Think-tank predicts boost in Azeri-Iranian economic relations

Zerkalo, Baku
25 Jan 05

Excerpt from CGR analytical group report by Azerbaijani newspaper
Zerkalo on 25 January entitled “Next stage of dialogue between Baku
and Tehran”, subheaded “Cooperation between Azerbaijan and Iran plays
pivotal role in maintaining balance of forces in the region”

Azerbaijani President Ilham Aliyev started his official visit to the
Islamic Republic of Iran yesterday [24 January]. This visit should be
considered primarily as the next stage in the dynamic development that
has been observed in recent months in the Azerbaijani-Iranian
dialogue.

As the authors of this article have written in one of their previous
reports, cooperation between Azerbaijan and Iran plays a leading role
in maintaining the balance of forces between the power centres of the
South Caucasus, and is consequently of great significance for the
security of Azerbaijan and the whole region.

We would like to concentrate on another important component of
bilateral cooperation between Azerbaijan and Iran – namely, the
possibilities for transit alternatives and transport security for
Azerbaijan.

Azerbaijan has repeatedly come under pressure from neighbouring states
on the issue of importing oil and its transport via our territory and
access to world markets.

Problems triggered by Russia in the exploitation of the northern
[Baku-Novorossiysk] oil pipeline were a real headache for Azerbaijan
before the commissioning of the Baku-Supsa oil pipeline. [Passage
omitted]

Nevertheless, we should also bear in mind that we are in a region
where the interests of various force centres clash. Our country’s very
position at the point of contact of the interests of power centres
restricts its movements and compels us to take heed of the interests
of the opposing side in the course of cooperation with neighbouring
states. First of all there is the US factor, which has had an
influence on Azerbaijan’s relations with Iran. However, if we pay heed
to the fact that the Baku-Tbilisi-Ceyhan oil pipeline is nearing
completion, that Azerbaijan is successfully continuing integration
into the west and is a partner in the antiterror coalition, led by the
USA along with Russia and the European Union, and that a strengthening
of our southern neighbour is being observed, then it is easy to
imagine that a favourable situation for this highly important
cooperation with Iran in transport has been established.

Activities in this direction are being carried out in principle. As
Zerkalo newspaper reported, the sixth session of the
Azerbaijani-Iranian intergovernmental commission on cooperation in
economic, trade and humanitarian fields was held in Tehran on 8-9
January 2005. A memorandum, signed at the end of the session of the
commission, envisaged the development of a feasibility study of a
draft project for the construction of an Alat-Astara road. The
document also stipulated the drafting of projects for the construction
of a Qazvin-Rasht-Astara (Iran)-Astara (Azerbaijan) railway. If these
projects are successfully implemented, then the reconstruction of the
Alat-Astara road, the implementation of the Qazvin-Rasht-Astara
(Iran)-Astara (Azerbaijan) railway, and the establishment of a single
railway junction between Azerbaijan and Iran will be conducive to the
realization of the North-South transport corridor by boosting railway
transportation between Europe and South Asia. [Passage omitted]

However, all this does not mean that the important Baku-Tbilisi-Ceyhan
project will be put back. On the contrary, it will remain the main
export channel for Azerbaijani oil, and the Iranian route will play a
supporting role in force majeure circumstances. Such a position will
take into consideration both geopolitical factors, in particular, the
level and essence of US-Iranian relations. Thus, a marked
rapprochement and a striving for the implementation of fully-fledged
cooperation by both the Iranian and Azerbaijani sides is of
significance not only for political and economic relations between the
two countries but also for the resolution of the Armenian-Azerbaijani
conflict, securing energy and transit security for Azerbaijan, and
finally, for a strategy of maintaining a balance of forces in the
South Caucasus.