MEDVEDEV MAKES SPLASH IN BAKU
Shahin Abbasov
ISN, Switzerland
Monday, 07 July 2008
The Russian president pulls out all the stops in Azerbaijan, but is
it more style than substance?
Russian leader Dmitry Medvedev concluded 3 July talks with Azerbaijani
President Ilham Aliyev by pronouncing Baku to be Moscow’s "strategic
partner." Meanwhile, the head of the Kremlin-controlled conglomerate
Gazprom, Alexei Miller, announced that talks would soon begin on
the Russian firm’s purchase of Azerbaijani gas. But experts remain
unconvinced that the upbeat rhetoric surrounding Medvedev’s visit
will lead to any change in the existing bilateral relationship.
During their meeting in Baku, Medvedev and Aliyev issued a declaration
of friendship and presided over the signing of four intergovernmental
agreements covering such areas as customs and privatization. The
friendship declaration was vaguely worded and short on specifics,
although Russia did seem to endorse Baku’s position that any political
settlement of the Nagorno-Karabakh conflict should not undermine
Azerbaijan’s territorial integrity, according to a report distributed
by the APA news agency. At the same time, Medvedev was non-committal
in his public comments, saying that Russia favors resolution of the
Karabakh conflict through direct talks between the Azerbaijani and
Armenian presidents.
The two sides expressed a desire for better coordination in
the security sphere, and announced an intention to complete the
delimitation of their shared border. In another section of the
friendship declaration, Baku and Moscow pledged to promote a "central
role in international affairs" for the United Nations.
Miller, the Gazprom CEO, made perhaps the biggest news of the visit,
telling journalists that Russia and Azerbaijan had agreed to start
talks covering the purchases of Azerbaijani gas. "Azerbaijan will
become another country where Gazprom can buy gas while just few years
ago, our [Russian] gas was purchased by Azerbaijan," Miller said. He
declined to speculate on how much gas Gazprom was hoping to buy from
Azerbaijan, saying only that the company was prepared pay market
prices to obtain "maximum volume."
While on its surface the Kremlin’s ability to cajole Azerbaijan
into talking about gas sales may seem like a diplomatic coup. But
Azerbaijani experts are skeptical that Medvedev’s visit alone will
prompt Baku to make a geopolitical shift in Moscow’s direction.
Elhan Shahinoglu, head of the Baku-based Atlas non-governmental
think-tank, suggested that Aliyev, not wanting to antagonize Russia,
was stringing Medvedev and Gazprom along, essentially playing for
time. "Baku will try to delay the issue [of gas sales] for as long
as possible," Shahinoglu said to EurasiaNet.
According to Shahinoglu, Baku would prefer not to see Russia become a
middleman for Azerbaijani gas exports to Europe. Instead, Azerbaijani
officials are more interested in pursuing the US- and EU-supported
Nabucco project, which would evade Russia and link Caspian Basin
natural gas directly to European markets. The dilemma for Baku is
that Nabucco has not yet received the final go-ahead, and remains
stuck in the feasibility-study stage.
Another question mark for Azerbaijani export plans is the fact that
Turkmenistan has yet to make a firm commitment to shipping gas
via a trans-Caspian pipeline that would connect into the Nabucco
network. Such uncertainty reinforces Baku’s inclination to "not rush
with answer to Russia’s offer," Shahinoglu said.
Baku-based energy expert Ilham Shaban believes that, at present,
the maximum amount of gas that Azerbaijan is willing to sell
Russia annually is 1 billion cubic meters. In addition, Azerbaijani
officials are disinclined to accede to Gazprom’s desire to purchase
large volumes from the Shah Deniz field. "Baku is unlikely to agree
to sell gas from Shah Deniz to Russia," Shaban told EurasiaNet.
Other experts, such as political scientist Hikmet Hajizade, say
that while Russia currently seems keen on energy cooperation with
Azerbaijan, that stance would change quickly if Nabucco became a
reality. Azerbaijani participation in Nabucco would automatically
transform Baku and Moscow into bitter competitors. In this event,
Hajizade added, Moscow would likely institute economic and diplomatic
policies designed to coerce Baku.
Shahinoglu, the think-tank expert, predicted that if Baku pursues
an export strategy that is not to Moscow’s liking, then the Kremlin
would retaliate in other areas. "It is likely that Russia will use
the Nagorno-Karabakh conflict to pressure Baku," he said.
Shahinoglu and other experts are also wary of Russia’s tendency to
use corporate investment as a cudgel to compel former Soviet states
to follow the Kremlin’s line. Many Russian firms, especially energy
companies, are awash in capital and are always on the outlook to
obtain stakes in neighboring countries’ infrastructures, such as
energy distribution networks. During his visit to Baku, Medvedev was
accompanied by large group of Russia’s business leaders, including
Gazprom’s Miller, LukOil President Vagit Alekperov, and VTB Bank
chairman Andrei Kostin.
While Shahinoglu characterized the current state of Azerbaijani-Russian
relations as "normal," he and other experts pointed to a trouble
spot on the immediate horizon. The dilemma concerns a border spat
involving two Azerbaijani villages – Xraxoba and Uryanoba, located
in the Khachmaz Region along the border with the Russian autonomous
republic of Dagestan.
The two villages were transferred to Russia for a period of 20 years
during Soviet times, and although the transfer agreement expired in
2004, Russia has shown no signs of returning the settlements.
Indeed, the fate of the villages is perhaps the largest impediment
to the completion of border delimitation, as the residents of those
villages have received Russian citizenship and have been thoroughly
integrated in Russia’s political and economic system.