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. Last Updated: 07/27/2016

The Ultimate Cost of Deals in Iran

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During the seemingly endless arguments with the United States and the West in general over Russia's cooperation in the construction of Iran's Bushehr nuclear power plant, Moscow has consistently maintained that there is nothing political about the contract. It is sticking with this in portraying current negotiations over payment for the project as a purely economic question.

According to the Federal Atomic Energy Agency, Iran has paid only $50 million of a total $150 million due over the past half year and Russia has not received any payment at all for two months. Tehran says that it will pay in good time and is pushing for fuel deliveries to the reactor to begin this month. Agency head Sergei Kiriyenko has labeled the current disagreement a "technical matter," but there is clear displeasure with Iran.

The current problems don't seem to be the result of financial problems. A source close to the negotiations said Tehran was asking for Moscow's support in the United Nations in discussions about Iran's nuclear enrichment program in exchange for full payment. It is unlikely that Russia will surrender to this pressure, as just $200 million to $250 million of the total price tag for the station is still to be paid. But it is clear that Tehran has already used Russia more than is comfortable for Moscow.

The history of Bushehr and Russian-Iranian cooperation in the nuclear sphere demonstrates the idea that economic and financial issues cannot be separated from political ones in relationships with regimes of this type. Russia began construction of the Bushehr reactor when moderate leader Mohammad Khatami was still in power. Its refusal to lose a valuable contract by halting cooperation with Iran in the nuclear sphere under political pressure from the United States seemed reasonable.

But Moscow's position did not change when Islamic radical Mahmoud Ahmadinejad became president in 2005. Russia has had to ignore demands to take stronger steps against Iranian nuclear enrichment and, despite open disputes over territory in the Caspian Sea, has sold Iran military equipment and worked to keep construction at Bushehr free from UN sanctions. Apparently this steadfast support has not been enough for Tehran, which has recently hinted that continued payment for the construction at Bushehr depends on concessions on the Russian side.

The current situation provides another example of why Russia should be very careful in economic relations and agreements with regimes like the one in Iran, even if the rewards look very attractive. Their leaders try to use Moscow as an instrument to influence the international community, but are not inclined to comply with gentlemen's agreements.

This comment appeared as an editorial in Vedomosti.