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AZERBAIJAN


  
  

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 7,124 6,090 5,600 102
         
GNI per capita
 US $ 810 710 650 146
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 333 - (25/09/08)

Azerbaijan is in a highly volatile state. There are presidential elections in October. Yet externally the world around it is topsy-turvy.

The Baku-Moscow axis under strain
The August war between Georgia and Russia has changed everything. The Caucasus is now most definitely menaced with a new take-over by Russia.

Russia has re-absorbed Chechnya. It has established key beachheads in Georgia, Abkhazia and South Ossetia, whose ‘independence’ it now recognizes, although defacto they already were Russian colonies anyway. It has a client state in Armenia in unlawful possession of 20% of Azeri territory. The situation could not be more menacing.

It is in this context that one should appraise Azerbaijani President Ilham Aliyev’s visit to Moscow on September 16. It was notable mostly for what he did not say. Russia has pressed Azerbaijan to sell a large volume of natural gas to the Kremlin-controlled conglomerate, Gazprom. But Aliyev and his Russian hosts did not announce a gas purchase deal following their talks. 

Aliyev me t with President Dmitry Medvedev and Prime Minister Vladimir Putin during his day-long stay in Moscow. Medvedev indicated that the discussions were merely informational. Azerbaijan has been a Western ally so far in the Caspian Basin energy game. 

West or East?
The Kremlin is trying hard to woo Baku away from the West. "We had to check positions taking into account problems which appeared in the Caucasus after the Georgian aggression. I informed the Azerbaijani president about steps that Russia undertook to provide security in South Caucasus," Medvedev said.

Aliyev, like other regional leaders, is trying to avoid being backed into a situation where he would have to declare his preference for one side or the other. In Moscow, he was careful not to say anything that might offend Moscow. Here is an example: "There is a necessity to consolidate efforts, in order to provide peace and predictability," he said. "We need to diminish tension. All problems have to be solved peacefully." 

Aliyev avoided commenting generally on Georgian-Russian tension, and specifically refrained from any comments concerning Russia’s decision to ‘recognize’ the separatist territories of Abkhazia and South Ossetia. 

The key question
Baku’s sensitivities are heightened by concern over its own separatist enclave, Nagorno-Karabakh. Some Azerbaijani officials are evidently concerned that if Baku expressed support for Georgia, then Azerbaijan’s own efforts to regain control of Karabakh would suffer. 

During the Moscow visit, Russian officials reassured Aliyev that he need not be concerned about Karabakh - yet. Medvedev stressed that the Kremlin did not see a connection between Karabakh and Georgia’s separatist entities. "Russia’s position has not changed," Medvedev said, referring to the Karabakh peace process. "We also support continuation of direct talks between the Azerbaijani and Armenian presidents." 

Neither Aliyev nor Medvedev touched on the possible Russian large-scale purchase of Azerbaijani gas. Experts in Baku believe that Aliyev’s administration has yet to reach a decision on the matter, and is playing for time. 

On September 12, Elshad Nasirov, the vice president of Azerbaijan’s State Oil Company (SOCAR), said that "Azerbaijan tries to fully depoliticize the issue of export destinations for the "large gas" which is expected after 2013." According to Nasirov, Azerbaijan’s choice will mostly depend on commercial factors. "All destinations [of gas export] are equally possible and we will mostly consider the net-profit for SOCAR and its partners," he said. 

Gazprom is reportedly willing to pay Baku $300 per 1.000 cubic meters. Nasirov added that Western Europe, Russia and Iran all remain possible export destinations. He added that even exports to Asia via Turkmenistan could become a fourth option. 

Aliyev and Medvedev also had no comment on a Turkish initiative to establish a "Caucasus platform for security and cooperation." That concept was raised by Turkish President Abdullah Gul during his recent visits to Yerevan and Baku. 

Reflecting on the visit, some Baku experts said they did not expect Baku to make up its mind on the gas-purchase question until after presidential elections in the fall. "Aliyev is hardly ready to answer these questions," said Rauf Mirgadirov, a political columnist for the Zerkalo newspaper, referring to the issues of gas purchases and Azerbaijan’s security cooperation with the West. 

Indeed, to try to maintain room for manoeuvre, Baku continues to explore ties with NATO. Azerbaijani Foreign Minister Elmar Mammadyarov went to Brussels on September 16 to take part in discussions over NATO representatives.

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