine the pipeline formerly used to export gas to the USSR. Corbachev aald publicly during Rafsanjani's visit that negotiations on resuming the flow of natural gas would be completed in the near future. Failure toeal during the visit could have been due to,ther things, differences on the price of the gasthe most*contentious issue in the past. In any event, the gas will probably not start to flow until next year at the earliest because of the substantial costs of the project.

Progress is likely on other projects that have long been under discussion, especially industrial facilities, power plants, dans, and commercial shipping. The two sides signed an agreement during the Rafsanjani visit on trade and scientific and technological cooperation up to the The agreementslike the ones the Soviets have with several other Middle Eastern countriessets goals but lacks specific details. The reil agreement signed during Rafeanjani's visit will, when implemented, considerably shorten the route for Iranian Imports from the Far East and provide soviet goods from the eastern USSR more direct access to the Persian Gulf and beyond (see map} .


Overall economic ties between Iran and the Soviet Union are likely to remain limited because the two economies are essentially uncomplementary. Both countriestho USSR with its focus on urgent reform of its domestic economy, and Iran with its war-depleted capitalill be hard put to come up with the caah needed to finance any but the most limited projects. In addition, Moscow cannet provide Tehran with the kind of high tech and basic goods it badly needa in the near term. An Iran expert in the Soviet Foreign Ministry said that much of what Iran needed to emerge from its economic crisis could only come from the Heat. Tho Soviet Union, he said, simply does not have the wherewithal Co provide it. ^amj

How far can the Affair Go?

We believe that in the near term the factors driving the current worming trend will dominate developments. Tehran will probably continue its dialogue with Soviets on Afghanistan, despite its ultimate contradiction with Iranian long-term goals. Moscow is concerned about but apparently reconciled to the preaent stalemate in tha Geneva talka between Xren end Iraq and has abandoned its attempts to mediate. The Soviets probably calculate that Tehran is unlikely to initiate hostilities, given its military and economic weaknoss and the fluid situation following Khomeini's death. Gorbachev probably will move forward with watchful deliberateness in an effort to solidify ties as such as possible before the competition with the West stiffens and what many Soviet officials view as the Inevitable normalization of ties between Iran and the West begins.

There are several potential obstacles which could eventually emerge as limitations to progress. For example, neither of the two regional conflicts that blocked progress in bilateral relations earlier has been totally resolved, and differences could once again emerge over Afghanistan or the Iran-Iraq war. oviet Foreign Ministry official confided to US Embassy personnel in Moscow that the Kremlin ie aware of the two-faced natureran's Afghan policy, with one line designed to appease the Soviets while telling the resistance leaders that the Hajibullah regime in unacceptable. nafatmml

An increase in radicalism in Tehran such as overt backing for terrorism, continued efforts to export the Islamic revolution, increased meddling in Afghanistan,esumption of hostilities with Iraq would woaken Moscow's desire for better relations with Iran. Such radical behavior would complicate the Kremlin's relations with the Gulf Arabs and the West. In such an event, the Soviets might express their displeasure to Tehran by dragging their feet on unconsummated economic or military deals.

If Moscow were to respond harshly to any future outbreaks of ethnic violence in the USSR's Muslim republics, anti-Soviet sentiment could revive in Iran. Tehran, for ita part, continues

to harbor aor.athat moscow ia foaenting trouble aaong iran's minorltioa in baluchistan and azerbaijan. ^Lnaaal

hutuai auapiclona are probably atlll too great for tha relationship to become cloae, even over tine. iren aey eventually noraalixe ite tlea with the meat. if it doea, hoecow would lose ite current edge in economic coapetltion with the westhare in iran'sn . SG?flH

even moscow's strong suit, aras salee, haa llaitatlona because of the potential straine froa trying to be the allitary supplier to both archrival* in the gulf. tehran will view soviet willingness to approve the sale of advanced weaponry as an laportant test of the relationship and will keep pressing moscow for increased ailitery coaaltaente. the likely etteapts by iran to exploit eny aras deals with moscoweans of poisoning soviat-iraql reletloneotential source of friction. iranian press reports in april that the two sides reeched tentative agreement on.arae deals alaost certainly irritated the soviets andublic denial froa the kraal in. moreover, toerious downturn in its extensive ties with baghdad, the krealin will continue to sell. iraq advanced weaponry. thie will fuel iranian suspicions although tehran probably would go along for sons tiae if moscow were gradually to provide increasingly advanced weapons to iran, evsn if not equal in sophistication to those which irarj lo receiving,

aa long aa the enhanced regional stability froa the ceasefire in the gulf and moscow's troop withdrawal froa afghanistan lasts, however, the factors driving the sides closer will probably keep the current warming trend on track. continued calm in iranian domestic politics will further ensure that moscow's interest in courting tehran remains high. it may, in fact, be some time before the improving ties show signs of levelling off, given the probable deliberate pace of developments and the considerable room for improvement froa the strained relations of tha Laafl

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