THE SOVIET IN THE PERSIAN GULF/ARABIAN PENINSULA -- ASSETS AND PROSPECTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00889A000900070001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 40
• Document Creation Date: December 15, 2016
• Document Release Date: February 26, 2004
• Sequence Number: 1
• Publication Date: December 1, 1976
• Content Type: STUDY

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Secret
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Research Study
The Soviets in the Persian Gulf/Arabian
Peninsula -Assets and Prospects
Secret
PR 76 10077
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CENTRAL INTELLIGENCE AGENCY
DIRECTORATE OF INTELLIGENCE
OFFICE OF POLITICAL RESEARCH
THE SOVIETS IN THE PERSIAN GULF/ARABIAN
PENINSULA: ASSETS AND PROSPECTS
In preparing this study, the Office of Political Research consulted with other
offices of the Central Intelligence Agency. Their comments and suggestions were
appreciated and used. The cutoff date on information contained in the paper is 15
December 1976. Comments would be welcomed by the author F -1
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CONTENTS
Page
PRECIS ............................................................ vii
1. SOVIET INTERESTS AND EXPECTATIONS .................. 1
A. Interests and Goals ........................................ 1
1. Geostrategic Considerations ............................... 1
2. Role in Broader Middle East Context .................... 2
3. The Oil Angle .......................................... 2
4. Appeal of Hard Currency ............................... 3
5. Revolutionary Credentials and the Chinese Factor ......... 3
B. Constraints on Achievement ................................ 3
1. Intrinsic Hostility and Suspicion .......................... 4
2. Conflicting Interests ..................................... 4
3. Economic Appeal of the West ........................... 4
4. US Response ............................................ 4
II. THE TOOLS OF SOVIET POLICY ........................... 4
A. Bilateral Contacts ......................................... 4
B. Economic Inducements ..................................... 6
C. The Military Lever ........................................ 10
D. Propaganda ............................................... 13
E. Subversion ................................................. 13
1. Local Communist Parties ................................ 13
2. Dissidents and Potential Subversives ....................... 15
3. Active Insurrection (the PFLO) ........................... 18
III. SOVIET GAINS-WORTH THE COST? ....................... 20
A. Geostrategic Achievements .................................. 20
B. The Question of Western Influence ......................... 20
C. Relations with Target States-Intangibles .................... 21
D. Leverage on Energy Questions ............................. 24
E. Access to Hard Currency .................................. 24
F. Revolutionary Image ....................................... 25
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W. PROSPECTS .................................................
A. Prevailing Trends Work Against USSR ......................
B. Alternative Scenarios .......................................
t. Deterioration of Gulf-State Relations with US ................
2. Changes in Oil Terms of Trade .........................
3. Internal Changes in Gulf States ..........................
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GLOSSARY: Dissident Organizations in Gulf/Peninsula Region .......... 31
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Persian Gulf/Arabian Peninsula as Viewed from Moscow
503092 10-78 (542936) Figure 1
PREFATORY NOTE
As the British withdrew most of their remaining forces from the Persian
Gulf/Arabian Peninsula region in the early 1970s, many Western observers felt that
the Soviets would try to fill the vacuum thus created. Concern about possible Soviet
inroads into the area was based both on the USSR's demonstrated desire to strengthen
its position there and on the establishment of a Soviet presence in several of the
Gulf/Peninsula nations. This paper deals with Soviet objectives, policies, achieve-
ments, and prospects in this important part of the world, aiming in the process to help
define the appropriate scope of Western concern.
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Relations of Gulf/Peninsula Countries with the USSR
Cyprus
*Nicosia Syria
Mediterranean Sea Leban
Beirut Dames
!? IsraeE_T{
Alexandria UFi } t OK,
E aAa( (rY T
Egypt
Political and economic relations
with the USSR
.1raq
Baghdad*
Caspian
,. Sea
Al Bayrah? Abadan
Kuwait
wait
fP- Bandar Abbas
N9 `'t c ;ark
Bahrala a3 T,\ .:
;.Ulf of
Ethiopia
Northern 7
*Sana?
Yemen
Somalia
Iran
Egfahen'
Shiraz
Doha JU an
Abu Dhabi =-_
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PRECIS
The Gulf/Peninsula region is important to the USSR in the first
place because it is important to the West, and the primary Soviet goal is
a negative one-to deprive the West of influence there. This apart, the
USSR's interest in the area is based on its geographic proximity, its
strategic location between the Mediterranean Sea and the Indian
Ocean, its status in the general Middle East context, and its economic
significance based on vast oil deposits. While these elements translate
into a broad desire on the part of the USSR to achieve the strongest
possible position there, no vital Soviet interests are involved. This does
not imply a lack of motivation to act. It does, however, suggest a lower
level of intensity in the Soviet effort and less inclination to risk
confrontation with the West than might be the case in an area of higher
priority.
Before 1973, the Soviets had made good progress in developing
their presence and influence in the area. Their 1972 Treaty of
Friendship and Cooperation with Iraq is the most far-reaching security
treaty which the Soviets have with any Third World country. The
USSR gained access to the Iraqi ports of Basrah and Umm Qasr and
fairly extensive use of the South Yemeni port of Aden. Soviet economic
relations with Iran have developed significantly since the early 1960s,
and the Soviets have many economic advisors in place in Iran as well as
in Iraq and South Yemen.
The Soviets also have an impressive contingent of military
personnel in Iraq and South Yemen. The Soviet role in providing
economic assistance, military resupply, and spare parts has also helped
give the USSR some leverage in its dealings with these two countries.
Moreover, the Soviets have some compatibility of interest with these
clients, which facilitates cooperative action. Both South Yemen and
Iraq share the Soviet desire to radicalize the Gulf, and both provide
assistance to the so-called "progressive forces" which the Soviets also
back. While these states may be acting primarily on their own initiative
and in their own behalf, they are also advancing Soviet interests in the
Gulf, funneling Soviet arms and propaganda to subversive and
revolutionary elements.
The Soviet position in the area has, however, deteriorated since the
1973 Middle East war, and the prospects of a resurgence are not
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impressive. This is due primarily to the growing wealth of the oil-
producing Gulf states which has contributed to several trends inimical
to Soviet interests. First, it has produced a new set of economic
relationships between these states and the West based both on Western
oil purchases and on the desire of the oil-rich nations to purchase
products and technology from the advanced industrial states. The
Soviets have been excluded from the resultant economic network.
Secondly, their increased wealth has permitted a new self-
assertiveness on the part of the major local states, Saudi Arabia and
[ran, which are determined to prevent Soviet encroachment. Iran, with
some credibility based on its rapidly expanding military strength, has
expressed a commitment to police the Gulf and exclude foreign
intrusions. It demonstrated its willingness to act on this commitment by
intervening in late 1973 to tip the balance for the Sultan in the struggle
against Soviet-backed rebels in Oman's southern province of Dhofar.
Saudi actions, while less dramatic, may be producing even more
profound long-term effects. The Saudi weapon is money, and the goal
is to encourage moderation in the area. While Saudi policies are not
often pressed forcefully, their net effect has increasingly been to
constrain the expansion of Soviet influence in the area (and, as a
consequence of the Saudi-Egyptian combination, in the Middle East in
general).
Soviet bilateral relations with those Gulf/Peninsula nations with
which they have had contacts have generally declined since late 1973.
[n the case of Iran, this has been due to the Shah's rapid arms buildup,
aspiration to predominance in the Gulf, and intervention in the Oman
struggle. North Yeme
has been able to move away from the USSR. South Yemen has
also sought money from the traditionalist oil states-a situation which
may eventually have a moderating effect on its policies. And Soviet
leverage over their major client in the area, Iraq, has declined as that
nation has improved its economic position, patched up its relations
with Iran, and turned to the West for technology and equipment.
At the same time, Soviet efforts to improve political and economic
relations with the traditionalist Arab states of the Gulf have thus far
proved unsuccessful, Kuwait being to some degree an exception. In
spite of repeated Soviet initiatives, Saudi Arabia, the United Arab
Emirates (UAE), Bahrain, Qatar and Oman refuse to have any formal
dealings with Communist countries.
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The USSR's efforts to gain some leverage over the region's energy
resources have, to date, also proved fruitless. It has established firm
trade relations with Iran and Iraq, importing primarily gas and oil and
exporting machinery and equipment. It does therefore have access to
key energy markets. But the quantities involved are small, and both
Iran and Iraq have proved tough in negotiating payment terms for their
energy exports, preferring hard currency to barter arrangements and
demanding market prices from the Soviets. The USSR has thus failed tc
lay the groundwork for large-scale future purchases at concessionary
rates.
In their effort to become the main patron of subversion and
revolution in the Gulf area, the Soviets have registered only one gain in
recent years: the fact that the Chinese have seen fit to abandon local
competition with the Soviets. The USSR itself has accomplished little.
The rebellion in Dhofar which the Soviets backed has failed abysmally,
and subversive forces elsewhere in the Gulf have thus far made few
gains. The main result of Soviet support of subversion has been to
further alarm the traditionalist states which have been the objects of
these efforts.
And finally, while some advantages have accrued to the USSR from
its efforts to cultivate clients, the clients themselves have been
frustratingly independent. In addition to North Yemen's movement
away from the USSR in recent years, the Iraqi Baathists continue to
pursue a number of policies which are objectionable to the Soviets.
They oppose such Soviet Middle East policies as support for a Geneva
conference, they repress the Iraqi Communist Party, and they are
continually at odds with the USSR's other major Middle East client,
Syria. In short, the extent of the influence which the USSR seems able
to gain in these countries is limited. When there is a coincidence of
interests, Soviet backing may enable the client state to pursue mutual
goals for mutual benefit. When these interests conflict, the Soviets may
try to force their will by threatening to slow down arms shipments or
cut financial assistance. Such strong-arm tactics have brought
immediate results on occasion, but at the cost of antagonizing the
client.
In spite of the current adverse trend in the region, Soviet policy-
makers do not appear to be shifting their tactics. They continue to
pursue a two-track policy in the area. On the one hand, they seek
improved relations with the conservative oil-rich states in the hope that
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they might neutralize and reverse the negative influence being exerted
by Iran and Saudi Arabia, prevent Western domination of the oil
resources of the region, insure their own potential access to the oil, and
tap the hard-currency holdings of the wealthy Gulf states.
On the other hand, the Soviets try to foster the accession to power
of sympathetic radically-minded regimes which will be responsive to
Soviet policy interests, permit Soviet access to port facilities, welcome a
Soviet physical presence, and deny the same to the West. To this end,
the USSR supports subversive and revolutionary forces whose stated
goal is the overthrow of the traditionalist governments of the area.
While these clearly contradictory approaches must complicate
Soviet efforts in the region, the Soviets actually have little to lose by
supporting subversion and revolution-their relations with the tradi-
tionalist states could hardly be worse. They probably reason, moreover,
that the situation in the region is fluid and that they can well afford to
wait for favorable opportunities to develop.
Such opportunities might include another Middle East war
accompanied by an oil embargo which would again undermine Gulf-
state relations with the West, or a deterioration in US relations with
these states due to disagreements over the Arab trade boycott or US
weapons sales. Either of these developments could lead to an improved
Soviet political position in the region based largely on the desire of the
Gulf states to put pressure on the US. However, the Soviets would still
be unable to absorb or pay for the oil in which the Gulf states would be
drowning and would still not have the technology and expertise which
these states want to purchase. This, combined with the continuing
regional antagonism towards the USSR, would act as a limiting factor
on the extent of any rapprochement.
The Soviets will, in all likelihood, increase their oil imports in
coming years, and, should their need to import coincide with either an
oil embargo or substantially increased production in the Gulf states, it is
likely that some barter arrangements could be made between the USSR
and these states. This eventuality is unlikely to affect the long-term
economic situation, however. Soviet imports will rise gradually, and the
oil states, if they choose to do so, will probably have the capacity to
meet both Soviet and Western oil requirements. In addition, the
Western market will continue to be preferred, as the oil states will still
want hard-currency payments rather than barter arrangements.
In the event one or more of the conservative governments of the
region were overthrown and a radical government established, the
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Soviets would be the obvious beneficiaries. As Iran and Saudi Arabia
would probably not tolerate such an occurrence in one of the smaller
states of the region, with the possible exception of Kuwait, where their
intervention might draw a countering Iraqi reaction, the main question
becomes what effect such a change might have in one of these larger
countries.
Should reformist elements prepared to deal with the USSR come to
power in Saudi Arabia, doors now shut would open to the Soviets
elsewhere in the Gulf, and they would quickly enlarge their presence.
Saudi efforts to check Soviet influence throughout the Gulf might cease
and Soviet-backed radical groups in the smaller Gulf states, particularly
Kuwait and Bahrain, might be tolerated. This would certainly be even
more the case if radicals were to come to power in Saudi Arabia.
However, economic reality would presumably continue to limit the
extent of Soviet-Saudi cooperation.
Iran may be more vulnerable to a radical takeover. And
t e potential benefit to the USSR would be more obvious. A complex
economic relationship already exists between the two and geographic
proximity makes further cooperation feasible and desirable from the
Soviet point of view. Iran has overwhelming local military superiority
and the capacity to control passage through the Straits of Hormuz. This
has strategic implications for the West as well as for Iran's Gulf
neighbors. For these reasons, the Soviets would be strongly motivated to
provide clandestine assistance to radical forces in the event of
insurgency in Iran.
While the above contingencies or other, as yet unforeseen,
developments could disrupt the pattern and alter prevailing tendencies,
the current combination of factors is clearly detrimental to Soviet
interests in the Gulf/Peninsula region. Continued antagonism toward
and suspicion of the Soviets by the major Gulf states, contradictory
Soviet policy approaches, the growing wealth of the Gulf states, and the
expanding economic network between these states and the West all
work to impede Soviet progress. Should these factors remain fairly
stable, it seems likely that the forces working against Soviet penetration
will remain dominant in the region.
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THE DISCUSSION
1. SOVIET INTERESTS AND EXPECTATIONS
A. Interests and Goals
1. Geostrategic Considerations
With the exception of Iran, none of the countries of
the Persian Gulf/Arabian Peninsula region* directly
borders the USSR. But Soviet commentary frequently
stresses the fact that the USSR is not indifferent to the
development of events in this region close to the
USSR's southern flank. This basic interest is bolstered
by the area's location between the Mediterranean Sea
and the Indian Ocean and by the USSR's desire to
insure the ability of its fleets, both merchant and
military, to move freely between these bodies of water
via the Suez Canal, Red Sea, and Gulf of Aden. The
Soviets have not become dependent militarily on the
Suez Canal since its reopening in June 1975, as they
continue to support their Indian Ocean fleet primarily
via the Pacific. However, they have made extensive
commercial and limited military use of the canal and
have a vested interest in keeping this shipping route
open.
The general expansion of the Soviet naval presence
in the area over the past 10 years** has been
paralleled by Soviet attempts to improve relations
with the littoral states of the Middle East, East Africa,
* The nations included in the Gulf/Peninsula region are Iran
(population 33 million), Iraq (population 11 million), Saudi Arabia
(population 6 million), the Yemen Arab Republic (YAR or North
Yernen-population 6.5 million), the Peoples Democratic Republic
of Yemen (PDRY or South Yemen-population 1.5 million), Kuwait
(population one million), Bahrain (population 240,000), Qatar
(population 185,000), and the United Arab Emirates (UAE-
population 179,000).
** Between 1967 and 1973, the Soviets steadily augmented their
fleets in both the Mediterranean Sea and Indian Ocean. Since 1973,
this presence has stabilized-and Soviet ship-days in the Indian
Ocean actually decreased in 1975. Fuller discussion of Soviet
military interest and involvement in the region can be found in NIE
11-10-76, "Soviet Military Policy in the Third World," 21 October
and South Asia. The aim has been to fortify the
USSR's general position in the region and to maintain
a growing transportation, communications, and trade
network. In addition, the USSR has sought access to
port facilities in these states as part of the effort to
maintain its fleets. Such access provides a number of
potential advantages: it can be of symbolic signifi-
cance, offering the USSR a chance to show the flag; it
can offer a range of practical benefits-rest and
rotation of ship crews, resupply, and ship repair; and
it enables the Soviets to establish a physical presence
in these countries from which to expand their contacts
throughout the region. While vigorously denying any
desire to establish bases in the Middle East, the USSR
has sought the substance of base rights, if not the
name.
While the littoral states of the Arabian Peninsula,
particularly South Yemen, are clearly part of this
general Soviet strategic interest, the Persian Gulf itself
is peripheral. It is a closed waterway and plays little
part in Soviet Indian Ocean activities, although any
increased access to port facilities in the Gulf undoubt-
edly would help in supporting the Indian Ocean fleet.
The Soviets do, however, have extensive commercial
dealings with Iraq, and Soviet merchant vessels make
frequent use of the Gulf. Thus the Soviets are anxious
to preserve their access to the Gulf through the narrow
Straits of Hormuz.
While the Soviets' own general strategic interest in
the Gulf would appear to be of rather limited
intensity, their interest in preventing the establish-
ment of a US presence in the region is strong. They
have frequently voiced concern about alleged US
efforts to dominate the Gulf and Peninsula and to
control the exits from the Persian Gulf and Red Sea.
The Soviets have also registered concern at what they
see as the growing tendency of both Iran and Saudi
Arabia to act as US surrogates in the region and the
growing ability of these nations to frustrate Soviet
objectives. Since Iran's intervention in the Oman
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insurgency in December 1973, Soviet press commen-
tary has attacked Iran's military buildup, the so-called
revival of the Central Treaty Organization
(CENTO),* and what it terms US-British-Iranian
collusion aimed at frustrating the "national liberation
struggle" in Dhofar. Similarly, Soviet propaganda has
charged that Saudi rulers are acting in the interests of
the US and its monopolies, using their vast oil
revenues to fight progress in the Arab world.
This new Soviet view of Iranian and Saudi
capabilities and intentions has been reflected in a
change in the Soviet position on the question of
Persian Gulf security. Through 1973, the Soviets had
strongly affirmed the position that the people of the
Gulf should determine their own destiny without
outside (i.e., Western) interference.** In the past
several years, however, the Soviets, rather than
stressing the need for Gulf-state cooperation to head
off Western intrusions, have shown anxiety that Gulf-
state cooperation might instead lead to a loss of Soviet
influence. Iran's intervention in Oman demonstrated
to the Soviets that settlement of questions relating to
the Gulf by Gulf nations themselves is not necessarily
beneficial to the USSR. They are therefore anxious to
forestall any agreements among the nations of the
region which would undermine their presence-for
example, by prohibiting their use of port facilities.
2. Role in Broader Middle East
Context
A strengthened Soviet position in the Gulf/Penin-
sula area would bolster the declining credibility of
Soviet claims to an equal share of influence with the
US in shaping the future of the Middle East. In the
past three years, Soviet fortunes in the area have
suffered, largely because of Egyptian President Sadat's
shift toward the US. Saudi Arabia both encouraged
this move and provided the support which has
enabled Egypt thus far to survive the consequences of
its rift with the USSR. This Saudi-Egyptian alliance,
fashioned in the months before the 1973 war and
continued thereafter, has caused a major setback to
* Current members of CENTO are the US, UK, Iran, Pakistan,
Turkey.
** Moscow's position that the Gulf countries alone have the right
to determine their own fate was authoritatively set forth in a TASS
statement of 3 March 1968, and it has not been officially changed.
Egyptian President Sadat meets with Saudi King Faysal.
the Soviet position in the Middle East and has
become an obstacle to Soviet penetration.
3. The Oil Angle
While Soviet interest in Gulf oil itself is currently
minimal, it may well grow in the next 10 years. The
USSR is presently self-sufficient in oil and is, in fact, a
net exporter. * Given Soviet determination to develop
Siberian reserves, this will probably remain the case
through this decade. However, predicted shortfalls in
projected oil production by 1980** will force the
Soviets either to curb domestic consumption, cut
projected increased exports to Eastern or Western
Europe, or import more oil. The Soviets have already
begun encouraging the East Europeans to seek other
energy sources and will probably continue to do so.
But they will also probably remain obligated to
provide a substantial portion of East Europe's
expanding energy needs. This, as well as their desire to
earn hard currency through sales of oil to the West,
argues against a sharp curtailment of exports. Thus, if
the Soviets are unable or unwilling to slow their own
consumption, they will be seeking increased quantities
of foreign oil either for themselves or their allies.
Given geographic and logistic considerations, they
would undoubtedly look to the nations of the Gulf. In
that case, considering their own shortage of hard
* In 1975, the USSR imported for its own use 150 barrels per day
(b/d) of oil, up from 110 b/d in 1974. At the same time, they were
exporting 2,600 b/d in 1975, compared with 2,340 b/d in 1974.
** The current plan calls for the production of about 12.6 million
b/d (630 million tons annually) by 1980. Delayed development of
West Siberian fields is expected to reduce this to about 11.8 million
b/d (590 million tons annually).
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currency, they would be trying to arrange barter deals,
possibly involving military equipment.* In short, they
would try to trade for Gulf oil and sell their own to the
West for hard currency.
they apparently give no material assistance to other
dissident elements in the region. Nonetheless, China
and Maoism continue to appeal to the imaginations
of young rebels, and the Soviets are sensitive to this
fact.
4. Appeal of Hard Currency
The Soviets, in view of their shortage of hard
currency, would like to tap the holdings of the
wealthy Persian Gulf oil nations by selling both goods
and expertise or by obtaining long-term loans. While
politics has been an inhibiting factor with many of the
conservative states, the Soviets have also had increas-
ing trouble competing with the more advanced
Western nations both in selling goods and in
promoting new development projects even in the more
receptive Gulf countries (Iraq, Kuwait, Iran). The
only major funds flowing to them fropi the Gulf
comprise repayment for project and military aid. The
only product area in which the Soviets are competitive
is that of weapons, and they would like to sell
weapons to Gulf countries.
5. Revolutionary Credentials and the Chinese
Factor
The Soviets are committed to the support of
"national liberation" movements and to the advance-
ment of "progressive" elements in the Gulf/Peninsula
region as elsewhere in the world. They have long
condemned "feudalist" Gulf sheikdoms (including
Saudi Arabia), helped revolutionary elements either
attain or keep power (as in the Yemens), and given
verbal and material assistance to those who would
change the established order (the Dhofar rebels). They
have committed time, resources, and prestige to the
support of such elements, and they have a vested
interest in maintaining their revolutionary image and
appealing to radical forces.
This interest is reinforced by the fact that in the
Gulf, as in all Third World areas, the Soviets have
been waging a struggle with the Chinese for patronage
of the few revolutionary elements there are. In the
Gulf and Peninsula, the Chinese have now withdrawn
from any practical involvement in this struggle. They
cut off their support to the Dhofar rebels in 1973, and
* These general conclusions were contained in the Office of
Economic Research's "International Oil Developments" of 20 May
1976.
in assessing the various objectives described above,
it seems clear that the Soviets do not have a vital
strategic interest in the Gulf/Peninsula region. Strate-
gic interests motivating them relate to broader policy
interests-the drive to bolster their strategic presence
in the Mediterranean Sea-Indian Ocean area, a felt
need to minimize US influence and prevent Western
control of the region's oil resources, a desire to
strengthen their own leverage in Middle East politics,
and the general aim of strengthening ties with nations
on their southern flank. Their own local interests-
insuring their own future access to the region's oil
resources, tapping the hard-currency holdings of
wealthy Gulf nations, and promoting radical changes
in local governments-are secondary, although they
may well gain added weight in future years.
The fact that this region, in and of itself, may not
yet be considered a high-priority area by the Soviets
does not imply a lack of Soviet interest in penetrating
the region and advancing the USSR's position there. It
does, however, imply a lower level of intensity in
Soviet efforts than might be seen elsewhere, less
anxiety about unfavorable occurrences and trends,
and less inclination to risk confrontation with the
West in pursuit of Soviet objectives.
In trying to advance their own position in the
region and curtail that of the West, the Soviets face a
variety of obstacles. Most importantly, they are
dealing with nations which have deep-seated anti-
Communist and anti-Soviet attitudes. In addition,
there are a variety of forces hostile to each other in the
area; this both invites and complicates Soviet efforts
at manipulation. And there are inherent contradic-
tions in the USSR's own objectives-support for
revolution and subversion is clearly incompatible with
pursuit of good state relations. And finally, this is an
area of strong Western economic interest and influ-
ence; its strategic importance for the West is clearly a
factor which the Soviets must continually weigh.
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1. Intrinsic Hostility and Suspicion
The ideological and religious rejection of Commu-
nism by the conservative Muslim nations of the area,
led by Saudi Arabia, and the longstanding suspicion
of Soviet intentions held by these nations, particularly
Iran, pose a strong impediment to substantial im-
provement in Soviet relations with them. These
attitudes are coupled with a determination on the part
of the rulers of these nations to assert their own
independence and to prevent any kind of Great Power
domination of the area.
2. Conflicting Interests
Many of the Soviet interests described above would
seem to be best served by the improvement of political
and economic relations with the existing governments
of the region. The glaring exception to this general
premise is the Soviet ideological commitment to the
subversion of these same governments. Obviously this
commitment is incompatible with the promotion of
harmonious relations with a country in which the
USSR is actively supporting insurgency (e.g., Oman);
and it seriously jeopardizes good relations with other
nations which are either supporting the nation
concerned (as Iran is assisting Oman) or strongly
oppose such actions generally (Saudi Arabia). In such
a case, the Soviets have the constant problem of
deciding which of their objectives is more important
to them.
A similar, though less dramatic, contradiction
occurs whenever the Soviets support dissident ele-
ments in a country with which they are also trying to
establish close bilateral ties. While pursuit of both is
possible, and is the approach usually taken by the
Soviets, it tends to weaken both elements of the
policy. For example, Soviet support for the tiny Saudi
Communist Party in exile antagonizes the Saudi elite
with which the Soviets are simultaneously trying to
establish relations; and because they are trying to
cultivate the Saudi government, the Soviets give only
limited support to the Saudi Communists.
A variety of contradictions is continually being
encountered by the Soviets in the Gulf/Peninsula area
itself. For example, Soviet assistance to the Iraqi
government in its battle with the Kurds during the
early 1970s was detrimental to Soviet relations with
Iran, which was supporting the Kurds. Similarly, the
Soviets might antagonize Iraq by selling arms to
Kuwait, which wants them partially to deter Iraqi
aggression. Soviet efforts to cultivate both North and
South Yemen have been complicated by the hostility
of the two Yemens toward each other.
3. Economic Appeal of the West
The oil-rich states of the Gulf have looked almost
entirely to the West as both the market for their oil
and the supplier of products and technology. The
West pays hard currency for its oil; the Soviets for now
have neither the need nor hard currency. And the Gulf
nations, given the choice, clearly prefer Western over
Soviet civilian technology; even Iraq has been
reorienting its foreign trade position and is looking
increasingly to the West for advanced technology.
4. US Response
Finally, Soviet action is inhibited by the West's
vital strategic interest in the area. The Soviets
probably expect that any strong action on their part in
this region would draw a US response-for example, a
buildup of the Soviet naval presence in the Gulf might
lead to a similar buildup in the US presence, and
attempts to gain access to port facilities might produce
a corresponding US interest in further expanding its
own facilities in the region. Such actions, would, in
addition, have a negative effect on US-Soviet detente.
While this factor does not rule otit aggressive Soviet
policies, it is certainly a strong restraining element.
II. THE TOOLS OF SOVIET POLICY
In seeking to translate their objectives in the
Gulf/Peninsula region into operational policies, the
Soviets have a host of tactical approaches open to
them. These range from the cultivation of diplomatic
and cultural relations with existing regimes to support
of subversive activities against such regimes. In
between lie such options as development of trade,
economic and military assistance, and the use of
propaganda.
A. Bilateral Contacts
Obviously, the first step in promoting state-to-state
contact is the establishment of diplomatic relations
and an exchange of representatives. This provides at
least a formal level of communication and establishes
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a basis for the further development of political,
economic, and cultural ties. Subsequent progress in
developing contacts generally involves the exchange
of delegations in an effort to promote closer relations
through personal contact and the trading of informa-
tion. Depending on the circumstances, such delega-
tions might involve cultural or parliamentary repre-
sentatives, economic and financial officials, military
personnel, or high-level political figures. And finally,
the Soviets like to formalize their relations with other
countries in protocols, agreements, and treaties.
The Soviets have to date failed to make a
breakthrough in establishing diplomatic relations with
the traditionalist Gulf states. * The latter, headed by
Saudi Arabia** and including the United Arab
Emirates (UAE), Bahrain, Qatar, and Oman have
refused to have any formal dealings with Communist
countries.
antagonizing the Saudis continues, however, to
prevail over any desire it might have to establish 25X6
contact with the Soviets.
Sporadic Soviet efforts to overcome the resistance of
these smaller nations have been frustrated rimarily
because of the opposition of Saudi Arabia,II
The emergence
of the UAE, Bahrain, and Qatar as independent states
in 1971 and the 1973 Middle East war presented the
USSR with potential openings which it tried unsuc-
cessfully to exploit. After independence, Moscow
cabled its official recognition to each and, at least in
the case of Qatar and the UAE, has indicated its wish
to establish diplomatic relations. The Soviets have
devoted more attention to the UAE than to the others,
probably because the latter, in the early 1970s, at a
time when its relations with Saudi Arabia were
strained,*** gave hints of responsiveness to Soviet
overtures. For example, in early 1976, the Soviets
reportedly offered to sell anti-aircraft missiles to the
UAE's defense forces as part of a deal involving
diplomatic relations, The UAE's need to avoid
* The USSR has had diplomatic relations with Iran since 1921,
Iraq since 1958, and Kuwait since 1963. Its ties with North and
South Yemen go back to its announced support for the forces which
came to power in those nations in 1962 and 1967 respectively.
** In 1926 the USSR became the first nation to recognize King
Faysal's father as King of Saudi Arabia and in 1929 became the first
nation to raise its Consulate General in Jidda to legation status. The
Soviet Union subsequently withdrew its legation in the 1930s, but
Soviet diplomats maintain that relations were never formally
severed. The Saudis, however, claim that no relations exist.
*** A territorial dispute between the two countries was finally
resolved in the summer of 1974. Only then did Saudi Arabia
recognize the federation.
In the case of those Gulf/Peninsula states with
which the Soviets have exchanged delegations, in
general the frequency of such visits, the scope of their
missions, and level of representation has increased as
bilateral state relations became closer.* While basic-
ally a straightforward foreign policy tool with overt
and obvious objectives, visiting groups can also be
used to advance less clear-cut aims, such as clandes-
tine collection and the establishment of contact with
sympathetic elements which can subsequently be
cultivated. One example of a delegation's being used
for several purposes arises in the Saudi-Soviet context.
* This is demonstrated visually in Figure 3 which shows Iraq
leading all nations of the region in exchanging visits with the USSR.
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Saudi Arabia's King Khalid.
The Soviets have concluded a number of cultural
and economic agreements with countries of the
region, including Iran, Iraq, Kuwait, and both
Yemens. They also have friendship treaties with Iran
and North Yemen, but these are of little significance,
certainly as compared with their Friendship and
Cooperation Treaty with Iraq, signed in 1972 for a 15,
year period. This is the only security-related treaty the
Soviets have with a nation in this region, and it is
probably the most extensive treaty the USSR has with
any Third World nation. It provides for consultation
on international and bilateral matters and binds the
two sides not to allow their territory to be used for any
action that might cause military harm to the other.
The treaty also states that the parties will develop
cooperation in the strengthening of their defense
capabilities. This particular provision was not in-
cluded in similar Soviet treaties with India and Egypt;
the former contained no defense provision and the
latter mentioned only the strengthening of Egypt's
defense capability. As there obviously is little contri-
bution that the Iraqis can make to Soviet defenses,
this provision probably covers Soviet use, present or
potential, of Iraqi port and airfield facilities.
B. Economic Inducements
Over the years, the USSR has extended economic
aid-primarily in the form of credits to be drawn for
specific development projects and to be repaid at
favorable rates-to Iran, Iraq, North Yemen, and
South Yemen. Because economic patterns are designed
and imposed from above in the USSR and do not
evolve from a multitude of unrelated business and
economic decisions, the Soviets are better able than
Western leaders to coordinate foreign trade decisions
with general policy objectives.
During the past 15 years, the USSR has granted
considerable assistance to both Iraq and Iran. Iran has
received six percent and Iraq five percent of total
Soviet aid to developing nations since 1954, and East
European countries have also extended credit to these
states. In Iran much of this assistance has gone to
finance construction of a large steel mill in Isfahan
and construction of a gas pipeline. The latter has
enabled Iran to service its debt to the USSR with gas,
which was previously a waste product. Soviet funds
and expertise in Iraq have been used for a variety of
projects-most importantly, the development of pe-
troleum fields, refineries, and pipelines. Such assist-
ance to energy production capabilities enables the
USSR to generate future repayment in oil or gas,
clearly desirable to the Soviets to whom such resources
represent hard currency.
Soviet efforts to cultivate significant economic ties
to Iran and Iraq have, however, been severely diluted
since 1973 as these nations have sharply increased
their purchasing power. While trade between these
states and the USSR has continued to grow, the level
of Iran and Iraq's trade with the rest of the world has
increased at a far greater rate. For example, while
Iraqi imports from the USSR grew by some 25 percent
in 1975, its imports from West Germany grew by over
200 percent and from Japan by over 150 percent in
the same year. Iraqi imports from the USSR represent-
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FIGURE 3 EXCHANGE OF DELEGATIONS BETWEEN USSR AND GULF/PENINSULA COUNTRIES
TYPE OF DELEGATION/VISITOR
Hil;h-.level*
Cultural
Economic
Government
Government Ministers
Friendship
Industrial
Military
Military leaders
Party
Trade Union
Months
High-level*
Cultural
Economic
Government
Government Ministers
Friendship
Industrial
Military
Military leaders
Party
Trade Union
Months
COUNTRY: IRAQ
lop
1974 1975
Years
High-level*
Cultural
Economic
Government
Government Ministers
Friendship
Industrial
Military _
Military leaders
Parma
Trade Union
Months
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112
1973 1974 1975 1976
Years
High-level*
Cultural
Economic
Government
Government Ministers
Friendship
Industrial
Military
Military leaders
Party
Trade Union
Months
High-level*
Cultural
Economic
Friendship
Industrial
Military
Military leaders
Pam
*1'olitburo Members, Prime Ministers, Heads of Government
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FG] FROM COUNTRY TO SOV UN N
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ed only 15 percent of total imports. Similarly, while
Iraq exported $373 million worth of goods to the
USSR in 1975, total Iraqi export earnings for that year
were about $8 billion.
As the economic situation of these states has
changed, the nature of their economic relationship
with the USSR has also shifted. For example, Iraq's
$800 million foreign debt now appears slight when
compared with its $2.5 billion in reserves. The fact
that Iraq has some 30 percent of these reserves in
Soviet and East European banks is a positive
development for the Soviets but hardly leaves them in
a donor-recipient role vis-a-vis Iraq. Similarly, as
Iran's wealth has increased, it has itself become a
capital-lending nation. In 1975, Iran for the first time
extended credits to three East European nations and
agreed to provide Moscow with long-term credits to
build a paper complex in the USSR. And finally, since
1972,. no new economic credits have been extended by
either the Soviets or East Europeans to Iraq and, since
1973, only a small credit extension has been made to
Iran by these nations. *
The comparative Soviet economic position in Iran
and Iraq thus appears to be both declining and
changing, and Soviet economic leverage has clearly
diminished. But the USSR will undoubtedly continue
to be involved economically with both these nations.
Much of the credit extended by the Communist
nations remains to be used, and development projects
continue to be negotiated.** In Iraq, for example,
discussions were held in May 1975 on joint projects
including a steel plates plant, a cement plant, and
several irrigation projects. And, in October 1975,
agreement was reached to cooperate in developing the
Luhays oil field in southern Iraq. Similarly, a 1975
agreement calls for cooperation between Iran and the
USSR on projects in both countries whose estimated
eventual cost could run as high as $3 billion,
As the Soviets continue to seek expanded commer-
cial relations with Iran and Iraq, they are also anxious
to enter the financial and commercial markets of the
other Gulf states. While they have virtually no
dealings with the traditionalist Gulf states,*** they
* See Figure 4.
See Figure 5.
*** There is a modicum of trade between the USSR and Saudi
Arabia which never ended when relations worsened in the 1930s.
This involves Soviet sales of some steel, cotton, and cheap consumer
items. In 1975, it amounted to less than $8 million worth of goods.
Soviet/East European Economic Credits
Extended to Gulf/Peninsula Countries
(in million US$)
Major Recipients
836
Iran Iraq
1954166
1973
Iran Iraq
19671June 76
Yemen Yemen
1954169
North
Yemen Yemen
1907/June 79
Communist Aid to Less Developed Countries of the
Free World, 1975, DER.
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SECRET,
Soviet/East European Credits Extended
and Drawn 1954-June 1976
(in million US$ )
kINN
Communist Aid to Less Developed Countries of the
Free World, 1975, DER.
are currently trying to develop such ties with Kuwait;
they have recently sought joint project cooperation as
well as financial cooperation. Kuwaiti leaders have
been dubious about the quality of Soviet work,
however, and thus far little has been accomplished.
Except for arms, the USSR has little to offer Kuwait,
which prefers Western technology and is in a strong
enough financial position to purchase what it wants.
The Soviets have provided assistance to both North
Yemen and South Yemen-to the former mostly
before 1967 and to the latter since 1967.* Of the $137
million extended to it thus far by the Soviets and East
Europeans, South Yemen has drawn only $17 mil-
lion,** suggesting that it has not organized itself to
use the credits in a meaningful way.
C. The Military Lever
The capacity to supply large quantities of weapons,
including highly sophisticated systems, is probably the
most significant tool the Soviets have for advancing
their interests in the Third World, It is a flexible
device which can be used in several ways depending
on circumstances and desired objectives. The Soviets
can sell such materiel outright or they can extend
credits to finance such purchases. Soviet credits, when
extended, are generally for specific projects and
usually involve lenient terms-typically a two percent
annual interest with 8 or 10 years to repay.
Increasingly, however, the Soviets have been seeking
cash payment for military goods as this is the best
means they have for gaining hard currency.
In theory, arms agreements serve to bind the
contracting parties together as a dependency is
established for training and spare parts. Soviet
military agreements generally include equipment,
technicians and advisors, and the training of military
personnel in the USSR. The presence of Soviet
technicians and the purchasing nation's need for their
expertise as well as for training gives the Soviets a
degree of leverage. As the Egyptian example has
demonstrated, however, there are limits to the Soviet
ability to use this leverage. The Soviet physical
presence may serve to alienate rather than bind, and
Soviet efforts to use the military supply lever to exert
pressure may antagonize rather than persuade. The
" See Figure 4.
See Figure 5.
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Soviets may then be faced with the prospect of losing
it all-weapons, repayment, presence, and influence.
Iraq has been one of the major recipients of Soviet
military assistance (some 13 percent of total Soviet
military aid extended to less developed countries);*
only Egypt and Syria have received more. In addition,
Iraq has contracted for some of the most sophisticated
Soviet systems, including MIG-23 fighters, SU-20
fighter bombers, TU-22 supersonic bombers, sophisti-
cated SAM systems, and SCUD surface-to-surface
missiles.** Iraq has received the bulk of its military
deliveries from the Soviets in the 1970s,*** and, in
* See Figure 6.
See Figure 7.
*** See Figure S.
1976, the deliveries continued at a high rate. By mid-
year, equipment worth over $400 million, mostly
MIG-23s, had already been delivered.
The USSR has also extended large-scale credits to
Iran for the purchase of military equipment (about 5
percent of all such Soviet aid).* The agreements have
totalled $826 million of which $589 has been used.
While these figures are significant, they are much
below the comparable figures for US arms deliveries to
Iran,** and the discrepancy is growing. Furthermore,
the USSR and East Europe have extended over twice
as much military aid to Iraq as to Iran over the same
* See Figure 6.
** Between 1955 and 1974, the US delivered $2,346 million in
military goods to Iran.
Soviet/East European Military Agreements with Less
Developed Countries 1955-1975*
North Yemen 0.9%
South Yemen 0.9%
*Including cash sales.
Communist Aid to Less Developed Countries of the Free World, 1975, OER.
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MAJOR COMMUNIST MILITARY EQUIPMENT DELIVERED
TO GULF/PENINSULA COUNTRIES
1955-1975*
LAND ARMAMENTS
IRAN
IRAQ
NORTH
YEMEN
SOUTH
YEMEN
Medium tanks
1446
Light tanks
-
Assault guns
188
60
Personnel carriers
1370
1889
175
1 8~
Artillery pieces
13 7
2220
266
NAVAL SHIPS
Minesweepers
-
Submarine chasers: escort vessels
-
3
-
Motor torpedo & missile boats
-
22
Auxiliary vessels (e.g., landing craft)
-
14
3-
1
AIRCRAFT
Medium _j Lt bombers
24
Light jet bombers
15
Jet fighters
-
387
21-
Large transports
-
Other (helicopters, trainers, etc.)
-
287
4
: I
GUIDED MISSILES
Air to surface
-
Air to air
_
_
Surface to air
21
---
Surface to surface
-
15
period. And, most importantly, Iran, by its own
choice, has purchased no sophisticated arms from the
USSR, preferring to purchase these in the West and
avoid dependence on the Soviet Union. *
The Gulf oil countries, with their great wealth, have
become a tremendous market for military equipment.
Iran and Saudi Arabia are making large-scale pur-
chases from the West, and Kuwait alone contracted
for $1 billion worth of military equipment in 1974 and
1975. Even the small Gulf emirates are in the market
for arms and are willing to pay cash. The Soviets
would certainly like to tap this reservoir of hard
currency by selling arms, but have been deliberately
kept at a distance.
With the exception of Iraq, which is probably
paying cash for much of its most recent arms
purchases from the USSR, Kuwait has been the only
potential buyer among the Gulf states. Arms negotia-
tions between Kuwait and the USSR, under way since
1974, have been complicated by Soviet concern that
such an accord would antagonize Iraq, by disagree-
ment over the terms of payment, by Soviet unwilling-
ness to sell what the Kuwaitis wanted to buy,
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Soviet Arms Agreements with
Gulf/Peninsula Countries 1966-1975
(in million US$)
Iran Iraq Iran Iraq
1968170 1971175
North South
Yemen Yemen
1966170
North South
Yemen Yemen
1971175
Communist Aid to Less Developed Countries of the
Free World, 1975, OER.
25X1
While the amount of the deal,
reportedly $400 million, is small compared to total
Kuwaiti arms purchases, such a sale would represent a
significant success for the Soviets.
D. Propaganda
Soviet use of the media as an arm of policy is
obvious given centralized control of both the press and
broadcasting services in the USSR. Soviet press articles
present general Soviet policy in the Persian Gulf/Ara-
bian Peninsula region in an altruistic , light and
condemn the imperialist designs of the West. Official
Soviet broadcasts beamed into the area do the same.
Similarly, the propaganda machine is organized to
support the favored forces in local struggles-such as
the rebels in Dhofar-and to encourage preferred
domestic policies-such as formation of a progressive
national front in Iraq. In addition to this official
network, the Soviets support clandestine broadcasting
operations which take more extreme positions than the
former, for example, supporting the Tudeh Commu-
nist Party of Iran.
E. Subversion
A major tool of Soviet policy has always been the
use of subversion designed to strengthen local forces
sympathetic to the Soviet cause, influence policy, and
eventually replace existing, unfriendly governments
with responsive ones, The Soviets may choose to
operate through the local Communist Parties, through
local dissident groups, or through active support of
armed insurrection.
1. Local Communist Parties
Soviet support for local Communist Parties is more
a liability than an asset in the Gulf/Peninsula region.
The Parties are illegal in the strongly anti-Communist
Gulf countries and unable to function effectively
underground. Soviet backing for the exile or under-
ground groups which do exist serves mainly to
antagonize those governments with which the USSR
would like to improve relations. Even in Iraq, where
the Communist Party is legal, it is perceived as a
competitor by the ruling elite, and Soviet support for
the Party thus serves to undermine relations with that
elite. In spite of these drawbacks, the USSR remains
committed ideologically to backing the Parties and
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must therefore at least go through the motions
furnishing political and material support.
of confrontation with the dominant Baath Party (BPI). It
As stated, the underground Parties of the region are
weak. For example, the leader of the Communist
Pn;rty of Saudi Arabia, after spending several years in
Moscow in the 1960s. now lives in Serial
re;3orts of the existence of an ineffective underground
Communist Party in Bahrain with which the Soviets
try to maintain contact, there is no available evidence
or any such organizations in Qatar and the UAE.
Such groups, if they exist at all, are not particularly
noteworthy. *
Kuwait allows no political parties to function, but,
at least until August 1976, did permit Communists
and Marxists to openly espouse their philosophy. A
country
of non-Kuwaiti Communists live in the
Me Tudeh Party of Iran has historically had close
ties with the USSR, but it is not clear how close the
cu,rent relationship is. It is an illegal Communist
Party which operates underground and has received
some Soviet support, although there is little evidence
on this subject. While official Soviet radio broadcasts
arc circumspect, clandestine broadcasts beamed into
Iran from East Europe support the Party. The Party's
leaders are in East Europe and its Iranian organiza-
tion--if any--is small.
The Communist Party of Iraq (CPI) functions both
openly and underground. A member of the National
Front government of that country established in 1973,
the CPI has had a history of competition and bloody
was largely because of Soviet pressure that the
Communists participated in the National Front, and
animosity between the CPI and BPI persists. The BPI
has rejected a number of Soviet-supported proposals
for joint military and economic undertakings with the
CPI and has in fact tried to curtail the authority of
Communist representatives in the civil service and
other organizations. Because of its obviously beseiged
position, the CPI intends to continue to function as an
underground organization as well as a member of the
government.
Despite clear indications that the Iraqis are
annoyed by Soviet representations on behalf of the
CPI, the Soviets have chosen to sacrifice a measure of
their strength with the Iraqi government and expend
some of their political capital in the interests of the
CPI. They continue to make CPI advancement or at
least protection an important element of their policy.
In his speech during Iraqi leader Saddam Husayn
Tikriti's visit, to the USSR in April 1975, Soviet
Premier Kosygin urged the further "consolidation of
the progressive forces of the country" and specifically
encouraged further CPI and BPI cooperation
Iraqi officials have also
indicated irritation wit CPI criticism of Iraq's March
1975 agreement with Iran and have expressed concern
that the Soviets might become more actively involved
in Iraq's internal affairs through the CPI.
The smoothest situation which the Soviets have at
the moment is in South Yemen, where the Communist
Popular Front for the Liberation of Oman (PFLO) which will be Iraqi leader Saddam Husayn is greeted by Soviet Premier
discussed below. Kosygin.
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Party, called the Peoples Democratic Union, merged
with the ruling National Front Party and the Baath
Party in October 1975. The Soviets applauded this
merger which was reportedly strongly backed by their
main supporter within South Yemen, General Secre-
tary of the National Front Abd Al-Fattah Ismail. It is
less clear that President Salim Rubayyi Ali, who is not
so firmly in the Soviet camp, was in favor of the
action. And there are some recent indications that the
Communist Party itself feels threatened as a result of
the merger.
2. Dissidents and Potential Subversives
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Ra's al Khaymah~s4}~8i
Pit!!
Umar'~l(iaimah ??.?.
Umm al paywayn -li Fu urah
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Dubsyy4 ~ b7m1 ''II
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K a
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Dubai Fajairsh 6
9hariah
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A. Geostrategic Achievements
Efforts by the USSR to bolster its military-strategic
position in the Gulf/Peninsula region and thus to
reinforce its broader strategic posture have met with
only limited success in the past decade and virtually
none since the 1973 war. As we have seen, while they
have established close relations with several radical
nations of the area, their hopes of parlaying the
victory of revolutionary forces in South Yemen into
rapid and continuing gains elsewhere in the area have
been frustrated in Dhofar, and they have made no
progress with the traditionalist states.
In contrast, the 1972 conclusion of the Soviet-Iraqi
Friendship and Cooperation Treaty was certainly a
major achievement of Soviet policy. The Soviets have
also gained access to port facilities in both Iraq and
South Yemen. Soviet ships have access to two Iraqi
ports-Umm Qasr and Basrah. While Soviet naval
auxiliaries and a few warships have called at the latter
on a fairly regular basis since 1971, there is no
evidence that the Soviets consider it an important
support facility. They do, however, use Umm Qasr for
* Simultaneously, the Soviets were conducting their airlift to
Angola, which reached its peak in November 1975.
occasional refueling, and a small portion of the Soviet-
constructed facilities at the port has apparently been
allocated to joint Iraqi-Soviet naval support. The
Soviets have used the port of Aden in South Yemen
more extensively than either of the Iraqi ports, and
they also have anchoring privileges at South Yemen's
Socotra Island. In addition, Aden has served as a
staging base for Soviet airlifts of military supplies to
other areas. Compared with the USSR's expanding
operations in Somalia, its use of the Iraqi and Yemeni
facilities is of secondary importance. In addition, both
states retain control over the use of the ports, and
reported requests by the Soviets for base rights have
been denied.
During the 1970s, the Soviets have established an
impressive physical presence in the Gulf/Peninsula
area. They have over 1,000 military advisers and
technicians in Iraq and over 250 in South Yemen.* In
addition, a number of Cuban military personnel have
been stationed in South Yemen, serving largely as
advisers. The Soviets and the East Europeans also
have over 3,500 civilian technicians involved in
various projects in Iran and some 2,500 in Iraq, with
smaller numbers participating in the economic devel-
opment of South Yemen, The Soviets are also training
both military and civilian officials from these coun-
tries and have a number of students from the region
studying in the Soviet Union. In the past two years,
the numbers involved in these programs have re-
mained fairly constant.
B. The Question of Western Influence
The Soviets took satisfaction in the 1973 Arab oil
embargo, the subsequent oil-price rises and the
mounting independence of the oil-rich nations of the
Gulf from the US and other Western nations. They
have had to watch in some frustration, however, as
former Western ascendancy over these oil nations has
given way to influence which is indirect and subtle,
but no less significant. Previously dependent on the
West to run their petroleum operations and sell their
oil, these nations now control their own production
and reap their own financial benefits. But, as
indicated previously, they remain dependent on the
*The Chinese continue to participate in economic development
projects in the region; in 1975, they had more civilian technicians
working in both North and South Yemen than the Soviets and East
Europeans combined. They are not involved in military programs,
however, and have no military presence in the area.
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West to purchase their oil, and they themselves look to
the West for purchases, technology, and investment.
The Soviets also continue to worry about a possible
anti-Communist alliance in the area, directed by the
US.
C. Relations with Target States-
Intangibles
Iraq
While formal Soviet-Iraqi ties are fairly close at this
point, relations between the two nations have always
been complicated and frequently strained. This is
partly because of differing approaches to the general
Middle East situation. Iraq opposes both the Moscow-
backed Geneva conference and Soviet acceptance of
Israel's right to exist and supports the militant wing of
the Palestinian movement. In addition, the Soviets
have often found themselves in the middle as their
two clients, Syria and Iraq, have clashed. Iraq's active
involvement in the Middle East has thus served
frequently to complicate rather than complement
Soviet policy. Bilateral strains have also resulted from
previously-mentioned differences over Iraqi domestic
politics and from Iraq's keen nationalist sensitivities.
Added to this have been Iraq's increasing wealth and
ability to indulge its preference for Western goods.
The chronic Kurdish rebellion in Iraq, which flared
up most recently between the spring of 1974 and
March 1975, and the resultant Iraqi dependence on
the USSR for arms provided the Soviets with a lever
which they apparently exercised with some enthu-
siasm. They regulated the flow of equipment and
ammunition to suit their own purposes. During this
period, Iraq slowed its 1973 drift toward the West and
again turned to the USSR for assistance in oil
exploration and production, although it continued to
purchase considerable equipment from the West.
The Soviets were very upset by the Iran-Iraq
agreement of March 1975, which effectively ended
the Kurdish uprising. They had lost their leverage and
been excluded from the negotiations. They reportedly
went so far as to ask the PDFLP to wage a
propaganda campaign against Iraq, and the Iraqi
Communist Party came out against the agreement.
The Soviets were also concerned by the possibility
of collaboration between Iraq and Iran in a pact
which might harm the Soviet position. The March
accord had included wording regarding the exclusion
of foreign influence from the area. The Soviets felt this
was directed at them. Furthermore, in the spring of
1975, Saddam Husayn visited Tehran, and subse-
quent reports indicated that Iran and Iraq had agreed
to discuss security in the Gulf.
While it seems highly probable that any formal
cooperation between Iran and Iraq was doomed given
those nations' differing views of what collective
security in the Gulf should entail,* the Soviets were
worried. They clearly felt that any agreement on Gulf
security would be directed at limiting their influence
and eliminating their presence from the Gulf-par-
ticularly from the use of port facilities in Iraq.
In June 1975, the Soviets reportedly told the Iraqis
that they were suspending all action on outstanding
military sales agreements with Baghdad. They linked
the suspension to a demand for clarification of Iraqi
policy in the Gulf, implying that any collective
security agreement might limit Soviet access to the
Gulf through the Straits of Hormuz. The fact that
there were no major Soviet arms deliveries to Iraq
reported between June and late August suggests that
the Soviets may have suspended deliveries until they
were sure that Iraq had changed its position. By late
June 1975, the Iraqis had made it clear that they did
not support Iranian initiatives on a Gulf-security pact.
At that time, Iraqi President Ahmad Hasan al-Bakr
publicly announced that he was opposed to the
formation of any military or political organization by
the Persian Gulf states.
The Soviets were also annoyed during mid-1975 by
what they considered to be the watering down of the
National Front government and the suppression of
Iraq's Communist Party as well as by Iraq's expanding
economic relations with the West. And they were
upset by Iraq's attempts to smooth relations with its
conservative Arab neighbors while its relations with
another Soviet client, Syria, deteriorated.
While none of these situations had been relieved by
mid-1976, the Soviets and Iraqis had at least found a
common interest in their opposition to Syrian inter-
vention in Lebanon. This intervention threatened
* Iran has wanted a collective security agreement in the Gulf
both to gain the exclusion of both superpowers from the Gulf and to
curtail Iraq's support for subversion. Iraq has wanted a guarantee of
freedom of navigation in the Gulf in order to protect its own fleet
from Iran's superior forces.
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Soviet and. Iraqi-backed leftist and Palestinian inter-
ests in Lebanon. In this instance, Iraq's pressure on
Syria reinforced Soviet warnings to the latter. In June
1976, Kosygin visited Iraq as well as Syria, and while
the visit did not resolve any of the outstanding
differences between the two, the final communique
carried implicit criticism of Syria in its endorsement of
t he view that the Lebanese should be permitted to
resolve their own problems. In addition, the Soviets
s -cm to have made some concessions to the Iraqis in
the communique's section dealing with a Middle East
s ?ttlement. *
During the mid-1960s, the Soviets shifted their
policy towards Iran, stressing rapprochement rather
than belligerence. The new approach paid off as
c:'onomic relations developed between the two nations
and diplomatic contacts became more cordial. The
gradual improvement appears to have peaked in the
early 1970s, and, since late 1973, political relations
have deteriorated, although economic dealings have
remained strong. 'There are several immediate causes
for the political decline, all of which have been
mentioned previously; they include Iran's involve-
ment in Oman, its rapid military buildup, and what
the Soviets perceive as Iran's intention to serve as
policeman of the Gulf. In addition, with its new
wealth, Iran has been able to pursue its own economic
objectives aggressively and has proved a tougher
c -onomic negotiator than was previously the case.
'The Soviets have made their displeasure with the
h end known in various ways. They apparently
c.. mmunicated it to Shah Mohammad Reza Pahlavi
directly during his visit to Moscow in November 1974,
and the communique issued after his visit was the
C olest in some years. In addition, Soviet propaganda
has been very critical of Iran's policies. And, in the
sharpest indication of Soviet disapproval, Brezhnev
c)mpletely failed to mention Iran in his report to the
Soviet Communist Party Congress in February 1976.
An Iranian official subsequently took note of the
intended snub, commenting that this was the first
" One of the standard Soviet positions, support for the right of all
states in the area to exist, was omitted; and the reference to the
withdrawal of Israeli troops from all occupied Arab territories did
n >t specify 1967 as the benchmark date. These omissions did not
represent a permanent Soviet change-simply a temporary gesture
toward the Iraqis.
Shah of Iran is greeted in Moscow by Soviet leaders.
time since Lenin that Iran had not been mentioned in
such a report and that all other neighboring states had
been referred to. A Soviet official in Iran stated at the
time that this "spirit of silence" would prevail until
Iran demonstrated its desire for friendly relations. Iran
has thus far shown no inclination to change its policies
as a result of Soviet pressure and, in fact, took a
further step away from the Soviets in April 1976, when
it broke diplomatic relations with Cuba because of the
latter's expressed support for the banned Tudeh Party.
The Soviets have scored their most distinct success
in South Yemen, where a radical Marxist government
came to power in 1967. But even here the situation
has become more complex in the past several years as
South Yemen has sought to smooth relations with its
conservative Gulf neighbors in order to benefit from
the rapidly increasing wealth of these nations. While
the Soviets apparently encouraged South Yemen's
initial attempts to gain conservative Arab financial
support, there are indications that they are not pleased
with South Yemen's rapprochement with Saudi
Arabia in early 1976.
In 1974, as the conservative Arab states grew
wealthy and as the Dhofar rebellion began to suffer
defeats, even the radical South Yemeni leaders were
torn between their ideological commitment to subvert
the other states in the region and the potential
benefits of modifying this support. Kuwait had
reportedly offered financial assistance in return for
such modification, and the other oil-rich nations were
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also potential donors. During 1974 and 1975, South
Yemen did take steps aimed at mending its fences in
the Gulf and broadening its contact with the rest of
the world.*
The USSR reportedly encouraged South Yemen to
move in this direction. The Soviet rationale was that
South Yemen could pursue a two-tiered policy,
appearing to modify its politics while in fact building
up its strength, courting the rich Gulf states while
increasing subversion within Oma
n March
1976, after prolonged negotiations, Saudi Arabia and
South Yemen announced their intent to normalize
relations. In the spring of 1976, there were some
indications that the Soviets were not happy with the
agreement, and several East European diplomats
expressed concern that South Yemeni President Ali
was not sufficiently attuned to the Communist side
ideologically and that he might have come under the
influence of Egyptian President Sadat.
In spite of these apparent reservations, the Soviet
position in South Yemen remains strong.!
* South Yemen had an additional motive-the hope that when
the Suez Canal reopened Aden would once again become a major
port. The PDRY was thus also anxious to re-establish ties to the
shipping nations of the world. In fact, since the canal opened in
June 1975, Aden has received less traffic than anticipated.
maintain an extensive presence in the PDRY armed
forces, and the East Germans reportedly have influ-
ence within South Yemen's security apparatus.
North Yemen
Soviet relations with North Yemen have fluctuated
but on a generally downward spiral- since the late
1960s. The Soviets had given considerable assistance
to the revolutionary forces in North Yemen during the
protracted civil war of the 1960s and were displeased
when the forces they had supported compromised
with royalist elements in 1967, Relations were further
strained because of Soviet support for the new radical
government in South Yemen in that year. Given the
mutual antagonism existing between the two Yemens,
the Soviets would have had trouble supporting each
equally, and they clearly sided with the South. Some
Soviet involvement in North Yemen has continued,
however, because of the latter's dependence on Soviet
military equipment and advisers and because of prior
commitments and ongoing projects.
In recent years, there have been a number of reports
of Soviet pressure on North Yemen to adopt a more
pro-Soviet posture. The Soviets have keyed their
approach to the vulnerabilities of North Yemen,
which needs outside assistance, both economic and
military, if it is to survive. The Soviets have on
occasion threatened to hold back on military as-
sistance; on other occasions, they have held out the
promise of increased assistance. The North Yemenis
have indicated that they believe the USSR has backed
provocations on their borders with South Yemen.
This combination of implied threats to North
Yemen's security and offers to help that nation resist
such threats might well have been more effective if
North Yemen had not received support and assistance
elsewhere. By 1973, however, North Yemen was
receiving some help from Saudi Arabia, several other
Gulf states, and the US and was receiving multilateral
assistance from the World Bank.
Throughout 1975 and 1976, North Yemen has tried
to play the Saudis and Soviets off against each other.
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In the absence of a positive Saudi response in
November 1975, North Yemen agreed to discuss an
arms deal with the Soviets. While details of these
negotiations are not known, it is likely that North
Yemeni leaders told the Soviets that such talks would
preempt the Saudi deal. In any case, the Soviets are
reported to have agreed to supply North Yemen with
modern weapons, including MIG-21s, as well as
replacement equipment. The initial Saudi reaction to
these arms talks was reportedly one of annoyance;
however, they agreed to a new plan of assistance
shortly thereafter.
The saga of the arms deal continued during 1976
and culminated in June 1976 with an apparent North
Yemeni decision to accept no more Soviet weapons.
The Deputy Commander in Chief of North Yemen's
Armed Forces publicly stated on 16 June that his
country would do without Soviet experts and that
cooperation between the two countries was being
suspended. He claimed that the Soviets had stopped
supplying spare parts, but there is no evidence to
support this. The deputy went on to give what was
undoubtedly the real reason-that North Yemen had
contracted for arms from the US, to be financed by
Saudi Arabia. Thus, in mid-1976, the Saudis appeared
to be conducting a successful effort to wean North
Yemen away from the Soviets.
Kuwait
The Soviet situation in Kuwait is in some ways the
reverse of that in Iran. The Kuwaitis have not been in
general as hostile toward the Soviets as some of their
neighbors. Moreover, they have reckoned that they
might benefit from closer relations with the Soviets if
thereby they could induce the Soviets to reduce
suppport for Iraq in the latter's border claims against
Kuwait. But there is little common economic ground
to be developed. The one point at which Soviet-
Kuwaiti interests converge has been the Soviet desire
for hard currency and the Kuwaiti desire to purchase
arms. As indicated previously, agreement on such a
purchase may have been reached.
D. Leverage on Energy Questions
The Soviets have been frustrated in their efforts to
inject themselves in a substantial way into the Gulf
energy picture. While they are importing increasing
quantities of oil from Iraq and gas from Iran, the
figures involved are insignificant compared with the
total energy exports of these countries. And, as noted,
both Iran and Iraq have become increasingly tough
about the terms of Soviet payment for the energy
being purchased.
Soviet efforts to become more deeply involved in
the logistical aspects of energy production also have
been only slightly successful. They have given strong
backing to Iraq's energy exploration and production,
but there are indications that Iraq prefers Western
technology in this area as in others and is contracting
with Western firms for such operations. The Soviets
have also been involved in some unsuccessful explora-
tion in South Yemen. Otherwise their efforts have not
borne fruit. In 1975, Kosygin reportedly suggested to
Iranian Prime Minister Hoveyda that Iran and the
USSR cooperate in manufacturing oil production
equipment so that Iran and other nations could
reduce their heavy reliance on the West; the offer
seems to have fallen flat. Similarly, in January 1976,
Pravda carried a major article suggesting that the
USSR assist OPEC states in marketing and transport-
ing their oil by helping in the construction of tankers
and port facilities. This suggestion, confirmed by a
senior Soviet foreign ministry official, has apparently
received no response. In this, as in other economic
areas, the Soviets seem to have little to offer the oil
states.
E. Access to Hard Currency
The Soviets have watched in dismay as the huge oil
profits of the last several years have poured back into
the US and West Europe for equipment and expertise.
In addition, most OPEC holdings and investments are
in the West; only 5 percent of total OPEC holdings
were in Communist countries in 1975. Of the OPEC
countries, only Iraq has sizeable holdings in the
Communist world (some 30 percent of its total
holdings). In fact, the Soviets have little means of
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attracting hard currency. They currently are import-
ing more from Iraq than they are exporting and the
terms of their trade with Iran have been subject to
considerable negotiation. Kuwait has indicated a
willingness to extend loans at commercial interest
rates to the USSR, and, as indicated, may have agreed
to purchase arms. However the amounts involved
remain relatively small.
F. Revolutionary Image
With Chinese withdrawal of military support for
the PFLO in 1973, the Soviets became the unchal-
lenged outside backer of the "national liberation"
struggle in the Gulf region. This can be little
consolation at the moment given the low state of
subversive forces in the area. However, there is little
doubt that the Soviets, through their material support
for these forces, have established themselves for the
foreseeable future as the patrons of revolution in the
Gulf.
A. Prevailing Trends Work Against USSR
The gains which the Soviets have made in the Gulf/
Peninsula region were made before the October 1973
Middle East war. As we have seen, since that war,
they have accomplished little and, in fact, have
suffered a number of setbacks. On the face of it, this is
incongruous, as the Soviets appeared to have emerged
from the war with enhanced prestige and the US with
damaged relations in the region. In this particular
case, however, US losses did not result in correspond-
ing Soviet gains.
We have discussed various underlying factors which
have contributed to the decline in Soviet fortunes
since the 1973 war and which will probably continue
to militate against Soviet gains in the region. The first
is the basic antagonism towards the USSR held by
both Iran and Saudi Arabia. When combined with the
new financial independence of these nations, this
antagonism becomes not only an effective obstacle to
Soviet progress but an active force working to
undermine, existing Soviet influence.
Secondly, contradictory tactics will continue to
impede Soviet penetration of the area. The Soviets
will try to establish closer economic and political ties
with the conservative nations of the region in order to
limit Western influence and gain access to oil and
hard currency. At the same time, they will continue to
promote subversion in these nations-thus intensify-
ing antagonism rather than encouraging responsive-
ness. Their continued pursuit of both courses will
complicate the former without providing significant
chances of influencing the latter.
The growing wealth of the Gulf countries will
remain the third, and perhaps the most significant,
long-term impediment to Soviet progress in the area.
This is only partly because of the effect of new wealth
on Saudi Arabia and Iran. Of far more long-term
importance, as we have seen, is the fact that the Soviet
Union has proved unable to attract any of this wealth
to itself and has been largely excluded from the
growing set of relationships and interdependencies
developing between the rich Gulf states and the
nations of the West. This wealth is also having a
ripple effect on the poor nations of the area with
which the Soviets have previously made their biggest
gains. The wealthy Gulf states have begun to actively
support the poorer nations of the area which oppose
Soviet influence (e.g., Iran's support for Oman) and to
obtain influence over the policies of the poorer nations
which have been dependent on the USSR for
assistance (e.g., Saudi Arabia vis-a-vis North and
South Yemen).
And finally, reduced friction among the nations of
the Gulf works to Soviet disadvantage. Conflict can
act as a catalyst producing a need for Soviet assistance
and ultimately presence and influence. For example,
the degree of warmth in Soviet-Iraqi relations has
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varied with the intensity of Iraq's conflicts with the
Kurds and with Iran. Thus, it seems clear that future
Soviet strength in the region will depend to a
considerable extent on the stability of the region itself.
As this is an area noted for local antagonisms and
tensions, it seems likely that exploitable situations will
occur from time to time in the years to come.
B. Alternative Scenarios
While there is little indication that prevailing
tendencies in the Gulf/Peninsula region are about to
change significantly in the short-term, it is always
possible that new events and changed circumstances
will combine to alter the situation. The following
scenarios are presented as conceivable eventualities-
not as probabilities.
1. Deterioration of Gulf-State Relations
with US
It is entirely possible that, for one of several reasons,
the relatively close political ties between the Gulf-
state nations and the United States could be
disrupted. The most obvious and likely cause of this
would be the outbreak of another Arab-Israeli war.
While Iran's relationship with the US might be little
affected, Saudi Arabia would undoubtedly identify
closely with the Arab protagonists-and an oil
embargo directed at Israel's supporters might well
occur again. While the effects of such an embargo
would depend on a host of variables-including the
duration of the war, the Western response to an
embargo, and the oil states' willingness to absorb
continuing financial losses-it would almost certainly
undermine Gulf-state relations with the West.
Whatever the damage to the West from an oil
embargo, it is not clear that the Soviets would gain
proportionally. They could not move in to fill any
economic vacuum created, as they could neither pay
for nor absorb the oil in which the Gulf states would
be drowning. Their support would therefore be
primarily verbal. While it is conceivable that they
would pledge to defend the oil states in the event of
threatened Western military intervention, this seems
unlikely given Soviet recognition of the West's vital
strategic interest in the matter. It is also unlikely that
the traditionalist Gulf states would want Soviet
military backing in such a situation.
The Soviet political position in the Gulf might
improve incrementally, however, as a result of
renewed Middle East fighting. Following the 1973
war, there was some sentiment in the smaller Gulf
states for closer relations with the USSR, and it is
possible that the Saudis and their smaller neighbors
might establish relations with the USSR in order to
put pressure on the West. Once in place diplomati-
cally, the Soviets would certainly seek to expand
contacts and develop commercial ties with these
nations. It seems likely, however, that once the war
and the embargo ended, the economic dynamics
currently prevalent would again emerge. This, com-
bined with continued regional antagonism towards
the Soviets would serve to limit the extent of any
Soviet rapprochement with these nations in the long-
term.
It is also possible that relations between the US and
the Gulf states could deteriorate for reasons less
dramatic than renewed war. Political differences over
matters such as the Arab trade boycott or the sale of
weapons could well cause an increase in friction. In
this case, once again, these nations, possibly joined by
Iran, might choose to seek improvement in relations
with the Soviet Union in order to put pressure on the
US. Such moves for the traditionalist states could
conceivably include the opening of diplomatic rela-
tions and the establishment of commercial ties. Iran,
for its part, might choose to purchase increased
quantities of Soviet military equipment-although its
preference would probably be to deal with Western
Europe. The Soviets would try to establish themselves
as much as possible in the region and to maintain
their contacts with dissident elements as well. Even in
this case, however, the basic complementary nature of
Western and Gulf-state relations would be working to
pull the US and these nations again into a working
relationship from which the USSR would continue to
be largely excluded.
2. Changes in Oil Terms of Trade
In the next several years, there are unlikely to be
any major developments (other than an embargo)
which could sharply alter the oil balance of trade.
Most developments in this respect are gradual and the
adjustments to them take considerable time. Even
sharply increased oil prices might produce only
somewhat reduced consumption as the oil-consuming
states have little alternative to buying their oil abroad.
Over the next decade, however, the West could be
motivated by high oil prices or major new oil
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discoveries to increase its own self-sufficiency (by
increasing oil production or by substituting other
energy sources for oil). Should this result in reduced
sales for the Gulf oil states, the latter would certainly
be more interested in developing trade relations with
the USSR. Similarly, should the Gulf states increase
their oil production capability and production beyond
Western purchasing capacity, they might also seek
Eastern markets.
While the USSR is currently in no position to
absorb large quantities of oil, this too could change in
the next 10 years. It is in fact quite possible that the
Soviets will continue to fall short of their oil
production goals, that they will be either unable or
unwilling to curb domestic consumption, and that
they and the East Europeans will therefore have to
purchase increased quantities of oil. For logistics
reasons, they would certainly look to the Gulf for these
purchases. While the oil producers are not likely to
prefer selling to the East, given the lack of hard
currency and attractive exports, they would undoubt-
edly bargain with the Soviets if faced with the loss of
Western markets (as a result of an oil embargo or
otherwise).
Should the oil balance of trade shift in this fashion,
it would certainly have a significant effect on the
structure of Gulf-state relations with both East and
West. The fabric of economic interrelationships
between Western and Gulf-state nations would be
weakened and new ties between the Eastern bloc and
these states would be forged. Political reorientation
would presumably accompany the economic shift.
For a number of reasons, the above scenario is
unlikely. For, while some of the necessary contingen-
cies are possible, they are not likely to be of long
enough duration, profound enough, or in the right
combination to produce a dramatic shift in trade
patterns. The oil states are not apt to price themselves
completely out of Western oil markets. As far as a
decrease in Western demand for Gulf oil is concerned,
major oil discoveries take considerable time to develop
and exploit, and the substitution of other energy
sources for oil is a time-consuming and difficult
process. Furthermore, many of the most important oil
states do not appear inclined to increase their
production radically; rather, they are concerned about
conserving their chief, in some cases only, national
resource. And it would be in the interests of neither oil
producer nor oil consumer to permit a prolonged oil
embargo. Finally, increased Soviet need for imported
oil will be gradual rather than dramatic, and the
Soviets will be in no position to replace the West as a
major consumer of Gulf-state oil for many years.
While any dramatic increase in Soviet purchases of
Gulf-state oil is therefore highly unlikely even in the
next 10 years, it is probable that the Soviets will
gradually increase their purchases and that the oil
states will have enough capacity to sell them the
desired quantities while maintaining their sales to the
West. The preferred Soviet approach will be to invest
in the oil production capacity of the oil states-as has
already occurred in Iraq-with oil being the repay-
ment commodity. This process is not likely, however,
to substantially alter the economic or political
orientation of the main Gulf states.
3. Internal Changes in Gulf States
Given their apparent inability to improve their
political position in the Gulf under current conditions
and their lack of the assets necessary to make
economic gains, the Soviets undoubtedly realize that
their best chance of making significant breakthroughs
lies in the overthrow of one or more of the
conservative governments of the region. Saudi Arabia
and Iran have made it clear that they would not
tolerate such an occurrence in one of the small Gulf
sheikhdoms, and it is highly unlikely that the Soviets
would involve themselves in any but the most
circumspect fashion should insurrection threaten in
one of these states. They would, however, certainly be
tempted to assist radical elements involved in an
attempted takeover in Iran, Saudi Arabia, or Kuwait
if they saw some prospect of their succeeding.
Kuwait is probably the most vulnerable of the three
nations as it has permitted various dissidents from
other Gulf nations to reside there and it has a large
foreign (mostly Palestinian) labor force. Neither Saudi
Arabia nor Iran would look favorably on a radical
takeover in Kuwait, and either might intervene to
prevent it. But this is not inevitable given Iraq's
possible involvement, and it is conceivable that such a
change could take place. In the event of insurgency in
Kuwait, the Soviets might be prepared to funnel arms
and other material support to the radicals through
Iraq. The Soviets would clearly benefit politically
from a radical takeover in Kuwait. Kuwait would be
more open to Soviet influence and might become a
partner with the Soviets in supporting radical ele-
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rents throughout the Gulf. Radical causes in the area
would receive a boost, both psychologically and
financially.
There is little to suggest that the Soviets are
optimistic about the chances for promoting radical
change in either Saudi Arabia or Iran in the near
future. Soviet commentary does not reflect any hope
of internal Saudi upheaval, although there is an
occasional reference to the growth of a modern
working class and the influx of immigrant labor
coupled with the assertion that this trend will
eventually undermine the feudal-theocratic founda-
tion of the nation. This line suggests an underlying
Soviet belief that time will work to Soviet advantage.
in the unlikely event insurgency should develop
within Saudi Arabia, the Soviets would probably try
to provide clandestine support to radical forces.
Should such forces come to power in Saudi Arabia, the
Soviets would benefit greatly. Saudi money, currently
directed at preventing Soviet encroachment, would
presumably be placed at the disposal of radicals
throughout the Gulf, and the smaller Gulf sheikhdoms
would be in considerable jeopardy of falling similarly
into radical hands.
It is somewhat more possible that reformist ele-
ments amenable to dealing with the USSR would
come to power in Saudi Arabia. In that case, the doors
would probably open to the USSR in the smaller Gulf
states as well, and with the establishment of embassy
and consular offices, the Soviets would quickly
become more visible throughout the area. They would
undoubtedly use this presence to try to develop
economic relations with the Gulf states as well as to
expand their contact with leftist elements there.
While viewing the chances of either radical or
reformist change in Saudi Arabia as basically long-
term, the Soviets may meanwhile be hopeful that the
current Saudi regime will make a modest shift towards
the Soviet Union in order to offset its present one-
sided relationship with the West. They may anticipate
that in the event of renewed and intense Saudi-US
friction, the Saudis would seek improved relations
with the USSR in order to put pressure on the West.
Soviet relations with Iran are already far more
:.advanced than those with Saudi Arabia, and efforts to
promote closer ties with the Iranian government
probably inhibit official Soviet commentary concern-
ing the prospects for radical internal change in that
country. While there is no evidence that the Soviets
anticipate such change in the near future, they may
consider it a possibility given Iran's large population
and developing economy. The Soviets may have
hoped at one time that Iran would move toward
.neutrality because of the Shah's determination to
prevent any foreign domination of the area. But they
have become increasingly disenchanted in the past
several years.
Nonetheless, the potential for developments in Iran
favorable to the USSR, particularly in the post-Shah
period, appears somewhat more promising than in the
other states of the area. As a more developed state
than Saudi Arabia, Iran is more vulnerable to radical
forces. Should a radical takeover occur, moreover, the
Soviets are in a better position to benefit than they are
elsewhere in the Gulf. Because of its larger population
and rapid development, Iran continues to have more
need of assistance and technology than its Gulf
neighbors. A complex economic relationship has been
developed between Iran and the USSR, and geo-
graphic proximity makes further cooperation feasible.
Even without a radical change, Iran may become
more deeply involved economically with the Soviets.
Economic problems have arisen recently as a result of
over-extension, and Iran may want to engage in
additional cooperative ventures with the USSR in
order to conserve capital.
The Soviets obviously would have a great deal to
gain from a radical takeover in Iran and would be
strongly motivated to assist radical forces in the event
of insurrection. Because of their common border, the
task would be fairly simple. The Soviets would
provide arms and material support to the radicals, but
would probably refrain from having Soviet personnel
become involved directly.
Should a radical takeover occur in Iran, the
implications for Gulf politics would be extensive. Iran
has overwhelming local military predominance and
the ability to threaten navigation in the Straits of
Hormuz. This has strategic implications for the West
as well as for Iran's Gulf neighbors. What is now an
active force in opposition to radical penetration would
become a major proponent of such penetration-and
a major obstacle to Soviet advancement in the region
would be removed.
* * * *
Having presented the worst-case possibilities for the
major traditionalist Gulf states, it is essential to re-
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emphasize that radical change in either Iran or Saudi
Arabia is very unlikely in the next few years and in
Kuwait only somewhat less unlikely. Furthermore,
even should radical change occur, certain important
factors would probably remain stable. The oil states
would need to continue selling oil to the West and
would probably continue to prefer Western equip-
ment and technology. This, combined with tradition-
alist religious conviction, inherent distrust based on
geographic proximity, and the desire for independence
would limit the extent of a turn by any of these
nations towards the USSR.
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Secret
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