Personnel and structural reforms in the Republic of Azerbaijan (AR) do not change Baku’s foreign policy. For example, unlike economic and humanitarian relations between Baku and Moscow, there are fundamental differences in priorities in the military-political sphere between the countries.
In the military-political and energy partnership of the AR with the West, official Moscow traditionally sees a challenge to the national interests of the Russian Federation. Moreover, the official Baku de jure in military and political terms has completely defined itself, having obtained the status of non-aligned state.
The interests of Baku and the Kremlin coincide in two directions: first, to prevent the institution of power of the ruling elites from weakening; second, to prevent Western interference in the internal affairs of countries. However, with regard to the integration of the AR into the CSTO and the EAEU, the interests of the ruling elites of the two countries diverge.
The main problem in the Azerbaijani-Russian interstate relations is the Karabakh conflict. Official Moscow does not seek a full settlement of the conflict. This is evidenced by statements made by Russian Defense Minister S. Shoigu in Armenia on the eve of his arrival in Baku on October 30, 2019, where the CIS Defense Ministers met. In particular, S. Shoigu in Gyumri stated: «The level of interaction of our military departments allows us to quickly solve current tasks and respond in time to changes in the region.» It can be assumed that under the changes in the region of the South Caucasus S. Shoigu meant the Western aspirations to become entrenched in the AR and Georgia. Thus, the 102nd Russian military base in Gyumri will respond to these challenges, which implies military and political pressure on Baku.
The Prime Minister of Armenia, N. Pashinyan, welcomed S. Shoigu, emphasized that Armenian-Russian cooperation in the field of defense contributes to strengthening stability and security in the region. In other words, in Yerevan, it is calculated that it is official Moscow that will not allow official Baku to restore the territorial integrity of the AR by military means.
The possible accession of the AR to the CSTO and the EAEU has been actively discussed for the past two years. So, recently Deputy Prime Minister of the Russian Federation Yuri Borisov in Yerevan at the 18th meeting of the Interstate Commission on Military-Economic Cooperation (MKVES) stated that «Russia is not against Azerbaijan receiving observer status in the CSTO». However, the foreign policy department of the AP AP Hikmet Hajiyev noted that «Azerbaijan does not currently consider participation in the CSTO in any form, including as an observer.»
The official Moscow is interested in the representation of the AR in the CSTO and the EAEU, as it will receive a direct land route to the Islamic Republic of Iran (IRI) and the Persian Gulf against the background of the Russian military and political presence in the Syrian Arab Republic (SAR).
Azerbaijan’s accession to the CSTO and the EAEU in the long-term interests of the Russian Federation. Therefore, official Moscow wants to see the CSTO as an observer in the Organization. Earlier, the idea of returning to the CSTO was discussed only at the level of various expert opinions, now at the moment high-ranking Russian officials are talking about it. Moscow believes that Azerbaijan and Armenia’s participation in CSTO will reduce the risk of armed confrontation between the two countries due to the Karabakh conflict. After all, the CSTO members must adhere to the principle of non-use of force or threat of force in interstate relations and to resolve all disagreements between themselves and other states by peaceful means.
However, even with these principles in mind, Baku and Yerevan must eventually come up with concrete solutions to the Karabakh conflict. Therefore, it makes no sense to join the CSTO with Armenia, since the official Moscow cannot resolve this conflict either within the framework of the OSCE MG or in the Baku-Yerevan-Moscow format. The membership of the AR in the CSTO will cause the Karabakh conflict to be “frozen”, ie. the status quo will continue to be maintained. Official Moscow will change the current status quo in the Karabakh settlement only after Baku’s transition to Russian geopolitical influence.
After all, the Kremlin is interested in maintaining allied relations with Yerevan. Otherwise, official Yerevan will start drifting towards the West. Official Moscow is not interested in the 3rd Karabakh war. In the event of any outcome of the Karabakh war, official Moscow will prove to be a loser because The Russian Federation will have to choose a side: either to break with Armenia, which is an ally of the Kremlin on the CSTO and the EAEU, or with Azerbaijan. The Kremlin’s current role as moderator of the conflict is quite satisfying. In other words, the Kremlin seeks to maintain equal relations with both Azerbaijan and Armenia. Official Moscow can revise its current strategy only because of geopolitical changes in the South Caucasus region. Otherwise, official Moscow will continue its balancing policy.
Therefore, official Moscow associates with the CIS certain geopolitical plans. CIS is a threat to Baku. Even in its current status, the CIS already allows the Kremlin to keep the AR in the orbit of Russian interests. We are talking about economic union, collective security and border protection, customs union, etc. In almost all these areas of integration within the CIS it is possible to observe the attempt to involve Azerbaijan in the Russian orbit.
We are talking about the military-political sphere, where the Karabakh conflict plays a key role. About the economy, where the Russian Federation is the main consumer of Azerbaijani products (mainly fruits and vegetables). About migration — there are more than 600 citizens of the AR in the Russian Federation. About energy — the AR and the Russian Federation supply energy to Europe, and Moscow influences the conditions of the EU energy market.
According to the CBR, at least $ 1,2 billion of remittances from the Russian Federation are received annually in the AR. Russia accounts for at least 10% of the total exports from the Autonomous Republic, and more than 70% of agricultural production goes away in the Russian direction, which testifies to the economic dependence of the republic. By the way, official Moscow uses economic leverage to pressure other countries when blocking the import of products.
However, the recent ratification of the Interim FTA Agreement between the IRI and the EAEU opens up economic prospects for the AR as well. Free trade regime operates between the Autonomous Republic of the Russian Federation and the Russian Federation, which promotes trade development and creates additional opportunities for cooperation between business entities. Under the auspices of the Intergovernmental Commission on Economic Cooperation between the AR and the Russian Federation, along with five sectoral working groups, a sixth one has been set up on innovation and high technology.
The authorities of the AR and the Russian Federation intend to develop cooperation in the field of agriculture, chemical engineering, industry and in a number of other industries. So, December 9 this year. representatives of the AR and the Russian Federation in Baku signed road maps for cooperation in the field of agriculture for the years 2020-2022 and for cooperation in the field of tourism for the years 2020-2022.
In other words, in the trade and economic cooperation between the AR and the Russian Federation, there is a process of transition from a traditional partnership to the formation of a free trade area. Today there are 950 companies with Russian capital in the Azerbaijani market, which is 10% of all companies with foreign capital. The «Strategic Roadmap for the AR by 2025» is the first of the four indicators put forward by the government of the country to «bring foreign direct investment (FDI) in the non-oil sector up to 4% of GDP.» Over the last 4 years, the level of FDI coming from Switzerland and Russia has increased. The Russian Federation is the main trading partner of the AR for the import and export of non-commodity goods. For the period 3-2000, 2017% ($ 71,6 million) of those coming from the Russian Federation to the non-oil sector of the AR FDI account for 542,2-2016.
Relations between the Autonomous Republic of the Russian Federation and the Russian Federation are intensifying in different directions: in trade, in cross-country movement of labor and in investments. Foreign trade cooperation is developing most dynamically, both within the framework of the Intergovernmental Commission on Economic Cooperation and at the level of interaction between the AR and the subjects of the Russian Federation.
Baku — Brussels
The EU is the largest trading partner of the AR. Trade turnover between the EU and the EU is about $ 5 billion. The volume of investments of the EU countries in the AR is more than $ 20 billion. Strategic partnership documents have been signed between the AR and 9 EU countries. In the energy balance of some European countries, the share of Azerbaijani oil is about 20-30%.
One of the problematic issues in the negotiations between the AR and the EU on the new enhanced cooperation agreement is the lack of intention of the official Baku to join the WTO, which seriously complicates the negotiation of the trade part of the agreement between the parties. The European Commission is ready to continue work on the new agreement. But, with one condition: the official Baku must reconsider its position.
However, official Baku is trying to advance its negotiating strategy: deepening relations with official Brussels in economics, culture and other areas. In addition, for the official Baku, the principle of territorial integrity of the AR is of fundamental importance in the agreement, which would facilitate the search for compromise solutions on problematic issues. However, official Brussels does not wish to state in the agreement the principle of territorial integrity of the AR. Official Brussels has publicly indicated the EU’s commitment to Georgia’s territorial integrity, refusing to do so. Moreover, not only the positions of the AR and the EU on other issues diverge, different conceptual approaches to these or other problems have emerged.
It turns out that with regard to the AR, official Brussels is in favor of a format for the development of bilateral cooperation. The AR’s energy resources are only intended to provide Europe with raw materials.
Washington’s involvement in the AP suggests expanding US geopolitical and geo-economic influence in the Caucasus-Caspian region amid restraints on Russia and the IRI in the region. The US seeks to increase pressure on Russia and the IRI. For Washington, this task is important in terms of the energy security of NATO allies; trade, economic and strategic partnership of the AR with European countries; promoting Washington’s interests in the Caspian countries.
The United States today has taken a more decisive position in addressing three key problems in the AR: the development of a Southern Gas Corridor (South Gas Corridor) (South East) corridor to Europe; democratic reforms; resolution of the Karabakh conflict.
In 2018, trade between the AR and the US amounted to $ 860 million. Currently, direct investments by the US in the AR amounted to $ 13,6 billion, and GNFAR invested in the United States $ 8,2 billion invested in capital and real estate. More than $ 20 billion of GFAR is an investment in the US economy. More than 250 companies from the United States were registered in the AR, and the activity of the American Chamber of Commerce in the Republic (AmCham) is very active and efficient.
Against this background, Washington develops ties with the official Baku in the field of security through the supply of military equipment and joint military exercises. This is evidenced by, for example, the meeting of October 28 this year. at the initiative of US Secretary of Defense M. Esper and Defense Minister Z. Hasanov at a meeting of NATO Defense Ministers at the NATO Headquarters in Brussels, contributing to the IA Resident Support Mission. The parties discussed the prospects of military relations between the AR and the USA — both bilaterally and within NATO, including the expansion of cooperation in the military, military-technical, military-educational and military-medical spheres, as well as issues of regional and global security .
The US has increased its financial support to the military in the military and law enforcement.
In particular, in 2018, $ 59,6 million was provided to the AR, and $ 2019 million in 42,9. The total amount was $ 102,5 million. The funds are allocated through the Pentagon and the US State Department. Almost all support for Baku ($ 101,5 million) has been allocated through the Section 333 Authority to Build Capacity program, which provides material assistance and exercises in the areas of combating terrorism, organized crime and drug trafficking, improving the Caspian coast infrastructure and military intelligence. By the way, official Washington will hand over to official Baku, including patrol ships, with which submarine detection systems, radars, etc. will be delivered. In parallel, the United States offers economic incentives and security guarantees to the AR to try to overcome the dependence of the AR on the Russian Federation. Moreover, the 907th amendment to the Act on the Protection of Liberty, which prohibits assistance to the AR, has not been repealed.
The United States supports trans-regional energy projects initiated by the official Baku, including such a strategic project as YGC. The participation of the AR in European energy cooperation indicates that the AR is ready to build ties with the West. Relations between the United States and the United States are broadening mainly in the energy sector. However, official Baku is interested in supporting the United States in the security of the energy and communications infrastructure of the AR. The AR and the US are also discussing the prospects for developing economic cooperation in the non-oil sector, which will further strengthen ties between the AR and the US. In particular, the United States and the United States discuss issues related to the development and strengthening of trade ties between the two countries, investment opportunities in the country’s economic reforms, as well as cooperation in the fields of tourism, taxes, customs, agriculture, food security, labor, intellectual property, etc. .
In the medium to long term, cooperation with the United States and NATO will continue, with a further upward trend. Cooperation programs are already being implemented between the two countries within the framework of joint military programs. The AR is involved in US programs «Foreign Military Sales,» Foreign Military Financing «,» International Military Education and Training «,» Cooperation in Counterterrorism. However, these programs do not yet hold up to the advanced formats of US-Georgia interaction in the «train and equip» series.
The US does not have the opportunity to advance the Western model of democracy in the AR. The United States Agency for International Development (USAID) is dissatisfied with the level of relations with the AR. Since 1991, USAID has provided financial and technical assistance to the AR with a total value of more than $ 300 million. For AR, funding has been $ 7,7 million annually. Although, since 1991, the United States has invested $ 1,3 billion in the humanitarian development of the AR (about $ 125 million of the above was earmarked to assist IDPs).
However, the United States’ over-efforts in promoting the Western model of democracy in the AR proved unproductive and put at risk the pro-Western civic activists and politicians in the country.
One of the options of Azerbaijan’s involvement in the Russian model of integration is in the plane of formation of the «Greater Eurasian Partnership» (BEP). At the PMEF in 2016, Putin proposed the creation of a BEP with the participation of the EAEU members, as well as the countries with which the official Moscow has established close relations — China, India, the PRI, the IRI, and partners in the CIS and other interested states and associations.
The integration of the AR into the BEP can occur in several stages: reduction of tariffs and definition of the schedule of the FTA creation; creation of a comprehensive mechanism for cooperation, involving the whole of Eurasia. Thus, the activation of the integration of the AR into the BEP is conditioned by the use of the Kremlin’s political capabilities in relations with the AR, which are «capitalized» in joint long-term projects and programs of cooperation.
Baku’s refusal to join the EAEU and the CSTO provides closer military-political and trade-economic ties between the AR and the US, taking the official Baku balance policy between the West and the Russian Federation to a new level.
The 1992 amendment to the «Freedom Support Act» of the US Congress restricts state aid to Azerbaijan. Therefore, official Baku will continue to take serious steps in carrying out reforms. Although it takes time for the political leadership of the AR to build a Western model of democracy in the country.
Rauf RAJABOV, orientalist, Head of Analytical Center 3RD VIEW, Baku, Azerbaijan