HUGO CHAVEZ RETURNS TO RUSSIA SEEKING MORE ARMS

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003139 SIPDIS SIPDIS E.O. 12958: DECL: 06/27/2017 TAGS: PREL MARR ECON RS SUBJECT: HUGO CHAVEZ RETURNS TO RUSSIA SEEKING MORE ARMS Classified By: Ambassador William J. Burns: 1.4 (b, d). ¶1. (C) Summary: The Ambassador expressed strong concern to Security Council Secretary Ivanov and Kremlin Foreign Policy Adviser Prikhodko over the visit of Venezuelan President Chavez to Moscow, June 28-30, on the eve of Putin's meeting with the President in Kennebunkport. Noting that the visit was long-planned and not designed to send any signal, both Russian officials defended its basis on Russian arms exports, which appear to be the primary factor driving the red carpet protocol accorded to Chavez. While eager to pursue commercial opportunities -- both in arms and energy -- GOR officials are realistic about Russia's influence in Latin America, although some see Russian activism in America's backyard as a counter to perceived U.S. encroachments in Russia's "neighborhood." Chavez's visit excites little comment here, where he is depicted in nostalgic terms as another Fidel, albeit one whose pocketbook provides a "pragmatic" basis for engagement. End Summary Russia's Embarrassing Guest -------------- ¶2. (C) In meetings with Russian Security Council Secretary Igor Ivanov and Presidential Foreign Policy Adviser Sergey Prikhodko, the Ambassador raised strong concerns over the visit of Hugo Chavez to Moscow on June 28-30 -- his fifth trip to Russia, and part of a broader swing through Belarus and Iran. The Ambassador stressed, that on the eve of Putin's July 2 meeting with the President at Kennebunkport, the GOR was sending a negative signal through the high-level attention and protocol accorded to Chavez; his attendance as Putin's guest at the Presidential (horse racing) Cup in Rostov-on-Don (to which the CIS leaders and a swath of Russia's political elite are traditionally invited); and reports of another significant arms sale package, at a time when Chavez's policies were destabilizing the region and as news reports carried the Venezuelan leader's calls for military action against the United States. Both Ivanov and Prikhodko expressed regret over the timing of the visit, which was scheduled months earlier and was not (they claimed) intended as a signal to Washington. Stating that they understood the scrutiny that the visit would face in Washington and evincing no fondness for Chavez, both noted that Russia's arms export policy adhered to international law and UN resolutions. Arms Sales Top the Agenda -------------- ¶3. (C) The MFA declined to discuss planning for the visit, but local press reports speculate that the primary agenda item is conclusion of another arms package, with the possible provision of nine diesel submarines (five Project 636 and four Project 677 Amur subs),Tor-M1 air defense systems, coastal patrol aircraft, and small arms touted. (Note: We have seen Venezuelan Defense Ministry statements disclaiming any interest in submarines.) With USD 3.4 billion in arms purchases since 2005, Venezuela now ranks as one of the major buyers of Russian weapons, with defense experts noting that Russia usually does best in restricted markets. Ivan Safranchuk, Chief Defense Analyst at the World Security Institute, told us that expanding markets, keeping production lines open, and lowering unit costs by achieving economies of scale were the primary factors in engaging with Chavez. Russia's goal, he maintained, was to become an "arsenal" to fellow BRIC members (Brazil, India, and China),and Venezuela was an important entree into the Western hemisphere. Improvements in Russian weapons systems and Rosoboronexport's adoption of more "American" marketing techniques, which allowed Russia to offer complete packages -- equipment, training, and parts -- were contributing to Russia's increased appeal. According to MFA Disarmament Department Counselor Sergey Petlyakov, there are few Russian restrictions on trade with Caracas and he reinforced the view that Moscow would be willing to meet Venezuela's demands, which were grounded in the defense of its oil facilities and other economic infrastructure. ¶4. (C) Director of the Latin America Institute Vladimir Davydov told us that the Kremlin was realistic about the limits of its influence in Latin America in general and regarded the region as peripheral to Russia's strategic interests. (Putin's visit to Guatemala, following Kennebunkport, is to further Russia's bid for the 2014 Winter Olympics.) Putin had signaled this with the closure of the Russian listening station at Lourdes, Cuba, in 2000. While Russian parastatals and private companies were interested in pursuing commercial opportunities -- particularly in energy and arms sales -- Davydov was dismissive of some of the grander infrastructure projects being discussed, such as a MOSCOW 00003139 002 OF 002 pipeline from Venezuela to Argentina. Russia's political interests in Venezuela were much more circumscribed; Moscow appreciated Venezuelan support in international fora, but was not seeking to act as a counterweight to the U.S. through its ties with Chavez. Memories of Fidel -------------- ¶5. (SBU) Russian television coverage of the upcoming visit tends to portray the Venezuelan strongman in nostalgic terms, as a plucky populist in the Fidel mold, with little attention paid to his human rights record at home. His defiance of the U.S. plays well on Russian television, and parallels are drawn by some commentators between his clashes with Conoco-Phillips and Exxon-Mobil and Russia's sometimes difficult relations with Western oil companies. Clearly, the opportunity to exercise Russian influence in America's neighborhood appeals to some Russian audiences, as well. Comment -------------- ¶6. (C) If Putin's body language during the fourth visit of Chavez to Moscow last year was any guide, there is little love lost for the Venezuelan leader. However, there also is little public controversy over the red carpet being rolled out, with most officials and commentators prepared to defend Russia's "pragmatic" relations and commercial interests. BURNS