Last month Azerbaijan cancelled the long-planned visit of a European Commission delegation to discuss an agreement on strategic partnership after the European Parliament passed a motion criticizing Baku’s human rights record. That agreement would have been significant both from the geopolitical and the geo-economic point of view, as Azerbaijan is the main exporter of natural gas to Europe through the Southern Gas Corridor and is the potential Caspian bridge for gas from Central Asia.

Russia’s President Vladimir Putin visited Baku in August 2013 with his foreign and defence ministers, to discuss his own “strategic partnership” with Azerbaijan. One of the results was increased Russian military sales to the country. And Azerbaijani-Russian trade turnover has been growing every year, and hit an all-time (post-Soviet) high in 2014, up 12 per cent over 2013.

Putin would very much like to make Russia into Azerbaijan’s principal military supplier. Russia already bankrolls Armenia’s forces by selling to them at prices the same as the domestic Russian market, but Azerbaijan has to pay the going world market prices. Military co-operation between the two countries is estimated at over US$5 billion. Russia’s condition for giving Azerbaijan the same terms as Armenia is that the arms should never be used to retake occupied Nagorno-Karabakh, but Baku will never agree to that.

Meanwhile Azerbaijan has even begun importing small amounts of Russian gas and is holding informal, soon to be formal, talks with Iran over the prospect of Iranian gas entering the Azerbaijani gas transmission system (GTS) for transit through Turkey to Europe, albeit later rather than sooner.

The Trans-Anatolian Gas Pipeline (TANAP, after its Turkish initials) is slated to take Azerbaijan’s natural gas to Europe, and moreover the agreement gives Turkey a $5 billion state-of-the-art petrochemical plant in western Anatolia, still further enhanced bilateral training and industrial cooperation; and Azerbaijan will become by 2020 the largest provider of FDI to Turkey.

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The American-driven agreement of the P5+1 with Iran has forced Baku to begin to find accommodations with Tehran, as the latter’s regional power begins to approach the level of its self-ascribed prestige. As part of this, Azerbaijan has found itself constrained to limit the profile, and indeed some of the activities, of its heretofore excellent co-operation with Israel.

Relations between Turkey and Iran have also been mollified as the two countries begin to discuss possibilities for enhanced energy co-operation. Azerbaijan’s relations with Turkey will never really be in question, however, leaving Russia to seek ways to capitalize on Azerbaijan’s increasing diplomatic isolation, or at least disinterest, by the United States and Europe.

An astute Azerbaijani commentator observed some time ago that, for Russia, “Georgia is the way, Armenia is the tool and Azerbaijan is the prize.” Thus there have been noises lately about Russia motivating a settlement of the Karabakh question in Azerbaijan’s favour, although this is also a way of keeping Armenia in line. Yet out of the three regional powers now reasserting themselves into the vacuum created by the West’s general distraction by Syria, it is Russia has the most sticks and the most carrots regarding Azerbaijan.

Robert M. Cutler
Robert M. Cutler is Fellow at the Canadian Global Affairs Institute. He was for many years a senior researcher at the Institute of European, Russian and Eurasian Studies, Carleton University.

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